Document:

EX-10.2

Exhibit 10.2

PEPSICO ANNUAL LONG-TERM INCENTIVE AWARD

STOCK OPTION / RESTRICTED STOCK UNITS TERMS AND CONDITIONS

These Terms and Conditions, along with the PepsiCo Annual Long-Term Incentive 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 2003 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 and/or
restricted stock units set forth on the Award Summary; and

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

NOW, THEREFORE, it is mutually agreed as follows:

A. Terms and Conditions Applicable to Stock Options. These terms and conditions shall
apply with respect to the stock options, if any, 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 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 Options shall become fully vested on the vesting date set forth in the Award Summary (the
“Vesting Date”) and shall be exercisable from the 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 (and
thus extend when Options may be exercised). However, an authorized leave will not extend the time
to exercise Options to the extent the extension would cause the Options to be subject to
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and an authorized leave
will not increase vesting.

(b) Retirement Prior to Age 62. If the Participant’s employment terminates prior to
the Vesting Date, by reason of the Participant’s Retirement (as defined below) prior to attaining
at least age 62, then: (i) a portion of the Options shall vest on the Participant’s last day of
active employment with the Company, 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; (ii) the Options shall continue to become exercisable in accordance
with Paragraph A.2 of 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 may be exercised by the
Participant prior to the Expiration Date in accordance with this Agreement.

(c) Death, Total Disability, or Retirement on or After Age 62. If the Participant’s
employment terminates by reason of the Participant’s death, Total Disability (as defined below), or
Retirement after attaining at least age 62, then: (i) the Options shall become fully vested 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); (ii) the Options shall continue to
become exercisable in accordance with Paragraph A.2 of this Agreement, with no change in the
earliest date of exercise as a result of the vesting provided by this subparagraph 4(c); and
(iii) the Options 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 Retirement or Total Disability, prior to the
Expiration Date in accordance with this Agreement.

(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. Buy-Out of Option Gains. Except as provided in Paragraph C.3, 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.

6. 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.

B. Terms and Conditions Applicable to Restricted Stock Units. These terms and
conditions shall apply with respect to the restricted stock units, if any, 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 and subparagraphs
2(a) and (b) below, the Restricted Stock Units shall become fully vested on 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. The Restricted Stock Units payable pursuant to
the preceding sentence shall be reduced by any Restricted Stock Units that are paid pursuant to
subparagraphs (a) and (b) below.

(a) Eligibility for Retirement Prior to Age 62. A Participant shall be vested in 33%
of his Restricted Stock Units on the first February 1 that follows the Grant Date if on such
February 1 the Participant: (i) is eligible for Retirement, (ii) is not yet age 62, and (iii) has
been actively employed by the Company continuously since the Grant Date. This vested portion shall
be paid as soon as practicable after this February 1. A Participant shall be vested in 66% of his
Restricted Stock Units on the second February 1 that follows the Grant Date if on such February 1
the conditions in (i), (ii) and (iii) of this Paragraph B.2(a) are satisfied. This vested portion
shall be paid as soon as practicable after this second February 1 (net of any Restricted Stock
Units previously paid out).

(b) Eligibility for Retirement on or After Age 62. A Participant shall be fully vested
in his Restricted Stock Units on the first February 1 that follows the Grant Date if on such
February 1 the Participant: (i) is eligible for Retirement, (ii) is at least age 62, and (iii) has
been actively employed by the Company continuously since the Grant Date. The Participant’s
Restricted Stock Units shall be payable as soon as practicable after this February 1. A Participant
shall be fully vested in his Restricted Stock Units on the second February 1 that follows the Grant
Date if on such February 1 the conditions in (i), (ii) and (iii) of this Paragraph B.2(b) are
satisfied. The Participant’s Restricted Stock Units shall be payable as soon as practicable after
this second February 1 (net of any Restricted Stock Units previously paid out).

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. No fractional shares shall be delivered under this Agreement,
and so any fractional share that may be payable shall be rounded to the nearest whole share. 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 B.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, Death, Retirement 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),
4(c) and 4(d), all unvested Restricted Stock Units shall automatically be forfeited and canceled
upon the date that the Participant’s active employment with the Company terminates.

(b) Retirement Prior to Age 62. If the Participant’s employment terminates prior to
the Vesting Date, by reason of the Participant’s Retirement prior to attaining age 62, then a whole
number of Restricted Stock Units shall vest on the Participant’s last day of active employment with
the Company, 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, and shall be payable as soon as practicable after that date (net of any Restricted
Stock Units previously paid out).

