Exhibit 99.1
[Year] Non-Employee Director Long-Term Incentive
Award Agreement
AGREEMENT, made as of this
day of
, 200 by and between PepsiCo,
Inc. (“PepsiCo”), a North Carolina corporation having
its principal office at 700 Anderson Hill Road, Purchase, New York,
and [Director name] (“Director” or “you”).
W I T N E S S E T H:
WHEREAS, the Board of Directors (the
“Board”) and shareholders of PepsiCo have approved the
PepsiCo, Inc. 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 Plan, as amended and
restated, each non-employee director, including the Director, is
granted a stock award and stock options as described herein on
, 200 (the “Grant
Date”); and
WHEREAS, stock awards and options granted under
the Plan are to be evidenced by an Agreement in such form and
containing such terms and conditions as the Board shall determine.
NOW,
THEREFORE, it is mutually agreed as follows:
A. Terms and Conditions
Applicable to Stock Awards .
1. Grant . In consideration of your
remaining a director of PepsiCo, PepsiCo hereby grants to you, on
the terms and subject to the conditions set forth in Section C
below,
shares of PepsiCo Common Stock (the “Stock
Award”).
2. Withholding . Federal income tax
withholding at the rate required by the Plan (which as of the date
of this Agreement is 25%), or such higher rate as may be legally
required, and all other tax withholding that is legally required
with respect to a Stock Award shall be satisfied by PepsiCo
retaining shares of PepsiCo Common Stock, having a Fair Market
Value on the date such shares are taxable to you, that is equal to
the amount of such withholding (rounded, if necessary, to the next
highest whole number of shares of PepsiCo Common Stock).
B. Terms and Conditions
Applicable to Stock Options .
1. Grant . In consideration of your
remaining a director of PepsiCo, PepsiCo hereby grants to you, on
the terms and conditions set forth in this Section B and in
Section C below, the right and option to purchase
shares of PepsiCo Common Stock, par value $0.0167 per share,
at $
per share (the “Option Exercise Price”), which was the
Fair Market Value (as defined in the Plan) 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. Exercisability . Subject to the
terms and conditions set forth herein, the Options shall become
fully vested on the third (3 rd ) anniversary of the
Grant Date (the “Vesting Date”) and shall be
exercisable from the Vesting Date through the day immediately prior
to the tenth (10 th ) anniversary of the Grant Date (the
“Expiration Date”). Options may vest only while you are
a director of PepsiCo. 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 set out in the Plan
or as established by the Board or its delegate 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, must be paid in full at the time of issuance of such
shares.
4. Effect of Termination, Death,
Retirement and Total Disability .
(a) Termination . The Options may
vest and become exercisable only while you are a director of
PepsiCo. Thus, vesting ceases upon the termination of your
directorship with PepsiCo. Subject to subparagraph (b) of this
paragraph 4, all unvested Options shall automatically be forfeited
and canceled upon the date that your directorship with PepsiCo
terminates.
(b) Death, Retirement or Total
Disability . If your directorship terminates prior to the
Vesting Date, by reason of your death, Retirement (as defined in
the Plan) or Total Disability (as defined in the Plan), then the
Options shall fully vest on your last day of directorship with
PepsiCo and shall be exercisable by your 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 your
death, or by you, in the event of your Retirement or Total
Disability, prior to the Expiration Date in accordance with this
Agreement.
5. Buy-Out of Option Gains . At any
time after any Option becomes exercisable, the Board shall have the
right, in its sole discretion and without your consent, to cancel
such Option and pay you the difference between the Option Exercise
Price and the Fair Market Value of the shares covered by the Option
as of the date the Board gives 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 PepsiCo 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 PepsiCo
Common Stock at the date of the Buy-Out Notice. In no event shall
PepsiCo be required to deliver a fractional share of PepsiCo Common
Stock in satisfaction of a buy out hereunder. Payments of any such
buy out amounts shall be made net of any required tax withholding,
in accordance with procedures specified in the Buy-Out
Notice.
6. Adjustment for Change
in
