Document:

exv10w1

 

Exhibit 10.1

ANNUAL INCENTIVE PLAN

FISCAL YEAR 2008

Effective April 1, 2007 — March 31, 2008

			
	
	 	

	 	 	 	 	 
	

	 	
	 	

July 11,
2007 final

 

 

Contents

	I.	 	Purpose of the Plan
	 
	II.	 	Eligibility
	 
	III.	 	Administration of Plan
	 
	IV.	 	Plan Design
	 
	V.	 	Financial Objectives
	 
	VI.	 	Individual Objectives
	 
	VII.	 	Incentive Payments
	 
	VIII.	 	Amendment, Suspension and Termination
	 
	IX.	 	Unfunded Plan
	 
	X.	 	Other Benefit and Compensation Programs
	 
	XI.	 	Governing Law

	 	 	 
	Exhibit I:

	 	FY2008 Incentive Plan Components
	 
	 	 
	Exhibit II:

	 	FY2008 Incentive Plan Payout Schedule
	 
	 	 
	Exhibit III:

	 	FY2008 Incentive Payout Calculation Examples

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	I.	 	Purpose of the Plan

The purpose of the Annual Incentive Plan is to align all participants with the business
objectives of Navarre Corporation and its subsidiaries (the “Company”) by motivating,
rewarding and recognizing participants for their achievements and impact on the Company’s
success.

	II.	 	Eligibility

All management-level employees of the Company are normally eligible to participate in the
Plan. New hires must be employed prior to January 1st to be eligible for a pro-rata
incentive payment for that fiscal year (example: you must be employed by December
31st, 2007 in order to be eligible for the FY08 incentive plan year which pays
out in the first quarter of FY09). Participants who terminate from the company, for any
reason, prior to the date of the incentive payment, will lose their eligibility to
receive an incentive payment.

	III.	 	Administration

The Plan is administered by the Compensation Committee of the Company’s Board of
Directors (the “Compensation Committee”). The Chief Executive Officer of the Company
(the “CEO”) will make recommendations to the Compensation Committee regarding
participation, level of awards, changes to the Plan, financial objectives, and other
aspects of the Plan’s administration. The Compensation Committee has the authority to
interpret the Plan, and, subject to the Plan’s provisions, to make and amend rules and to
make all other decisions necessary for the Plan’s administration. Any decision of the
Compensation Committee in the interpretation and administration of the Plan, shall lie
within its sole and absolute discretion and shall be final, conclusive and binding on all
parties concerned. Specifically, the Compensation Committee has the authority to approve
payout percentages and to approve individual awards, including discretionary awards, for
the executive officers. The CEO has the authority to approve individual awards,
including discretionary awards, for other participants consistent with the Plan.

	IV.	 	Plan Design

The Annual Incentive Plan has two components:

1. Financial Objectives

2. Individual Objectives

The potential bonus percentage based on these two components is determined by the
participant’s level and type of position. This is summarized in Exhibit I.

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	V.	 	Financial Objectives

Early each fiscal year the Compensation Committee will approve the Financial Objectives
for such fiscal year. The Financial Objectives will be based on attainment of specific
levels of performance of the Company (or of a subsidiary, division, or department
thereof) with reference to one or more of the following criteria: (i) consolidated
earnings before or after taxes; (ii) EBITDA (earnings before interest, taxes,
depreciation and amortization); (iii) net income; (iv) operating income; (v) earnings per
share; (vi) return on shareholders’ equity; (vii) expense management; (viii) return on
investment; (ix) improvements in capital structure; (x) net sales; (xi) maintenance or
improvements of profit margins; (xii) stock price; (xiii) market share; (xiv) cash flow;
(xv) working capital; (xviii) return on assets; (xv) asset turnover; (xvi) inventory
turnover; (xvii) economic value added (economic profit) and (xviii) total shareholder
return. Payment is made on each Financial Objective as indicated in the Annual Incentive
Plan Payout Schedule (Exhibit II).

For FY2008, the Compensation Committee has determined that the Financial Objectives are:

Consolidated Operating Income  — $24 million

Consolidated Net Sales  — Budgeted Net Sales

Business Unit Budgeted Operating Income (for subsidiary participants)

Business Unit Budgeted Net Sales (for subsidiary participants)

Threshold

The Compensation Committee may determine one or more threshold Financial Objectives which
must be attained in order for any bonus payout to be earned (other than a discretionary
pool payout).

For FY2008, the Compensation Committee has determined that the threshold Financial
Objective is Consolidated Operating Income of $19.2 million.

Growth Multiplier

For FY2008, subject to the maximum payment provision in Paragraph VII, the Compensation
Committee has determined that if Consolidated Operating Income exceeds the target, a
participant’s incentive payment will be increased by the same percentage that
Consolidated Operating Income exceeds the stated target (the Growth Multiplier). This
provides for an enhanced incentive payout which is totally funded by improvement in
Consolidated Operating Income. See III for a sample calculation.

Discretionary Pool

The Compensation Committee may also establish a discretionary pool to reward participants
in the plan with exemplary performance during the fiscal year be paid out whether or not
the threshold Financial Objectives are attained.

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The Compensation Committee has determined that the maximum discretionary pool for FY2008
is $500,000, which may be awarded in whole or in part in the discretion of the
Compensation Committee.

	VI.	 	Individual Objectives

To be eligible for a payout on Individual Objectives, written incentive objectives must
be approved and submitted to Human Resources in a timely manner.

Goal Setting

Plan participants and their managers will share accountability for establishing annual
specific goals for the Individual Objectives factor of the incentive plan. Generally
participants will have three to five specific and measurable goals which may be
weighted or prioritized. Joint agreement on goals will be confirmed with signatures of
the participant, their manager and their functional Vice President.

Goal Monitoring

Participants will normally meet with their managers at least quarterly to review progress
on specific goals. This review may include specific discussion of the participant’s
year-to-date performance rating on goals. Progress on specific goals of all participants
will then be reviewed and discussed at quarterly off-site meetings of the Senior
Management Team.

Goal Modification

Goals may be modified during the plan year if the business or the individual’s position
requires the change. The Senior Management Team will normally be consulted for input
before any changes are made.

Goal Measurement

Plan participants and their managers will discuss the participant’s performance level on
their Individual Objectives and managers must submit the ratings to Human Resources for
approval in a timely manner. The Compensation Committee will rate the CEO’s individual
performance and review the ratings for the other executive officers.

	VII.	 	Incentive Payments

Results and Adjustments

Actual business results for the fiscal year will be provided by the Chief Financial
Officer and approved by the Compensation Committee. The Compensation Committee may
approve adjustments to actual business results to reflect organizational, operational, or
other changes which have occurred during the year,

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e.g., acquisitions, dispositions,
expansions, contractions, material non-recurring items of income or loss, extraordinary
items, effects of accounting changes or other events which might create unwarranted
hardships or windfalls to participants.

Payments

Payments under the Plan will normally be paid within 45 days of the annual audit.
Payment will be made for the number of full months that the participant held a qualifying
position during the plan year and checks will be taxed in compliance with Internal
Revenue Service guidelines for bonuses. Checks will normally be hand delivered in
one-on-one meetings by the participant’s manager.

