CHANGE IN CONTROL SEVERANCE
PLAN
FOR SENIOR EXECUTIVE EMPLOYEES
(Effective June 19,
2009)
1.1.
Purpose of Plan. This document sets forth the terms of
the PepsiAmericas, Inc. Change in Control Severance Plan for Senior
Executive Employees. The purpose of this Plan is to encourage
Participants to remain with the Company in the context of any
potential Change in Control of the Company. This Plan is effective
June 19, 2009.
1.2. Plan
Status. This Plan is intended to comply with all relevant
provisions of ERISA and is to be interpreted in a manner consistent
with its requirements.
Whenever used
herein, the following terms have the following meanings unless a
different meaning is clearly intended:
2.1. “
Administrator ” means the Company’s
Executive Vice President of Human Resources or such other person or
committee as may be appointed from time to time by the Committee to
supervise the administration of the Plan.
2.2. “
Base Salary ” means the Participant’s base
annual salary.
2.3. “
Board ” means the Company’s Board of
Directors.
2.4. “
Bonus ” means the annual bonus payable to a
Participant under the Company’s annual incentive plan (or
equivalent plan).
2.5. “
Cause ” means any of the following:
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(a)
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gross negligence or willful
misconduct,
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(b)
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refusal to carry out job duties or a
resignation, in each case other than for Good Reason;
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(c)
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conviction of or plea of guilty or
nolo contendre to a felony; or
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(d)
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a
violation of the Company’s Code of Conduct, Workplace Policy,
or Harassment Policy (including discrimination or harassment made
on basis of sex, race, nationality, religion, etc.).
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For purposes of
this Section, no act or failure to act on the part of the
Participant shall be considered “willful” unless it is
done, or omitted to be done, by the Participant in bad faith or
without reasonable belief that the Participant’s action or
omission was in the best interest of the Company.
2.6. “
Change in Control ” means the occurrence of any of
the following events:
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(a)
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any
one person or more than one person acting as a group acquires
ownership of stock of the Company that, together with the stock
held by such person or group, constitutes more than fifty percent
(50%) of the total fair market value or the total voting power of
the stock of the Company, other than a merger in which the holders
of Common Stock immediately prior to the merger have substantially
the same proportionate ownership of common stock of the surviving
corporation immediately after the merger; provided, however, if any
one person or more than one person acting as a group, is considered
to own more than fifty percent (50%) of the total fair market value
or total voting power of the stock of the Company, the acquisition
of additional stock by the same person or persons is not considered
to cause a change in the ownership of the Company or to cause a
change in the effective control of the Company;
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(b)
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any
one person, or more than one person acting as a group acquires (or
has acquired during the twelve (12) month period ending on the
date of the most recent acquisition by such person or persons)
ownership of stock of the Company possessing thirty percent (30%)
percent or more of the total voting power of the stock of the
Company;
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(c)
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any
one person, or more than one person acting as a group acquires (or
has acquired during the twelve (12) month period ending on the
date of the most recent acquisition by such person or persons)
assets of the Company that have a total gross fair market value
equal to or more than forty percent (40%) of the total gross fair
market value of all of the assets of the Company taken as a whole,
immediately prior to such acquisition or acquisitions;
or
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(d)
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a
majority of the members of the Board is replaced during any twelve
(12) month period by directors whose appointment or election
is not endorsed by a majority of the members of the Board prior to
the date of the appointment or election.
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Notwithstanding
(a), (b), (c) or (d) above, a proposed transaction
wherein PepsiCo, Inc. would acquire a less than fifty percent (50%)
interest in the Common Stock shall not constitute a Change in
Control.
2.7. “
Change in Control Pay ” means the greater of a
Participant’s Base Salary in effect on (a) the date on
which a Change in Control occurs or (b) the Qualifying
Termination Date.
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2.8.
“ Code ” means the Internal Revenue Code
of 1986, as amended.
2.9.
“ Committee ” means the Management
Resources and Compensation Committee of the Board of Directors of
PepsiAmericas, Inc.
2.10.
“ Common Stock ” means the common stock,
par value $0.01 per share, of PepsiAmericas, Inc.
2.11.
“ Company ” means PepsiAmericas, Inc.,
its affiliates and subsidiaries and, after a Change in Control, any
successor thereto.
2.12.
“ Earned Bonus ” means Target Bonus in
the year of the Qualifying Termination Date multiplied by the
payout percentage attributed to the Company’s forecasted (as
determined by the Company from time to time) or actual, as
applicable, full-year performance under the Company’s annual
incentive plan (or equivalent) for the year in which the Qualifying
Termination Date occurs.
2.13.
