Document:

EX-10.3

Exhibit 10.3

PEPSICO STOCK OPTION RETENTION AWARD

STOCK OPTION TERMS AND CONDITIONS

These Terms and Conditions along with the PepsiCo Stock Option Retention Award Summary
(the “Award Summary”) delivered herewith and signed by the individual named on the Award Summary
(the “Participant”) shall constitute an Agreement made as of the Grant Date (as indicated on the
Award Summary) by and between PepsiCo, Inc., a North Carolina corporation having its principal
office at 700 Anderson Hill Road, Purchase, New York 10577 (“PepsiCo,” and with its divisions and
direct and indirect subsidiaries, the “Company”), and the Participant.

W I T N E S S E T H:

WHEREAS, the Board of Directors and shareholders of PepsiCo have approved the PepsiCo, Inc.
2007 Long-Term Incentive Plan (the “Plan”), for the purposes and subject to the provisions set
forth in the Plan; and

WHEREAS, pursuant to the authority granted to it in said Plan, the Compensation Committee of
the Board of Directors of PepsiCo (the “Committee”), by resolution duly adopted at a meeting held
on or prior to the Grant Date, authorized the grant to the Participant of the stock options set
forth on the Award Summary; and

WHEREAS, awards granted under the Plan are to be evidenced by an Agreement in such form and
containing such terms and conditions as the Committee shall determine.

NOW, THEREFORE, it is mutually agreed as follows:

1. Grant. In consideration of the Participant remaining in the employ of the Company,
PepsiCo hereby grants to the Participant, on the terms and conditions set forth herein, the right
and option to purchase the number of shares of PepsiCo Common Stock, par value $.0167 per share,
indicated on the Award Summary at the Grant/Exercise Price per share indicated on the Award Summary
(the “Option Exercise Price”), which was the Fair Market Value (as defined below) of PepsiCo Common
Stock on the Grant Date. The right to purchase each such share is referred to herein as an
“Option.” All Options granted hereunder shall be “Non-Qualified Stock Options” as defined in the
Plan.

2. Vesting and Exercisability. Subject to the terms and conditions set forth herein,
the number of Options specified in the Award Summary shall become vested on each vesting date set
forth in the Award Summary (“Vesting Date”). The specified number of Options shall be exercisable
from the applicable Vesting Date through the expiration date set forth in the Award Summary (the
“Expiration Date”). Options may vest only while the Participant is actively employed by the
Company. Once vested and exercisable, and until terminated, all or any portion of the Options may
be exercised from time to time and at any time under procedures that the Committee or its delegate
shall establish from time to time, including, without limitation, procedures regarding the
frequency of exercise and the minimum number of Options which may be exercised at any time.

3. Exercise Procedure. Subject to terms and conditions set forth herein, Options may
be exercised by giving written notice of exercise to PepsiCo in the manner specified from time to
time by PepsiCo. The aggregate Option Exercise Price for the shares being purchased, together with
any amount which the Company may be required to withhold upon such exercise in respect of
applicable foreign, federal (including FICA), state and local taxes, must be paid in full at the
time of issuance of such shares.

4. Effect of Termination of Employment, Death, Retirement and Total Disability.

(a) Termination of Employment. Options may vest only while the Participant is actively
employed by the Company. Thus, no vesting shall occur following the termination of the
Participant’s active employment with the Company, and all unvested Options shall automatically be
forfeited and cancelled upon the date that the Participant’s active employment with the Company
terminates. Only vested options may be exercised. Subject to subparagraphs 4(b), 4(c) and 4(d),
vested Options shall be exercisable until, and shall automatically be forfeited and cancelled upon,
the earlier of the Expiration Date and the date that is the last trading day on the New York Stock
Exchange during the 90-calendar day period after the date the Participant’s employment with the
Company terminates. It is intended that an authorized leave of absence may extend employment for
purposes of determining the period when vested Options may be exercised. However, an authorized
leave of absence will not be treated as active employment and, as a result, vesting of unvested
Options will not be extended by any such period.

(b) Death or Total Disability. If the Participant’s employment terminates, by reason
of the Participant’s death or Total Disability (as defined below), then: (i) a portion of the
Options shall vest on the Participant’s last day of active employment with the Company (which, for
purposes of Total Disability, means the effective date of Total Disability), with such portion
determined in proportion to the Participant’s active service (measured in calendar days) during the
period commencing on the Grant Date and ending on the Vesting Date for the Options (determined
separately for the specified number of Options related to each Vesting Date); (ii) the Options
(that are vested as provided above) shall continue to become exercisable on the applicable Vesting
Date in accordance with this Agreement, with no change in the earliest date of exercise as a result
of the vesting provided by this subparagraph 4(b); and (iii) the Options (that are vested as
provided above) may be exercised by the Participant’s legal representative (or any person to whom
the Options may be transferred by will or the applicable laws of descent and distribution), in the
event of death, or the Participant, in the event of Total Disability, in accordance with this
Agreement.