Maximum Payment

Notwithstanding anything to the contrary provided in this Plan, the Compensation
Committee may establish a maximum pay-out to any one participant for any fiscal year.

For FY2008, the Compensation Committee has determined that the total payment to any
participant under this Plan shall not exceed 150% of the participant’s base salary.

Communication

After year-end closing, managers should meet individually with each participant to
communicate the final rating on specific goals and the incentive payment amount. Human
Resources will prepare a communication document to assist managers to effectively
communicate this information. To ensure consistent communication throughout the
organization, this document will include an outline of all information that should be
included in the meeting.

	VIII.	 	Amendment, Suspension and Termination

The Compensation Committee or the Board of Directors may at any time, and without prior
notice, terminate, suspend, amend or modify the Plan or any incentive payments under the
Plan not yet paid. No incentive payment will be made during any suspension of the Plan
or after its termination.

	IX.	 	Unfunded Plan

The Plan shall be unfunded and the Company shall not be required to segregate any assets
for incentive payments under the Plan.

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	X.	 	Other Benefit and Compensation Programs

Payments received by a participant under this Plan shall not be deemed a part of a
participant’s regular, recurring compensation for purposes of the termination, indemnity
or severance pay law of any state and shall not be included in, nor have any effect on,
the determination of benefits under any other employee benefit plan, contract or similar
arrangement provided by the Company unless expressly so provided by such other plan,
contract or arrangement. Nothing in the Plan shall be construed as a contractual payment
obligation or guarantee of employment for any participant.

	XI.	 	Governing Law

To the extent that Federal laws do not otherwise control, the Plan and all determinations
made and actions taken pursuant to the Plan shall be governed by the laws of Minnesota
and construed accordingly.

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Exhibit I

FY2008 Annual Incentive Plan Components:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Consolidated	 	Subsidiary	 	 	 	 	 	 
	 	 	Operating	 	Operating	 	Consolidated	 	Subsidiary	 	Individual
	Job Level	 	Income	 	Income	 	Net Sales	 	Net Sales	 	Objectives
	CEO,CFO and COO
	 	 	60	%	 	 	 	 	 	 	20	%	 	 	 	 	 	 	20	%
	Subsidiary Presidents
	 	 	20	%	 	 	40	%	 	 	 	 	 	 	20	%	 	 	20	%
	Subsidiary GM’s
	 	 	20	%	 	 	40	%	 	 	 	 	 	 	20	%	 	 	20	%
	Corporate VP’s
	 	 	60	%	 	 	 	 	 	 	20	%	 	 	 	 	 	 	20	%
	Subsidiary VP’s
	 	 	20	%	 	 	40	%	 	 	 	 	 	 	20	%	 	 	20	%
	Corporate Directors
	 	 	40	%	 	 	 	 	 	 	20	%	 	 	 	 	 	 	40	%
	Subsidiary Directors
	 	 	20	%	 	 	20	%	 	 	 	 	 	 	20	%	 	 	40	%
	Corporate Managers
	 	 	40	%	 	 	 	 	 	 	20	%	 	 	 	 	 	 	40	%
	Subsidiary Managers
	 	 	20	%	 	 	20	%	 	 	 	 	 	 	20	%	 	 	40	%

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EXHIBIT II

Annual Incentive Plan

FY2008 Payout Schedule for Financial Objectives

	 	 	 	 	 	 	 	 	 
	 	 	Percent of	 	Payout
	 	 	Objective	 	%
	Target
	 	 	100	%	 	 	100	%
	 
	 	 	99	%	 	 	97.5	%
	 
	 	 	98	%	 	 	95.0	%
	 
	 	 	97	%	 	 	92.5	%
	 
	 	 	96	%	 	 	90.0	%
	 
	 	 	95	%	 	 	87.5	%
	 
	 	 	94	%	 	 	85.0	%
	 
	 	 	93	%	 	 	82.5	%
	 
	 	 	92	%	 	 	80.0	%
	 
	 	 	91	%	 	 	77.5	%
	 
	 	 	90	%	 	 	75.0	%
	 
	 	 	89	%	 	 	72.5	%
	 
	 	 	88	%	 	 	70.0	%
	 
	 	 	87	%	 	 	67.5	%
	 
	 	 	86	%	 	 	65.0	%
	 
	 	 	85	%	 	 	62.5	%
	 
	 	 	84	%	 	 	60.0	%
	 
	 	 	83	%	 	 	57.5	%
	 
	 	 	82	%	 	 	55.0	%
	 
	 	 	81	%	 	 	52.5	%
	Minimum
	 	 	80	%	 	 	50	%
	 
	 	Below 80%	 	0% Payout

Incentive Plan Upside Potential: Incentive Payments may exceed 100% of the targeted bonus
opportunity, up to a maximum of 150% of base salary, if Consolidated Operating Income exceeds
budget. This is accomplished through the use of the Growth Multiplier which increases the final
incentive payment by the same percentage that Consolidated Operating Income exceeds the stated
objective. Please see example two in Exhibit III for details.

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EXHIBIT III

FY2008 Incentive Payout Calculation Examples

Example One: Financial Objectives are set for the fiscal year for Operating Income and Net
Sales. Navarre achieves 80% of Operating Income, both Consolidated and Subsidiary, 100% of Net
Sales, both Consolidated and Subsidiary, and participant achieves 80% of their individual
objectives.

Subsidiary VP ($100,000 base salary with a Bonus opportunity of 40%)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Consolidated	 	Subsidiary	 	Consolidated	 	 	 	 	 	Individual
	Operating Income	 	Operating Income	 	Sales	 	Subsidiary Sales	 	Objectives
	8% (20% of total)
	 	16% (40% of total)	 	 	0	%	 	8% (20% of total)	 	8% (20% of total)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	%	 	 	 	 	 	 	 	 	 
	Incentive Component	 	Attained	 	Payout %	 	Calculation	 	Payout
	Consolidated Op Income
	 	 	80	%	 	 	50	%	 	 	.50 x .08 x  $100,000	 	 	$	4,000	 
	Subsidiary Op Income
	 	 	80	%	 	 	50	%	 	 	.50 x .16 x  $100,000	 	 	$	8,000	 
	Consolidated Sales
	 	 	100	%	 	 	100	%	 	 	1.0 x 0 x  $100,000	 	 	$	0	 
	Subsidiary Sales
	 	 	100	%	 	 	100	%	 	 	1.0 x .08 x $100,000	 	 	$	8,000	 
	Individual Objectives
	 	 	80	%	 	 	80	%	 	 	.80 x .08 x $100,000	 	 	$	6,400	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	26,400	 

Example Two: Financial Objectives are set for the fiscal year for Operating Income and Net Sales.
Navarre achieves 150% of Operating Income, both Consolidated and Subsidiary, 90% of Net Sales, both
Consolidated and Subsidiary, and participant achieves 95% of their individual objectives.

