As filed with the Securities and Exchange Commission on November 14, 1995
- -------------------------------------------------------------------------
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------------------------
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
PepsiCo, Inc.
(Exact name of registrant as specified in its charter)
North Carolina 5812 13-1584302
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Code
organization) Number)
Purchase, New York 10577-1444
(914) 253-2000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
DOUGLAS M. CRAM, Esq.
Vice President and Assistant General Counsel
PepsiCo, Inc.
Purchase, New York 10577-1444
(914) 253-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
WILLIAM M. HARTNETT, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
(212) 701-3000
Approximate date of commencement of proposed sale of the
securities to the public:
From time to time after the effective date of this Registration
Statement as determined in light of market conditions.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following box.
If any of the securities being registered on this form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933 (the "Act"), other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following box.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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<S> <C> <C> <C> <C>
Title of Amount to be Proposed Proposed Amount of
securities registered maximum maximum registration
to be aggregate offering fee
registered offering price price (1)
per unit (1)
- ---------------------------------------------------------------------------
Debt Securities,
Debt Warrants and $2,500,000,000 100% $2,500,000,000 $500,000.00
Shelf Warrants (2)(3) (2)
</TABLE>
(1) Estimated solely for the purpose of determining the amount
of the registration fee.
(2) In U.S. dollars or the equivalent thereof in the case of
foreign currencies or currency equivalents.
(3) The principal amount at maturity will be greater if any
Debt Securities, Debt Warrants or Shelf Warrants are sold with
original issue discount.
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Act or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
Pursuant to Rule 429 of the Rules and Regulations of the
Securities and Exchange Commission under the Securities Act of
1933, as amended, the prospectus included in this registration
statement also relates to $2,087,000,000 of Debt Securities, Debt
Warrants and Shelf Warrants previously registered under the
registrant's registration statement on Form S-3 (File No. 33-
57181).
<PAGE>
PROSPECTUS
U.S. $4,587,000,000
L O G O
DEBT SECURITIES AND WARRANTS
Due Not Less Than Nine Months from Date of Issue
PepsiCo, Inc., a North Carolina corporation (the "Company"), may
from time to time offer one or more of the following securities
under the Registration Statement (hereinafter defined) of which
this Prospectus forms a part: debt securities, consisting of
notes, debentures, and other evidences of unsecured indebtedness
(the "Debt Securities"), warrants to purchase Debt Securities
(the "Debt Warrants"), and other warrants, options, and unsecured
contractual obligations of the Company (the "Shelf Warrants")
(Debt Warrants and Shelf Warrants sometimes referred to
collectively as the "Warrants"), up to an aggregate initial
offering price of $4,587,000,000 or the equivalent thereof in one
or more foreign or composite currencies (any such foreign or
composite currency a "Specified Currency"). See "Important
Currency Exchange Information". Debt Securities and Warrants
(collectively, the "Securities" and each, individually, a
"Security") may be offered separately or together, in amounts, at
prices, and on terms to be determined at the time of sale.
The particular terms of any series of Debt Securities will be set
forth in a separate supplement to this Prospectus (each
a "Pricing Supplement"). Each Debt Security will bear interest
at either a fixed rate established by the Company at the date of
issue (a "Fixed Rate Debt Security") (which in the case of a Debt
Security issued at a discount from its principal amount (a
"Discount Debt Security") may be zero) or a floating rate (a
"Floating Rate Debt Security"). A Fixed Rate Debt Security may
pay a variable amount of principal and a Floating Rate Debt
Security may pay a variable amount of interest and/or principal,
in each case as determined by reference to the relative value of
one or more Specified Currencies, commodities, or instruments,
the level of one or more financial or non-financial indices, or
any other designated factor or factors (each such security an
"Indexed Debt Security"). The minimum denominations in which
Debt Securities of a particular series may be purchased will be
set forth in the applicable Pricing Supplement. Unless otherwise
specified in the applicable Pricing Supplement, Debt Securities
will be issued in integral multiples of $1,000, will not be
redeemable or repayable prior to maturity, and will not be
subject to any sinking fund. Each Debt Security will be issued
in registered form and will be represented by a single global
certificate (a "Global Debt Security") or, at the option of the
Company, by a certificate registered in definitive form. Each
Global Debt Security will be deposited with The Depository Trust
Company, as depositary ("DTC"), or with any other depositary
appointed by the Company (DTC or such other depositary the
"Depositary"), and will be registered in the name of the
Depositary or a nominee thereof. Beneficial interests in a
Global Debt Security will be shown on, and transfers thereof will
be effected only through, records maintained by the Depositary
and its Participants (hereinafter defined). Except under the
circumstances described herein or in the applicable Pricing
Supplement, beneficial interests in a Global Debt Security will
not be issuable in definitive form. SEE "DESCRIPTION OF DEBT
SECURITIES--CURRENCY AND INDEX-RELATED RISK FACTORS" FOR A
DISCUSSION OF GENERAL RISKS ASSOCIATED WITH INVESTMENTS IN
INDEXED DEBT SECURITIES AND IN DEBT SECURITIES DENOMINATED OR
PAYABLE IN A SPECIFIED CURRENCY.
The particular terms of any series of Warrants, including the
designation, offering price, detachability, expiration date,
procedures and conditions relating to exercise, and information
regarding the underlying instrument, commodity, or index will be
set forth in one or more supplements to this Prospectus (each a
"Prospectus Supplement"). The applicable Prospectus Supplement
will also identify any material United States tax considerations
and any general risks associated with an investment in Warrants
of a given series. See "Description of Warrants".
<PAGE>
In the event of a variance in the terms set forth in this
Prospectus and in the Pricing Supplement or Prospectus Supplement
applicable to a particular series of Securities (each such
supplement an "applicable Supplement"), the terms of the
applicable Supplement will govern.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS OR ANY APPLICABLE SUPPLEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Securities may from time to time be offered and sold by the
Company directly to investors, through one or more agents, or to
underwriters for resale to investors. There is no agreement at
this time between the Company and any agent or underwriter with
respect to the Securities. However, it is anticipated that any
agreement between the Company and any agent or underwriter will
be in substantially the form of Distribution Agreement filed as
Exhibit 1 to the Registration Statement (hereinafter defined).
The name of any agent or underwriter involved in the offering of
any particular series of Securities (other than an agent acting
as purchaser for its own account) will be set forth in the
applicable Supplement (any such named agent or underwriter,
respectively, an "Agent" or "Underwriter"). It is not currently
anticipated that any series of Securities will be listed on any
securities exchange and there can be no assurance either that the
Securities will be sold or, if sold, that there will be a
secondary market for them. The Company or any Agent or
Underwriter may reject any offer to purchase Securities, in whole
or in part, whether or not solicited. The Company will have the
sole right to accept any offer to purchase Securities and
reserves the right to withdraw, cancel, or modify, without
notice, the offer to sell Securities contained in this Prospectus
and in any applicable Supplement. See "Plan of Distribution".
<TABLE>
<CAPTION>
Maximum
Aggregate Minimum
Price to Commissions & Proceeds to
Public (1) Discounts the Company
(2)(3) (2)(3)(4)
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<S> <C> <C> <C>
Per Debt 100%(5) 0.75% 99.25%
Security
Per Warrant (6) 0.75% 99.25%
Total $4,587,000,000 $34,402,500(7)(8) $4,552,597,500(7)(8)
(7)(8)
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</TABLE>
(1) The aggregate initial public offering price of all Debt
Securities and Warrants sold hereunder will not exceed
$4,587,000,000, or the equivalent thereof in one or more
Specified Currencies, as the case may be.
(2) The Company may pay commissions to Agents and offer
discounts to Underwriters, which commissions and discounts
will not, in the aggregate, exceed 0.75% of the aggregate
initial offering price of all Debt Securities and Warrants
sold through Agents and Underwriters. Any such commission
or discount will be identified in the applicable Supplement.
(3) An Agent or Underwriter may realize additional consideration
from its participation as broker or counterparty in one or
more swap transactions related to the issuance of Debt
Securities or Warrants. Each Agent and Underwriter will be
indemnified by the Company against certain civil
liabilities, including liabilities under the Securities Act
of 1933, as amended.
(4) Before deduction of expenses payable by the Company
estimated at $1,550,000.00.
(5) Unless otherwise specified in the applicable Pricing
Supplement, Debt Securities will be issued at 100% of their
principal amount.
(6) The initial public offering price of any Warrants sold
hereunder will be set forth in the applicable Prospectus
Supplement.
(7) Includes up to $2,087,000,000 in initial public offering
price, $15,652,500.00 of discounts and commissions, and
$2,071,347,500 -- of minimum proceeds to the Company, of
Debt Securities and Warrants which, as of the date hereof,
were eligible for sale under the Company's prospectus dated
January 11, 1995, relating to up to $3,322,000,000 in
aggregate principal amount of debt securities and warrants.
(8) In U.S. dollars or the equivalent thereof in one or more
Specified Currencies, as the case may be.
This Prospectus may be used by Agents, Underwriters, and other
dealers in connection with offers and sales of Securities in
market-making transactions at negotiated prices relating to
prevailing market prices at the time of sale or otherwise. This
Prospectus may not be used to consummate the sale of any
Securities unless accompanied by the applicable Supplement.
The date of this Prospectus is November , 1995.
<PAGE 2>
AVAILABLE INFORMATION
The Company is subject to the informational
requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and, in accordance therewith,
files reports, proxy statements, and other information with
the Securities and Exchange Commission (the "Commission").
Such reports, proxy statements, and other information can be
inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, Room 1024,
N.W., Washington, D.C. 20549, at the Commission's New York
Regional Office, 7 World Trade Center, Room 1400, New York,
New York 10048, and at its Chicago Regional Office, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies
of such material can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, Room 1024,
N.W., Washington, D.C. 20549, at prescribed rates. Such
reports, proxy statements, and other information may also be
inspected and copied at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005,
and at the offices of the Chicago Stock Exchange, Inc., 440
South LaSalle Street, Chicago, Illinois 60605.
This Prospectus does not contain all of the information
set forth in the registration statement filed by the Company
with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the offer
contained herein. Reference should be made to such
registration statement (the "Registration Statement"), the
exhibits thereto, and the documents incorporated by
reference therein for further information regarding the
Company and the Securities.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company
with the Commission, relating to the Company and its
consolidated subsidiaries, are incorporated by reference in
this Prospectus:
(a) the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994;
(b) the Company's Quarterly Report on Form 10-Q
for the twelve weeks ended March 25, 1995;
(c) the Company's Quarterly Report on Form 10-Q
for the twelve and twenty-four weeks ended
June 17, 1995; and
(d) the Company's Quarterly Report on Form 10-Q
for the twelve and thirty-six weeks ended
September 9, 1995.
All documents filed by the Company pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Exchange Act after the
date of this Prospectus and prior to the termination of the
offering of the Securities will be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from
the date of filing of such documents. Any statement
contained herein or in any document incorporated or deemed
to be incorporated by reference herein will be deemed to be
modified or superseded for purposes of this Prospectus to
the extent that a statement contained in any subsequently
filed document that also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement.
Any statement so modified or superseded will not be deemed,
except as so modified or superseded, to constitute a part of
this Prospectus.
The Company will furnish, without charge, to each
person to whom a copy of this Prospectus has been delivered,
upon the oral or written request of any such person, a copy
of any or all of the documents incorporated by reference
herein, except the exhibits to such documents (unless such
exhibits are expressly incorporated by reference therein).
Requests should be directed to the Manager of Shareholder
Relations, PepsiCo, Inc., 700 Anderson Hill Road, Purchase,
N.Y. 10577, telephone number (914) 253-3055.
<PAGE 3>
IMPORTANT CURRENCY EXCHANGE INFORMATION
Unless otherwise provided in the applicable Pricing
Supplement, purchasers will be required to pay for each
non-U.S. dollar denominated Debt Security in the Specified
Currency, and payments of principal, premium, if any, and
interest, if any, on such Debt Security will be made in such
Specified Currency. Currently, there are limited facilities
in the United States for the conversion of U.S. dollars into
foreign currencies and vice versa. In addition, most banks
do not currently offer non-U.S. dollar denominated checking
account facilities in the United States and there may be
significant restrictions on other non-U.S. dollar
denominated accounts offered by banks in the United States.
Accordingly, unless alternative arrangements are made,
payments of principal, premium, if any, and interest, if
any, on Debt Securities payable in a Specified Currency will
be made to an account at a bank outside the United States.
See "Description of Debt Securities--Currency and
Index-Related Risk Factors".
If the applicable Pricing Supplement provides for
payments of principal, premium, if any, and interest, if
any, on a non-U.S. dollar denominated Debt Security to be
made in U.S. dollars, the conversion of the Specified
Currency into U.S. dollars will be handled by the exchange
rate agent identified in the applicable Pricing Supplement.
The costs of such conversion will be borne by the Holder
(see Glossary) of such Debt Security through deductions from
such payments.
References herein to "U.S. dollars", "U.S. $", and "$"
are to the lawful currency of the United States.
THE COMPANY
The Company was incorporated in Delaware in 1919 and
was reincorporated in North Carolina in 1986. Unless the
context indicates otherwise, the term "PepsiCo" as used in
this Prospectus means the Company and its various divisions
and subsidiaries. PepsiCo is engaged in the following
domestic and international business activities: beverages,
snack foods, and restaurants.
PepsiCo's beverage business consists of Pepsi-Cola
North America ("PCNA") and Pepsi-Cola International ("PCI").
PCNA manufactures and sells beverages, primarily soft drinks
and soft drink concentrates, in the United States and
Canada. PCNA sells its concentrates to licensed independent
and company-owned bottlers ("Pepsi-Cola bottlers") and to
joint ventures in which PepsiCo participates. Under
appointments from PepsiCo, bottlers manufacture, sell and
distribute, within defined territories, carbonated soft
drinks and syrups bearing trademarks owned by PepsiCo,
including PEPSI-COLA, DIET PEPSI, MOUNTAIN DEW, SLICE, MUG
and, within Canada, 7UP and DIET 7UP (the foregoing are
sometimes referred to as "Pepsi-Cola beverages"). The
Pepsi/Lipton Tea Partnership, a joint venture of PCNA and
Thomas J. Lipton Co., develops and sells tea concentrate to
Pepsi-Cola bottlers and develops and markets ready-to-drink
tea products under the LIPTON trademark. Such products are
distributed by Pepsi-Cola bottlers throughout the United
States. A joint venture between PCNA and Ocean Spray
Cranberries, Inc. develops new juice products under the
OCEAN SPRAY trademark. Pursuant to a separate distribution
agreement, Pepsi-Cola bottlers distribute single-serve sizes
of OCEAN SPRAY juice products throughout the United States.
PCI manufactures and sells soft drinks and soft drink
concentrates outside the United States and Canada. PCI
sells its concentrates to Pepsi-Cola bottlers and to joint
ventures in which PepsiCo participates. Under appointments
from PepsiCo, bottlers manufacture, sell and distribute,
within defined territories, Pepsi-Cola beverages bearing
PEPSI-COLA, DIET PEPSI, MIRINDA, PEPSI MAX, 7UP, DIET 7UP
and other trademarks. Principal international markets
include Mexico, Saudi Arabia, Argentina, Spain, the United
Kingdom, Thailand, Venezuela, Brazil and China.
<PAGE 4>
PepsiCo's snack food business consists of Frito-Lay
North America ("Frito-Lay") and PepsiCo Foods International
("PFI"). Frito-Lay manufactures and sells a varied line of
snack foods throughout the United States and Canada,
including FRITOS brand corn chips, LAY'S (in the United
States) and RUFFLES brands potato chips, DORITOS and
TOSTITOS brands tortilla chips, CHEETOS brand cheese
flavored snacks, ROLD GOLD brand pretzels, SMARTFOOD brand
cheese flavored popcorn and SUNCHIPS brand multigrain
snacks.
PFI manufactures and markets snack foods outside the
United States and Canada through company-owned facilities
and joint ventures. On most of the European continent,
PepsiCo's snack food business consists of Snack Ventures
Europe, a joint venture between PepsiCo and General Mills,
Inc., in which PepsiCo owns a 60% interest. Many of PFI's
snack food products, such as SABRITAS brand potato chips in
Mexico, are similar in taste to Frito-Lay snacks sold in the
United States and Canada. PFI also sells a variety of snack
food products which appeal to local tastes including, for
example WALKERS CRISPS, which are sold in the United
Kingdom, and GAMESA cookies and SONRIC'S candies, which are
sold in Mexico. In addition, RUFFLES, CHEETOS, DORITOS,
FRITOS and SUNCHIPS brand snack foods have been introduced
to international markets. Principal international markets
include Mexico, the United Kingdom, Spain, Brazil, Poland,
the Netherlands, France, and Australia.