(c) Retirement. In the event that, prior to the expiration of the Options, the
Participant ceases to be an employee of the Company by reason of the Participant’s Retirement (as
defined below), then the Participant shall continue to be vested with and have the right to
exercise those Options which are vested and exercisable as of the Participant’s Retirement Date.
Any Options which are not vested as of the Participant’s Retirement Date shall automatically expire
and terminate on the Retirement Date.

(d) Transfers to a Related Entity. In the event the Participant transfers to a Related
Entity (as defined below), as a result of actions by PepsiCo, the Options shall become fully vested
on the date of such transfer and shall become exercisable as soon as practicable thereafter and
shall otherwise remain outstanding and be exercisable in accordance with this Agreement.

5. Prohibited Conduct.

(a) The Participant agrees that, at any time prior to the exercise of the Options granted
hereunder, and for a period of twenty-four months after the later of (i) completion of all such
exercises or (ii) termination of the Participant’s employment with the Company for any reason
whatsoever (including Retirement or Total Disability), he or she will not engage in any of the
following activities anywhere in the world:

(1) Non-Competition. Participant shall not accept any employment, assignment, position
or responsibility, or acquire any ownership interest, which involves the Participant’s
participation in a business entity that markets, sells, distributes or produces Covered Products,
unless such business entity makes retail sales or consumes Covered Products without in any way
competing with the Company.

(2) Raiding Employees. Participant shall not in any way, directly or indirectly
(including through someone else acting on the Participant’s recommendation, suggestion,
identification or advice), solicit any Company employee to leave the Company’s employment or to
accept any position with any other entity.

(3) Non-Disclosure. Participant shall not use or disclose to anyone any confidential
information regarding the Company other than as necessary in his or her position with the Company.
Such confidential information shall include all non-public information the Participant acquired as
a result of his or her positions with the Company which might be of any value to a competitor of
the Company, or which might cause any economic loss or substantial embarrassment to the Company or
its customers, bottlers, distributors or suppliers if used or disclosed. Examples of such
confidential information include, without limitation, non-public information about the Company’s
customers, suppliers, distributors and potential acquisition targets; its business operations and
structure; its product lines, formulas and pricing; its processes, machines and inventions; its
research and know-how; its financial data; and its plans and strategies.

(4) Misconduct. Participant shall not engage in any acts that are considered to be
contrary to the Company’s best interests, including, but not limited to, violating the Company’s
Code of Conduct, engaging in unlawful trading in the securities of PepsiCo or of any other company
based on information gained as a result of his or her employment with the Company, or engaging in
any other activity which constitutes gross misconduct.

(b) In the event the Company determines that the Participant has breached any term of this
Paragraph 5, in addition to any other remedies the Company may have available to it, the Company
may in its sole discretion:

(1) Cancel any unexercised Options granted hereunder; and/or

(2) Require the Participant to pay to the Company all gains realized from the exercise of any
Options granted hereunder, which have been exercised within the twelve-month period immediately
preceding the date at which the Participant has breached a provision of this Paragraph 5, as
determined by the Company.

6. Adjustment for Change in Common Stock. In the event of any change in the
outstanding shares of PepsiCo Common Stock by reason of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, combination or exchange of shares,
spin-off or other similar corporate change, the number and type of shares which the Participant may
purchase pursuant to the Options and the Option Exercise Price at which the Participant may
purchase such shares shall be adjusted as may be, and to such extent (if any), determined to be
appropriate and equitable by the Committee.

7.  Effect of Change in Control. In the event of a Change in Control (as defined in
the Plan), the following provisions shall apply:

(a) If the successor corporation (or affiliate thereto) (1) assumes the outstanding Options or
(2) replaces the outstanding Options with equity awards that preserve the existing value of such
Options at the time of the Change in Control and provide for subsequent payout in accordance with a
vesting schedule that is the same or more favorable to the Participant than the vesting schedule
applicable to such Options, then the outstanding Options or such substitutes thereof shall remain
outstanding and be governed by their respective terms and the provisions of the Plan, subject to
subparagraph 7(c) below.

(b) If the outstanding Options granted hereunder are not assumed or replaced in accordance
with subparagraph 7(a) above, then upon the Change in Control, (1) the outstanding Options granted
hereunder shall immediately vest and become exercisable and shall remain outstanding in accordance
with their terms and (2) notwithstanding subparagraph 7(b)(1) but after taking into account the
accelerated vesting set forth therein, the Board may, in its sole discretion, provide for
cancellation of the outstanding Options at the time of the Change in Control in which case a
payment of cash, property or a combination thereof shall be made to the Participant that is
determined by the Board in its sole discretion and that is at least equal to the excess, if any, of
the value of such consideration over the Option Exercise Price for such Options.

(c) If the outstanding Options granted hereunder are assumed or replaced in accordance with
subparagraph 7(a) and the Participant’s employment with the Company is terminated by the Company
for any reasons other than Cause or by the Participant for Good Reason, in each case, within the
two-year period commencing on the Change in Control, then, as of the date of the Participant’s
termination, the outstanding Options granted hereunder shall immediately vest and become
exercisable and shall remain outstanding until the Expiration Date. For purposes of this
Paragraph 7, “Cause” and “Good Reason” are defined in the Plan and a termination for Cause or Good
Reason is subject to the terms and conditions set forth in the Plan.