Subsidiary VP ($100,000 base salary with a Bonus opportunity of 40%)

	 	 	 	 	 	 	 	 	 	 	 
	Consolidated	 	Subsidiary	 	Consolidated	 	 	 	Individual
	Operating Income	 	Operating Income	 	Sales	 	Subsidiary Sales	 	Objectives
	8% (20% of total)

	 	16% (40% of total)
	 	 	0	%	 	8% (20% of total)
	 	8% (20% of total)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	%	 	 	 	 	 	 	 	 	 
	Incentive Component	 	Attained	 	Payout %	 	Calculation	 	Payout
	Consolidated Op Income
	 	 	150	%	 	 	100	%	 	 	1.0 x .08 x  $100,000	 	 	$	8,000	 
	Subsidiary Op Income
	 	 	150	%	 	 	100	%	 	 	1.0 x .16 x  $100,000	 	 	$	16,000	 
	Consolidated Sales
	 	 	90	%	 	 	75	%	 	 	.75 x 0 x  $100,000	 	 	$	0	 
	Subsidiary Sales
	 	 	90	%	 	 	75	%	 	 	.75 x .08 x $100,000	 	 	$	6,000	 
	Individual Objectives
	 	 	95	%	 	 	95	%	 	 	.95 x .08 x $100,000	 	 	$	7,600	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	$	37,600	 
	Growth Multiplier
	 	 	150	%	 	 	 	 	 	 	150% x 37,600	 	 	$	56,400	 

10exv4w1

 

EXHIBIT 4.1

[Face of Note]

 

					
	 Registered
No. 1 
	 	PEPSIAMERICAS, INC.
	 	CUSIP No. 71343P AE 1

5.75% Note due 2012

(Fixed Rate)

     If this Note is a Book-Entry Note, the registered owner of this Note (as indicated below) is
The Depository Trust Company (the “Depository”) or a nominee of the Depository, and the following
legend is applicable: Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation (“DTC”), to the Issuer or its agent for
registration of transfer, exchange or payment, and any certificate issued is registered in the name
of Cede & Co., or in such other name as is requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

     The following summary of terms is subject to the information set forth on the reverse hereof:

	 	 	 
	Principal Amount and Currency or Currency Unit:
	 	 
	U.S. $300,000,000
	 	 
	 
	 	 
	Denominations

	 	Form:    Book-Entry: þ
	(If other than U.S. Dollars or the U.S. Dollar

	 	              Certificated: o
	denominations set forth on the reverse): N.A.
	 	 
	 
	 	 
	Option to receive payments in specified currency:

        Yes: o          No: þ

	 	Exchange Rate Agent: N.A.
	 
	 	 
	Issue Date: July 18, 2007

	 	Stated Maturity Date: July 31, 2012
	 
	 	 
	Interest Rate: 5.75% per annum
	 	 
	 
	 	 
	Interest Payment Date(s):
	 	 
	January 31 and July 31,
	 	 
	commencing January 31, 2008
	 	 
	 
	 	 
	Record
Date(s): January 15 and July 15
	 	 
	 
	 	 
	Redemption Date(s) (option of the Company): At any
time on or after the Issue Date

	 	Redemption Price(s): The greater of (i)
100% of the principal amount of this Note
to be redeemed, and (ii) as determined by
an Independent Investment Banker, the sum
of the present values of the remaining
scheduled payments of principal of this
Note to be redeemed plus interest thereon
from the Redemption Date (exclusive of
interest payable on such Redemption Date)
through the Stated Maturity Date,
discounted to the Redemption Date on a
semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the
Treasury Rate (as defined herein) plus
0.15%.
	 
	 	 
	Minimum Denomination: $2,000, and integral multiples
of $1,000 in excess thereof.
	 	 
	 
	 	 
	Repayment Date(s) (option of the Holder): N.A.

	 	Repayment Price(s): N.A.

1

 

	 	 	 
	Notice Period: Not less than 30 nor more than 60 days

	 	 
	 
	 	 
	Sinking Fund: Yes: o      No: þ

	 	Optional extension of stated maturity date:
	 

	 	        Yes: o      No: þ
	 
	 	 
	Amortizing Note:      Yes: o      No: þ

	 	Extension Period: N.A.
	 

	 	Number of Extension Periods: N.A.
	 

	 	Final Maturity Date: N.A.
	 
	 	 
	Original Issue Discount Security:

     Yes:o      No: þ

     Total Amount of OID:

     Yield to Maturity:

     Initial Accrual Period OID:

	 	Other Provisions: See “Repurchase at the
Option of Holders Upon a Change of
Control” on the reverse of this Note.

2

 

     PEPSIAMERICAS, INC., a corporation duly organized and existing under the laws of Delaware
(herein called the “Company,” which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay to CEDE & CO. or
registered assigns, the Principal Amount specified above (any currency or currency unit other than
U.S. dollars being hereinafter referred to as a “Specified Currency”) on the Stated Maturity Date
specified above, and to pay interest thereon from and including the Issue Date specified above or
from and including the most recent Interest Payment Date specified above to which interest on this
Note (or any predecessor Note) has been paid or duly provided for, as the case may be, to but
excluding the relevant Interest Payment Date or redemption date, as applicable.

     Interest will be paid on the Interest Payment Date or Dates specified above, commencing with
the first such Interest Payment Date next succeeding the Issue Date specified above (except as
provided below), at the rate per annum specified above, until the principal hereof is paid or made
available for payment; provided that, unless the Holder hereof is entitled to make, and has
made, a Specified Currency Payment Election (as hereinafter defined) with respect to one or more
such payments, the Company will make all such payments in U.S. dollars in amounts determined as set
forth herein. The interest so payable and punctually paid or duly provided for on any Interest
Payment Date will, as provided in such Indenture, be paid to the Holder of this Note (or one or
more predecessor Notes) at the close of business on the Record Date specified above immediately
preceding such Interest Payment Date. The first payment of interest on any Note originally issued
between a Record Date and the next Interest Payment Date will be made on the Interest Payment Date
following the next succeeding Record Date to the Holder on such next succeeding Record Date.
Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Record Date and may either be
paid to the Holder of this Note (or one or more predecessor Notes) at the close of business on a
subsequent record date fixed by the Trustee for the payment of such defaulted interest, notice
whereof shall be given to Holders not less than 15 days prior to such subsequent record date, or be
paid at any time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in said Indenture.

     If this Note is a Book-Entry Note as specified above, while this Note is represented by one or
more Book-Entry Notes registered in the name of the Depository or its nominee, the Company will
cause payments of principal of, and any premium and interest on, this Note to be made to the
Depository or its nominee, as the case may be, by wire transfer of immediately available funds, in
the funds and in the manner required by agreements with, or regulations or procedures prescribed
from time to time by, the Depository or its nominee, and otherwise in accordance with such
agreements, regulations and procedures. If this Note is a Book-Entry Note as specified above, the
following legend is applicable except as specified on the reverse hereof: THIS NOTE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY
OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR OF THE
DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR.