(c) Death, Total Disability, or Retirement on or After Age 62. If the Participant’s
employment terminates by reason of the Participant’s death, Total Disability (as defined below), or
Retirement after attaining at least age 62, then the Restricted Stock Units shall become fully
vested 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) and will be payable as soon as
practicable after that date (net of any Restricted Stock Units previously paid out).

(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 Restricted Stock Units shall
become fully vested on the date of such transfer and shall be payable as soon as practicable after
that date (net of any Restricted Stock Units previously paid out).

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. 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.

C. Terms and Conditions Applicable to Stock Options and Restricted Stock Units.

1. Prohibited Conduct.

(a) The Participant agrees that, at any time prior to the exercise of the Options or vesting
of the Restricted Stock Units granted hereunder, and for a period of twelve months after the later
of (i) completion of all such exercises of Stock Options, (ii) vesting of Restricted Stock Units or
(iii) 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 C.1(a), 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 or unvested Restricted Stock Units granted hereunder;

(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 as of which the Participant has breached a provision of Paragraph C.1(a), as
determined by the Company; and/or

(3) Require the Participant to pay to the Company the value (determined as of the Vesting
Date) of any Restricted Stock Units, which have vested within the twelve-month period immediately
preceding the date as of which the Participant has breached a provision of Paragraph C.1(a), as
determined by the Company.

2. 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, (a) 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, and (b) the number and type of shares to which the
Restricted Stock Units held by the Participant relate shall be adjusted, in the case of (a) and
(b), as may be, and to such extent (if any), determined to be appropriate and equitable by the
Committee.

3. 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
and Restricted Stock Units granted hereunder or (2) replaces the outstanding Options and Restricted
Stock Units with equity awards that preserve the existing value of such Options and 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 Options and Restricted Stock Units, then the outstanding Options and
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 C.3(c) below.

(b) If the outstanding Options and Restricted Stock Units granted hereunder are not assumed
or replaced in accordance with Paragraph C.3(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 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 and (2),
notwithstanding Paragraph C.3(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
and 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, in the case of the Restricted Stock Units, 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 and, in the case of the outstanding Options, 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 and Restricted Stock Units granted hereunder are assumed or
replaced in accordance with Paragraph C.3(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, (1) the outstanding Options granted hereunder shall immediately
vest and become exercisable and shall remain outstanding until the Expiration Date and (2) 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 C.3, “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.

4. Nontransferability. Unless the Committee specifically determines otherwise: (a) the
Options and Restricted Stock Units are personal to the Participant and, with respect to Options,
during the Participant’s lifetime, such Options may be exercised only by the Participant, and
(b) the Options and 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.

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

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

(b) “Fair Market Value” of a share of PepsiCo Common Stock on any date shall mean an amount
equal to the mean of the high and low sales prices for a share of PepsiCo Common Stock as reported
on the composite tape for securities listed on The New York Stock Exchange, Inc. on the date in
question (or if no sales of Common Stock were made on said Exchange on such date, on the next
preceding day on which sales were made on such Exchange), rounded up to 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 (provided that such determination does not cause the Award to be
subject to Section 409A of the Code).

(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).

6. 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.

7. Binding Effect.

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

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

8. No Contract of Employment; Agreement‘s Survival. This Agreement is not a
contract of employment, 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.

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

10. Amendment; Waiver. The terms and conditions of this Agreement may be amended in
writing by the chief personnel officer or chief legal officer of PepsiCo (or either of their
delegates), provided, however, that (i) no such amendment shall be adverse to the Participant
(except as necessary to comply with applicable law, including the provisions of Code Section 409A
and the regulations thereunder pertaining to the deferral of compensation); 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.

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

12. Prospectus and Award Acceptance. The Participant has been provided a copy of
PepsiCo’s Prospectus relating to the Plan, the Options and the shares covered thereby, 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 the proceeds of any
Option exercise or Restricted Stock Unit payment.

13. Plan Controls. The Options, 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 Board reserves its rights to amend or terminate the Plan at any time without the
consent of the Participant; provided, however, that Options and Restricted Stock Units outstanding
under the Plan at the time of such action shall not be adversely affected thereby (except as
necessary to comply with applicable law). 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 or 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.