PepsiCo's worldwide restaurant business principally
consists of Pizza Hut, Inc. ("Pizza Hut"), Taco Bell Corp.
("Taco Bell"), KFC Corporation ("KFC") and PepsiCo
Restaurants International ("PRI").
Pizza Hut is engaged principally in the operation,
development and franchising of a system of casual full
service family restaurants, delivery/carryout units and
kiosks operating under the name PIZZA HUT throughout the
United States and Canada. The full service restaurants
serve several varieties of pizza as well as pasta, salads
and sandwiches.
Taco Bell is engaged principally in the operation,
development and franchising of a system of fast-service
restaurants serving carryout and dine-in moderately priced
Mexican-style food, including tacos, burritos, taco salads
and nachos and operating under the name TACO BELL throughout
the United States and Canada.
KFC is engaged principally in the operation,
development and franchising of a system of carryout and dine-
in restaurants featuring chicken and operating under the
names KENTUCKY FRIED CHICKEN and/or KFC throughout the
United States and Canada.
PRI is engaged principally in the operation and
development of casual dining and fast-service restaurants,
delivery units and kiosks which sell PIZZA HUT, KFC and, to
a lesser extent, TACO BELL products outside the United
States and Canada.
PFS, a division of PepsiCo, is engaged in the
distribution of food, supplies and equipment to company-
owned, franchised and licensed PIZZA HUT, TACO BELL and KFC
restaurants in the United States, Australia, Canada, Mexico,
Puerto Rico and Poland.
The Company's executive offices are located at 700
Anderson Hill Road, Purchase, New York 10577 (telephone
number (914) 253-2000).
<PAGE 5>
USE OF PROCEEDS
Except as otherwise provided in any applicable
Supplement, the net proceeds from the sale of Securities
will be utilized by the Company or its subsidiaries for
general corporate purposes, including the funding of
acquisitions and share repurchases and the refunding of
commercial paper and other indebtedness.
Depending upon market conditions, the financial needs
of the Company, and other factors, the Company may, from
time to time, undertake additional financings. The amount
and timing of such financings, if any, cannot be determined
at this time.
RATIO OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges of the Company
and its consolidated subsidiaries for the fiscal years 1990
through 1994, inclusive, and for the 36 weeks ended
September 9, 1995, are set forth below. "Fixed charges"
consist of interest expense, capitalized interest,
amortization of debt discount, and a portion of net rental
expense deemed to be representative of the interest factor.
The ratio of earnings to fixed charges is calculated as
income from continuing operations, before provision for
income taxes and cumulative effect of accounting changes,
where applicable, plus fixed charges (excluding capitalized
interest), plus amortization of capitalized interest and
adjusted for joint ventures and minority interests, net,
with the sum divided by fixed charges.
<TABLE>
<CAPTION>
FISCAL YEARS
----------------
<S> <C> <C> <C> <C> <C>
36 Weeks
1990 1991 1992 1993 1994 Ended
September 9,
1995
3.09 3.27 3.65 4.38 4.31 4.54
</TABLE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an
Indenture, dated as of December 14, 1994 (the "Indenture"),
between the Company and The Chase Manhattan Bank (National
Association), as trustee (the "Trustee"), a copy of which is
incorporated by reference as an exhibit to the Registration
Statement of which this Prospectus is a part. The
statements herein concerning the Indenture do not purport to
be complete and are subject to, and are qualified in their
entirety by reference to, all of the provisions of the
Indenture, including the definitions of certain terms. All
capitalized terms used herein and not otherwise defined have
the meanings ascribed to such terms in the Indenture. All
capitalized terms used in an applicable Pricing Supplement
and not otherwise defined therein have the meanings ascribed
to such terms in this Prospectus.
THE TERMS AND CONDITIONS SET FORTH IN THIS PROSPECTUS
WITH RESPECT TO DEBT SECURITIES WILL APPLY TO EACH DEBT
SECURITY UNLESS OTHERWISE SPECIFIED HEREIN OR IN THE
APPLICABLE PRICING SUPPLEMENT.
<PAGE 6>
General
The Debt Securities may be issued from time to time in
an aggregate principal amount that, together with the
aggregate initial offering price of Warrants that may be
issued from time to time hereunder, will not exceed
$4,587,000,000 or the equivalent thereof in one or more
Specified Currencies. The aggregate principal amount may be
increased from time to time as authorized by the Board of
Directors of the Company. For the purpose of this
paragraph: (i) the principal amount of any Discount Debt
Security or of any Debt Security issued at a premium over
its face amount means the Issue Price (hereinafter defined)
of such Debt Security, and (ii) the principal amount of any
Debt Security denominated in a Specified Currency means the
U.S. dollar equivalent of the Issue Price of such Debt
Security as of its issue date. The Indenture does not limit
the aggregate principal amount of debt securities that the
Company may issue and does not limit the amount of
additional indebtedness the Company may incur. The Debt
Securities will be unsecured and unsubordinated obligations
of the Company and will rank in parity with all other
unsecured and unsubordinated indebtedness of the Company.
Debt Securities denominated in U.S. dollars will be
issued in integral multiples of $1,000 and in such
denominations as will be set forth in the applicable Pricing
Supplement. The authorized denominations of Debt Securities
denominated in a Specified Currency will be as set forth in
the applicable Pricing Supplement. The U.S. dollar
equivalent of the principal amount of a Debt Security
denominated in a Specified Currency will be determined on
the basis of the noon buying rate in the City of New York
for cable transfers of such Specified Currency published by
the Federal Reserve Bank of New York (such rate the "Market
Exchange Rate") on the New York Business Day (hereinafter
defined) prior to the date the Company accepted the offer to
purchase such Debt Security. Determination of the Market
Exchange Rate will be made by the Exchange Rate Agent
(hereinafter defined).
Each Debt Security will be issued in fully registered
form, as a Global Debt Security, or, if provided in the
applicable Pricing Supplement, as a Debt Security in
definitive form. Debt Securities may be registered for
transfer or exchange at the Corporate Trust Office of the
Trustee, at 4 Chase MetroTech Center, Brooklyn, New York
11245. No service charge will be made for any transfer or
exchange of Debt Securities, but the Company may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Except
as set forth below, beneficial interests in Global Debt
Securities will not be exchangeable for Debt Securities in
definitive form. See "Description of Debt Securities--
Global Debt Securities".
Each Debt Security will mature on a date not less than
nine months from its issue date, as set forth in the
applicable Pricing Supplement. Debt Securities will not be
redeemable at the option of the Company or repayable at the
option of the Holder prior to maturity and will not be
subject to any sinking fund. The foregoing notwithstanding,
the Company may purchase Debt Securities at any time, at any
price, in the open market or otherwise, and may thereafter
hold or resell such Debt Securities, or surrender such Debt
Securities to the Trustee for cancellation, at the sole
discretion of the Company.
The applicable Pricing Supplement will describe the
particular terms of each Debt Security to be sold pursuant
thereto, including (1) the principal amount and, if the
principal amount will be amortized over the life of the Debt
Security, the method of determining when and to what extent
payments of principal will be made prior to maturity or, if
the principal amount is variable, the face amount and any
index, formula, or other factor to which payment of
principal is linked; (2) the initial offering price (the
"Issue Price"), if other than 100% of the principal amount;
(3) the date on which the Issue Price must be paid (the
"Settlement Date") and the manner in which such payment must
be made, if other than by wire transfer of immediately
available funds; (4) the interest rate or, if the interest
rate is variable, any index, formula, or other factor to
which payment of interest is linked; (5) the date from which
interest, if any, will accrue (the "Interest Accrual Date"),
if other than the date of issue; (6) the scheduled date or
dates on which interest, if any, will be payable (each an
"Interest Payment Date"); (7) the scheduled date or dates on
which principal and premium, if any, will be payable (each a
"Principal Payment Date"); (8) the date on which the Debt
Security is scheduled to mature (the "Scheduled Maturity
Date"); (9) whether principal, premium, if any, or interest,
<PAGE 7>
if any, may, at the option of the Company or the Holder, be
payable in a currency other than the denominated currency of
the Debt Security, and the terms and conditions upon which
such option may be exercised; (10) whether and under what
circumstances the Company will pay additional amounts on the
Debt Security in respect of any taxes, assessments, or other
governmental charges withheld or deducted and, if so,
whether the Company will instead have the option to redeem
the Debt Security; (11) any other terms or conditions upon
which the Debt Security may be redeemed or repaid by the
Company prior to its Scheduled Maturity Date; (12) any
mandatory or optional sinking fund provisions; (13) any
Event of Default (as defined in the Indenture) with respect
to the Debt Security, if not set forth in the Indenture; and
(14) any additional terms or provisions of the Debt
Security, which will not in any event be inconsistent with
the terms and conditions of the Indenture.
Exchange Rate and Other Calculations
Any currency exchange rates and currency exchange
calculations to be made with respect to a given Debt
Security will be made by the exchange rate agent, which may
be either the Company or its appointed agent, as identified
in the applicable Pricing Supplement (the Company or any
agent so identified in the applicable Pricing Supplement the
"Exchange Rate Agent"). Any other calculations to be made
with respect to a given Debt Security will be made by the
calculation agent, which may be either the Company or its
appointed agent, as identified in the applicable Supplement
(the Company or any agent so identified in the applicable
Pricing Supplement the "Calculation Agent"). All
determinations and calculations made by the Exchange Rate
Agent or the Calculation Agent, as the case may be, will be
at the sole discretion of the Exchange Rate Agent or the
Calculation Agent, as the case may be, and in the absence of
manifest error will be conclusive for all purposes and
binding on the Holders of the subject Debt Securities.
All currency amounts resulting from calculations with
respect to any Debt Security will be rounded, if necessary,
to the nearest one-hundredth of a unit, with five
one-thousandths of a unit being rounded upward -- e.g.,
1.765 being rounded to 1.77 -- except that in the case of
the Japanese yen and the Italian lire, such currency amounts
will be rounded to the nearest whole unit -- e.g., 99.5 yen
being rounded to 100 yen. All percentages resulting from
any calculation with respect to any Debt Security will be
rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point (.0000001), with five one-millionths
of a percentage point rounded upward -- e.g., .09876545 (or
9.876545%) being rounded to .0987655 (or 9.87655%).
Payment Currency
If the applicable Pricing Supplement provides for
payments of principal, premium, if any, and interest, if
any, on a non-U.S. dollar denominated Debt Security to be
made in U.S. dollars at the option of the Holders thereof,
the exchange rate applicable to the conversion of the
Specified Currency into U.S. dollars will be based on the
highest bid quotation (assuming European-style quotation --
i.e., Specified Currency per U.S. dollar) received by the
Exchange Rate Agent on the second New York Business Day
prior to the applicable payment date from three recognized
foreign exchange dealers in the City of New York (one of
which may be the Exchange Rate Agent) for the purchase of
the aggregate amount of the Specified Currency payable on
such payment date, for settlement on such payment date, and
at which the applicable dealer timely commits to execute a
contract. If no such bid quotations are available, payments
will be made in the Specified Currency. All currency
exchange costs will be borne by the Holder of the Debt
Security by deductions from such payments.
If payments of principal, premium, if any, or interest,
if any, with respect to a Debt Security are required to be
made in a Specified Currency and such Specified Currency is
not available to the Company for any such payment due to the
imposition of exchange controls or other circumstances
beyond the control of the Company, or if such Specified
Currency is no longer used by the government of the country
issuing such currency or is no longer used or is no longer
generally available for use for the settlement of
transactions by public institutions within the international
banking community, then the Company will be entitled to
satisfy its payment obligations with respect to such Debt
Security by making such payments in
<PAGE 8>
U.S. dollars. The amount of each such payment in U.S. dollars will
be computed on the basis of the Market Exchange Rate in effect with
respect to such Specified Currency on the second New York
Business Day prior to the applicable payment date or, if the
Market Exchange Rate in effect on such date cannot be
readily determined, then on the basis of the highest bid
quotation (assuming European-style quotation -- i.e.,
Specified Currency per U.S. dollar) received by the Exchange
Rate Agent on the second New York Business Day prior to the
applicable payment date from three recognized foreign
exchange dealers in the City of New York (one of which may
be the Exchange Rate Agent) for the purchase of the
aggregate amount of the Specified Currency payable on such
payment date, for settlement on such payment date, and at
which the applicable dealer timely commits to execute a
contract. No payment in U.S. dollars made under such
circumstances will constitute an Event of Default.
If payments of principal, premium, if any, or interest,
if any, with respect to a Debt Security are required to be
made in a composite currency and the composition of such
composite currency is at any time altered (whether by the
addition, elimination, combination, or subdivision of one or
more components, by adjustment of the ratio of any component
to the composite unit, or by any combination of such
events), then the Company will be entitled to satisfy its
payment obligations with respect to such Debt Security by
making such payments in such composite currency as altered.
See "Currency and Index-Related Risk Factors".
Interest and Principal Payments
The Holder in whose name a Debt Security is registered
with the Trustee at the close of business on any given
Record Date (see Glossary) will be entitled to the payment
of principal, premium, if any, and/or interest, if any,
payable on the applicable payment date (such Holder the
"Holder of Record"). The Record Date with respect to a
payment of principal (other than a payment of principal
payable on a Maturity Date) will be the fifteenth day prior
to the applicable Principal Payment Date. The Record Date
with respect to a payment of interest (other than a payment
of interest payable on a Maturity Date) will be the
fifteenth day prior to the applicable Interest Payment Date.
The initial interest payment on a Debt Security will be made
on the first Interest Payment Date occurring at least 15
calendar days after the date of issue to the Holder of
Record as of the applicable Record Date. Any payment of
principal, premium, and/or interest payable on a Maturity
Date will be payable to the Holder in whose name the Debt
Security is registered as of such date.
Any U.S. dollar payment of principal, premium, if any,
and interest, if any, on a Debt Security, other than
principal, premium, if any, or interest, if any, payable on
the Maturity Date, will be made by check mailed to the
registered address of the Holder of Record as of the
applicable Record Date. U.S. dollar payments of principal,
premium, if any, and interest, if any, payable on the
Maturity Date will be made in immediately available funds
upon presentation and surrender of the Debt Security at the
office of the Paying Agent located at 4 MetroTech Center,
Brooklyn, New York 11245. The foregoing notwithstanding,
(a) the Depositary, as Holder of Record of Global Debt
Securities, will be entitled to receive U.S. dollar payments
of principal, premium, if any, and interest, if any, by wire
transfer of immediately available funds, and (b) any Holder
of Record of $10,000,000 or more in aggregate principal
amount of Debt Securities of the same series issued in
definitive form will be entitled to receive U.S. dollar
payments of principal, premium, if any, and/or interest, if
any, by wire transfer of immediately available funds,
provided, that the Paying Agent receives from such Holder of
Record a written request with appropriate wire transfer
instructions no later than 15 calendar days prior to such
date. Non-U.S. dollar payments of principal, premium, if
any, and interest, if any, on a Debt Security will be made
by wire transfer of funds in the Specified Currency to an
account maintained by the Holder of Record with a bank
located outside the United States, in accordance with
appropriate written wire transfer instructions to be
provided by the Holder of Record to the Paying Agent no
later than 15 calendar days prior to the applicable payment
date. If such wire transfer instructions are not so
provided, such non-U.S. dollar payments on such Debt
Security will be made by check payable in the Specified
Currency mailed to the registered address of the Holder of
Record.
<PAGE 9>
Certain Debt Securities, including Discount Debt
Securities, may be considered to be issued with original
issue discount. The beneficial owners of such Debt
Securities must include such discount in income for United
States federal income tax purposes at a constant rate. See
"United States Tax Considerations--OID Debt Securities". If
the principal of any Discount Debt Security is declared to
be immediately due and payable as described below under
"Description of Certain Indenture Provisions--Events of
Default", the amount of principal due and payable with
respect to such Discount Debt Security will be limited to
the aggregate principal amount of such Discount Debt
Security multiplied by the sum of its Issue Price (expressed
as a percentage of the aggregate principal amount) plus the
original issue discount amortized from the date of issue to
the date of declaration (also expressed as a percentage of
the aggregate principal amount), which amortization will be
calculated using the "interest method" (computed in
accordance with generally accepted accounting principles in
effect on the date of declaration). Special considerations
applicable to any such Debt Securities will be set forth in
the applicable Pricing Supplement.