     If this Note is a certificated Note as specified above, payments of the principal of, and any
premium and interest on, this Note will be made in immediately available funds if this Note is
surrendered at the principal corporate trust office of the Trustee in Minneapolis, Minnesota,
provided that this Note is presented to the Trustee in time for the Trustee to make such
payment in such funds in accordance with its normal procedures. A Holder of $10,000,000 or more in
aggregate principal amount of Notes denominated and payable in U.S. dollars and having the same
Interest Payment Date shall be entitled to receive such payments by wire transfer of immediately
available funds to an account maintained by such Holder with a bank located in the United States,
provided that the Holder shall have provided in writing to

3

 

the Trustee, on or prior to the relevant Record Date, appropriate payment instructions. The
Company will pay any administrative costs imposed by banks in connection with making payments by
wire transfer, but not any tax, assessment or governmental charge imposed upon the Holder of this
Note.

     Payment of the principal of, and any premium and interest on, this Note shall be made in such
coin or currency of the United States of America as at the time of payment is legal tender for the
payment of public debts: provided that, if this Note is denominated in a Specified
Currency, the Holder hereof is entitled to make, and has made, a Specified Currency Payment
Election with respect to such payments, the Exchange Rate Agent is able to convert such payments as
provided below and the Specified Currency is not unavailable due to the imposition of exchange
controls or other circumstances beyond the control of the Company, then (i) the payment of interest
on this Note will be made in the Specified Currency (or, if such Specified Currency is not at the
time of such payment legal tender for the payment of public and private debts, in such other coin
or currency of the country which issued such Specified Currency as at the time of such payment is
legal tender for the payment of such debts) by check drawn on a bank office located outside the
United States and mailed to the address of the Person entitled thereto as such address shall appear
in the Security Register and (ii) the payment of principal, and any premium and interest, due at
Maturity will be made in such Specified Currency (or, if applicable, such other currency or
currencies) by wire transfer of immediately available funds to an account maintained by the holder
hereof with a bank office located in the country which issued the Specified Currency (or, in the
case of Euros, Brussels), as shall have been designated at least fifteen days prior to Maturity by
the Holder, upon presentation of this Note to the Trustee (or a duly authorized paying agent) in
time for such wire transfer to be made by the Trustee (or such paying agent) in accordance with its
normal procedures. Unless otherwise specified above, if this Note is denominated in a Specified
Currency the Holder hereof may elect to receive payments of principal, and any premium and
interest, in such Specified Currency (a “Specified Currency Payment Election”) by delivery of a
written request (including, in the case of an election with respect to payments at Maturity,
appropriate wire transfer instructions) to the Trustee at its principal corporate trust office
referred to above on or prior to the relevant Record Date or the fifteenth day prior to Maturity,
as the case may be. Such request may be in writing (mailed or hand delivered) or by cable, telex
or other form of facsimile transmission. The Holder may elect to receive payment in the Specified
Currency for all principal, premium and interest payments and need not file a separate election for
each payment. Such election shall remain in effect until revoked by written notice to the Trustee,
but written notice of any such revocation must be received by the Trustee on or prior to the
relevant Record Date or at least fifteen days prior to Maturity, as the case may be.

     If a Specified Currency is not available for the payment of principal of, or any premium or
interest on, this Note due to the imposition of exchange controls or other circumstances beyond the
control of the Company, the Company will be entitled to satisfy its obligations to the Holder of
this Note by making payment in U.S. dollars on the basis of the Market Exchange Rate on the second
Business Day prior to such payment, or if such Market Exchange Rate is not then available, on the
basis of the most recently available Market Exchange Rate or as otherwise specified above. Any
payment made under such circumstances in U.S. dollars where the required payment is in other than
U.S. dollars will not constitute an Event of Default under the Indenture.

     If payment in respect of this Note is required to be made in any currency unit, and such
currency unit is unavailable due to the imposition of exchange controls or other circumstances
beyond the control of the Company, then the Company will be entitled, but not required, to make any
payments in respect of this Note in U.S. dollars until such currency unit is again available. The
amount of each payment in U.S. dollars will be computed on the basis of the equivalent of the
currency unit in U.S. dollars, which will be determined by the Company or its agent on the
following basis. The component currencies of the currency unit for this purpose (the “Component
Currencies” or, individually, a “Component Currency”) will be the currency amounts that were
components of the currency unit as of the last day of which the

4

 

currency unit was used. The equivalent of the currency unit in U.S. dollars shall be
calculated by aggregating the U.S. dollar equivalents of the Components Currencies. The U.S.
dollar equivalent of each of the Component Currencies will be determined by the Company or such
agent on the basis of the most recently available Market Exchange Rate for each such Component
Currency or as otherwise specified above.

     If the official unit of any Component Currency is altered by way of combination or
subdivision, the number of units of the currency as a Component Currency will be divided or
multiplied in the same proportion. If two or more Component Currencies are consolidated into a
single currency, the amounts of whose currencies as Component Currencies will be replaced by an
amount in such single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is divided into two or
more currencies, the amount of the original Component Currency will be replaced by the amounts of
such two or more currencies, the sum of which will be equal to the amount of the original Component
Currency.

     All determinations referred to above made by the Company or its agent (including the Exchange
Rate Agent) will be at the Company’s sole discretion and will, in the absence of manifest error, be
conclusive for all purposes and binding on the Holder of this Note.

     REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE
HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT
THIS PLACE.

     Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof, or its successor as Trustee, or its Authenticating Agent, by manual
signature of an authorized signatory, this Note will not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its
corporate seal.

Dated: July 18, 2007

	 	 	 	 	 
	 	PEPSIAMERICAS, INC.

 	 
	 	By: 	 
 	 
	 	 
 	 
	 	Its:  Executive Vice President and Chief Financial 	 
	 	Officer 	 
	 
	 	Attest:  	 	 
	 	Its: Secretary 	 
	 

This is one of the Securities of the series designated 
herein issued under the within-mentioned Indenture.

	 	 	 	 	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Trustee

 	 
	By:  	 	 
	Authorized Signatory 	 
	 	 	 	 
	 

5

 

[Reverse of Note]

PEPSIAMERICAS, INC.

5.75% Note due 2012

          SECTION 1. General. This Note is one of a duly authorized issue of debt
securities of the Company (herein called the “Securities”), issued and to be issued in one or more
series under an Indenture, dated as of August 15, 2003 (herein called the “Indenture”), between the
Company and Wells Fargo Bank, National Association, as Trustee (herein called the “Trustee,” which
term includes any successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be, authenticated and
delivered. This Note is one of the Securities of the series designated as the “5.75% Notes due
2012” (the “Notes”). The Company may, without the consent of any of the holders of the Note,
create and issue additional debt securities so that those additional debt securities will form a
single series with the Note.

          SECTION 2. Payments. Interest on this Note will be payable on the Interest
Payment Date or Interest Payment Dates as specified on the face hereof and, in either case, at
Maturity.