14. Rights to Future Grants; Compliance with Law; Section 409A. By entering into this
Agreement, the Participant acknowledges and agrees that: (a) the Option and/or 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 Options and Restricted Stock Units already granted under the Plan),
(b) stock options and restricted stock units 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 and/or Restricted Stock Units pursuant to this Agreement
to require options, restricted stock units 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 or 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) 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 (f) this Agreement will be interpreted and applied so that the Options and 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).

15. 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.

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

1

PepsiCo Annual Long-Term Incentive Award Summary

Executive Name:

Grant Date:

Grant Price: $

CORE ANNUAL AWARD

Restricted Stock Units:

Stock Options:

CORE ANNUAL AWARD DETAILS

RESTRICTED STOCK UNITS AWARD

US Dollar Value Core Annual Award:

Percentage RSU:

Restricted Stock Unit Award Value:

Grant Price: $

Number of Restricted Stock Units Granted:

Vesting Date*:

STOCK OPTIONS AWARD

US Dollar Value Core Annual Award:

Percentage Stock Options:

Stock Option Award Value:

Conversion Factor: 4x

Stock Option Award Face Value:

Option Exercise (Grant) Price: $

Number of Options Granted:

Vesting Date*:

Expiration Date:

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

I accept my PepsiCo Annual Long-Term Incentive 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-10.3

Exhibit 10.3

PEPSICO PERFORMANCE-BASED LONG-TERM INCENTIVE AWARD

STOCK OPTION / RESTRICTED STOCK UNITS TERMS AND CONDITIONS

These Terms and Conditions, along with the PepsiCo Performance-Based Long-Term Incentive 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 2003 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 and
restricted stock units set forth on the Award Summary; and

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

NOW, THEREFORE, it is mutually agreed as follows:

A. Terms and Conditions Applicable to Stock Options. These terms and conditions shall
apply with respect to the stock options granted to the Participant as indicated on the Award
Summary.

1. Grant. In consideration of the Participant remaining in the employ of the Company,
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 Options shall become fully vested on the vesting date set forth in the Award Summary (the
“Vesting Date”) and shall be exercisable from the 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 (and
thus extend when Options may be exercised). However, an authorized leave will not extend the time
to exercise Options to the extent the extension would cause the Options to be subject to
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and an authorized leave
will not increase vesting.

(b) Retirement Prior to Age 62. If the Participant’s employment terminates prior to
the Vesting Date, by reason of the Participant’s Retirement (as defined below) prior to attaining
at least age 62, then: (i) a portion of the Options shall vest on the Participant’s last day of
active employment with the Company, 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; (ii) the Options shall continue to become exercisable in accordance
with Paragraph A.2 of 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 may be exercised by the
Participant prior to the Expiration Date in accordance with this Agreement.

(c) Death, Total Disability, or Retirement on or After Age 62. If the Participant’s
employment terminates by reason of the Participant’s death, Total Disability (as defined below), or
Retirement after attaining at least age 62, then: (i) the Options shall become fully vested 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); (ii) the Options shall continue to
become exercisable in accordance with Paragraph A.2 of this Agreement, with no change in the
earliest date of exercise as a result of the vesting provided by this subparagraph 4(c); and
(iii) the Options 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 Retirement or Total Disability, prior to the
Expiration Date in accordance with this Agreement.

(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. Buy-Out of Option Gains. Except as provided in Paragraph C.3, 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.

6. 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.

B. Terms and Conditions Applicable to Restricted Stock Units. 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”). All
Restricted Stock Units granted hereunder are intended to be Performance Awards (as defined in the
Plan) that satisfy the conditions for the Performance Based Exception (as defined in the Plan)
under Section 162(m) of the Code.

2. Payment. Subject to Paragraphs B.3 and B.4 below, the Restricted Stock Units shall
vest on the Vesting Date and be payable as soon as practicable after such date (the “Payment
Date”). Restricted Stock Units that become payable shall be settled in shares of PepsiCo Common
Stock with the Participant receiving one share of PepsiCo Common Stock for each Restricted Stock
Unit. No fractional shares shall be delivered under this Agreement, and so any fractional share
that may be payable shall be rounded to the nearest whole share. 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 Paragraph B.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 will withhold
shares to satisfy the required withholding obligation related to the settlement of Restricted Stock
Units.

3. Forfeiture of Restricted Stock Units. The number of Restricted Stock Units that are
payable shall be determined based on the achievement of performance targets. Subject to the terms
and conditions set forth herein, the Restricted Stock Units shall be subject to forfeiture as
follows:

(a) The payment of one-third of the Restricted Stock Units shall be determined based on the
achievement of specific {Year} performance targets. The specific performance targets and the
percentage of the one-third of the Restricted Stock Units that shall be forfeited if such targets
are not achieved shall be established by the Committee in the first ninety (90) days of {Year}.