Fixed Rate Debt Securities
Each Fixed Rate Debt Security will bear interest at the
rate stated on the face thereof and in the applicable
Pricing Supplement until the principal thereof is paid or
duly made available for payment. Such interest will be
computed on the basis of a 360-day year of twelve 30-day
months.
Interest payments on each Fixed Rate Debt Security will
include interest accrued from (and including) the Interest
Accrual Date or the last date in respect of which interest
has been paid, as the case may be, to (but excluding) the
next succeeding Interest Payment Date or the Maturity Date,
as the case may be. The interest rates that the Company
will agree to pay on newly-issued Fixed Rate Debt Securities
are subject to change without notice from time to time, but
no such change will affect any Fixed Rate Debt Security
previously issued.
If any Interest Payment Date or Principal Payment Date
(including the Maturity Date) for any Fixed Rate Debt
Security would fall on a day that is not a New York Business
Day, the payment of interest and/or principal (and premium,
if any) that would otherwise be payable on such date will be
postponed to the next succeeding New York Business Day, and
no additional interest on such payment will accrue as a
result of such postponement.
Floating Rate Debt Securities
Each Floating Rate Debt Security will bear interest
until the principal thereof is paid or duly made available
for payment at a rate to be determined by reference to the
base rate specified in the applicable Pricing Supplement
(the "Base Rate"), plus or minus the "Spread", if any,
and/or (i) multiplied by the "Spread Multiplier", if any, or
(ii) divided by the "Spread Divisor", if any. The "Spread"
is the number of basis points (each basis point being equal
to one one-hundredth of a percentage point) to be added to
or subtracted from the Base Rate. The "Spread Multiplier",
if any, and the "Spread Divisor", if any, are the amounts by
which the Base Rate, or the Base Rate as adjusted by the
Spread, will be multiplied or divided. The Spread, if any,
the Spread Multiplier, if any, the Spread Divisor, if any,
and the period of maturity of the instrument or obligation
with respect to which the Base Rate is calculated (the
"Index Maturity") will be specified in the applicable
Pricing Supplement.
If specified in the applicable Pricing Supplement, a
Floating Rate Debt Security may also have either or both of
the following: (i) a maximum limitation, or ceiling, on the
rate of interest that may accrue during any interest period
(a "Maximum Interest Rate"), and (ii) a minimum limitation,
or floor, on the rate of interest that may accrue during any
interest period (a "Minimum Interest Rate"). In addition to
any Maximum Interest Rate that may be applicable to a
Floating Rate Debt Security, the interest rate on a Floating
Rate Debt Security will be limited to the maximum rate
permitted by New York law, as the same may be modified by
United States law of general application.
<PAGE 10>
The rate of interest on each Floating Rate Debt
Security will be reset daily, weekly, monthly, quarterly,
semiannually, annually, or otherwise, as specified in the
applicable Pricing Supplement (each such period an "Interest
Period" and the first day of any Interest Period an
"Interest Reset Date"). The foregoing notwithstanding
(i) the interest rate in effect from the Interest Accrual
Date to the first Interest Reset Date will be the initial
interest rate specified in the applicable Pricing Supplement
(the "Initial Interest Rate"), (ii) the interest rate in
effect for the 15 calendar days prior to any Maturity Date
other than the Scheduled Maturity Date will be the interest
rate in effect on the fifteenth day preceding such Maturity
Date, and (iii) with respect to any Floating Rate Debt
Security for which interest is reset daily or weekly, the
interest rate in effect for the two-day period immediately
preceding any Interest Payment Date will be the interest
rate that was in effect on the first day of such two-day
period. If any Interest Reset Date for a Floating Rate Debt
Security would otherwise be a day that is not a New York
Business Day, such Interest Reset Date will be the next
succeeding New York Business Day, provided, however, that in
the case of a Floating Rate Debt Security whose interest
rate is determined by reference to LIBOR (as defined in the
applicable Pricing Supplement), if the next succeeding
New York Business Day falls in the next succeeding calendar
month, such Interest Reset Date will be the immediately
preceding New York Business Day.
Interest payments on a Floating Rate Debt Security will
be equal to the amount of interest accrued from (and
including) the Interest Accrual Date or from (and including)
the last date to which interest has been paid, as the case
may be, to (but excluding) the applicable Interest Payment
Date, except that interest payable on the Maturity Date will
include interest accrued to (but excluding) the Maturity
Date. If any Interest Payment Date (other than the Maturity
Date) for any Floating Rate Debt Security would otherwise be
a day that is not a New York Business Day, the payment of
interest that would otherwise be payable on such date will
be postponed to the next succeeding New York Business Day,
provided, however, that in the case of a Floating Rate Debt
Security whose interest rate is determined by reference to
LIBOR (as defined in the applicable Pricing Supplement), if
the next succeeding New York Business Day falls in the next
succeeding calendar month, such Interest Payment Date will
be the immediately preceding New York Business Day. If the
Maturity Date for any Floating Rate Debt Security falls on a
day that is not a New York Business Day, the payment of
principal, premium, if any, and interest, if any, otherwise
payable on such date will be postponed to the next
succeeding New York Business Day, and no interest on such
payment will accrue as a result of such postponement.
Accrued interest on a Floating Rate Debt Security will
be calculated by multiplying the principal amount of such
Floating Rate Debt Security (or, in the case of a Floating
Rate Debt Security whose principal amount is determined by
reference to a specified index, the face amount of such
Floating Rate Debt Security) by an accrued interest factor.
The accrued interest factor will be computed as the sum of
the interest factors calculated for each day in the period
for which interest is being paid. The interest factor for
any day in such period will be computed by dividing the
interest rate in effect on such day by 360, or as otherwise
specified in the applicable Supplement.
Upon the request of the Holder of any Floating Rate
Debt Security, the Calculation Agent will provide the
interest rate then in effect and, if determined, the
interest rate that will become effective on the next
Interest Reset Date.
Indexed Debt Securities
The Company may, from time to time, issue Indexed Debt
Securities with respect to which the principal amount
payable on any Principal Payment Date and/or the amount of
interest payable on any Interest Payment Date will be
determined by reference to the relative value of one or more
Specified Currencies or commodities, the level of one or
more financial or non-financial indices, and/or any other
factor or factors identified in the applicable Pricing
Supplement (such identified currencies, commodities,
indices, and/or other factors applicable to the
determination of principal or interest payable with respect
to a given Debt Security the "applicable Index"). A Fixed
Rate Debt Security that is also an Indexed Debt Security may
pay an aggregate principal amount that is greater or less
than the face amount thereof, depending on the relative
value or level of the applicable Index. A Floating Rate
Debt Security that is also
<PAGE> 11
an Indexed Debt Security may pay interest and/or an aggregate
principal amount that is greater or less than the face amount thereof,
in each case depending on the relative value or level of the applicable
Index. Specific information regarding a particular Indexed
Debt Security, including the face amount thereof, the method
for determining the principal amount payable on any
Principal Payment Date (if applicable), and the method for
determining the amount of interest payable on any Interest
Payment Date (if applicable) will be set forth in the
applicable Pricing Supplement.
Global Debt Securities
All Debt Securities of a given series will be
represented by a single Global Debt Security issued in a
denomination equal to the aggregate principal amount of the
Debt Securities represented thereby. Upon issuance of a
Global Debt Security, the respective principal amounts of
the Debt Securities represented thereby will be credited by
the Depositary, on its book-entry registration and transfer
system, to the account of one or more institutions that have
established an account with the Depositary (each such
institution a "Participant"). The particular accounts to be
credited will be designated by the underwriters or agents
through which the subject Debt Securities were sold, or by
the Company if the subject Debt Securities were offered and
sold directly by the Company. Ownership of beneficial
interests in a Global Debt Security will be limited to
Participants and to those persons who hold interests in a
Global Debt Security through Participants. Ownership of
beneficial interests in a Global Debt Security will be shown
on, and transfers of such ownership will be effected only
through, records maintained by the Depositary (with respect
to beneficial interests of Participants) or by Participants
(with respect to beneficial interests of persons other than
Participants). As long as the Depositary or its nominee (as
the case may be) is the registered Holder of any Global Debt
Security, the Depositary or such nominee (as the case may
be) will be considered the sole owner and holder of the Debt
Securities represented thereby for all purposes under the
Indenture. Except under the circumstances described below,
owners of beneficial interests in a Global Debt Security
will not be entitled to have the underlying Debt Securities
registered in their names and will not receive or be
entitled to receive physical delivery of the underlying Debt
Securities in definitive form.
Payments of principal, premium, if any, and interest,
if any, with respect to Debt Securities represented by a
Global Debt Security will be made to the Depositary or its
nominee, as the case may be, as the registered owner
thereof. None of the Company, the Trustee, or any Paying
Agent for the underlying Debt Securities will have any
responsibility or liability for any aspect of the records
relating to, or for payments made on account of, beneficial
ownership interests in a Global Debt Security, or for
maintaining, supervising, or reviewing any records relating
to such beneficial ownership interests.
The Company expects that, immediately upon receipt of
any payment of principal, premium, or interest with respect
to the Debt Securities represented by a Global Debt
Security, the Depositary will credit each Participant's
account with the amount of such payment that is
proportionate to its respective ownership interest in the
principal amount of such Global Debt Security (as shown on
the records of the Depositary). Payments by Participants to
persons who hold beneficial interests in such Global Debt
Security through such Participants will be the
responsibility of such Participants; the Company expects
that such payments will be governed by standing instructions
and customary practices, as is now the case with respect to
securities registered in "street name" and held by financial
institutions for the accounts of customers.
Owners of beneficial interests in a Global Debt
Security will not receive or be entitled to receive physical
delivery of the underlying Debt Securities in definitive
form, provided, however, that (i) if the Depositary for any
Debt Securities represented by a Global Debt Security is at
any time unwilling or unable to continue as depositary, and
a successor depositary is not appointed by the Company
within 90 days, the Company will issue such Debt Securities
in definitive form in exchange for such Global Debt
Security, (ii) the Company may, at any time and in its sole
discretion, determine not to have any Debt Securities of a
series represented by one or more Global Debt Securities, in
which event the Company will issue Debt Securities of such
series in definitive form in exchange for the related Global
Debt Security, and (iii) if the Company so provides with
respect to a series of Debt Securities represented by a
Global Debt Security, the Depositary may, on terms
acceptable to the Company and the Depositary, direct that
one or more owners of
<PAGE 12>
a beneficial interest in a Global Debt Security receive Debt
Securities of such series in definitive form and in a principal
amount equal to such beneficial interest in the Global Debt Security.
Unless and until it is exchanged in whole or in part
for Debt Securities in definitive form, a Global Debt
Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary, or by a nominee
of the Depositary to either the Depositary or another
nominee of the Depositary, or by the Depositary or any such
nominee to a successor Depositary or a nominee of such
successor Depositary and, in any such case, with the written
consent of the Company.
Certain Indenture Provisions
Restrictive Covenant: The Indenture contains a
covenant that neither the Company nor any Restricted
Subsidiary (see Glossary) will incur, guarantee, or suffer
to exist any indebtedness for borrowed money ("Debt"),
secured by any mortgage, pledge or lien on any Restricted
Property (see Glossary) or on any shares of stock of any
Restricted Subsidiary unless the Debt Securities (and, at
the option of the Company or a Restricted Subsidiary, as the
case may be, any other debt not subordinate to the Debt
Securities) are secured at least equally and ratably with
such Debt for as long as such Debt remains so secured,
subject to certain exceptions specified in the Indenture.
Such exceptions include: (i) liens existing prior to the
issuance of the Debt Securities; (ii) liens on property or
shares of stock of any corporation existing at the time such
corporation becomes a Restricted Subsidiary; (iii) liens on
property or shares of stock existing when acquired
(including acquisition through merger or consolidation) or
securing the payment of all or any part of the purchase
price, construction, or improvement thereof or securing any
Debt incurred prior to, at the time of, or within 120 days
after the later of the acquisition, the completion of
construction, or the commencement of full operation of such
property or within 120 days after the acquisition of such
shares for the purpose of financing all or any portion of
the purchase price thereof or construction thereon;
(iv) liens in favor of the Company or a Restricted
Subsidiary; (v) certain liens in favor of, or required by
contracts with, governmental entities; (vi) any extension,
renewal, or replacement of any lien referred to in any of
the preceding clauses (i) through (vi); and (vii) liens
otherwise prohibited by such covenant, securing Debt which,
together with the aggregate amount of outstanding
indebtedness secured by liens otherwise prohibited by such
covenant, does not exceed 10% of the Company's Consolidated
Net Tangible Assets (see Glossary). The Indenture does not
restrict the transfer of a Restricted Property to an
Unrestricted Subsidiary (see Glossary) or the change in
designation of a subsidiary owning a Restricted Property
from a Restricted Subsidiary to an Unrestricted Subsidiary.
There are no other restrictive covenants contained in
the Indenture. The Indenture does not contain any provision
that will restrict the Company from entering into one or
more additional indentures providing for the issuance of
debt securities or warrants, or from incurring, assuming, or
becoming liable with respect to any indebtedness or other
obligation, whether secured or unsecured, or from paying
dividends or making other distributions on its capital
stock, or from purchasing or redeeming its capital stock.
The Indenture does not contain any financial ratios or
specified levels of net worth or liquidity to which the
Company must adhere. In addition, the Indenture does not
contain any provision that would require that the Company
repurchase, redeem, or otherwise modify the terms of any of
the Debt Securities upon a change in control or other event
involving the Company that may adversely affect the
creditworthiness of the Company or the value of the Debt
Securities.
Consolidation, Merger, and Sale of Assets: The
Indenture provides that the Company may, without the consent
of the Holders of any of the Debt Securities then
outstanding, consolidate or merge with or into, or transfer
or lease all or substantially all of its assets to, any
corporation that is organized and validly existing under the
laws of any domestic jurisdiction, and may permit any such
corporation to consolidate with or merge into the Company or
convey, transfer, or lease all or substantially all of its
assets to the Company, provided, (i) that either the Company
will be the surviving corporation or, if not, that the
successor corporation will expressly assume by a
supplemental indenture the due and punctual payment of the
principal, premium, if any, and interest, if any, on the
Debt Securities and the performance of every covenant of the
Indenture to be performed or observed by the Company, and
(ii) the Company or such
<PAGE 13>
successor corporation will not, immediately after such merger,
consolidation, sale, or conveyance, be in default in the performance
of any such obligations. In the event of any such consolidation,
merger, conveyance, or transfer, any such successor
corporation will succeed to and be substituted for the
Company as obligor on the Debt Securities with the same
effect as if it had been named in the Indenture as the
"Company".
Modification of the Indenture: With certain
exceptions, the Holders of a majority in aggregate principal
amount of outstanding Debt Securities of a given series may,
on behalf of the Holders of all then outstanding Debt
Securities of such series, consent to a modification of the
Indenture affecting all such Holders' rights thereunder
and/or under such Debt Securities, provided, however, that
the consent of the Holders of at least 75% in aggregate
principal amount of outstanding Debt Securities of a given
series must consent to extend the time for payment of any
installment of interest payable with respect to such Debt
Securities, and provided, further, that except to the extent
described in the immediately preceding proviso, the right of
any Holder of any outstanding Debt Security to receive
payment when due of any payment of principal, premium, or
interest payable with respect to such Debt Security, or to
institute suit for the enforcement of any such payment, will
not be impaired or affected without the consent of such
Holder.
The Indenture may be modified by the Company and the
Trustee without the consent of any of the Holders of the
Debt Securities to (i) evidence the succession of another
corporation to the Company, (ii) add to the covenants of the
Company, (iii) surrender any right or power of the Company,
(iv) cure any ambiguity, (v) add any provisions expressly
permitted by the Trust Indenture Act of 1939, as amended,
(vi) establish any form of Debt Security, provide for the
issuance of any series of Debt Securities, set forth the
terms of any series of Debt Securities, or add to the rights
of Holders of Debt Securities of any series, (vii) evidence
and provide for the acceptance of a successor trustee,
(viii) establish additional events of default, and
(ix) provide for the issuance of Debt Securities in bearer
form provided that no modification may be made with respect
to the matters described in clauses (ii), (iii), (iv), (vi),
or (viii) if it is reasonably determined that to do so would
adversely affect the interests of the Holders of any
outstanding Debt Securities of any series.