8. Nontransferability. Unless the Committee specifically determines otherwise: (a) the
Options are personal to the Participant and, during his or her lifetime, may be exercised only by
the Participant, and (b) the Options shall not be transferable or assignable, other than by will or
the laws of descent and distribution, and any such purported transfer or assignment shall be null
and void.

9. Buy-Out of Option Gains. Except as provided in Paragraph 7, at any time after any
Option becomes exercisable, the Committee shall have the right, in its sole discretion and without
the consent of the Participant, to cancel such Option and to cause PepsiCo to pay to the
Participant the excess of the Fair Market Value of the shares of Common Stock covered by such
Option over the Option Exercise Price of such Option as of the date the Committee provides written
notice (the “Buy Out Notice”) of its intention to exercise such right. Payments of such buy out
amounts pursuant to this provision shall be effected by PepsiCo as promptly as possible after the
date of the Buy Out Notice and shall be made in shares of Common Stock. The number of shares shall
be determined by dividing the amount of the payment to be made by the Fair Market Value of a share
of Common Stock at the date of the Buy Out Notice, and by rounding up any fractional share to a
whole share. Payments of any such buy out amounts shall be made net of the minimum applicable
foreign, federal (including FICA), state and local withholding taxes, if any.

10. Definitions. As used in this Agreement, the following terms shall have the
meanings set forth below:

(a) “Covered Products” means any product which falls into one or more of the following
categories, so long as the Company is producing, marketing, selling or licensing such product
anywhere in the world: beverages, including without limitation carbonated soft drinks, tea, water,
juice drinks, sports drinks, coffee drinks, and value added dairy drinks; juices and juice
products; snacks, including salty snacks, sweet snacks, meat snacks, granola and cereal bars, and
cookies; hot cereals; pancake mixes; value-added rice products; pancake syrup; value-added pasta
products; ready-to-eat cereals; dry pasta products; or any product or service which the Participant
had reason to know was under development by the Company during the Participant’s employment with
the Company.

(b) “Fair Market Value” of a share of PepsiCo Common Stock on any date shall mean an amount
equal to the mean of the high and low sales prices for a share of PepsiCo Common Stock as reported
on the composite tape for securities listed on The New York Stock Exchange, Inc. on the date in
question (or if no sales of Common Stock were made on said Exchange on such date, on the next
preceding day on which sales were made on such Exchange), rounded up to the nearest one-fourth.

(c) “Participation” shall be construed broadly to include, without limitation: (i) serving as
a director, officer, employee, consultant or contractor with respect to such a business entity;
(ii) providing input, advice, guidance or suggestions to such a business entity; or (iii) providing
a recommendation or testimonial on behalf of such a business entity or one or more products it
produces.

(d) “Related Entity” shall mean any entity as to which the Company directly or indirectly owns
20% or more of the entity’s voting securities, general partnership interests, or other voting or
management rights.

(e) “Retirement” shall mean (i) early, normal or late retirement under the U.S. pension plan
of the Company in which the Participant participates (if any), (ii) retirement as explicitly set
out in an individual agreement between the Company and the Participant for this purpose in effect
on the Grant Date, (iii) termination of employment after attaining at least age 55 with at least
10 years of service with the Company (or, if earlier, after attaining at least age 65 and
completing at least five years of service with the Company), or (iv) retirement as otherwise
determined by the Committee.

(f) “Retirement Date” shall mean the effective date of Retirement.

(g) “Total Disability” shall mean becoming totally and permanently disabled, as determined for
purposes of the Company’s Long Term Disability Plan (or in the absence of such Disability Plan
being applicable to the Participant, as determined by the Committee in its sole discretion).

11. Notices. Any notice to be given to PepsiCo in connection with the terms of this
Agreement shall be addressed to PepsiCo at Purchase, New York 10577, Attention: Vice President,
Compensation, or such other address as PepsiCo may hereafter designate to the Participant. Any such
notice shall be deemed to have been duly given when personally delivered, addressed as aforesaid,
or when enclosed in a properly sealed envelope or wrapper, addressed as aforesaid, and deposited,
postage prepaid, with the federal postal service.

12. Binding Effect.

(a) This Agreement shall be binding upon and inure to the benefit of any assignee or successor
in interest to PepsiCo, whether by merger, consolidation or the sale of all or substantially all of
PepsiCo’s assets. PepsiCo will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business and/or assets of
PepsiCo expressly to assume and agree to perform this Agreement in the same manner and to the same
extent that PepsiCo would be required to perform it if no such succession had taken place.

(b) This Agreement shall be binding upon and inure to the benefit of the Participant or his or
her legal representative and any person to whom the Options may be transferred by will or the
applicable laws of descent and distribution.

13. No Contract of Employment; Agreement’s Survival. This Agreement is not a contract
of employment, nor does it impose on the Company any obligation to retain the Participant in its
employ. This Agreement shall survive the termination of the Participant’s employment for any
reason.