     Unless otherwise specified on the face hereof, payments on this Note with respect to any
Interest Payment Date or Maturity will include interest accrued from and including the Issue Date,
or from and including the most recent Interest Payment Date to which interest has been paid or duly
provided for, to but excluding such Interest Payment Date or Maturity. Unless otherwise specified
on the face hereof, interest on this Note will be computed and paid on the basis of a 360-day year
of twelve 30-day months.

     Unless otherwise specified on the face hereof, if this Note is an Amortizing Note, payments
with respect to this Note will be applied first to interest due and payable hereon and then to the
reduction of the unpaid principal amount hereof. If this Note is an Amortizing Note, a table
setting forth repayment information in respect to this Note will be set forth on the face hereof.

     All percentages resulting from any calculation with respect to this Note will be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point (with five one-millionths of
a percentage point being rounded upward) and all dollar amounts used in or resulting from any such
calculation with respect to this Note will be rounded to the nearest cent or, if this Note is
denominated in one or more currencies or currency units other than U.S. dollars, the nearest unit
(with one-half cent or five one-thousandths of a unit being rounded upward).

     If this Note is denominated in a Specified Currency, unless the Holder hereof is entitled to
make, and has made, a Specified Currency Payment Election with respect to such payments as provided
on the face hereof, the Holder of this Note shall receive payment of principal, and any premium and
interest, in U.S. dollars at an exchange rate based on the highest bid quotation in The City of New
York received by the Exchange Rate Agent (who, unless otherwise specified on the face hereof, will
be the Trustee) at approximately 11:00 A.M., New York City time, on the second Business Day
preceding the applicable payment date from three recognized foreign exchange dealers (one of which
may be the Exchange Rate Agent) selected by the Exchange Rate Agent and approved by the Company for
the purchase by the quoting dealer of the Specified Currency for U.S. dollars for settlement on
such payment date in the aggregate amount of such Specified Currency payable to all Holders of
Securities of this Series denominated in a Specified Currency and scheduled to receive U.S. dollar
payments on such payment date and at which the applicable dealer commits to execute a contract. If
three such bid quotations are not

6

 

available, payments will be made in the Specified Currency. All currency exchange costs will
be borne by the Holder of this Note by deductions from such payments.

     “Business Day” means any day other than a Saturday or Sunday and other than a day on which
banking institutions in New York, New York or Minneapolis, Minnesota are authorized or obligated by
law or executive order to close. If an Interest Payment Date or Maturity for this Note falls on a
day that is not a Business Day, payment of principal, and any premium or interest, to be made on
such day with respect to this Note will be made on the next day that is a Business Day with the
same force and effect as if made on the due date, and no additional interest will be payable on the
date of payment for the period from and after the due date as a result of such delayed payment.

     “Euro” means the lawful currency of the participating member states of the European Union that
adopted a single currency in accordance with the treaty establishing the European Comity as amended
by the Treaty on European Union signed February 7, 1992.

          SECTION 3. Redemption. This Note will be redeemable at the option of the
Company prior to the Stated Maturity Date only if one or more Redemption Dates is specified on the
face hereof. If so specified, this Note will be subject to redemption at the option of the Company
on the Redemption Date (or during any such range of dates) in whole or from time to time in part in
increments of $1,000 or the minimum denomination, if any, specified on the face hereof (provided
that any remaining principal amount hereof shall be at least $1,000 or such minimum denomination),
at the Redemption Price or Prices specified on the face hereof, plus accrued and unpaid interest to
but excluding the Redemption Date, but interest payments due with respect to this Note on an
Interest Payment Date or prior to the Redemption Date will be payable to the Holder of this Note at
the close of business on the relevant Record Date specified on the face hereof, all as provided in
the Indenture. The Company may exercise such option by causing the Trustee to mail a notice of
such redemption, at least 30 but not more than 60 calendar days prior to the date of redemption, in
accordance with the provisions of the Indenture. In the event of redemption of this Note in part
only, this Note will be cancelled and a new Note or Notes representing the unredeemed portion
hereof will be issued in the name of the Holder hereof.

     “Treasury Rate” means, with respect to any Redemption Date, (i) the yield, under the heading
which represents the average for the week immediately prior to the third Business Day before such
Redemption Date, appearing in the most recently published statistical release designated H.15(519)
or any successor publication which is published weekly by the Federal Reserve (as defined below)
and which establishes yields on actively traded United States Treasury securities adjusted to
constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding
to the remaining term of this Note (if no maturity is within three months before or after such
remaining term, yields for the two published maturities most closely corresponding to such
remaining term shall be determined and the Treasury Rate shall be interpolated or extrapolated from
such yields on a straight-line basis, rounding to the nearest month) or (ii) if such release (or
any successor release) is not published during the week preceding the third Business Day before
such Redemption Date or does not contain such yields, the rate per annum equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue for this Note, calculated using a
price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price for such Redemption Date.

     “Comparable Treasury Issue” means the United States Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining term of this Note
that would be used, at the time of selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of comparable maturity to the remaining term of
this Note.

7

 

     “Comparable Treasury Price” means, with respect to any Redemption Date, (i) the arithmetic
average of at least three Reference Treasury Dealer Quotations for such Redemption Date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations or (ii) if fewer than
five Reference Treasury Dealer Quotations are obtained, the arithmetic mean of all such obtained
Reference Treasury Dealer Quotations.

     “Independent Investment Banker” means one of the Redemption Treasury Dealers.

     “Redemption Treasury Dealer” means Citigroup Global Markets Inc. and Morgan Stanley & Co.
Incorporated and their respective successors, and three other firms that are primary U.S.
government securities dealers (each a “Primary Treasury Dealer”) which the Company specifies after
consultation with the Independent Investment Banker. If any of the Redemption Treasury Dealers
ceases to be a Primary Treasury Dealer, the Company will substitute another Primary Treasury Dealer.

     “Reference Treasury Dealer Quotations” means, with respect to each Redemption Treasury Dealer
and any Redemption Date, the arithmetic average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Redemption Treasury Dealer at 5:00 p.m. (New York
City time) on the third Business Day before the Redemption Date.

          SECTION 4. Repayment. If so specified on the face hereof, this Note will be
repayable, in whole or from time to time in part, prior to Maturity at the option of the Holder on
the Repayment Date or Dates (or range of such dates) specified on the face hereof at the Repayment
Price or Prices specified on the face hereof, plus accrued and unpaid interest to but excluding the
date of repayment. In order for this Note to be repaid prior to Maturity, the Trustee must receive
at least 30 but not more than 60 calendar days prior to the Repayment Date (i) this Note with the
form below entitled “Option to Elect Repayment” duly completed or (ii) a telegram, facsimile
transmission, or letter (first class, postage prepaid) from a member of a national securities
exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust
company in the United States setting forth the name of the Holder of this Note, the principal
amount of this Note, the principal amount of this Note to be repaid, the certificate number or a
description of the tenor and terms of this Note, a statement that the option to elect repayment is
being exercised thereby and a guarantee that this Note with the form below entitled “Option to
Elect Repayment” duly completed will be received by the Trustee not later than five Business Days
after the date of such telegram, facsimile transmission or letter. If the procedure described in
clause (ii) of the preceding sentence is followed, this Note with such form duly completed must be
received by the Trustee by such fifth Business Day. Unless otherwise specified on the face hereof,
exercise of the repayment option by the Holder of this Note will be irrevocable. The repayment
option may be exercised by the Holder of this Note for less than the entire principal amount of
this Note, provided that the principal amount of this Note remaining outstanding after such
repayment is an authorized denomination. Upon such partial repayment this Note will be cancelled
and a new Note or Notes for the remaining principal amount hereof will be issued in the name of the
Holder hereof.