Events of Default, Notice, and Waiver: The Indenture
provides that each of the following events constitutes an
Event of Default with respect to a given series of Debt
Securities (other than any such series that has been issued
under or modified by a supplemental indenture or Board
Resolution (as defined in the Indenture) in which such event
is specifically deleted): (i) failure to make any payment of
principal or premium, if any, when due (whether at maturity,
upon redemption, at declaration, or otherwise) on the Debt
Securities of such series, (ii) failure to make any payment
of interest when due on the Debt Securities of such series,
which failure is not cured within 30 days, provided,
however, that the Holders of not less than 75% of the then
outstanding Debt Securities of such series shall not have
consented to a postponement of such payment, (iii) failure
to make payment when due of any sinking fund or purchase
fund installment or analogous obligation, if any, on the
Debt Securities of such series, which failure is not cured
within 30 days, (iv) failure of the Company to observe or
perform any of its other covenants or warranties under the
Indenture for the benefit of the Holders of such series,
which failure is not cured within 90 days after notice is
given as specified in the Indenture, and (v) certain events
of bankruptcy, insolvency, or reorganization of the Company.
A default under other indebtedness of the Company will not
constitute a default under the Indenture, and a default
under one series of Debt Securities will not constitute a
default under any other series of Debt Securities.
If any Event of Default described in clause (i), (ii),
or (iii) of the immediately preceding paragraph shall have
occurred, then either the Trustee or the Holders of no less
than 51% in aggregate principal amount of the outstanding
Debt Securities of the applicable series may declare the
principal (or, in the case of Discount Debt Securities, the
portion thereof specified by the terms thereof) of all
outstanding Debt Securities of such series, and the
interest, if any, accrued thereon, to be immediately due and
payable. If any Event of Default described in clause
(iv) or (v) of the immediately preceding paragraph shall
have occurred and shall affect more than one series of Debt
Securities, then either the Trustee or the Holders of no
less than 51% in aggregate principal amount of the
outstanding Debt Securities of each affected series
<PAGE> 14
may declare the principal (or, in the case of Discount Debt
Securities, the portion thereof specified by the terms
thereof) of all outstanding Debt Securities of such series
and the interest, if any, accrued thereon, to be immediately
due and payable. However, declarations of default may be
rescinded and past defaults (other than any Event of Default
described in clause (ii) of the immediately preceding
paragraph) may be waived by the Holders of a majority in
principal amount of the outstanding Debt Securities of the
applicable series.
The Indenture requires the Trustee to give to the
Holders of each series of Debt Securities notice of all
uncured defaults known to the Trustee with respect to such
series within 90 days after such default occurs (the term
"default" used here to include the Events of Default
summarized above, exclusive of any grace period or
requirement that notice of default be given), provided,
however, that except in the case of a default in the payment
of principal, premium, if any, or interest, if any, on the
outstanding Debt Securities of such series, or a default in
the payment of any sinking fund or purchase fund installment
or analogous obligation with respect to such series of Debt
Securities, the Trustee will be protected in withholding
such notice if it in good faith determines that the
withholding of such notice is in the interests of the
Holders of the outstanding Debt Securities of such series.
No Holder of any Debt Securities of any series may
institute any action under the Indenture unless and until
(i) such Holder has given the Trustee written notice of an
Event of Default, (ii) the Holders of not less than 51% in
aggregate principal amount of the outstanding Debt
Securities of such series have requested the Trustee to
institute proceedings in respect of such Event of Default,
(iii) such Holder or Holders has or have offered the Trustee
such reasonable indemnity as the Trustee may require,
(iv) the Trustee has failed to institute an action for 60
days thereafter, and (v) no inconsistent direction has been
given to the Trustee during such 60-day period by the
Holders of not less than 51% in aggregate principal amount
of the outstanding Debt Securities of such series.
The Holders of a majority in aggregate principal amount
of the outstanding Debt Securities of any series will have
the right, subject to certain limitations, to direct the
time, method, and place of conducting any proceeding for any
remedy available to the Trustee or of exercising any trust
or power conferred on the Trustee with respect to such
series of Debt Securities. The Indenture provides that if
an Event of Default shall have occurred and be continuing,
the Trustee, in exercising its rights and powers under the
Indenture, will be required to use the degree of care of a
prudent person in the conduct of his or her own affairs.
The Indenture further provides that the Trustee will not be
required to expend or risk its own funds, or otherwise incur
any financial liability in the performance of any of its
duties under the Indenture, unless it has reasonable grounds
for believing that repayment of such funds or adequate
indemnity against such risk or liability is reasonably
assured.
The Company is required to deliver to the Trustee,
within 120 days after the end of each fiscal year, a
certificate signed by certain officers of the Company
stating whether such officers have obtained knowledge of any
default by the Company in the performance of certain
covenants and, if so, specifying such default.
Principal Amount of Debt Securities Denominated in a
Specified Currency: For the purposes of determining whether
the Holders of the requisite principal amount of Debt
Securities denominated in a Specified Currency have taken
any action as provided under the Indenture, the principal
amount of such Debt Securities will be deemed to be that
amount of U.S. dollars that could be obtained for such
principal amount on the basis of the spot rate of exchange
into U.S. dollars for the Specified Currency in which such
Debt Securities are denominated (as evidenced to the Trustee
by a certificate provided by a financial institution,
selected by the Company, that maintains an active trade in
such Specified Currency, acting as conversion agent) as of
the date of the taking of such action.
Defeasance and Discharge of Covenants: The Indenture
provides that the Company, at its option, (i) will be
discharged from any and all obligations with respect to the
Debt Securities of any series (except for certain
obligations to register the transfer or exchange of such
Debt Securities, to replace any such Debt
<PAGE 15>
Securities that have been stolen, lost, or mutilated, and to maintain
paying agencies and hold moneys for payment in trust in respect of
such Debt Securities), or (ii) need not comply with certain
covenants of the Indenture with respect to the Debt
Securities of any series (including those described in the
preceding paragraphs captioned "Restrictive Covenant" and
"Consolidation, Merger, and Sale of Assets"), in each case:
(a) if the Company irrevocably deposits with the Trustee, in
trust, money, U.S. Government Obligations, and/or Equivalent
Government Securities (each as defined in the Indenture)
which, through the payment of interest thereon and principal
thereof in accordance with their respective terms, will
provide money in an amount sufficient to pay all the
principal of (including any mandatory sinking fund payments)
and interest, if any, on, such Debt Securities, (b) such
Debt Securities will not thereby be delisted from any stock
exchange on which they may be listed, (c) no Event of
Default shall have occurred and be continuing with respect
to such Debt Securities, and (d) the Company delivers to the
Trustee an opinion of counsel to the effect that such
deposit and defeasance will not cause the Holders of such
Debt Securities to recognize income, gain, or loss for
Federal income tax purposes.
The Trustee: The Chase Manhattan Bank (National
Association), the Trustee under the Indenture, is also
trustee under other indentures under which unsecured debt of
the Company and its subsidiaries is outstanding, is a
depositary of the Company, has from time to time made loans
to the Company and its subsidiaries, and has performed other
services for the Company and its subsidiaries in the normal
course of its business, including the establishment and
management of investment accounts.
CURRENCY AND INDEX-RELATED RISK FACTORS
Currency Exchange Rates
Investments in Debt Securities denominated or payable
in a Specified Currency, and in Debt Securities the
principal of and/or interest on which will be determined by
the relative value of a Specified Currency, entail
significant risks (over which the Company has no control)
that are not associated with similar investments in Debt
Securities denominated and payable in U.S. dollars and
bearing a fixed rate of interest. Such risks include,
without limitation, the possibility of significant changes
in the rate of exchange between the U.S. dollar and any such
Specified Currency and the possibility of the imposition or
modification of exchange controls by either the United
States or any foreign government with respect to such
Specified Currency (or component thereof, as the case may
be), which risks generally depend on domestic and
international economic and political events. In recent
years, rates of exchange between the U.S. dollar and certain
foreign currencies have been highly volatile and such
volatility may occur in the future. The exchange rate
between the U.S. dollar and any Specified Currency (or
component thereof, as the case may be) is at any moment a
result of the supply and demand for such currencies and
changes in such exchange rate result over time from the
interaction of many factors, including rates of inflation,
interest rate levels, balances of payments, and the extent
of governmental surpluses or deficits in the countries that
have issued such currencies. These factors are in turn
sensitive to the monetary, fiscal, and trade policies
pursued by such countries' governments and those of other
countries important to international trade and finance.
Fluctuations in any particular exchange rate that have
occurred in the past are not necessarily indicative,
however, of fluctuations in the rate that may occur during
the term of any Debt Security. Depreciation against the
U.S. dollar of the currency in which a Debt Security is
payable would result in a decrease in the effective yield of
such Debt Security below its coupon rate and, in certain
circumstances, could result in the loss to the investor on a
U.S. dollar basis. In addition, depending on the specific
terms of a currency-linked Debt Security, changes in
exchange rates relating to any of the currencies involved
may result in a decrease in the effective yield of such Debt
Security and, in some circumstances, could result in a loss
to the investor of all or a substantial portion of the
principal thereof. See also "Indexed Payments" below.
<PAGE 16>
Currency Exchange Controls
An investment in a Debt Security payable in a Specified
Currency is subject to the additional risk that such
Specified Currency may not be available at the time a
payment of principal, premium, if any, or interest, if any,
on such Debt Security becomes due. Governments have from
time to time imposed exchange controls affecting the general
availability of certain Specified Currencies and the
imposition or modification of exchange controls by either
the United States or any foreign government could affect the
availability of one or more Specified Currencies in the
future. Even in the absence of such exchange controls, the
interaction of various economic and political factors could
result in the unavailability of one or more Specified
Currencies at any given time. If the Specified Currency in
which any payment under a Debt Security would otherwise be
required is for any reason not available at the time such
payment becomes due, the Company will make such payment in
U.S. dollars on the basis of the Market Exchange Rate on the
date of such payment, or if such rate of exchange is not
then available, then on the basis of the highest bid
quotation (assuming European-style quotation -- i.e.,
Specified Currency per U.S. dollar) received by the Exchange
Rate Agent on the second New York Business Day prior to the
applicable payment date from three recognized foreign
exchange dealers in the City of New York (one of which may
be the Exchange Rate Agent) for the purchase of the
aggregate amount of the Specified Currency payable on such
payment date, for settlement on such payment date, and at
which the applicable dealer timely commits to execute a
contract. No payment in U.S. dollars made under such
circumstances will constitute an Event of Default. See
"Description of Debt Securities--Payment Currency".
Indexed Payments
Investments in Indexed Debt Securities the principal of
and/or interest on which will be determined by the relative
value or level of a designated Index entail significant
risks (over which the Company has no control) that are not
associated with similar investments in conventional fixed
rate debt securities paying a fixed amount of principal.
The value or level of any applicable Index (and,
accordingly, the amount of principal and/or interest, as the
case may be, payable on an Indexed Debt Security) may at any
time be affected by the interaction of various factors,
including domestic and international economic and political
events. These factors may in turn be affected by the
monetary, fiscal, and trade policies pursued by the United
States and by other countries important to international
trade and finance. In addition, if the formula used to
determine the amount of principal and/or interest (as the
case may be) payable with respect to an Indexed Debt
Security contains a multiple or leverage factor, the effect
of any fluctuation in such Index will be increased. A
decline in the relative value or level of such Index would
result in a decrease in the effective yield of the
applicable Indexed Debt Security and, in certain
circumstances, could result in a loss to the investor of all
or a substantial portion of the principal thereof.
Fluctuations in any particular Index that have occurred in
the past are not necessarily indicative of fluctuations in
such Index that may occur during the term of the applicable
Indexed Debt Security.
Governing Law and Foreign Currency Judgments
The Indenture and the Debt Securities will be governed
by and construed in accordance with the laws of the State of
New York. United States courts have not customarily
rendered judgments for money damages denominated in any
currency other than the U.S. dollar. However, New York
State law provides that an action based upon an obligation
(such as a Debt Security) denominated in a currency other
than U.S. dollars will be rendered in the foreign currency
of the underlying obligation and converted into U.S. dollars
at the rate of exchange prevailing on the date of the entry
of the judgment or decree.
THIS PROSPECTUS (AS SUPPLEMENTED BY ANY APPLICABLE
PRICING SUPPLEMENT) DOES NOT DESCRIBE ALL THE RISKS OF AN
INVESTMENT IN INDEXED DEBT SECURITIES OR IN DEBT SECURITIES
DENOMINATED OR PAYABLE IN A SPECIFIED CURRENCY. THE COMPANY
DISCLAIMS ANY RESPONSIBILITY TO ADVISE PROSPECTIVE
PURCHASERS OF SUCH RISKS AS THEY EXIST AT THE DATE OF THIS
<PAGE 17>
PROSPECTUS OR ANY APPLICABLE PRICING SUPPLEMENT OR AS SUCH
RISKS MAY CHANGE FROM TIME TO TIME. PROSPECTIVE PURCHASERS
SHOULD CONSULT THEIR OWN LEGAL, TAX, AND FINANCIAL ADVISORS
AS TO THE RISKS ENTAILED IN AN INVESTMENT IN INDEXED DEBT
SECURITIES OR IN DEBT SECURITIES DENOMINATED OR PAYABLE IN A
SPECIFIED CURRENCY. SUCH DEBT SECURITIES ARE NOT AN
APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED
WITH RESPECT TO INVESTMENTS IN DERIVATIVE SECURITIES AND
(WITH RESPECT TO AN INVESTMENT IN DEBT SECURITIES
DENOMINATED OR PAYABLE IN A SPECIFIED CURRENCY OR IN DEBT
SECURITIES WHOSE PRINCIPAL AND/OR INTEREST WILL BE
DETERMINED BY THE RELATIVE VALUE OF A SPECIFIED CURRENCY)
ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY
TRANSACTIONS.
The information set forth in this Prospectus and/or any
applicable Pricing Supplement is directed to prospective
purchasers who are residents of the United States. The
Company disclaims any responsibility to advise prospective
purchasers as to issues regarding the purchase or ownership
of or receipt of payments under any Debt Security by
residents of countries other than the United States except
with respect to certain federal tax issues. See "United
States Tax Considerations- Non-United States Holders".
Persons who are not residents of the United States are
advised to consult their own legal, tax, and financial
advisors with regard to such matters.
UNITED STATES TAX CONSIDERATIONS
The following summary is a general discussion of
certain United States federal income tax consequences
resulting from the ownership and disposition of Debt
Securities and does not address the tax consequences of the
ownership or disposition of Warrants. A discussion of the
material United States federal income tax consequences, if
any, resulting from the ownership and disposition of
Warrants of any particular series will be provided in the
applicable Prospectus Supplement.
This discussion deals only with Debt Securities held as
capital assets within the meaning of Section 1221 of the
Internal Revenue Code of 1986, as amended to the date hereof
(the "Code"), and does not address special classes of
holders, such as life insurance companies, dealers in
securities or foreign currencies, tax exempt organizations,
persons holding Debt Securities as a hedge or hedged against
currency risks, persons holding Debt Securities as part of a
straddle within the meaning of Section 1092 of the Code or
as part of a conversion transaction within the meaning of
Section 1258(c) of the Code, or persons whose functional
currency (as defined in Section 985 of the Code) is not the
U.S. dollar. It does not deal with holders other than the
original purchaser and does not discuss the "market discount
rules" or the "acquisition premium rules". This discussion
does not include any description of the tax laws of any
state or local government or of any foreign government that
may be applicable to Debt Securities. The United States
federal income tax consequences of the ownership and
disposition of a particular Debt Security will depend, in
part, on the particular terms of the Debt Security as set
forth in the applicable Pricing Supplement.
This summary is based on the Code, and United States
Department of Treasury regulations, Internal Revenue Service
("IRS") rulings, and judicial decisions as of the date
hereof, all of which are subject to change at any time.
Such changes may be applied retroactively in a manner that
could adversely affect the holder of a Debt Security. These
authorities are subject to various interpretations and it is
therefore possible that the United States federal income tax
treatment of any series of Debt Securities may differ from
the treatment described below.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH BELOW IS
INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE
APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR SITUATION.