“ Employee ” means a common law employee
of the Company.
2.14.
“ ERISA ” means the Employee Retirement
Income Security Act of 1974, as amended.
2.15.
“ Excise Tax ” means the excise tax
imposed by Section 4999 of the Code, together with any
interest or penalties imposed with respect to such tax.
2.16.
“ Good Reason ” means:
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(a)
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a
material diminution in the Participant’s target total
compensation (meaning Base Salary, annual bonus opportunity, and
target long-term incentive compensation opportunity) other than
pursuant to a reduction of total compensation for all salaried
Employees of the Company and its affiliates;
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(b)
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a
material diminution in the Participant’s Base Salary, other
than pursuant to a reduction in the Base Salary for all salaried
Employees of the Company and its affiliates;
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(c)
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a
material diminution in the Participant’s authority, duties,
titles, or responsibilities (including budget responsibilities),
held by the Participant immediately prior to the Change in Control
or any assignment to the Participant of duties or responsibilities
that are materially inconsistent with the Participant’s
status, offices, titles, and reporting relationships as in effect
immediately prior to the Change in Control; or
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(d)
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(i) any change of the
Participant’s principal place of employment to a location
more than thirty (30) miles from the Participant’s place
of employment immediately prior to the Change in Control, or that
increases the Participant’s commuting time by forty-five
(45) minutes or more in either direction or (ii) a
material increase in the Participant’s travel
obligations.
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In order to resign
for Good Reason the (i) Participant must provide notice to the
Company of the existence of the condition described above within
ninety (90) days of the initial existence of any such
condition, (ii) Company shall have thirty (30) days
following receipt of the notice during which the Company may remedy
the condition and not be required to make payment to the
Participant in accordance with Section 3.1,
(iii) Participant must resign within ninety (90) days
after the cure period ends; and (iv) resignation process must
be completed within two (2) years after the Change in
Control.
A
Participant’s right to resign for Good Reason shall remain in
effect for the two-year period following a Change in Control.
Consequently, a Participant’s decision to remain employed
following a change constituting Good Reason shall not impair the
Participant’s right to resign for Good Reason for any other
change constituting Good Reason within the two-year period
following a Change in Control.
2.17.
“ Month of Change in Control Pay ” means
the Participant’s Change in Control Pay divided by twelve
(12).
2.18.
“ Monthly Target Bonus ” means the Target
Bonus divided by twelve (12).
2.19.
“ Participant ” means a “Named
Executive Officer” (as set forth in the Company’s most
recently filed proxy statement) and the Company’s other
Executive Vice Presidents. The names of such Participants are set
forth on Schedule A hereto. Prior to a Change in Control,
Participants may from time to time be added to, or deleted from
Schedule A as determined by the Committee; provided that any
individual who is a Participant on the day prior to a Change in
Control shall always be a Participant.
2.20.
“ Payment ” means any payment, award,
benefit, or distribution (or any acceleration of any payment,
award, benefit or distribution) by the Company to or for the
benefit of a Participant.
2.21.
“ Plan ” means the PepsiAmericas, Inc.
Change in Control Severance Plan for Senior Executive
Employees.
2.22.
“ Qualifying Termination ” means upon or
within two (2) years of a Change in Control (a) the
Company’s termination of the Participant’s employment
other than for Cause or Total Disability, or (b) a
Participant’s resignation from employment for Good
Reason.
2.23.
“ Qualifying Termination Date ” means the
effective date of a Qualifying Termination. The effective date of a
Participant’s Qualifying Termination shall be the same as the
date the Participant separates from service within the meaning of
Section 409A(a)(2)(a)(i) of the Code as a result of the
Qualifying Termination.
2.24.
“ Salary Continuation ” means the
severance benefit available to a Participant upon a Qualifying
Termination Date that is payable in accordance with
Section 3.1.
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2.25.
“ Section 409A ” means
Section 409A of the Code.
2.26.
“ Separation Agreement ” means the
Company-provided release and separation agreement that must become
irrevocable prior to the commencement of the benefits described in
Section 3.1, a copy of which is attached hereto and
incorporated by reference as Exhibit A.
2.27.
“ Target Bonus ” means the greater of the
annual target Bonus for the performance period in progress when
either the (a) Qualifying Termination Date occurs or
(b) Change in Control occurs; provided, however, that for
purposes of Section 3.1(b)(ii)(2), subsection (a) shall
not apply.
2.28.
“ Total Disability ” means total
disability as set forth in the Company’s Long-Term Disability
Plan.
ARTICLE
3. BENEFITS UNDER THE PLAN
3.1. Plan
Benefits . Upon or within two (2) years after a Change
in Control, a Participant who has a Qualifying Termination and
executes a Separation Agreement shall receive severance benefits in
accordance with the provisions of this Section 3.1.