     If this Note is a Book-Entry Note as specified on the face hereof, while this Note is
represented by one or more Book-Entry Notes registered in the name of the Depository or its
nominee, the option for repayment may be exercised by a participant that has an account with the
Depository, on behalf of the beneficial owner of this Note, by delivering a written notice
substantially similar to the form below entitled “Option to Elect Repayment” duly completed to the
Trustee at its Corporate Trust Office (or such other address of which the Company will from time to
time notify the Holders), at least 30 but not more than 60 calendar days prior to the Repayment
Date. A notice of election from a participant on behalf of the beneficial owner of this Note to
exercise the option to have this Note repaid must be received by the Trustee prior to 5:00 P.M.,
New York City time, on the last day for giving such notice. In order to ensure

8

 

that a notice is received by the Trustee on a particular day, the beneficial owner of this
Note must so direct the applicable participant before such participant’s deadline for accepting
instructions for that day. Different firms may have different deadlines for accepting instructions
from their customers. Accordingly, the beneficial owner of this Note should consult the
participant through which such beneficial owner owns its interest herein for the deadline for such
participant. All notices shall be executed by a duly authorized officer of such participant (with
signatures guaranteed) and will be irrevocable. In addition, the beneficial owner of this Note
shall effect delivery at the time such notice of election is given to the Depository by causing the
applicable participant to transfer such beneficial owner’s interest in this Note, on the
Depository’s records, to the Trustee.

          SECTION 5. Optional Extension of Maturity. If so specified on the face
hereof, the Stated Maturity Date of this Note may be extended at the option of the Company for one
or more periods, as specified on the face hereof (each an “Extension Period”), up to but not beyond
the date (the “Final Maturity Date”) specified on the face hereof. The Company may exercise such
option with respect to this Note by notifying the Trustee of such exercise at least 45 but not more
than 60 calendar days prior to the Stated Maturity Date, or the then applicable extension thereof, of this Note (the “Applicable Maturity Date”). If the Company so notifies the Trustee of such
exercise, the Trustee will send, not later than 40 calendar days prior to the Applicable Maturity
Date, by telegram, telex, facsimile transmission, hand delivery or letter (first class, postage
prepaid) to the Holder of this Note a notice (the “Extension Notice”) relating to such Extension
Period indicating (i) that the Company has elected to extend the Stated Maturity Date of this Note,
(ii) the new Stated Maturity Date, (iii) the interest rate applicable to such Extension Period and
(iv) the provisions, if any, for redemption during such Extension Period, including the date or
dates on which or the period or periods during which and the price or prices at which such
redemption may occur during such Extension Period. Upon the Trustee’s sending of the Extension
Notice, the Stated Maturity Date of this Note will be extended automatically and, except as
modified by the Extension Notice and as described in the next two paragraphs, this Note will have
the same terms as prior to the sending of such Extension Notice.

     Notwithstanding the foregoing, not later than 20 calendar days prior to the Applicable
Maturity Date of this Note, the Company may, at its option, revoke the interest rate provided for
in the Extension Notice and establish a higher interest rate for the Extension Period by causing
the Trustee to send by telegram, telex, facsimile transmission, hand delivery or letter (first
class, postage prepaid) notice of such higher interest rate to the Holder of this Note. Such
notice will be irrevocable. All Notes with respect to which the Stated Maturity Date is extended
will bear such higher interest rate for the Extension Period, whether or not tendered for repayment
as provided in the next paragraph.

     If the Company extends the Stated Maturity Date of this Note (or an Extension Period, as
applicable), the Holder will have the option to elect repayment of this Note, in whole but not in
part, by the Company on the Applicable Maturity Date at a price equal to the principal amount
hereof, plus accrued and unpaid interest to but excluding such date. In order for this Note to be
so repaid on the Applicable Maturity Date, the Holder of this Note must follow the procedures
specified under Section 4 for optional repayment, except that the period for delivery of this Note
or notification to the Trustee will be at least 25 but not more than 35 calendar days prior to the
Original Maturity Date. If the Holder has tendered this Note for repayment following receipt of an
Extension Notice, the Holder may revoke such tender for repayment by written notice to the Trustee
received prior to 5:00 p.m., New York City time, on the tenth calendar day prior to the Applicable
Maturity Date.

          SECTION 6. Renewal of Maturity. If the note is a variable rate renewable
Note (a “Renewable Note”), the stated maturity of all or any portion of the principal amount may be
extended in accordance with the procedures described below. On the Interest Payment Dates
specified herein (each such Interest Payment Date, an “Election Date”), the stated maturity of the
Renewable Note will be

9

 

extended to the Interest Payment Date occurring twelve months after such Election Date, unless
the holder elects to terminate the automatic extension of the stated maturity of the Renewable Note
or of any portion thereof having a minimum principal amount of $100,000 or any multiple of $100,000
in excess thereof by delivering a notice to such effect to the Trustee prior to such Election Date.
The stated maturity of Renewable Notes may not be extended beyond the Final Maturity Date, as
specified in the applicable pricing supplement (the “Final Maturity Date”). If the holder elects
to terminate the automatic extension of the stated maturity of any portion of the principal amount
of Renewable Notes and such election is not revoked as described below, such portion will become
due and payable on the Interest Payment Date falling six months (unless another period is specified
herein) after the Election Date prior to which the holder made its election.

     An election to terminate the automatic extension of maturity may be revoked as to any portion
of Renewable Notes having a minimum principal amount of $100,000 or any multiple of $100,000 in
excess thereof by delivering a notice to such effect to the Trustee on any day following the
effective date of the election to terminate the automatic extension of the stated maturity and
prior to the date 15 days before the date on which such portion would otherwise mature. The
revocation may be made for less than the entire principal amount of the Renewable Notes for which
the automatic extension of the stated maturity has been terminated as long as the above-described
minimum amount and multiple requirement is met. A revocation may not be made during the period
from and including a Record Date to but excluding the immediately succeeding Interest Payment Date.

     Renewable Notes may be redeemed in whole or in part at the option of the Company on the
Interest Payment Dates in each year specified herein, at a redemption price specified herein,
together with accrued and unpaid interest to the date of redemption.

          SECTION 7. Sinking Fund. This Note is not subject to a sinking fund unless
otherwise specified on the face hereof.