PERSONS CONSIDERING THE PURCHASE OF DEBT SECURITIES SHOULD
CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO
<PAGE 18>
THE TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP, AND DISPOSITION OF
DEBT SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE,
LOCAL, FOREIGN, AND OTHER TAX LAWS, AND THE POSSIBLE EFFECTS
OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
United States Holders
For purposes of this discussion, the term "United
States Holder" means a beneficial owner of a Debt Security
that, for United States federal income tax purposes, is
(i) a citizen or resident of the United States, (ii) a
corporation, partnership, or other entity created or
organized in or under the laws of the United States or of
any political subdivision thereof, or (iii) an estate or
trust subject to United States federal income taxation
without regard to the source of its income.
Payment of Interest. Interest paid on a Debt Security
other than interest on an "OID Debt Security" that is not
"qualified stated interest" (as such terms are defined
below), generally will be taxable to a United States Holder
as ordinary interest income at the time it is accrued or
received, in accordance with the United States Holder's
method of accounting for federal income tax purposes.
Original Issue Discount. The following discussion is a
summary of the principal United States federal income tax
consequences of the ownership and disposition of OID Debt
Securities, which for purposes of this discussion means any
Debt Security that is treated as having been issued with
original issue discount ("OID"), as described below. The
rules governing the tax treatment of OID Debt Securities may
vary depending on the specific terms of such Debt Security,
as set forth in the applicable Pricing Supplement. The
following summary is based in part upon the OID provisions
of the Code and regulations issued thereunder on January 27,
1994 (the "OID Regulations"). The OID Regulations are to be
effective generally for Debt Securities issued on or after
April 4, 1994.
A Debt Security will be treated as having been issued
with OID if its "stated redemption price at maturity"
exceeds its "issue price" by more than a de minimis amount.
In general, the excess of stated redemption price at
maturity over issue price is treated as de minimis if the
amount of OID on the instrument is less than 1/4 of 1
percent of the Debt Security's stated redemption price at
maturity multiplied by the number of complete years from
issuance to maturity. Under the OID Regulations, special de
minimis OID rules apply to certain types of debt
instruments, including installment obligations (defined by
the OID Regulations as debt instruments that provide for the
payment of any amount other than "qualified stated interest"
prior to maturity) and Variable Rate Debt Securities
(defined below).
In general, the issue price of each Debt Security in a
particular offering will be the initial price at which a
substantial amount of that particular offering is sold.
Under the OID Regulations, if Debt Securities and Warrants
are issued together as an investment unit, the issue price
for the unit is determined by treating the investment unit
as a debt instrument. The issue price as so determined must
be allocated between the Debt Securities and the Warrants in
the investment unit based on their relative fair market
values. Under the OID Regulations, the Company's
determination of the allocation will be binding upon a
holder unless the holder files a disclosure statement with
the holder's timely filed federal income tax return for the
year including the acquisition date of the investment unit.
Notice will be given in the applicable Pricing Supplement of
the Company's determination of the allocation of the issue
price where Debt Securities and Warrants are issued together
as part of an investment unit.
The stated redemption price at maturity of a Debt
Security is the total of all payments provided by the Debt
Security other than "qualified stated interest". Qualified
stated interest generally is stated interest that is
unconditionally payable at least annually in cash or in
property (other than debt instruments of the Company) at a
single fixed rate applied to the outstanding principal
amount of the Debt Security. Interest is payable at a single
fixed rate only if the rate appropriately takes into account
the length of the interval between stated interest payments.
<PAGE 19>
United States Holders of OID Debt Securities (other
than certain "short-term OID Debt Securities", as defined
below) will be required to include OID in income for United
States federal income tax purposes in increasingly greater
amounts in successive "accrual periods" (as defined below),
generally prior to the receipt of corresponding cash
payments, regardless of the holder's method of accounting.
The amount of OID includible in the income of an
initial United States Holder for any taxable year is the sum
of the daily portions of OID with respect to the OID Debt
Security for each day during the taxable year or portion
thereof in which such United States Holder held the OID Debt
Security ("accrued OID"). The daily portion of OID with
respect to an OID Debt Security is determined by allocating
to each day in any "accrual period" a ratable portion of the
OID allocable to such accrual period. The accrual periods
may be of any length and may vary in length over the term of
the Debt Security provided that each accrual period is no
longer than one year and each scheduled payment of principal
or interest occurs on the first day or the final day of an
accrual period. In general, the amount of OID allocable to
any accrual period is an amount equal to the excess of
(i) the product of the adjusted issue price of the OID Debt
Security at the beginning of such accrual period and its
yield to maturity (determined on the basis of compounding at
the close of each accrual period and adjusted for the length
of the accrual period) over (ii) the amount of qualified
stated interest, if any, allocable to the accrual period.
The "adjusted issue price" of the OID Debt Security at the
beginning of any accrual period is equal to the original
issue price of the OID Debt Security plus the sum of the
daily portions of OID with respect to the OID Debt Security
for each prior accrual period (determined without regard to
the amortization of any premium, as described below), minus
any prior payments and any payments made on the first day of
the accrual period on the OID Debt Security that were not
qualified stated interest. The term "yield to maturity"
generally means the discount rate that, when used to compute
the present value of all principal and interest payments to
be made under the Debt Security, will produce an amount
equal to the issue price of the Debt Security. In
determining OID allocable to an accrual period, if an
interval between payments of qualified stated interest
contains more than one accrual period the amount of
qualified stated interest payable at the end of the
interval, (including any qualified stated interest that is
payable on the first day of the accrual period immediately
following the interval), is allocated on a pro rata basis to
each accrual period in the interval and the adjusted issue
price at the beginning of each accrual period in the
interval must be increased by the amount of any qualified
stated interest that has accrued prior to the first day of
the accrual period but is not payable until the end of the
interval. OID allocable to a final accrual period is the
difference between the amount payable at maturity (other
than a payment of qualified stated interest) and the
adjusted issue price at the beginning of the final accrual
period. If all accrual periods are of equal length, except
for either an initial shorter accrual period or an initial
and a final shorter accrual period, the amount of OID
allocable to the initial accrual period may
be computed under any reasonable method.
The OID Regulations provide special rules for "Variable
Rate Debt Securities," generally defined as a Debt Security
(i) with an issue price that does not exceed the sum of the
noncontingent principal payments to be made on the Debt
Security by more than a specified amount and (ii) that
provides for stated interest that is compounded or paid at
least annually, at the current value(s) (as defined in the
OID Regulations), of (A) one or more qualified floating
rates; (B) a single fixed rate and one or more qualified
floating rates; (C) a single objective rate; or (D) a single
fixed rate and a qualified inverse floating rate. In
certain circumstances, a Debt Security bearing an initial
fixed rate for a period of less than one year, followed by a
qualified floating rate or an objective rate, may be treated
as a Variable Rate Debt Security. A rate is a qualified
floating rate if variations in the rate can reasonably be
expected to measure contemporaneous variations in the cost
of newly borrowed funds in the currency in which the Debt
Security is denominated. In addition, certain multiples of
a qualified floating rate will be treated as a qualified
floating rate. Restrictions on the maximum or minimum
stated interest rate, restrictions on the amount of increase
or decrease in the stated interest rate, or other similar
restrictions generally do not result in a rate failing to be
treated as a qualified floating rate provided that such
restrictions are fixed throughout the term of the Debt
Security or do not significantly alter the yield of the Debt
Security. In general, an objective rate is a rate (other
than a qualified floating rate) that is determined using a
single formula that is fixed throughout the term of the Debt
Security and that is based on either (i) the yield or
changes in the price of one or more items of actively traded
personal property (other than stock or debt of the Company
or certain
<PAGE 20>
related parties); (ii) one or more qualified
floating rates; (iii) one or more rates where each would be
a qualified floating rate for a debt instrument denominated
in a currency other than the currency in which the Debt
Security is denominated; (iv) a combination of rates
described immediately above; or (v) any other variable rate
designated by the IRS. A rate is not an objective rate,
however, if it is reasonably expected that the rate will
result in significant front-loading or back-loading of
interest. A qualified inverse floating rate is an objective
rate that is equal to a fixed rate minus a qualified
floating rate, provided that the variations in the rate can
reasonably be expected to inversely reflect contemporaneous
variations in the cost of newly borrowed funds.
For purposes of determining the OID accruals and the
amount of qualified stated interest, a Variable Rate Debt
Security is "converted" to an equivalent fixed rate debt
instrument by substituting an appropriate fixed rate (as
specified by the OID Regulations) for the variable rate or
rates. The rules applicable to fixed rate debt instruments,
described above, are then applied to determine OID accruals
and the qualified stated interest payments. In certain
circumstances, if the interest actually accrued or paid
during an accrual period is greater or less than the
interest assumed to be accrued or paid under the equivalent
fixed rate debt instrument, appropriate adjustments must be
made to the qualified stated interest or OID allocable to
the accrual period. Notice will be given in the applicable
Pricing Supplement when the Company determines that a
particular Debt Security will be a Variable Rate Debt
Security.
Alternative Payment Schedules. The OID Regulations
provide special rules for purposes of determining the yield
and maturity of a Debt Security that provides for one or
more alternative payment schedules applicable upon the
occurrence of certain contingencies, where the timing and
amounts of the payments under each alternative payment
schedule are fixed as of the original issue date. Except as
provided in the next paragraph, the yield and maturity of
such a Debt Security are generally determined by assuming
that the payments will be made according to the stated
payment schedule. However, if based on all the facts and
circumstance as of the issue date, it is more likely than
not that the stated payment schedule will not occur, then
yield and maturity are computed based on the payment
schedule most likely to occur. Notice will be given in the
applicable Pricing Supplement when the Company determines
that a particular Debt Security will be deemed to have a
payment schedule for federal income tax purposes that is
different than its stated payment schedule. The payment
schedule determined by the Company will be binding on all
holders of the Debt Security unless the holder explicitly
discloses, on a statement attached to the holder's timely
filed federal income tax return for the taxable year that
includes the acquisition date of the Debt Security, that
such holder's determination of yield and maturity is
different from the Company's determination.
For purposes of determining yield and maturity of a
Debt Security, one or more unconditional options of either
the holder or the Company to require payments to be made on
the Debt Security under one or more alternative payment
schedules (e.g., an option to extend or an option to call a
Debt Security at a fixed premium) will be deemed exercised
if exercise of such option or options would change the yield
on the Debt Security in a manner which would benefit the
party that holds such option or options.
Under the OID Regulations, a Debt Security that
provides for one or more alternative payment schedules
provides for qualified stated interest to the extent of the
lowest fixed rate at which qualified stated interest would
be payable under any of the payment schedules.
If a contingency described above (including the
exercise of an option described in the preceding paragraph)
actually occurs or does not occur contrary to the
assumptions made with respect thereto, then for purposes of
determining the accrual of OID, the yield and maturity of
the Debt Security are redetermined by treating the Debt
Security as reissued on the date of the change in
circumstances for an amount equal to its adjusted issue
price on such date.
Contingent Debt Securities. The OID Regulations do not
address the federal income tax treatment of Debt Securities
which provide for contingent principal or of Floating Rate
Debt Securities and Index Debt Securities that do not
qualify as Variable Rate Debt Securities ("Contingent Debt
Securities"). The
<PAGE 21>
federal income tax consequences of the
ownership and disposition of a particular Debt Security, and
whether it constitutes a Contingent Debt Security, may
depend, in part, on the particular terms of the Debt
Security as set forth in the applicable Pricing Supplement.
UNITED STATES HOLDERS SHOULD CONSULT WITH THEIR OWN TAX
ADVISORS REGARDING THE TAX TREATMENT OF CONTINGENT DEBT
SECURITIES.
Election by United States Holder. Under the OID
Regulations, a United States Holder may elect to treat all
interest on a Debt Security as OID. For purposes of this
election, interest includes stated interest, OID, de minimis
OID, and unstated interest, as adjusted for any amortizable
bond premium. The election is to be made for the taxable
year in which the United States Holder acquired the Debt
Security and may not be revoked without the consent of the
IRS. UNITED STATES HOLDERS SHOULD CONSULT WITH THEIR OWN
TAX ADVISORS REGARDING THIS ELECTION.
Short-term OID Debt Securities. In the case of an OID
Debt Security that matures one year or less from the date of
its issuance (a "short-term OID Debt Security") all payments
(including all stated interest) are included in the stated
redemption price at maturity. Thus, United States Holders
who report income for United States federal income tax
purposes on the accrual method and certain other holders are
required to include OID in income currently (in lieu of
stated interest). The total OID will be equal to the excess
of the stated redemption price at maturity over the issue
price of the short-term OID Debt Security, unless the United
States Holder elects to compute the OID using tax basis
instead of issue price. United States Holders who report
income for United States federal income tax purposes on the
accrual method and certain other holders are required to
accrue such OID on a short-term OID Debt Security on a
straight-line basis, unless an election is made to accrue
the OID under the constant yield method (based on daily
compounding). Generally, an individual and certain other
cash method United States Holders of short-term OID Debt
Securities are not required, but may elect, to include OID
in their income currently. In the case of a United Stated
Holder who is not required and does not elect to include OID
in income currently, any gain realized on the sale, exchange
or retirement of a short-term OID Debt Security will be
ordinary income to the extent of the OID accrued on a
straight-line basis (or, if elected, according to a constant
yield method) through the date of sale, exchange or
retirement, reduced by any payments of stated interest or
other interest received. In addition, such non-electing
United States Holders who are not subject to the current
inclusion requirement described above will be required to
defer deductions of all or a portion of any interest paid on
indebtedness allocable to such short-term OID Debt
Securities in an amount not exceeding the deferred income.
Debt Securities Issued at a Premium. A United States
Holder that purchases a Debt Security at original issue for
an amount in excess of the sum of all amounts payable on the
Debt Security after the purchase date (other than qualified
stated interest) will be treated as having purchased the
Debt Security at a premium and will not be required to
include OID, if any, in income. Generally, a United States
Holder may elect to amortize such premium over the term of
the Debt Security on a constant yield method. If such
election is made, the amount required to be included in the
United States Holder's income each year with respect to
interest on the Debt Security will be reduced by the amount
of premium amortized in such year. The premium on a Debt
Security held by a United States Holder that does not make
such an election will decrease the gain or increase the loss
otherwise recognized on the disposition of the Debt
Security. Any election to amortize premium applies to all
bonds (other than bonds the interest on which is excludable
from gross income) held by the United States Holder at the
beginning of the first taxable year to which the election
applies or thereafter acquired by the United States Holder,
and is irrevocable without the consent of the IRS. If the
Debt Security is redeemable at a premium, special rules may
apply which could result in a deferral of the amortization
of some of the premium.
Reporting. The Company is required to report to the
IRS the amount of OID accrued on OID Debt Securities held of
record by certain United States Holders. The amount
required to be reported by the Company may not be equal to
the amount of OID required to be reported as taxable income
by a holder of such OID Debt Security.
<PAGE 22>
Sale, Exchange, or Retirement of Debt Securities. A
United States Holder's adjusted tax basis in a Debt Security
(other than an OID Debt Security) generally will equal the
cost of the Debt Security to such holder, reduced by any
amortized premium and by payments on the Debt Security
received by the holder, other than qualified stated
interest. A holder's tax basis in an OID Debt Security will
generally be the cost of the Debt Security to such holder,
increased by any OID previously included in the holder's
income and decreased by the amount of any payment to the
holder under the OID Debt Security, other than a payment of
qualified stated interest, and by any amortized premium.
Upon the sale, exchange, or retirement of a Debt Security, a
United States Holder will recognize taxable gain or loss
equal to the difference between the amount realized on the
sale, exchange or retirement (other than amounts
attributable to accrued OID or interest not previously
included in the income of the holder) and such holder's
adjusted tax basis in the Debt Security. Any gain
attributable to de minimis OID that is recognized on the
sale or exchange of a Debt Security is treated as capital
gain if the Debt Security is a capital asset in the hands of
the holder. Except as described above with respect to
certain short-term OID Debt Securities or as described below
with respect to certain Foreign Currency Debt Securities,
such gain or loss will be capital gain or loss and will be
long-term capital gain or loss if, at the time of sale or
retirement, the Debt Security has been held for more than
one year. Net capital gains of individuals are, under
certain circumstances, taxed at lower rates than items of
ordinary income. The deductibility of capital losses,
however, may be limited.