14. Registration, Listing and Qualification of Shares. The Committee may require that
the Participant make such representations and agreements and furnish such information as the
Committee deems appropriate to assure compliance with or exemption from the requirements of any
securities exchange, any foreign, federal, state or local law, any governmental regulatory body, or
any other applicable legal requirement, and PepsiCo Common Stock shall not be issued unless and
until the Participant makes such representations and agreements and furnished such information as
the Committee deems appropriate.

15. Amendment; Waiver. The terms and conditions of this Agreement may be amended in
writing by the chief personnel officer or chief legal officer of PepsiCo (or either of their
delegates), provided, however, that (i) no such amendment shall be adverse to the Participant
(except to the extent the Board reasonably determines that such amendment is necessary or
appropriate to comply with applicable law or the rules and regulations of any stock exchange on
which PepsiCo Common Stock is listed or quoted); and (ii) the amendment must be permitted under the
Plan. The failure to exercise, or any delay in exercising, any right, power or remedy under this
Agreement shall not waive any right, power or remedy which the Board, the Committee or the Company
has under this Agreement.

16. Severability or Reform by Court. In the event that any provision of this Agreement
is deemed by a court to be broader than permitted by applicable law, then such provision shall be
reformed (or otherwise revised or narrowed) so that it is enforceable to the fullest extent
permitted by applicable law. If any provision of this Agreement shall be declared by a court to be
invalid or unenforceable to any extent, the validity or enforceability of the remaining provisions
of this Agreement shall not be affected.

17. Prospectus and Award Acceptance. The Participant will be provided a copy of
PepsiCo’s Prospectus relating to the Plan, the Options and the shares covered thereby. By signing
the Award Summary, the Participant agrees that he or she has reviewed the Prospectus, and fully
understands his or her rights under the Plan. Unless and until the Participant signs the Award
Summary and returns the Agreement to the Company, notwithstanding the other terms of this
Agreement, the Participant shall not be entitled to the proceeds of any Option exercise.

18. Plan Controls. The Options and the terms and conditions set forth herein are
subject in all respects to the terms and conditions of the Plan and any guidelines, policies or
regulations which govern administration of the Plan, which shall be controlling. The Committee
reserves its rights to amend or terminate the Plan at any time without the consent of the
Participant; provided, however, that Options outstanding under the Plan at the time of such action
shall not be adversely affected thereby (except to the extent the Committee reasonably determines
that such amendment or termination is necessary or appropriate to comply with applicable law or the
rules and regulations of any stock exchange on which PepsiCo Common Stock is listed or quoted). All
interpretations or determinations of the Committee or its delegate shall be final, binding and
conclusive upon the Participant (and his or her legal representatives and any recipient of a
transfer of the Options permitted by this Agreement) on any question arising hereunder or under the
Plan, or other guidelines, policies or regulations which govern administration of the Plan.

19. Participant Acknowledgements. By entering into this Agreement, the Participant
acknowledges and agrees that:

(a) the Option grant will be exclusively governed by the terms of the Plan, including the
right reserved by the Company to amend or cancel the Plan at any time without the Company incurring
liability to the Participant (except for Options already granted under the Plan);

(b) stock options are not a constituent part of the Participant’s salary and that the
Participant is not entitled, under the terms and conditions of his/her employment, or by accepting
or being awarded the Options pursuant to this Agreement to require options or other awards to be
granted to him/her in the future under the Plan or any other plan;

(c) upon exercise of the Options the Participant will arrange for payment to the Company an
estimated amount to cover employee payroll taxes resulting from the exercise and/or, to the extent
necessary, any balance may be withheld from the Participant’s wages;

(d) benefits received under the Plan will be excluded from the calculation of termination
indemnities or other severance payments;

(e) in the event of termination of the Participant’s employment, a severance or notice period
to which the Participant may be entitled under local law and which follows the date of termination
specified in a notice of termination will not be treated as active employment for purposes of this
Agreement and, as a result, vesting of unvested Options will not be extended by any such period;

(f) the Participant will seek all necessary approval under, make all required notifications
under and comply with all laws, rules and regulations applicable to the ownership of stock options
and stock and the exercise of stock options, including, without limitation, currency and exchange
laws, rules and regulations; and

(g) this Agreement will be interpreted and applied so that the Options will not be subject to
Section 409A of the Internal Revenue Code of 1986, as amended.

20. No Rights as Shareholder. The Participant shall have no rights as a holder of
PepsiCo Common Stock with respect to the Options granted hereunder unless and until such Options
are exercised and the shares have been registered in the Participant’s name as owner.

21. Governing Law. This Agreement shall be governed by, construed and enforced in
accordance with the laws of North Carolina, without giving effect to conflict of laws principles.

22. Entire Agreement. This Agreement constitutes the entire understanding between the
parties to this Agreement.

1

PepsiCo Stock Option Retention Award Summary

Executive Name:

Grant Date:

AWARD DETAILS

STOCK OPTIONS AWARD

Stock Options Award Face Value: $

Option Exercise (Grant) Price: $

Number of Options Granted:

Vesting Dates*:

     Options shall vest on      

     Options shall vest on      

Expiration Date:

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

I accept my PepsiCo Stock Option Retention Award as described above, subject to all the terms
and conditions set forth in the attached.