          SECTION 8. Original Issue Discount Notes. Notwithstanding anything herein
to the contrary, if this Note is an Original Issue Discount Note as specified on the face hereof,
the amount payable in the event the principal amount hereof is declared to be due and payable
immediately by reason of an Event of Default or in the event of redemption or repayment hereof
prior to the Stated Maturity Date hereof, in lieu of the principal amount due at the Stated
Maturity Date hereof, will be the Amortized Face Amount of this Note as of the date of declaration,
redemption or repayment, as the case may be. The “Amortized Face Amount” of this Note will be the
amount equal to (a) the principal amount of this Note multiplied by the Issue Price specified on
the face hereof plus (b) the portion of the difference between the dollar amount determined
pursuant to the preceding clause (a) and the principal amount hereof that has accreted at the Yield
to Maturity specified on the face hereof (computed in accordance with generally accepted United
States bond yield computation principles) to such date of declaration, redemption or repayment but
in no event will the Amortized Face Amount of this Note exceed its principal amount.

          SECTION 9. Events of Default. If any Event of Default with respect to the
Notes shall occur and be continuing, the principal of the Notes may be declared due and payable in
the manner and with the effect provided in the Indenture; provided, however, that
notwithstanding anything herein to the contrary, if this Note is an Original Issue Discount Note,
the amount so declared to be due and payable will be the Amortized Face Amount of this Note as of
the date of such declaration as specified under Section 8.

          SECTION 10. Modification or Waiver: Obligation of the Company Absolute. The
Indenture permits, with certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the rights of the Holders of the
Securities

10

 

of each series to be affected under the Indenture at any time by the Company and the Trustee
with the consent of the Holders of not less than a majority in principal amount of the Outstanding
Securities of each series to be affected. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Outstanding Securities of each series,
on behalf of the Holders of all Securities of such series, to waive, with respect to the Securities
of such series, compliance by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of
this Note will be conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not notation of such consent or waiver is made upon this Note.

     No reference herein to the Indenture and no provision of this Note or of the Indenture will
alter or impair the obligation of the Company, which is absolute and unconditional, to pay the
principal of, and any premium and interest on, this Note at the times, places and rates herein
prescribed.

          SECTION 11. Discharge, Legal Defeasance and Covenant Defeasance. The
Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the
Company on this Note and (b) certain restrictive covenants and the related Events of Default upon
compliance by the Company with certain conditions specified therein, which provisions apply to this
Note.

          SECTION 12. Authorized Denominations. Unless otherwise specified on the
face hereof, the Notes are issuable only in global or certificated registered form, without
coupons, in denominations of $1,000 and integral multiples of $1,000 in excess thereof (or in the
case of Notes denominated in a Specified Currency, in such minimum denomination not less than the
equivalent of $1,000 in such Specified Currency on the basis of the noon buying rate for cable
transfers in The City of New York as certified for customs purposes by (or if not so certified, as
otherwise determined by) the Federal Reserve Bank of New York (the “Market Exchange Rate”) for such
Specified Currency on the date the Company agrees to issue such Security and such other
denomination or denominations in excess of $1,000 or its equivalent as is specified on the face
hereof). As provided in the Indenture and subject to certain limitations therein specified and to
the limitations described below, if applicable, Notes are exchangeable for Notes of like aggregate
principal amount and like Stated Maturity Date and with like terms and conditions of a different
authorized denomination, as requested by the Holder surrendering the same.

          SECTION 13. Registration of Transfer. As provided in the Indenture and
subject to certain limitations therein specified and to the limitations described below, if
applicable, the transfer of this Note is registerable in the Security Register upon surrender of
this Note for registration of transfer at the office or agency of the Company maintained for that
purpose duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory
to the Company and the Security Registrar (which will initially be the Trustee at its principal
corporate trust office located in Minneapolis, Minnesota) duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Notes, with like terms and
conditions of authorized denominations and for the same Stated Maturity Date and aggregate
principal amount, will be issued to the designated transferee or transferees.

     If this Note is a Book-Entry Note as specified on the face hereof, this Note is exchangeable
for certificated Notes only upon the terms and conditions provided in the Indenture. Except as
provided in the Indenture, owners of beneficial interests in this Book-Entry Note will not be
entitled to receive physical delivery of Notes in certificated registered form and will not be
considered the Holders thereof for any purpose under the Indenture.

11

 

     No service charge will be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

          SECTION 14. Owners. Prior to due presentment of this Note for registration
of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all purposes, whether or not
this Note be overdue and notwithstanding any notation of ownership or other writing hereon, and
none of the Company, the Trustee or any such agent will be affected by notice to the contrary.

          SECTION 15. Governing Law. The Indenture and the Notes, including this
Note, will be governed by and construed in accordance with the laws of the State of Minnesota.

          SECTION 16. Defined Terms. All terms used in this Note which are defined in
the Indenture will have the meanings assigned to them in the Indenture unless otherwise defined
herein; and all references in the Indenture to “Security” or “Securities” will be deemed to include
the Notes.

          SECTION 17. (a) Repurchase at the Option of Holders Upon a Change of
Control. If a Change of Control Triggering Event occurs, the Company will make an offer (a
“Change of Control Offer”) to each Holder to repurchase all or any part (equal to $2,000 or an
integral multiple of $1,000 in excess thereof) of each Holder’s Notes at a purchase price
equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest on the
Notes repurchased, if any, to, but not including, the date of purchase, subject to the rights of
the Holders on the relevant record date to receive interest due on the relevant interest payment
date (the “Change of Control Payment”). Within 30 days following any Change of Control Triggering
Event, the Company will, or will cause the Trustee to, mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control Triggering Event and stating:

                    (i) that the Change of Control Offer is being made pursuant to this Section
17 and that all Notes tendered and not withdrawn will be accepted for payment;

                    (ii) the purchase price and the purchase date, which shall be no earlier than 30
days and no later than 60 days from the date such notice is mailed (the “Change of Control Payment
Date”);

                    (iii) that any Note not tendered will continue to accrue interest;

                    (iv) that, unless the Company defaults in the payment of the Change of Control
Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to
accrue interest after the Change of Control Payment Date;

                    (v) that
Holders electing to have any Notes purchased pursuant to a Change of
Control Offer will be required to surrender the Notes, with the form entitled “Option to
Elect Repayment” attached to the Notes completed, or transfer by book-entry transfer, to the Paying
Agent at the address specified in the notice prior to the close of business on the third Business
Day preceding the Change of Control Payment Date;

                    (vi) that Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission, email or letter setting forth the
name of

12

 

the Holder, the principal amount of Notes the Holder delivered for purchase, and a statement
that such Holder is withdrawing his election to have such Notes purchased; and

                    (vii) that Holders whose Notes are being purchased only in part will be issued new
Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of $1,000
in excess thereof.

          The Company shall comply with the requirements of Rule 14e-1 under the Securities Exchange Act
of 1934, as amended, and any other securities laws and regulations thereunder to the extent those
laws and regulations are applicable in connection with the repurchase of the Notes as a result of a
Change in Control Triggering Event. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 17, the Company shall comply with
the applicable securities laws and regulations and will not be deemed to have breached its
obligations under this Section 17 by virtue of such compliance.