Foreign Currency Debt Securities. The following
discussion summarizes the principal United States federal
income tax consequences to a United States Holder of the
ownership and disposition of Debt Securities that are
denominated in a Specified Currency or on which interest or
principal are payable in one or more Specified Currencies (a
"Foreign Currency Debt Security"). The following summary is
based upon certain Treasury Regulations issued pursuant to
Section 988 of the Code.
Interest on a Debt Security paid in a Specified
Currency, other than interest on an OID Debt Security that
is not qualified stated interest, will be taxable to a
United States Holder as ordinary interest income at the time
it is accrued or received, in accordance with the United
States Holder's method of accounting for federal income tax
purposes. The amount recognized by a cash basis United
States Holder is the U.S. dollar value of the interest
payment (determined on the basis of the "spot rate" on the
date such payment is received) regardless of whether the
payment is in fact converted to U.S. dollars at that time.
No exchange gain or loss is recognized at the time of
receipt of such payment by a cash basis United States
Holder.
Unless the election described below is made, the amount
recognized by an accrual basis United States Holder is the
U.S. dollar value of the interest that has accrued for the
interest accrual period (determined on the basis of the
average exchange rate for the interest accrual period). The
average exchange rate for the accrual period (or partial
periods) is the simple average of the exchange rates for
each business day in such period (or other method if such
method is reasonably derived and consistently applied). An
accrual basis United States Holder may elect to translate
accrued interest income using the rate of exchange on the
last day of the accrual period or, with respect to an
accrual period that spans two taxable years, using the rate
of exchange on the last day of the taxable year. If the
last day of an accrual period is within five business days
of the date of receipt of the accrued interest, a United
States Holder may translate such interest using the rate of
exchange on the date of receipt. The above election will
apply to all debt obligations held by the United States
Holder and may not be changed without the consent of the
IRS. Upon receipt of an interest payment in the Specified
Currency, an accrual basis United States Holder will
recognize foreign currency gain or loss to the extent of the
difference, if any, between the U.S. dollar value of such
payment (determined by translating the Specified Currency
received at the spot rate on the date of receipt) and the
U.S. dollar value of the interest income that such holder
has previously included in income with respect to such
payment, which gain or loss will be treated as ordinary
income or loss.
In the case of a Foreign Currency Debt Security, the
U.S. dollar amount, if any, includible in income as OID for
each accrual period by a United States Holder is determined
by (i) calculating the amount of OID allocable to each
accrual period in the applicable Specified Currency using
the constant yield method described above, and (ii)
translating the amount so derived in the same manner as
interest
<PAGE 23>
income accrued by a holder on the accrual basis, as
described above. In general, upon the receipt of payment in
the Specified Currency attributable to OID, a United States
Holder will recognize foreign currency gain or loss equal to
the difference, if any, between the U.S. dollar value of the
accrued OID (determined in the same manner as interest
income accrued by an accrual basis holder) and the U.S.
dollar value of such payment (determined by translating the
Specified Currency at the spot rate on the date of receipt),
which gain or loss will be treated as ordinary income or
loss.
A United States Holder's tax basis in foreign currency
generally will be the U.S. dollar value thereof at the spot
rate on the date such foreign currency is acquired. The
amount of gain or loss recognized by a holder on a sale,
exchange or other disposition of foreign currency will be
equal to the difference between (i) the amount of
U.S. dollars, the U.S. dollar value at the spot rate of the
foreign currency, or the fair market value in U.S. dollars
of the property, received by the holder upon such sale,
exchange or other disposition, and (ii) the holder's tax
basis in the foreign currency. Accordingly, a holder that
purchases a Foreign Currency Debt Security with previously
owned foreign currency will recognize gain or loss in an
amount equal to the difference, if any, between such
holder's tax basis in the foreign currency and the
U.S. dollar value of the foreign currency at the spot rate
on the date of purchase of the Foreign Currency Debt
Security. Generally, any such gain or loss will be ordinary
income or loss.
A United States Holder's tax basis in a Foreign
Currency Debt Security will be the U.S. dollar value of the
currency paid for such Debt Security at the time of such
purchase. Gain or loss realized upon the sale, exchange or
retirement of a Foreign Currency Debt Security will be
ordinary income or loss to the extent it is attributable to
fluctuations in exchange rates. Such foreign currency gain
or loss may not exceed the total gain or loss on the sale or
retirement of the Debt Security. Generally, any gain or
loss recognized upon the sale, exchange or retirement of a
Foreign Currency Debt Security, other than the amount
treated as foreign currency gain or loss, will be capital
gain or loss and will be long-term capital gain or loss if,
at the time of the disposition, the Debt Security was held
for more than one year.
Any foreign currency gain or loss that is treated as
ordinary income or loss, as described above, generally will
not be treated as interest income or expense except to the
extent provided in Treasury Regulations or administrative
pronouncements of the IRS.
In the case of a Foreign Currency Debt Security, bond
premium which a holder elects to amortize will be computed
in the relevant Specified Currency and will reduce interest
income or OID determined in such Specified Currency. At the
time amortizable bond premium offsets interest income, a
United States Holder may realize exchange gain or loss
(taxable as ordinary income or loss, but generally not as
interest income or expense), measured by the difference
between exchange rates at that time and at the time of the
acquisition of the Debt Security.
Dual Currency Debt Securities. If so specified in an
applicable Pricing Supplement relating to a Foreign Currency
Debt Security, the Company may have the option to make all
payments of principal and interest scheduled after the
exercise of such option in a currency (the "Optional Payment
Currency") other than the Specified Currency. In general,
payments under such Foreign Currency Debt Securities
(referred to herein as "Dual Currency Debt Securities") will
be taxed pursuant to the rules regarding interest, OID,
premium and foreign currency transactions discussed above.
However, a United States Holder of a Dual Currency Debt
Security with respect to which the Company's option has been
exercised may be considered to have exchanged a Debt
Security denominated in the Specified Currency for a Debt
Security denominated in the Optional Payment Currency.
Whether such a deemed exchange will require a United States
Holder to recognize gain or loss will depend on whether the
exchange is part of a recapitalization of the Company. If
the Company exercises its option to make future payments in
the Optional Payment Currency as part of a recapitalization
that qualifies for nonrecognition treatment, a United States
Holder of a Dual Currency Debt Security will not recognize
gain or loss upon the deemed exchange and the Holder's basis
in the Debt Security will be unchanged. If, however, the
Company's exercise of this option is not part of a
<PAGE 24>
recapitalization, a United States Holder may recognize gain
or loss, if any, equal to the difference between the
holder's basis in the Debt Security denominated in the
Specified Currency and the value of the Debt Security
denominated in the Optional Payment Currency.
Non-United States Holders
The payment of interest, premium and principal
(including any OID) on a Debt Security to any non-United
States Holder will not be subject to United States federal
withholding tax (except as discussed below with respect to
backup withholding), provided that in the case of a payment
of interest, premium, or OID (i) the beneficial owner of the
Debt Security is subject to United States federal income tax
with respect to the Debt Security on a net basis because the
payments received with respect to the Debt Security by such
beneficial owner are effectively connected with a U.S. trade
or business of such beneficial owner (in which case such
beneficial owner may also be subject to the "branch-profits
tax" under Section 884 of the Code) and such beneficial
owner provides the Company with a properly executed IRS
Form 4224, (ii) such beneficial owner provides the Company
with a properly executed IRS Form 1001 (or successor form)
claiming an exemption from withholding under the benefit of
a tax treaty or (iii) (A) such beneficial owner does not
actually or constructively own ten percent or more of the
total combined voting power of all classes of stock of the
Company entitled to vote, (B) such beneficial owner is not a
bank whose receipt of interest on a Debt Security is
described in section 881(c)(3)(A) of the Code, (C) such
beneficial owner is not a controlled foreign corporation
that is related to the Company actually or constructively
through stock ownership, and (D) either (1) such beneficial
owner certifies to the Company or its agent, under penalties
of perjury, that it is not a United States Holder and
provides its name and address on United States Treasury Form
W-8 (or suitable substitute form) or (2) a securities
clearing organization, bank or other financial institution
that holds customer's securities in the ordinary course of
its trade or business (a "financial institution") and holds
the Debt Security on behalf of the beneficial owner
certifies under penalties of perjury that such a Form W-8
(or suitable substitute form) has been received from the
beneficial owner by it or by a financial institution between
it and the beneficial owner and furnishes the payor with a
copy thereof. Notwithstanding the foregoing, pursuant to
the Revenue Reconciliation Act of 1993 (the "1993 Act"),
certain contingent interest may be subject to United States
federal withholding tax. For purposes of this provision of
the 1993 Act, contingent interest includes interest that is
determined by reference to receipts, sales or other cash
flow, income or profits, or a change in value of any
property of the issuer or a related person. It also
includes interest determined by reference to any dividend,
partnership distribution or similar payment made by the
issuer or a related person.
A non-United States Holder generally will not be
subject to United Stated federal income tax (and no tax
generally will be withheld) with respect to gain recognized
on a sale, exchange or redemption of a Debt Security, unless
(i) the gain is effectively connected with a trade or
business of the non-United States Holder in the United
States, or (ii) in the case of a non-United States Holder
who is a nonresident alien individual and holds the Debt
Security as a capital asset, such Holder is present in the
United States for 183 or more days in the taxable year of
the sale or other disposition and certain other conditions
are met.
A Debt Security held by an individual who at the time
of death is not a citizen or resident of the United States
will not be subject to United States federal estate tax as a
result of such individual's death if, at the time of such
death, the individual does not actually or constructively
own 10% or more of the total combined voting power of all
classes of stock of the Company entitled to vote and the
income on the Debt Security would not have been effectively
connected with the conduct of a trade or business by the
individual in the United States. Notwithstanding the
foregoing, if interest on a Debt Security is treated as
contingent interest for purposes of the 1993 Act, as
described above, all or a portion of the value of such Debt
Security may be subject to United States federal estate tax
as a result of such individual's death.
<PAGE 25>
Backup Withholding
The 31% "backup" withholding and information reporting
requirements generally apply to certain payments of
principal (including OID, if any) and to any payments of
premium or interest made within the United States.
Information reporting and backup withholding do not apply to
payments of principal (including OID, if any) or to any
payments of premium or interest made outside the United
States by the Company provided the payor does not have
actual knowledge that the payee is a United States Holder,
and if the certification on United States Treasury Form W-8,
described under the section "non-United States Holders" is
received.
Payment of the proceeds from the sale of a Debt
Security to or through a foreign office of a broker will not
be subject to information reporting or backup withholding,
except that if the broker is a United States person, a
controlled foreign corporation for United States tax
purposes, or a foreign person 50% or more of whose gross
income is effectively connected with the conduct of a trade
or business within the United States for a specified
three-year period, information reporting will apply to such
payments unless such broker has documentary evidence in its
files of the owner's foreign status and has no actual
knowledge to the contrary, or the owner otherwise
establishes an exemption. Payment of the proceeds from a
sale of a Debt Security to or through the United States
office of a broker is subject to information reporting and
backup withholding unless the holder or beneficial owner
certifies as to its non-United States status or otherwise
establishes an exemption from information reporting and
backup withholding.
Backup withholding will generally not apply to United
States Holders other than certain non-corporate Holders who
fail to supply an accurate taxpayer identification number or
who fail to report all interest income required to be shown
on their federal income tax return. Any amounts withheld
from a payment to a United States Holder under the backup
withholding rules will be allowed as a refund or a credit
against such holder's United States federal income tax
provided that the required information is furnished to the
Service.
DESCRIPTION OF WARRANTS
Each series of Debt Warrants will be issued under a
Debt Warrant Agreement to be entered into between the
Company and The Chase Manhattan Bank (National Association),
in its capacity as warrant agent (the "Debt Warrant Agent"),
in substantially the form that has been filed as an exhibit
to the Registration Statement of which this Prospectus is a
part (such agreement the "Debt Warrant Agreement"), together
with the applicable form of warrant certificate (any such
certificate a "Debt Warrant Certificate"). Each series of
Shelf Warrants will be issued under a separate warrant
agreement (each such agreement a "Shelf Warrant Agreement")
to be entered into between the Company and The Chase
Manhattan Bank (National Association), in its capacity as
warrant agent, or such other bank or trust company as may be
identified in the applicable Prospectus Supplement (in
either case, the "Shelf Warrant Agent"), and to be filed as
an amendment to the Registration Statement together with an
appropriate form of shelf warrant certificate (any such
certificate a "Shelf Warrant Certificate" and any Debt
Warrant Certificate or Shelf Warrant Certificate sometimes
referred to as a "Warrant Certificate"). The statements
herein concerning the Debt Warrant Agreement or any Shelf
Warrant Agreement (the Debt Warrant Agreement and any Shelf
Warrant Agreement sometimes referred to as a "Warrant
Agreement") do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all
the provisions of the applicable Warrant Agreement and the
applicable Warrant Certificates, including the definitions
of certain terms.
THE TERMS AND CONDITIONS SET FORTH IN THIS PROSPECTUS
WITH RESPECT TO WARRANTS WILL APPLY TO EACH WARRANT UNLESS
OTHERWISE SPECIFIED HEREIN OR IN THE APPLICABLE PROSPECTUS
SUPPLEMENT.
<PAGE 26>
General
Warrants may be offered from time to time, independent
of or together with any series of Debt Securities. Prior to
the exercise of a Warrant, the holder thereof will not have
any of the rights of holders of any security or other
instrument underlying such Warrant. Unless otherwise
provided in the applicable Prospectus Supplement, a Warrant
of any series may be exercised at any time up to the close
of business on the expiration date set forth therein, after
which time all unexercised Warrants will become void.
Registered Warrants of a series will be exchangeable into
registered Warrants of the same series representing, in the
aggregate, the number of Warrants surrendered for exchange.
Warrant Certificates may be presented for transfer and, to
the extent exchangeable, may be presented for exchange, at
the corporate trust office of the Debt Warrant Agent or the
Shelf Warrant Agent, as the case may be (any such agent
sometimes referred to as a "Warrant Agent").
The Warrant Agent with respect to any series of
Warrants will act solely as an agent of the Company in
connection with the applicable Warrant Certificates and will
not assume any obligation or relationship of agency or trust
for or with any registered holders or beneficial owners of
the applicable Warrant Certificates.
Debt Warrants
Each Debt Warrant will entitle the holder to purchase
such principal amount of Debt Securities at such exercise
price as will in each case be set forth in, or calculable
from, the applicable Prospectus Supplement. In addition,
the applicable Prospectus Supplement will set forth (i) the
designation, aggregate principal amount, and terms of the
underlying Debt Securities, (ii) if applicable, the
designation and terms of any Debt Securities with which such
Debt Warrants are issued and the number of such Debt
Warrants issued with each such Debt Security, (iii) the
date, if any, on and after which such Debt Warrant and the
related Debt Securities will be separately transferable,
(iv) the date on which the right to exercise such Debt
Warrant will commence and the procedures and conditions
relating to exercise, (v) the date on which the right to
exercise such Debt Warrant will expire, (vi) a discussion of
any material United States tax considerations, (vii) a
discussion of any material risk factors, (viii) whether such
Debt Warrant will be issued in registered or bearer form
and, if registered, where it may be transferred and
registered, and (ix) any other terms of such Debt Warrant,
which terms will in no event conflict with the terms or
provisions of the Debt Warrant Agreement.
Subject to any restrictions and additional requirements
that may be set forth in the applicable Prospectus
Supplement, a Debt Warrant may be exercised by delivery to
the Debt Warrant Agent of the subject Debt Warrant
Certificate, properly completed and duly executed, and of
payment of the amount required to purchase the related Debt
Securities. The exercise price will be the price applicable
on the date of payment in full, as set forth in the
applicable Prospectus Supplement. As soon as practicable
after receipt by the Debt Warrant Agent at its corporate
trust office of such payment and of the Debt Warrant
Certificate properly completed and duly executed, the
Company will issue and deliver the Debt Securities that have
been purchased upon such exercise. If fewer than all the
Debt Warrants represented by any Debt Warrant Certificate
are exercised, a new Debt Warrant Certificate will be issued
for the remaining amount of Debt Warrants.