	 	 	 	 	 
	 

{Executive Name}

Date:

 

	 	 

 

 

 
	 	 

{Name/Title of PepsiCo Officer}

Sign and date this page. Fax entire agreement to PepsiCo Executive Compensation Dept. no
later than {Date}. Fax number {x-xxx-xxx-xxxx}.

2EX-10.4

Exhibit 10.4

PEPSICO RESTRICTED STOCK UNIT RETENTION AWARD

RESTRICTED STOCK UNITS TERMS AND CONDITIONS

These Terms and Conditions, along with the PepsiCo Restricted Stock Unit Retention Award
Summary (the “Award Summary”) delivered herewith and signed by the individual named on the Award
Summary (the “Participant”) shall constitute an Agreement made as of the Grant Date (as indicated
on the Award Summary), by and between PepsiCo, Inc., a North Carolina corporation having its
principal office at 700 Anderson Hill Road, Purchase, New York 10577 (“PepsiCo,” and with its
divisions and direct and indirect subsidiaries, the “Company”), and the Participant.

W I T N E S S E T H:

WHEREAS, the Board of Directors and shareholders of PepsiCo have approved the PepsiCo, Inc.
2007 Long-Term Incentive Plan (the “Plan”), for the purposes and subject to the provisions set
forth in the Plan; and

WHEREAS, the Compensation Committee of the Board of Directors of PepsiCo (the “Committee”)
authorizes retention long-term incentive awards to executives of the Company subject to Section 16
of the Securities Exchange Act of 1934 and, pursuant to the authority granted to it in said Plan,
the Committee, by resolution duly adopted at a meeting held on March 15, 2007, delegated to the
Chief Executive Officer of PepsiCo (and his or her designees) the authority to make retention
long-term incentive awards to other existing or newly hired executives of the Company; and

WHEREAS, awards granted under the Plan are to be evidenced by an Agreement in such form and
containing such terms and conditions as the Committee shall determine;

NOW, THEREFORE, it is mutually agreed as follows:

These terms and conditions shall apply with respect to the restricted stock units granted to
the Participant as indicated on the Award Summary.

1. Grant. In consideration of the Participant remaining in the employ of the Company,
PepsiCo hereby grants to the Participant, on the terms and conditions set forth herein, the number
of restricted stock units indicated on the Award Summary (the “Restricted Stock Units”).

2. Vesting. Subject to the terms and conditions set forth herein, the Restricted Stock
Units shall become vested as indicated on the Award Summary (the “Vesting Date”) and shall be
payable as soon as practicable after that date. Restricted Stock Units may vest only while the
Participant is actively employed by the Company.

3. Payment. Restricted Stock Units that vest and become payable shall be settled in
shares of PepsiCo Common Stock with the Participant receiving one share of PepsiCo Common Stock for
each vested Restricted Stock Unit. Any amount that the Company may be required to withhold upon the
settlement of Restricted Stock Units and/or the payment of dividend equivalents (see Section 5
below) in respect of applicable foreign, federal (including FICA), state and local taxes, must be
paid in full at the time of the issuance of shares or payment of cash. Unless the Participant makes
other arrangements to satisfy this withholding obligation in accordance with procedures approved by
the Company in its discretion, the Company shall withhold shares to satisfy the required
withholding obligation related to the settlement of Restricted Stock Units.

4. Effect of Termination of Employment, Retirement, Death, and Total Disability.

(a) Termination of Employment. Restricted Stock Units may vest and become payable only
while the Participant is actively employed by the Company. Thus, vesting ceases upon the
termination of the Participant’s active employment with the Company. Subject to subparagraphs 4(b)
and 4(c), all unvested Restricted Stock Units shall automatically be forfeited and canceled upon
the date that the Participant’s active employment with the Company terminates. An authorized leave
of absence will not be treated as active employment, and, as a result, the vesting of Restricted
Stock Units will not be extended by any such period.

(b) Death or Total Disability. If the Participant’s employment with the Company
terminates by reason of the Participant’s death or Total Disability (as defined below), then a
whole number of Restricted Stock Units shall vest on the Participant’s last day of active
employment with the Company (which, for purposes of Total Disability, means the effective date of
Total Disability), with such number determined in proportion to the Participant’s active service
(measured in calendar days) during the period commencing on the Grant Date and ending on the
Vesting Date, shall be payable as soon as practicable after that date, subject to the terms and
conditions of this Agreement.

(c) Transfers to a Related Entity. In the event the Participant transfers to a Related
Entity (as defined below), as a result of actions by PepsiCo, the Restricted Stock Units shall
become fully vested on the date of such transfer and shall be payable as soon as practicable after
that date.

(d) Retirement. For purposes of clarity of Paragraph 4(a) and not of limitation, in
the event that prior to the vesting of the Restricted Stock Units the Participant ceases active
employment with the Company by reason of the Participant’s Retirement (as defined below), then all
unvested Restricted Stock Units shall automatically be forfeited and canceled upon the date that
the Participant’s active employment with the Company terminates.