     (b) On the Change of Control Payment Date, the Company shall, to the extent lawful:

     (1) accept for payment all Notes or portions of Notes properly tendered
pursuant to the Change of Control Offer;

     (2) deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Notes or portions of Notes properly tendered; and

     (3) deliver or cause to be delivered to the Trustee the Notes properly accepted
together with an Officers’ Certificate stating the aggregate principal amount of
Notes or portions of Notes being purchased by the Company.

          (c) Upon receipt of the Change of Control Payment and Officers’ Certificate described above,
the Paying Agent will promptly mail or wire transfer to each Holder of Notes properly tendered and
so accepted the Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in
principal amount to any unpurchased portion of the Notes surrendered, if any; provided that
each new Note will be in a principal amount of $2,000 or an integral multiple of 1,000 in excess
thereof. Any Note so accepted for payment will cease to accrue interest on and after the
Change of Control Payment Date. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as reasonably practicable after the Change of Control Payment Date.

          (d) Notwithstanding anything to the contrary in this Section 17, the Company shall not
be required to make a Change of Control Offer upon a Change of Control Triggering Event if (1) a
third party makes the Change of Control Offer in the manner, at the times and otherwise in
compliance with the requirements set forth in this Section 17 and purchases all Notes
properly tendered and not withdrawn under the Change of Control Offer, or (2) notice of redemption
has been given pursuant to the Indenture, unless and until there is a default in payment of the
applicable redemption price. Notwithstanding anything to the contrary in this Section 17,
a Change of Control Offer may be made in advance of a Change of Control Triggering Event,
conditional upon such Change of Control Triggering Event, if a definitive agreement is in place for
the Change of Control at the time of making of the Change of Control Offer.

13

 

     “Below Investment Grade Rating Event” means a decrease in the ratings of the Notes below an
Investment Grade Rating by the Rating Agencies on any date from the date of the public notice of an
arrangement that could result in a Change of Control until the end of the 60-day period following
the public notice of the occurrence of the Change of Control (which period shall be extended so
long as the rating of the Notes is under publicly announced consideration for possible downgrade by
any of the Rating Agencies); provided that a Below Investment Grade Rating Event otherwise arising
by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a
particular Change of Control (and thus shall not be deemed a Below Investment Grade Rating Event
for purposes of the definition of Change of Control Triggering Event) if the Rating Agencies making
the reduction in rating to which this definition would otherwise apply do not announce or publicly
confirm or inform the Trustee in writing at the Company’s request that the reduction was the result, in whole
or in part, of any event or circumstance comprised of or arising as a result of, or in respect of,
the applicable Change of Control (whether or not the applicable Change of Control shall have
occurred at the time of the Below Investment Grade Rating Event).

     “Change of Control” means the occurrence of either of the following: (1) the direct or
indirect sale, transfer, conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or substantially all of the
properties or assets of the Company and its subsidiaries taken as a whole to any Person other than
the Company or PepsiCo, Inc. or one or more of their respective subsidiaries; or (2) the
consummation of any transaction (including, without limitation, any merger or consolidation) the
result of which is that any Person (other than PepsiCo, Inc. or one or more of its subsidiaries)
becomes the beneficial owner, directly or indirectly, of more than 50% of the then outstanding
number of shares of the Company’s voting stock.

     “Change of Control Triggering Event” means the occurrence of both a Change of Control and a
Below Investment Grade Rating Event.

     “Fitch” means Fitch Ratings.

     “Investment Grade
Rating” means a rating equal to or higher than BBB- (or the equivalent) by
Fitch, Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P.

     “Moody’s” means Moody’s Investors Service, Inc.

     “Person” has the meaning set forth in the Indenture and shall include a “person” as used in
Section 13(d)(3) of the Exchange Act.

     “Rating Agencies” means (1) each of Fitch, Moody’s and S&P; and (2) if any of Fitch, Moody’s
or S&P ceases to rate the Notes or fails to make a rating of the Notes publicly available for
reasons outside of the Company’s control, a “nationally recognized statistical rating organization” within
the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Company as a
replacement agency for Fitch, Moody’s or S&P, or all of them, as the case may be.

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

14

 

OPTION TO ELECT REPAYMENT

[To be completed only if this Note is repayable at the option

of the Holder or the Company makes a Change of Control Offer

and the Holder elects to exercise such rights to tender this Note]

     The undersigned owner of this Note hereby irrevocably elects to have the Company repay (i) the
principal amount of this Note or portion hereof below designated at the applicable Repayment Price
indicated on the face hereof plus accrued and unpaid interest to but excluding the date of
repayment, if this Note is to be repaid pursuant to Section 4 of this Note, (ii) 100% of the
principal amount of this Note plus accrued and unpaid interest to but excluding the Applicable
Maturity Date, if this Note is to be repaid pursuant to Section 5 hereof or (iii) the applicable
Change of Control Payment, if this Note is to be repaid pursuant to a Change of Control under
Section 17 hereof. If a portion of this Note is not being repaid pursuant to clause (i) or (iii) above,
specify the principal amount to be repaid and the denomination or denominations (which shall not be
less than the minimum authorized denomination) of the Note or Notes to be issued to the Holder for
the portion of this Note not being repaid (in the absence of any specification, one such Note will
be issued for the portion not being repaid):

	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Signature
	

Principal
amount to be repaid
if amount to be
repaid is pursuant
to clause (i) or (iii) above
and is less than
the entire
principal amount of
this Note
(principal amount
remaining must be
an authorized
denomination)
	 	 	 	Sign exactly as name appears on the front of this Note. 

Indicate address where check is to be sent, if repaid:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	$
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Denomination
or denominations of
the Note or Notes
to be issued for
the portion of this
Note not being
repaid pursuant to
clause (i) or (iii) above

	 	 	 	SOCIAL SECURITY OR OTHER TAXPAYER ID NUMBER
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

 

ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of this instrument, will
be construed as though they were written out in full according to applicable laws or regulations:

	 	 	 	 	 	 	 	 	 	 	 
	 	 	TEN COM — as tenants in common	 	 	 	 
	 	 	TEN ENT — as tenants by the entireties	 	 	 	 
	 	 	JT TEN — as joint tenants with right of survivorship and not as tenants in common	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	UNIF GIFT MIN ACT	 	 	 	Custodian	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	(Cust)
	 	 	 	(Minor)
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Under Uniform Gifts to Minors Act
	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	(State)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Additional abbreviations may also be used though not in the above list.	 	 

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR OTHER

IDENTIFYING NUMBER OF ASSIGNEE:

 

PLEASE PRINT OR TYPE NAME AND ADDRESS

INCLUDING POSTAL ZIP CODE OF ASSIGNEE

the within Note and all rights thereunder, hereby irrevocably constituting and appointing
                                                            
attorney to transfer said Note on the books of the Company, with full
power of substitution in the premises.

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 
	 

	 	 	 	 	 	Signature	 	 
	 

	 	 	 	 	 	Sign exactly as name appears on the front of this
Note
[SIGNATURE MUST BE GUARANTEED by a member of a
recognized Medallion Guarantee Program]	 	 

	NOTICE:  	 	THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF
THE WITHIN INSTRUMENT IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
WHATEVER.

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