Shelf Warrants
The Prospectus Supplement applicable to any particular
Shelf Warrant will describe (i) the designation and offering
price of such Shelf Warrant, (ii) whether such Shelf Warrant
is for the sale or purchase of any Specified Currency,
commodity, or security, (iii) whether the settlement value
of such Shelf Warrant at the time of exercise will be
determined by the relative value or level of any Index,
(iv) if such Shelf Warrant has been issued together with one
or more Debt Securities, the date on and after which such
Shelf Warrant and any such Debt Securities will be
separately transferable, (v) the date on which the right to
<PAGE 27>
exercise such Shelf Warrant will commence and the procedures
and conditions relating to exercise, (vi) the date on which
the right to exercise such Shelf Warrant will expire,
(vii) a discussion of any material United States tax
considerations, (viii) a discussion of any material risk
factors, (ix) whether such Shelf Warrant will be issued in
registered or bearer form and, if registered, where it may
be transferred and registered, and (x) any other terms of
such Shelf Warrant, which terms will in no event conflict
with the terms and provisions of the applicable Shelf
Warrant Agreement.
Subject to any restrictions and additional requirements
that may be set forth in the applicable Prospectus
Supplement, a Shelf Warrant may be exercised by delivery to
the Shelf Warrant Agent of the subject Shelf Warrant
Certificate, properly completed and duly executed, and
(except with respect to a Shelf Warrant providing for cash
settlement value) of payment of the amount required to
purchase the underlying currency, commodity, or instrument.
The exercise price will be the price applicable on the date
of payment in full, as set forth in the applicable
Prospectus Supplement. As soon as practicable after receipt
by the Shelf Warrant Agent at its corporate trust office of
such payment and of the Shelf Warrant Certificate properly
completed and duly executed, the Shelf Warrant Agent will
buy or sell the related currency, commodity, or instrument,
or pay the settlement value therefore, as the case may be.
If fewer than all the Shelf Warrants represented by any
Shelf Warrant Certificate are exercised, a new Shelf Warrant
Certificate will be issued for the remaining amount of Shelf
Warrants.
PLAN OF DISTRIBUTION
The Company may appoint Agents to solicit offers to
purchase the Securities, each of whom will agree to use best
efforts to solicit such offers. The name of any such Agent,
and the terms of its agreement with the Company (including
the amount of any commission payable by the Company in
connection with the sale of Securities through an Agent)
will be set forth in the applicable Supplement. Each Agent
will have the right, in its reasonable discretion, to reject
(in whole or in part) any offer to purchase Securities
solicited by such Agent. The Company may also, on its own
behalf, directly solicit offers to purchase Securities, at
any time, in any manner, upon any terms, and to any person.
The Company will have the sole right to accept offers to
purchase Securities and may reject (in whole or in part) any
offer to purchase Securities, whether solicited by the
Company or an Agent. Unless the Company otherwise agrees,
payment of the purchase price of Securities sold by the
Company, whether directly or through an Agent, will be
required to be made in immediately available funds.
The Company may also sell Securities to Underwriters at
discounts to be agreed upon at the time of sale. Such
Securities may be resold to investors and other purchasers
at a fixed offering price, at prevailing market prices, or
at prices related thereto at the time of such resale or
otherwise, as determined by the Underwriter and specified in
the applicable Supplement. After the initial public
offering of Securities that are to be resold by an
Underwriter to investors and other purchasers at a fixed
public offering price, the public offering price,
concession, and discount may be changed. An Underwriter may
also sell Securities to other dealers, and may allow to one
or more such dealers a discount from the public offering
price of such Securities, but the aggregate of all such
discounts allowed by the Underwriter to other dealers with
respect to such Securities will not be in excess of the
discount received by the Underwriter from the Company with
respect to such Securities. It is anticipated that any
underwriting agreement pertaining to any Securities will
provide that the Underwriter is obligated to purchase all
Securities taken by such Underwriter if any are taken.
Underwriters and Agents participating in the
distribution of Securities may be deemed to be
"underwriters" under the Securities Act, and any discounts
and commissions received by them and any profit realized by
them on resale of the Securities may be deemed to be
underwriting discounts and commissions within the meaning of
the Securities Act. Any such compensation received by any
such Underwriter or Agent from the Company will be described
in the applicable Supplement. It is anticipated that the
Company will enter into an agreement with each Underwriter
and Agent named in an applicable Supplement, in
substantially the form of Distribution Agreement filed as
Exhibit 1 to the Registration Statement, which agreement
will entitle such Underwriter or Agent to indemnification
against certain civil
<PAGE 28>
liabilities, including liabilities under the Securities Act, or to
contribution for payments it may be required to make in respect thereof.
If so indicated in the applicable Supplement, the
Company will authorize Underwriters or other persons acting
as the Company's agents to solicit offers by certain
institutions to purchase Securities from the Company at the
public offering price set forth in such Supplement pursuant
to delayed delivery contracts providing for payment and
delivery on the date or dates stated in such Supplement.
Institutions with which such contracts, when authorized, may
be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational
and charitable institutions, and other institutions, but
will in all cases be subject to the approval of the Company.
The obligations of any purchaser under any such delayed
delivery contract will not be subject to any conditions
except that (i) the purchase of the Securities will not at
the time of delivery be prohibited under the laws of any
jurisdiction to which such purchaser is subject, and (ii) if
the Securities are also being sold to Underwriters, the
Company will have sold to such Underwriters the Securities
not sold for delayed delivery. The Underwriters and such
other persons will not have any responsibility in respect of
the validity or performance of such contracts.
None of the Securities will have an established trading
market when issued. It is not currently anticipated that
the Securities will be listed on any securities exchange.
Agents, Underwriters, and other dealers may make a market in
the Securities but will not be obligated to do so and may
discontinue any market-making at any time without notice.
There can be no assurance that the Securities offered hereby
will be sold or, if sold, that there will be a secondary
market for them.
LEGAL OPINIONS
Unless otherwise indicated in any applicable
Supplement, the legality of the Securities offered hereby
will be passed upon (i) for the Company by Douglas Cram,
Esq., Vice President and Assistant General Counsel of the
Company and, with respect to the matters described herein
under the caption "Federal Tax Considerations", by Matthew
M. McKenna, Esq., Vice President, Taxes, of the Company,
and (ii) for any Agents and Underwriters by Cahill Gordon &
Reindel (a partnership including a professional
corporation), New York, New York. Mr. Cram and Mr. McKenna
each own certain securities of the Company. Cahill Gordon &
Reindel renders legal services to the Company from time to
time.
EXPERTS
The consolidated financial statements and schedule of
the Company as of December 31, 1994 and for each of the
fiscal years in the three-year period ended December 31,
1994, included in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994, have been
audited by KPMG Peat Marwick LLP, independent auditors, as
set forth in their report thereon included in such Annual
Report and incorporated herein by reference. The report of
KPMG Peat Marwick LLP covering the December 31, 1994
financial statements refers to the Company's adoption of the
Financial Accounting Standards Board's Statement of
Financial Accounting Standard No. 112, "Employers'
Accounting for Postemployment Benefits," in 1994 and change
in its method for calculating the market-related value of
pension plan assets used in the determination of pension
expense in 1994 and adoption of the Financial Accounting
Standards Board's Statements of Financial Accounting
Standards No. 106, "Employers' Accounting For Postretirement
Benefits Other Than Pensions" and No. 109, "Accounting For
Income Taxes" in 1992. Such consolidated financial
statements and schedule are incorporated herein by reference
in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
With respect to the unaudited condensed consolidated
interim financial information of the Company for the twelve
weeks ended March 25, 1995, the twelve and twenty-four weeks
ended June 17, 1995 and the twelve and thirty-six weeks
ended September 9, 1995, incorporated by reference herein,
KPMG Peat Marwick LLP have reported that they have applied
limited procedures in accordance
<PAGE 29>
with professional standards for a review of such information.
However, their separate reports included in the Company's quarterly
reports on Form 10-Q for the twelve weeks ended March 25, 1995, the
twelve and twenty-four weeks ended June 17, 1995 and the twelve and
thirty-six weeks ended September 9, 1995, incorporated by
reference herein, state that they did not audit and they do
not express an opinion on that condensed consolidated
interim financial information. Accordingly, the degree of
reliance on their reports on such information should be
restricted in light of the limited nature of the review
procedures applied. KPMG Peat Marwick LLP are not subject
to the liability provisions of Section 11 of the Securities
Act for their reports on the unaudited condensed
consolidated interim financial information because those
reports are not "reports" or a "part" of the Registration
Statement prepared or certified by accountants within the
meaning of Sections 7 and 11 of the Securities Act.
The financial statements incorporated herein by
reference to all documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14, or 15(d) of the
Exchange Act prior to the filing of a post-effective
amendment that indicates that all securities offered hereby
have been sold or that deregisters all securities then
remaining unsold, are or will be so incorporated in reliance
upon the reports of KPMG Peat Marwick LLP and any other
independent public accountants relating to such financial
information and upon the authority of such independent
public accountants as experts in accounting and auditing in
giving such reports to the extent that the particular firm
has audited such financial statements and consented to the
use of their reports thereon.
<PAGE A-1>
GLOSSARY
As used in the Prospectus or in any applicable
Supplement (unless otherwise defined therein), the terms set
forth below are defined as follows:
"Actual/Actual" means the actual number of days in the
applicable Interest Period in respect of which payment is
being made divided by 365 (or, if any portion of the
applicable Interest Period falls in a leap year, the sum of
(A) the actual number of days in that portion of the
applicable Interest Period falling in a leap year divided by
366 and (B) the actual number of days in that portion of the
applicable Interest Period falling in a non-leap year
divided by 365). See also "Actual/360", "Actual/365
(Fixed)", "Bond Basis", and "Eurobond Basis".
"Actual/360" means the actual number of days in the
applicable Interest Period in respect of which payment is
being made divided by 360. See also "Actual/Actual",
"Actual/365 (Fixed)", "Bond Basis", and "Eurobond Basis".
"Actual/365"--see "Actual/Actual".
"Actual/365 (Fixed)" means the actual number of days in
the applicable Interest Period in respect of which payment
is being made divided by 365. See also "Actual/Actual",
"Actual/360", "Actual/365 (Fixed)", "Bond Basis", and
"Eurobond Basis".
"Agent"--see page 1 of the Prospectus.
"Base Rate"--see page 9 of the Prospectus.
"Bond Basis" means the number of days in the applicable
Interest Period in respect of which payment is being made
divided by 360 (the number of days to be calculated on the
basis of a year of 360 days with twelve 30-day months
(unless (i) the last day of the applicable Interest Period
is the 31st day of a month but the first day of the
applicable Interest Period is a day other than the 30th or
31st day of a month, in which case the months that include
that last day shall not be considered to be shortened to a
30-day month, or (ii) the last day of the applicable
Interest Period is the last day of the month of February, in
which case the month of February shall not be considered to
be lengthened to a 30-day month).
"Business Day" when used in conjunction with a
designated city means any day other than a Saturday or
Sunday that is neither a legal holiday nor a day on which
banking institutions are authorized or required by law or
regulation to be closed in (i) London, England (with respect
to a Debt Security the principal of or interest on which
will be determined by reference to LIBOR), (ii) Brussels,
Belgium (with respect to a Debt Security denominated in ECUs
or whose principal or interest will be determined by
reference to the relative value of the ECU), or (iii) the
financial center of the country issuing the Specified
Currency (with respect to a Debt Security denominated in a
Specified Currency other than the ECU or whose principal or
interest will be determined by reference to the relative
value of any Specified Currency other than the ECU). See
also "New York Business Day".
"Business Day Convention" means the convention for
adjusting any relevant date if it would otherwise fall on a
day that is not a Business Day. The following terms, when
used in conjunction with the term "Business Day Convention"
and a date, shall mean that an adjustment will be made if
that date would otherwise fall on a day that is not a
Business Day so that:
(i) if "Following" is specified, that date will be
the first
<PAGE A-2>
following day that is a Business Day;
(ii) if "Modified Following" or "Modified" is
specified, that date will be the first following day
that is a Business Day unless that day falls in the
next calendar month, in which case that date will be
the first preceding day that is a Business Day; and
(iii) if "Preceding" is specified, that date will
be the first preceding day that is a Business Day.
"CD Rate" with respect to any Interest Determination
Date means the rate set forth in H.15(519) for the period
for the specified Index Maturity under the caption "CDs
(Secondary Market)". If such rate does not appear in
H.15(519) by 9:00 a.m., New York City time, on the
Calculation Date relating to such Interest Determination
Date, the rate for such Interest Determination Date will be
the rate set forth in Composite 3:30 P.M. Quotations for
U.S. Government Securities for such Interest Determination
Date for the Index Maturity under the caption "Certificates
of Deposit". If such rate does not appear in either
H.15(519) or Composite 3:30 P.M. Quotations for
U.S. Government Securities by 3:00 p.m., New York City time,
on the Calculation Date relating to such Interest
Determination Date, the rate for such Interest Determination
Date will be the arithmetic mean of the secondary market
offered rates of three leading nonbank dealers in negotiable
U.S. dollar certificates of deposit in New York City as of
10:00 a.m., New York City time, for such Interest
Determination Date for negotiable U.S. Dollar certificates
of deposit of major United States money market banks with a
remaining maturity closest to the Index Maturity and in an
amount that is representative for a single transaction in
the relevant market at the relevant time.
"Calculation Agent"--see page 7 of the Prospectus.
"Calculation Date" when used with respect to any
Interest Determination Date means the date by which the
applicable interest rate must be determined, which date will
be the earlier of (i) the tenth calendar day following such
Interest Determination Date or, if such date is not a
New York Business Day, the first New York Business Day
occurring after such 10-day period or (ii) the New York
Business Day immediately preceding the applicable Interest
Payment Date or Maturity Date, as the case may be.
"Commercial Paper Rate" with respect to any Interest
Determination Date means the Money Market Yield (see below)
of the rate set forth in H.15(519) for that day opposite the
Index Maturity under the caption "Commercial Paper". If
such rate does not appear in H.15(519) by 9:00 a.m.,
New York City time, on the Calculation Date relating to such
Interest Determination Date, the rate for such Interest
Determination Date will be the Money Market Yield of the
rate set forth in Composite 3:30 P.M. Quotations for
U.S. Government Securities for such Interest Determination
Date in respect of the Index Maturity under the caption
"Commercial Paper" (with an Index Maturity of one month or
three months being deemed to be equivalent to an Index
Maturity of 30 days or 90 days, respectively). If such rate
does not appear in either H.15(519) or Composite 3:30 P.M.
Quotations for U.S. Government Securities by 3:00 p.m.,
New York City time, on the Calculation Date relating to such
Interest Determination Date, the rate for such Interest
Determination Date will be the Money Market Yield of the
arithmetic mean of the offered rates of three leading
dealers of U.S. commercial paper in New York City as of
11:00 a.m., New York City time, for such Interest
Determination Date for U.S. dollar commercial paper of the
Index Maturity placed for industrial issuers whose bond
rating is "AA" or the equivalent from a nationally
recognized rating agency.
"Composite 3:30 P.M. Quotations for U.S. Government
Securities" means the daily statistical release designated
as such, or any successor publication, published by the
Federal Reserve Bank of New York.
"Commission"--see page 2 of the Prospectus.
"Company"--see page 1 of the Prospectus.
"Consolidated Net Tangible Assets" is defined as the
total assets of the Company and its Restricted Subsidiaries
(less applicable depreciation, amortization, and other
valuation reserves), except to the extent
<PAGE A-3>
resulting from write-ups of capital assets (other than
write-ups in connection with accounting for acquisitions,
in accordance with generally accepted accounting principles),
less all current liabilities (excluding intercompany liabilities) and
all intangible assets of the Company and its Restricted
Subsidiaries, all as set forth on the most recent
consolidated balance sheet of the Company and its Restricted
Subsidiaries, prepared in accordance with generally accepted
accounting principles.
"DTC"--see page 1 of the Prospectus.
"Debt Securities"--see page 1 of the Prospectus.
"Debt Warrant"--see page 1 of the Prospectus.
"Debt Warrant Agent"--see page 25 of the Prospectus.
"Debt Warrant Agreement"--see page 25 of the
Prospectus.
"Debt Warrant Certificate"--see page 25 of the
Prospectus.
"Depositary"--see page 1 of the Prospectus.
"Discount Debt Security"--see page 1 of the Prospectus.
"ECU" means the European Currency Unit and refers to a
single unit of the composite currency known as the "European
Currency".
"Eurobond Basis" means the number of days in the
applicable Interest Period in respect of which payment is
being made divided by 360 (the number of days to be
calculated on the basis of a year of 360 days with twelve
30-day months, without regard to the date of the first day
or last day of the applicable Interest Period unless, in the
case of the final applicable Interest Period, the Scheduled
Maturity Date is the last day of the month of February, in
which case the Month of February shall not be considered to
be lengthened to a 30-day month).