5. Dividend Equivalents. During the vesting period, the Participant shall accumulate
dividend equivalents with respect to the Restricted Stock Units, which dividend equivalents shall
be paid in cash (without interest) to the Participant only if and when the applicable Restricted
Stock Units vest and become payable. Dividend equivalents shall equal the dividends actually paid
with respect to PepsiCo Common Stock during the vesting period while (and to the extent) the
Restricted Stock Units remain outstanding and unpaid.

6. Prohibited Conduct.

(a) The Participant agrees that, at any time prior to the vesting and payment of the
Restricted Stock Units granted hereunder, and for a period of twelve months after the later of (i)
the vesting and payment of the Restricted Stock Units or (ii) termination of the Participant’s
employment with the Company for any reason whatsoever (including retirement or Total Disability),
he or she will not engage in any of the following activities anywhere in the world:

(1) Non-Competition. Participant shall not accept any employment, assignment, position
or responsibility, or acquire any ownership interest, which involves the Participant’s
Participation in a business entity that markets, sells, distributes or produces Covered Products,
unless such business entity makes retail sales or consumes Covered Products without in any way
competing with the Company.

(2) Raiding Employees. Participant shall not in any way, directly or indirectly
(including through someone else acting on the Participant’s recommendation, suggestion,
identification or advice), solicit any Company employee to leave the Company’s employment or to
accept any position with any other entity.

(3) Non-Disclosure. Participant shall not use or disclose to anyone any confidential
information regarding the Company other than as necessary in his or her position with the Company.
Such confidential information shall include all non-public information the Participant acquired as
a result of his or her positions with the Company which might be of any value to a competitor of
the Company, or which might cause any economic loss or substantial embarrassment to the Company or
its customers, bottlers, distributors or suppliers if used or disclosed. Examples of such
confidential information include, without limitation, non-public information about the Company’s
customers, suppliers, distributors and potential acquisition targets; its business operations and
structure; its product lines, formulas and pricing; its processes, machines and inventions; its
research and know-how; its financial data; and its plans and strategies.

(4) Misconduct. Participant shall not engage in any acts that are considered to be
contrary to the Company’s best interests, including, but not limited to, violating the Company’s
Code of Conduct, engaging in unlawful trading in the securities of PepsiCo or of any other company
based on information gained as a result of his or her employment with the Company, or engaging in
any other activity which constitutes gross misconduct.

(b) In the event the Company determines that the Participant has breached any term of
Paragraph 6(a), in addition to any other remedies the Company may have available to it, the Company
may in its sole discretion:

(1) Cancel any unvested Restricted Stock Units granted hereunder; and/or

(2) Require the Participant to pay to the Company the value of any Restricted Stock Units
(determined as of the date the restrictions on such Restricted Stock Units lapse), which have been
paid within the twelve-month period immediately preceding the date as of which the Participant has
breached a provision of Paragraph 6(a), as determined by the Company.

7. Adjustment for Change in Common Stock. In the event of any change in the
outstanding shares of PepsiCo Common Stock by reason of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, combination or exchange of shares,
spin-off or other similar corporate change, the number and type of shares to which the Restricted
Stock Units held by the Participant relate shall be adjusted as may be, and to such extent (if
any), determined to be appropriate and equitable by the Committee.

8. Effect of Change in Control. In the event of a Change in Control (as defined in the
Plan), the following provisions shall apply:

(a) If the successor corporation (or affiliate thereto) (1) assumes the outstanding Restricted
Stock Units granted hereunder or (2) replaces the outstanding Restricted Stock Units with equity
awards that preserve the existing value of such Restricted Stock Units at the time of the Change in
Control and provide for subsequent payout in accordance with a vesting schedule that is the same or
more favorable to the Participant than the vesting schedule applicable to such Restricted Stock
Units, then the outstanding Restricted Stock Units or such substitutes thereof shall remain
outstanding and be governed by their respective terms and the provisions of the Plan, subject to
Paragraph 8(c) below.

(b) If the outstanding Restricted Stock Units granted hereunder are not assumed or replaced in
accordance with Paragraph 8(a) above, then upon the Change in Control, (1) the outstanding
Restricted Stock Units granted hereunder shall immediately vest and shall be payable immediately in
accordance with their terms or, if later, as of the earliest permissible date under Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”) and (2), notwithstanding
Paragraph 8(b)(1) but after taking into account the accelerated vesting set forth therein, the
Board may, in its sole discretion, provide for cancellation of the outstanding Restricted Stock
Units at the time of the Change in Control in which case a payment of cash, property or a
combination thereof shall be made to the Participant that is determined by the Board in its sole
discretion and that is at least equal to the value of the consideration that would be received in
such Change in Control by the holders of PepsiCo’s securities relating to such awards.