(b) The payment of one-third of the Restricted Stock Units shall be determined based on the
achievement of specific {Year+1} performance targets. The specific performance targets and the
percentage of the one-third of the Restricted Stock Units that shall be forfeited if such targets
are not achieved shall be established by the Committee in the first ninety (90) days of {Year+1}.

(c) The payment of one-third of the Restricted Stock Units shall be determined based on the
achievement of specific {Year+2} performance targets. The specific performance targets and the
percentage of the one-third of the Restricted Stock Units that shall be forfeited if such targets
are not achieved shall be established by the Committee in the first ninety (90) days of {Year+2}.

(d) Notwithstanding the achievement of any performance targets established under Paragraphs
B.3(a), (b) and (c) above, the Committee has the discretion to reduce the number of Restricted
Stock Units paid, subject to and in accordance with the Plan. In the case of a Participant’s death
or Total Disability (as defined below), the Committee’s right to exercise this discretion shall
expire with respect to each one-third of the Restricted Stock Units at the later of: (i) the
Participant’s death or Total Disability (whichever applies), or (ii) the date the Committee
certifies the results for the specific performance targets that relate to such one-third of the
Restricted Stock Units. In all other cases, the Committee’s right to exercise this discretion with
respect to 100% of the Restricted Stock Units shall continue until the Payment Date. Accordingly,
except in the case of death or Total Disability, the Restricted Stock Units for which a Participant
has satisfied the performance criteria will be payable in one payment on the Payment Date.

4. Effect of Termination of Employment, Death, Retirement 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),
4(c) and 4(d), all unvested Restricted Stock Units shall automatically be forfeited and canceled
upon the date that the Participant’s active employment with the Company terminates.

(b) Retirement Prior to Age 62. If the Participant’s employment terminates prior to
the Vesting Date, by reason of the Participant’s Retirement (as defined below) prior to attaining
at least age 62, then a whole number of Restricted Stock Units shall vest on the Participant’s last
day of active employment with the Company, 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. All Restricted Stock Units that vest in accordance with the
foregoing sentence shall remain subject to the payment and forfeiture provisions of Paragraphs B.2
and B.3.

(c) Death, Total Disability, or Retirement on or After Age 62. If the Participant’s
employment terminates by reason of the Participant’s death, Total Disability (as defined below), or
Retirement after attaining at least age 62, then the Restricted Stock Units shall become fully
vested 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). All such vested Restricted Stock
Units shall remain subject to the payment and forfeiture provisions of Paragraphs B.2 and B.3,
except that in the case of death or Total Disability payment of each one-third of the Restricted
Stock Units will be made as soon as practicable after the Committee’s right to exercise discretion
with respect to such one-third expires in accordance with Paragraph B.3(d).

(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 Restricted Stock Units shall
become fully vested on the Participant’s last day of active employment with the Company. All such
vested Restricted Stock Units shall remain subject to the payment and forfeiture provisions of
Paragraphs B.2 and B.3.

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. 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.

C. Terms and Conditions Applicable to Stock Options and Restricted Stock Units.

1. Prohibited Conduct.

(a) The Participant agrees that, at any time prior to the exercise of the Options or payment
of the Restricted Stock Units granted hereunder, and for a period of twelve months after the later
of (i) completion of all such exercises of Stock Options, (ii) payment of Restricted Stock Units or
(iii) 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 C.1(a), 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 or unpaid Restricted Stock Units granted hereunder;

(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 as of which the Participant has breached a provision of Paragraph C.1(a), as
determined by the Company; and/or

(3) Require the Participant to pay to the Company the value (determined as of the date
restrictions on the Restricted Stock Units lapse) of any Restricted Stock Units, which have been
paid within the twelve-month period immediately preceding the date as of which the Participant has
breached a provision of Paragraph C.1(a), as determined by the Company.

2. 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, (a) 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, and (b) the number and type of shares to which the
Restricted Stock Units held by the Participant relate shall be adjusted, in the case of (a) and
(b), as may be, and to such extent (if any), determined to be appropriate and equitable by the
Committee.

3. 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
and Restricted Stock Units granted hereunder or (2) replaces the outstanding Options and Restricted
Stock Units with equity awards that preserve the existing value of such Options and Restricted
Stock Units at the time of the Change in Control and provide for subsequent payout in accordance
with a vesting schedule and performance targets, as applicable, that are the same or more favorable
to the Participant than the vesting schedule and performance targets applicable to such Options and
Restricted Stock Units, then the outstanding Options and 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 C.3(c) below.