Notwithstanding anything in this Section 3.1 to the contrary,
Section 3.3 shall govern the form and time of payments to
Participants for which Section 409A is applicable.
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(a)
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Severance
. Following the
Qualifying Termination Date, the Company shall pay the Participant
twenty-four (24) Months of Change in Control Pay plus the
Participant’s Monthly Target Bonus for twenty-four (24)
months. Payments under this subsection (a) shall be made in
installment payments on the Company’s regular payroll dates
commencing within sixty (60) days of the Qualifying
Termination Date, provided that the Separation Agreement has become
irrevocable.
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(b)
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Earned Bonus
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(i)
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Qualifying Termination Date in the
Calendar Year of a Change in Control . Participants whose Qualifying
Termination Date occurs during the calendar year of the Change in
Control shall receive a payment computed as follows: an amount
equal to the Participant’s Earned Bonus multiplied by the
number of days worked by the Participant during the calendar year,
divided by three hundred sixty-five (365).
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(ii)
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Qualifying Termination Date in One
(1) of the Two (2) Calendar Years Following the Calendar
Year of a Change in Control . Participants whose Qualifying
Termination Date occurs in one of the two calendar years following
the calendar year of a Change in Control shall receive a payment
equal to the greater of (1) or (2) below, calculated as of the
last day of the month prior to the Qualifying Termination
Date:
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(1)
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an
amount equal to the Participant’s Earned Bonus multiplied by
the number of days worked by the Participant during the calendar
year, divided by three hundred sixty-five (365); or
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(2)
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the
amount equal to the Target Bonus that the Participant would have
been eligible to receive in the year of the Change in Control,
multiplied by the number of days worked by the Participant during
the calendar year of the Qualifying Termination Date, divided by
three hundred sixty-five (365).
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(iii)
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Payment of the Earned Bonus shall be
made in a lump sum within sixty (60) days of the Qualifying
Termination Date provided that the Separation Agreement has become
irrevocable.
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(c)
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Continued Health and Welfare
Benefits . Following a Participant’s
Qualifying Termination Date, the Company shall provide such
Participant with medical, dental, life, and long-term disability
insurance coverage at the level provided by the Company to the
Participant immediately prior to the Qualifying Termination Date.
The Plan benefit described in this subsection shall be provided for
twenty-four (24) months, provided however, that if the
Participant becomes employed by a new employer, the
Participant’s coverage under the applicable Company plans
will end when the Participant becomes eligible for such new
employer’s coverage. Employee-paid benefits for supplemental
life insurance, supplemental Long-Term Disability benefits,
supplemental AD&D, dependent life insurance and all other
voluntary benefits will end as of the Qualified Termination Date.
The Participant shall pay any Employee contribution required for
active Employees as in effect from time to time during the first
eighteen (18) months of coverage at and after the Qualifying
Termination Date, and shall pay the full cost of such coverage for
the remaining six (6) months. The Company shall reimburse the
Participant during this six-month period for the amount paid by the
Participant that exceeds the rates then charged to active Employees
for medical and dental coverage (adjusted for taxes on such
amounts) on the first day of the month after receipt of the payment
by the Company. Following the expiration of this period, the
Participant will be eligible to elect COBRA continuation coverage.
The period during which medical and dental coverage is continued at
the active Employee rates is not included in the period within
which the Employee is allowed to continue medical and dental
coverage under COBRA.
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(d)
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Outplacement
. Outplacement services
selected by the Participant for the period ending on the earlier of
the Participant’s reemployment or the one (1) year
anniversary of the Participant’s Qualifying Termination Date,
with a maximum cost of $50,000 per Participant.
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(e)
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Financial and Tax Planning
Services . Financial and tax planning
services for the Participant for the year of the Qualifying
Termination Date and for the period of time reasonably necessary to
assist with financial issues and the preparation of the next
calendar year’s tax return. These services shall be provided
by Ayco and paid for by the Company. The scope of such services
shall be equal to the financial and tax planning services made
available to the Participant immediately prior to the Change in
Control.
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(f)
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Death Benefit
. In the event a
Participant dies before receiving all severance benefits due under
the Plan, the remaining benefits shall be paid, as allowed by law,
to the Participant’s estate or as directed by a Court of
competent jurisdiction. Payment shall be made in the form of a lump
sum within sixty (60) days of the Participant’s
death.
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3.2.
Exclusive Source of Severance Benefits . During the
two-year period following a Change in Control, Participants
eligible for severance benefits under this Plan are not eligible
for any other Company-provided severan
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