(c) If the outstanding Restricted Stock Units granted hereunder are assumed or replaced in
accordance with Paragraph 8(a) and the Participant’s employment with the Company is terminated by
the Company for any reasons other than Cause or by the Participant for Good Reason, in each case,
within the two-year period commencing on the Change in Control, then, as of the date of the
Participant’s termination, the outstanding Restricted Stock Units granted hereunder shall
immediately vest and shall be payable immediately in accordance with their terms or, if later, as
of the earliest permissible date under Code Section 409A. For purposes of this Paragraph 8, “Cause”
and “Good Reason” are defined in the Plan and a termination for Cause or Good Reason is subject to
the terms and conditions set forth in the Plan.

9. Nontransferability. Unless the Committee specifically determines otherwise: (a) the
Restricted Stock Units are personal to the Participant and (b) the Restricted Stock Units shall not
be transferable or assignable, other than in the case of the Participant’s death by will, the laws
of descent and distribution.

10. Definitions. As used in this Agreement, the following terms shall have the
meanings set forth below:

(a) “Covered Products” means any product which falls into one or more of the following
categories, so long as the Company is producing, marketing, selling or licensing such product
anywhere in the world: beverages, including without limitation carbonated soft drinks, tea, water,
juice drinks, sports drinks, coffee drinks, and value added dairy drinks; juices and juice
products; snacks, including salty snacks, sweet snacks, meat snacks, granola and cereal bars, and
cookies; hot cereals; pancake mixes; value-added rice products; pancake syrup; value-added pasta
products; ready-to-eat cereals; dry pasta products; or any product or service which the Participant
had reason to know was under development by the Company during the Participant’s employment with
the Company.

(b) “Participation” shall be construed broadly to include, without limitation: (i) serving as
a director, officer, employee, consultant or contractor with respect to such a business entity;
(ii) providing input, advice, guidance or suggestions to such a business entity; or (iii) providing
a recommendation or testimonial on behalf of such a business entity or one or more products it
produces.

(c) “Related Entity” shall mean any entity as to which the Company directly or indirectly owns
20% or more of the entity’s voting securities, general partnership interests, or other voting or
management rights.

(d) “Retirement” shall mean (i) early, normal or late retirement under the U.S. pension plan
of the Company in which the Participant participates (if any), (ii) retirement as explicitly set
out in an individual agreement between the Company and the Participant for this purpose in effect
on the Grant Date, (iii) termination of employment after attaining at least age 55 with at least
10 years of service with the Company (or, if earlier, after attaining at least age 65 and
completing at least five years of service with the Company), or (iv) retirement as otherwise
determined by the Committee.

(e) “Total Disability” shall mean becoming totally and permanently disabled, as determined for
purposes of the Company’s Long Term Disability Plan (or in the absence of such Disability Plan
being applicable to the Participant, as determined by the Committee in its sole discretion).

11. Notices. Any notice to be given to PepsiCo in connection with the terms of this
Agreement shall be addressed to PepsiCo at Purchase, New York 10577, Attention: Vice President,
Compensation, or such other address as PepsiCo may hereafter designate to the Participant. Any such
notice shall be deemed to have been duly given when personally delivered, addressed as aforesaid,
or when enclosed in a properly sealed envelope or wrapper, addressed as aforesaid, and deposited,
postage prepaid, with the federal postal service.

12. Binding Effect.

(a) This Agreement shall be binding upon and inure to the benefit of any assignee or successor
in interest to PepsiCo, whether by merger, consolidation or the sale of all or substantially all of
PepsiCo’s assets. PepsiCo will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business and/or assets of
PepsiCo expressly to assume and agree to perform this Agreement in the same manner and to the same
extent that PepsiCo would be required to perform it if no such succession had taken place.

(b) This Agreement shall be binding upon and inure to the benefit of the Participant or his or
her legal representative and any person to whom the Restricted Stock Units may be transferred by
will or the applicable laws of descent and distribution.

13. No Contract of Employment; Agreement’s Survival. This Agreement is not a contract
of employment, nor does it impose on the Company any obligation to retain the Participant in its
employ. This Agreement shall survive the termination of the Participant’s employment for any
reason.

14. Registration, Listing and Qualification of Shares. The Committee may require that
the Participant make such representations and agreements and furnish such information as the
Committee deems appropriate to assure compliance with or exemption from the requirements of any
securities exchange, any foreign, federal, state or local law, any governmental regulatory body, or
any other applicable legal requirement, and PepsiCo Common Stock shall not be issued unless and
until the Participant makes such representations and agreements and furnished such information as
the Committee deems appropriate.

15. Amendment; Waiver. The terms and conditions of this Agreement may be amended in
writing by the chief personnel officer or chief legal officer of PepsiCo (or either of their
delegates), provided, however, that (i) no such amendment shall be adverse to the Participant
(except to the extent the Committee reasonable determines that such amendment is necessary or
appropriate to comply with applicable law or the rules and regulations of any stock exchange on
which PepsiCo Common Stock is listed or quoted); and (ii) the amendment must be permitted under the
Plan. The failure to exercise, or any delay in exercising, any right, power or remedy under this
Agreement shall not waive any right, power or remedy which the Board, the Committee or the Company
has under this Agreement.