(b) If the outstanding Options and Restricted Stock Units granted hereunder are not assumed
or replaced in accordance with Paragraph C.3(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 the outstanding Restricted Stock Units
granted hereunder shall immediately vest and shall be payable, as if 100% of the performance
targets have been achieved, immediately in accordance with their terms or, if later, as of the
earliest permissible date under Code Section 409A and (2), notwithstanding Paragraph C.3(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 and 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,
in the case of the Restricted Stock Units, 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 and, in the case of the outstanding Options, 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 and Restricted Stock Units granted hereunder are assumed or
replaced in accordance with Paragraph C.3(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, (1) the outstanding Options granted hereunder shall immediately
vest and become exercisable and shall remain outstanding until the Expiration Date and (2) the
outstanding Restricted Stock Units granted hereunder shall immediately vest and shall be payable,
as if 100% of the performance targets have been achieved, immediately in accordance with their
terms or, if later, as of the earliest permissible date under Code Section 409A. For purposes of
this Paragraph C.3, “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.

4. Nontransferability. Unless the Committee specifically determines otherwise: (a) the
Options and Restricted Stock Units are personal to the Participant and, with respect to Options,
during the Participant’s lifetime, such Options may be exercised only by the Participant, and
(b) the Options and 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.

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

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

(b) “Fair Market Value” of a share of PepsiCo Common Stock on any date shall mean an amount
equal to the mean of the high and low sales prices for a share of PepsiCo Common Stock as reported
on the composite tape for securities listed on The New York Stock Exchange, Inc. on the date in
question (or if no sales of Common Stock were made on said Exchange on such date, on the next
preceding day on which sales were made on such Exchange), rounded up to 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 (provided that such determination does not cause the Award to be
subject to Section 409A of the Code).

(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).

6. 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.

7. Binding Effect.

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

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

8. No Contract of Employment; Agreement‘s Survival. This Agreement is not a contract
of employment, 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.

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

10.  Amendment; Waiver. The terms and conditions of this Agreement may be amended in
writing by the chief personnel officer or chief legal officer of PepsiCo (or either of their
delegates), provided, however, that (i) no such amendment shall be adverse to the Participant
(except as necessary to comply with applicable law, including the provisions of Code Section 409A
and the regulations thereunder pertaining to the deferral of compensation); 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.

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

12. Prospectus and Award Acceptance. The Participant has been provided a copy of
PepsiCo’s Prospectus relating to the Plan, the Options and the shares covered thereby, 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 the proceeds of any
Option exercise or Restricted Stock Unit payment.

13. Plan Controls. The Options, 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 Board reserves its rights to amend or terminate the Plan at any time without the
consent of the Participant; provided, however, that Options and Restricted Stock Units outstanding
under the Plan at the time of such action shall not be adversely affected thereby (except as
necessary to comply with applicable law). 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 or 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.

14. Rights to Future Grants; Compliance with Law; Section 409A. By entering into this
Agreement, the Participant acknowledges and agrees that: (a) the Option and/or 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 Options and Restricted Stock Units already granted under the Plan),
(b) stock options and restricted stock units 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 and/or Restricted Stock Units pursuant to this Agreement
to require options, restricted stock units 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 or 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) 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 (f) this Agreement will be interpreted and applied so that the Options and 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 (or by such later time as may be permitted by Code
Section 409A under the circumstances).

15. 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.

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

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PepsiCo Performance-Based Long-Term Incentive Award Summary

Executive Name:

Grant Date:

Grant Price: $

CORE ANNUAL AWARD

Restricted Stock Units:

Stock Options:

CORE ANNUAL AWARD DETAILS

RESTRICTED STOCK UNITS AWARD

US Dollar Value Core Annual Award:

Percentage RSU:

Restricted Stock Unit Award Value:

Grant Price: $

Number of Restricted Stock Units Granted:

Vesting Date*:

STOCK OPTIONS AWARD

US Dollar Value Core Annual Award:

Percentage Stock Options:

Stock Option Award Value:

Conversion Factor: 4x

Stock Option Award Face Value:

Option Exercise (Grant) Price: $

Number of Options Granted:

Vesting Date*:

Expiration Date:

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

I accept my PepsiCo Performance-Based Long-Term Incentive 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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