16. Severability or Reform by Court. In the event that any provision of this Agreement
is deemed by a court to be broader than permitted by applicable law, then such provision shall be
reformed (or otherwise revised or narrowed) so that it is enforceable to the fullest extent
permitted by applicable law. If any provision of this Agreement shall be declared by a court to be
invalid or unenforceable to any extent, the validity or enforceability of the remaining provisions
of this Agreement shall not be affected.

17. Prospectus and Award Acceptance. The Participant has been provided a copy of
PepsiCo’s Prospectus relating to the Plan and the Restricted Stock Units. By signing the Award
Summary, the Participant agrees that he or she has reviewed the Prospectus, and fully understands
his or her rights under the Plan. Unless and until the Participant signs the Award Summary and
returns the Agreement to the Company, notwithstanding the other terms of this Agreement, the
Participant shall not be entitled to any Restricted Stock Unit payment.

18. Plan Controls. The Restricted Stock Units and the terms and conditions set forth
herein are subject in all respects to the terms and conditions of the Plan and any guidelines,
policies or regulations which govern administration of the Plan, which shall be controlling. The
Committee reserves its rights to amend or terminate the Plan at any time without the consent of the
Participant; provided, however, that Restricted Stock Units outstanding under the Plan at the time
of such action shall not be adversely affected thereby (except to the extent the Committee
reasonably determines that such amendment or termination is necessary or appropriate to comply with
applicable law or the rules and regulations of any stock exchange on which PepsiCo Common Stock is
listed or quoted). All interpretations or determinations of the Committee or its delegate shall be
final, binding and conclusive upon the Participant (and his or her legal representatives and any
recipient of a transfer of the Restricted Stock Units permitted by this Agreement) on any question
arising hereunder or under the Plan or other guidelines, policies or regulations which govern
administration of the Plan.

19. Participant Acknowledgements. By entering into this Agreement, the Participant
acknowledges and agrees that:

(a) the Restricted Stock Unit grant will be exclusively governed by the terms of the Plan,
including the right reserved by the Company to amend or cancel the Plan at any time without the
Company incurring liability to the Participant (except for Restricted Stock Units already granted
under the Plan);

(b) restricted stock units are not a constituent part of the Participant’s salary and the
Participant is not entitled, under the terms and conditions of his/her employment, or by accepting
or being awarded the Restricted Stock Units pursuant to this Agreement to require restricted stock
units or other awards to be granted to him/her in the future under the Plan or any other plan;

(c) upon vesting of Restricted Stock Units the Participant will arrange for payment to the
Company an estimated amount to cover employee payroll taxes resulting from the exercise and/or, to
the extent necessary, any balance may be withheld from the Participant’s wages;

(d) benefits received under the Plan will be excluded from the calculation of termination
indemnities or other severance payments;

(e) in the event of termination of the Participant’s employment, a severance or notice period
to which the Participant may be entitled under local law and which follows the date of termination
specified in a notice of termination will not be treated as active employment for purposes of this
Agreement and, as a result, vesting of Restricted Stock Units will not be extended by any such
period;

(f) the Participant will seek all necessary approval under, make all required notifications
under and comply with all laws, rules and regulations applicable to the ownership of stock
including, without limitation, currency and exchange laws, rules and regulations; and

(g) this Agreement will be interpreted and applied so that the Restricted Stock Units will not
be subject to Code Section 409A. If notwithstanding the preceding sentence, the Restricted Stock
Units become subject to Code Section 409A, then the specified time of payment of the Restricted
Stock Units for purposes of Code Section 409A shall be the calendar year in which the short-term
deferral period expires with respect to the Restricted Stock Unit (or by such later time as may be
permitted by Code Section 409A under the circumstances).

20. No Rights as Shareholder. The Participant shall have no rights as a holder of
PepsiCo Common Stock with respect to the Restricted Stock Units granted hereunder unless and until
such Restricted Stock Units have been settled in shares of Common Stock that have been registered
in the Participant’s name as owner.

21. Governing Law. This Agreement shall be governed by, construed and enforced in
accordance with the laws of North Carolina, without giving effect to conflict of laws principles.

22. Entire Agreement. This Agreement constitutes the entire understanding between the
parties to this Agreement.

1

PEPSICO RESTRICTED STOCK UNIT RETENTION AWARD SUMMARY

Participant Name:

Grant Date:

Grant Price: $

AWARD DETAILS

RESTRICTED STOCK UNITS AWARD

US Dollar Value Retention Award: $

Restricted Stock Unit Award Value: $

Grant Date:

Grant Price: $

Number of Restricted Stock Units Granted:

Vesting Date(s)*:

* Vesting is subject to the terms and conditions of the award.

I accept my PepsiCo Restricted Stock Unit Retention Award as described above, subject to all the
terms and conditions set forth in the attached.

	 	 	 	 	 
	 

 

{Executive Name}

 

Date:

 

	 	 

 

 

 

 

 
	 	 

{Name/Title of PepsiCo Officer}

 

Sign and date this page. Fax entire agreement to PepsiCo Executive Compensation Dept. no later
than {Date}. Fax number {x-xxx-xxx-xxxx}.

2

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