"Event of Default" is defined in the Indenture. See
page 13 of the Prospectus for a discussion of Events of
Default.
"Exchange Act"--see page 2 of the Prospectus.
"Exchange Rate Agent"--see page 7 of the Prospectus.
"Federal Funds Rate" with respect to any Interest
Determination Date means the rate set forth in H.15(519) for
that day opposite the caption "Federal Funds (Effective)".
If such rate does not appear in H.15(519) by 9:00 a.m., New
York City time, on the Calculation Date relating to such
Interest Determination Date, the rate for such Interest
Determination Date will be the rate set forth in Composite
3:30 P.M. Quotations for U.S. Government Securities for
such Interest Determination Date under the caption "Federal
Funds/Effective Rate". If such rate does not appear in
either H.15(519) or Composite 3:30 P.M. Quotations for
U.S. Government Securities by 3:00 p.m., New York City time,
on the Calculation Date relating to such Interest
Determination Date, the rate for such Interest Determination
Date will be the Money Market Yield of the arithmetic mean
for the last transaction in overnight U.S. dollar Federal
Funds by three leading brokers of U.S. dollar Federal Funds
transactions in New York City as of 11:00 a.m., New York
City time, for such Interest Determination Date.
"Fixed Rate Debt Security"--see page 1 of the
Prospectus.
<PAGE A-4>
"Floating Rate Debt Security"--see page 1 of the
Prospectus.
"Global Debt Security"--see page 1 of the Prospectus.
"Holder" means (i) with respect to a Debt Security
issued in definitive form, the beneficial owner of the Debt
Security, and (ii) with respect to a Debt Security of any
series that is issued in global form, the Depositary or a
nominee thereof, in either case as reflected on the Security
Register (as defined in the Indenture) maintained by the
Trustee in its capacity as Paying Agent.
"H.15(519)" means the weekly statistical release
designated as such, or any successor publication, published
by the Board of Governors of the Federal Reserve System.
"Holder of Record"--see page 8 of the Prospectus.
"Index Maturity"--see page 9 of the Prospectus.
"Index" or "applicable Index"--see page 10 of the
Prospectus.
"Indexed Debt Security"--see page 1 of the Prospectus.
"Indenture"--see page 5 of the Prospectus.
"Initial Interest Rate"--see page 10 of the Prospectus.
"Interest Accrual Date"--see page 6 of the Prospectus.
"Interest Determination Date" with respect to any
Interest Reset Date means the date two Business Days prior
to such Interest Reset Date.
"Interest Payment Date"--see page 6 of the Prospectus.
"Interest Period"--see page 10 of the Prospectus.
"Interest Reset Date"--see page 10 of the Prospectus.
"Issue Price"--see page 6 of the Prospectus.
"LIBOR" with respect to any Interest Determination Date
will be the rate for deposits in U.S. dollars or the
Specified Currency (as the case may be) for a period of the
Index Maturity that appears on the Telerate Page: (a) 3740
(for Australian Dollars); (b) 3740 (for Canadian Dollars);
(c) 3750 (for Swiss Francs); (d) 3750 (for Deutsche Marks);
(e) 3740 (for French Francs); (f) 3750 (for Pound Sterling);
(g) 3740 (for Italian Lire); (h) 3750 (for Japanese Yen);
(i) 3740 (for Spanish Pesetas); (j) 3750 (for U.S. dollars),
and (k) 3750 (for European Currency Units) as of 11:00 a.m.,
London Time, on such Interest Determination Date. If such
rate does not appear on the specified Telerate Page by 9:00
a.m., New York City time, on such Interest Determination
Date, the rate for such Interest Determination Date will be
determined on the basis of the rates at which deposits in
U.S. dollars or in the Specified Currency (as the case may
be) are offered by four major banks in the London interbank
market as of approximately 11:00 a.m., London time, on such
Interest Determination Date to prime banks in the London
interbank market for a period of the Index Maturity
commencing on the applicable Interest Reset Date and in an
amount that is representative for a single transaction in
the relevant market at the relevant time. The Calculation
Agent will request the principal London office of each such
bank to provide a quotation of its rate. If at least two
quotations are provided, the rate for such Interest
Determination Date will be the arithmetic mean of the
quotations. If fewer than two quotations are provided as
requested, the rate for such
<PAGE A-5>
Interest Reset Date will be the arithmetic mean of the rates quoted by
major banks in New York City or in the relevant financial center of the
country issuing the Specified Currency (as the case may be) as of
11:00 a.m., local time in New York City or in such financial
center, on such Interest Determination Date for loans in
U.S. dollars or in the Specified Currency (as the case may
be) to leading European banks for a period of the Index
Maturity commencing on such Interest Reset Date and in an
amount that is representative for a single transaction in
the relevant market at the relevant time.
"Market Exchange Rate"--see page 5 of the Prospectus.
"Maturity Date" means the date on which the entire
principal amount outstanding under a Debt Security becomes
due and payable, whether on the Scheduled Maturity Date or
by declaration of acceleration, call for redemption, or
otherwise.
"Maximum Interest Rate"--see page 6 of the Prospectus.
"Minimum Interest Rate"--see page 9 of the Prospectus.
"Money Market Yield" means, in respect of any security
with a maturity of nine months or less, the rate for which
is quoted on a bank discount basis, a yield (expressed as a
percentage) calculated in accordance with the following
formula:
Money Market Yield = D X 360 X 100
--------------
360 - (D X M)
where "D" refers to the per annum rate for a security,
quoted on a bank discount basis and expressed as a decimal,
and "M" refers to the actual number of days in the
applicable Interest Period.
"New York Business Day" means any day other than a
Saturday or Sunday that is neither a legal holiday nor a day
on which banking institutions are authorized or required by
law, regulation, or executive order, to be closed in the
City of New York and: (i) with respect to any Debt Security
denominated or payable in ECUs, that is also a Brussels
Business Day, (ii) with respect to any Debt Security
denominated or payable in any other Specified Currency, that
is also a Business Day in the financial center of the
country issuing such Specified Currency, and (iii) with
respect to any Debt Security the principal of or interest on
which will be determined by reference to LIBOR, that is also
a London Business Day. See also "Business Day".
"Participant"--see page 11 of the Prospectus.
"Paying Agent" means the agent appointed by the Company
to distribute amounts payable by the Company on the Debt
Securities. The Company has designated the Trustee as
Paying Agent.
"PepsiCo" -- see page 3 of the Prospectus.
"Pricing Supplement" -- see page 1 of the Prospectus.
"Prime Rate" with respect to any Interest Determination
Date means the rate set forth in H.15(519) for that day
opposite the caption "Bank Prime Loan". If such rate does
not appear in H.15(519) by 9:00 a.m., New York City time, on
the Calculation Date relating to such Interest Determination
Date, the rate for such Interest Determination Date will be
the arithmetic mean of the rates of interest publicly
announced by each bank that appears on the Reuters Screen
NYMF Page as such bank's prime rate or base lending rate as
in effect for that Interest Determination Date as quoted on
the Reuters Screen NYMF Page for such Interest Determination
Date or, if fewer than four rates appear on the Reuters
Screen NYMF Page for such Interest Determination Date, the
rate will be the arithmetic mean of the rates of interest
publicly announced by three
<PAGE A-6>
major banks in New York City as its U.S. dollar prime rate or base
lending rate as in effect for such Interest Determination Date.
Each change in the prime rate or base lending rate of any bank so
announced by such bank will be effective as of the effective date of the
announcement or, if no effective date is specified, as of
the date of the announcement.
"Principal Payment Date" -- see page 6 of the
Prospectus.
"Prospectus Supplement" -- see page 1 of the
Prospectus.
"Record Date" means any date as of which the Holder of
a Debt Security will be determined by the Trustee for any
purpose described herein or in the Indenture, such
determination to be made as of the close of business on such
date by reference to the Security Register (as defined in
the Indenture) maintained by the Trustee in its capacity as
Paying Agent.
"Registration Statement" -- see page 2 of the
Prospectus.
"Restricted Property" is defined in the Indenture as
any single manufacturing or processing plant, office,
building, or warehouse owned or leased by the Company or a
Restricted Subsidiary, other than any such facility or
portion thereof that, in the opinion of the Board of
Directors of the Company, is not of material importance to
the business conducted by the Company and its Restricted
Subsidiaries taken as a whole, provided, that no such
facility (or portion thereof) will be deemed of material
importance if its gross book value (before deducting
accumulated depreciation) is less than 2% of the Company's
Consolidated Net Tangible Assets.
"Restricted Subsidiary" is defined in the Indenture as
any subsidiary of the Company other than an Unrestricted
Subsidiary.
"Scheduled Maturity Date" -- see page 6 of the
Prospectus.
"Securities" -- see page 1 of the Prospectus.
"Securities Act" -- see page 2 of the Prospectus.
"Settlement Date" -- see page 6 of the Prospectus.
"Shelf Warrant" -- see page 1 of the Prospectus.
"Shelf Warrant Agent" -- see page 25 of the Prospectus.
"Shelf Warrant Agreement" -- see page 25 of the
Prospectus.
"Shelf Warrant Certificate" -- see page 25 of the
Prospectus.
"Specified Currency" -- see page 1 of the Prospectus.
"Spread" -- see page 9 of the Prospectus.
"Spread Divisor" -- see page 9 of the Prospectus.
"Spread Multiplier" -- see page 9 of the Prospectus.
"Supplement" means any Pricing Supplement or Prospectus
Supplement.
<PAGE A-7>
"30/360" -- see "Bond Basis".
"30E/360" -- see "Eurobond Basis".
"360/360" -- see "Bond Basis".
"Trustee" -- see page 5 of the Prospectus.
"US Treasury Bill Rate" with respect to any Interest
Determination Date means the rate at which United States
Treasury bills are auctioned, as set forth in H.15(519) for
that day opposite the Index Maturity under the caption
"U.S. Government Security/Treasury Bills/Auction Average
(Investment)". If such rate does not appear in H.15(519) by
9:00 a.m., New York City time, on the Calculation Date
relating to such Interest Determination Date, the rate for
such Interest Determination Date will be the Bond Equivalent
Yield (as defined below) of the auction average rate for
those Treasury bills as announced by the United States
Department of the Treasury. If United States Treasury bills
of the Index Maturity are not auctioned during any period of
seven consecutive calendar days ending on and including any
Friday, and a U.S. Treasury Bill Rate would have been
available on the applicable Interest Determination Date if
such Treasury bills had been auctioned during that seven day
period, an Interest Determination Date will be deemed to
have occurred on the day during that seven-day period on
which such Treasury bills would have been auctioned in
accordance with the usual practices of the United States
Department of the Treasury, and the rate for that Interest
Determination Date will be the Bond Equivalent Yield of the
rate set forth in H.15(519) for that day opposite the Index
Maturity under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market". If such
interest rate does not appear in H.15(519) by 3:00 p.m.,
New York City time, on the Calculation Date relating to such
Interest Determination Date, the rate for such Interest
Determination Date will be the Bond Equivalent Yield of the
arithmetic mean of the secondary market bid rates of three
primary United States Government dealers in New York City as
of approximately 3:30 p.m., New York City time, for such
Interest Determination Date for the issue of United States
Treasury bills with a remaining maturity closest to the
Index Maturity.
For the purposes of this definition, the term "Bond
Equivalent Yield" is to be calculated in accordance with the
following formula:
Bond Equivalent Yield = D X N
----------- X 100
360 - (D X M)
where "D" refers to the per annum rate for the security,
quoted on a bank discount basis and expressed as a decimal,
"N" refers to 365 or 366, as the case may be, and "M" refers
to the actual number of days in the applicable Interest
Period.
"Underwriter" -- see page 1 of the Prospectus.
"Unrestricted Subsidiary" means A&M Food Services,
Inc., Kentucky Fried Chicken of California, Inc., Pizza Hut,
Inc., Pizza Management, Inc., QSR, Inc., Taco Bell Corp.,
any Subsidiaries thereof and any other Subsidiary of the
Company (not at the time designated a Restricted Subsidiary)
(i) the major part of whose business consists of finance,
banking, credit, leasing, insurance, financial services, or
other similar operations, or any combination thereof,
(ii) substantially all the assets of which consist of the
capital stock of one or more such Subsidiaries, or
(iii) designated as such by the Company's Board of
Directors; provided that such designation will not
constitute a violation of the terms of the Securities.
"Warrant Agent" -- see page 26 of the Prospectus.
"Warrant Agreement" --see page 25 of the Prospectus.
<PAGE A-8>
"Warrant Certificate" -- see page 25 of the Prospectus.
<PAGE>
No person has been authorized to give
any information or to make any
representations other than those U.S. $4,587,000,000
contained in or incorporated by
reference in this Prospectus or any
applicable Supplement in connection [PEPSICO LOGO]
with the offer contained herein or
therein and, if given or made, such Debt Securities and Warrants
information or representations must not Due Not Less Than Nine Months from
be relied upon as having been Date of Issue
authorized by the Company or by any
agent. Neither the delivery of this
Prospectus or any applicable Supplement
nor any sale made hereunder or
thereunder shall, under any PROSPECTUS
circumstances, create any implication
that there has been no change in the
affairs of the Company since the date
hereof or thereof, or that the November , 1995
information contained or incorporated
by reference herein or therein is
correct as of any time subsequent to
its date. Neither this Prospectus nor
any applicable Supplement constitutes
an offer to sell or a solicitation of
an offer to buy Debt Securities or
Warrants in any jurisdiction in which
such offer or solicitation is unlawful
or in which the person making such
offer or solicitation is not qualified
to do so.
TABLE OF CONTENTS
Page
Available Information 2
Incorporation of Certain Documents by 2
Reference
Important Currency Exchange Information 3
The Company 3
Use of Proceeds 5
Ratio of Earnings to Fixed Charges 5
Description of Debt Securities 5
General 6
Exchange Rate and Other 7
Calculations
Payment Currency 7
Interest and Principal 8
Payments
Fixed Rate Debt Securities 9
Floating Rate Debt 9
Securities
Indexed Debt Securities 10
Global Debt Securities 11
Certain Indenture
Provisions 12
Currency and Index-Related
Risk Factors 15
United States Tax
Considerations 17
Description of Warrants 25
General 26
Debt Warrants 26
Shelf Warrants 26
Plan of Distribution 27
Legal Opinions 28
Experts 28
Glossary A-1
<PAGE II-1>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses in connection with the issuance and
distribution of the securities being registered, other than
underwriting compensation, are:
Securities and Exchange $ 500,000.00
Commission Registration Fee
Accounting Fees and Expenses* $ 165,000.00
Trustee's Fees and Expenses $ 30,000.00
(including counsel fees)*
Blue Sky Fees and Expenses $ 30,000.00
(including counsel fees)*
Printing and Engraving Fees* $ 10,000.00
Rating Agency Fees* $ 810,000.00
Miscellaneous* $ 5,000.00
_____________
Total $1,550,000.00
____________________
*Estimated
Item 15. Indemnification of Directors and Officers.
(i) Sections 55-8-50 through 55-8-58 of the North
Carolina Business Corporation Act provide as follows:
Section 55-8-50. Policy statement and definitions.
(a) It is the public policy of this State to
enable corporations organized under this Chapter to
attract and maintain responsible, qualified directors,
officers, employees and agents, and, to that end, to
permit corporations organized under this Chapter to
allocate the risk of personal liability of directors,
officers, employees and agents through indemnification
and insurance as authorized in this Part.
(b) Definition in this Part:
(1) "Corporation" includes any domestic or
foreign corporation absorbed in a merger which, if its
separate existence had continued, would have had the
obligation or power to indemnify its directors,
officers, employees, or agents, so that a person who
would have been entitled to receive or request
indemnification from such corporation if its separate
existence had continued shall stand in the same
position under this Part with respect to the surviving
corporation.
(2) "Director" means an individual who is or was
a director of a corporation or an individual who, while
a director of a corporation, is or was serving at the
corporation's request as a director, officer, partner,
trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise. A
Director is considered to be serving any employee
benefit plan at the corporation's request if his duties
to the corporation also impose duties on, or otherwise
involve services by, him to the plan or to
<PAGE II-2>
participants in or beneficiaries of the plan. "Director" includes,
unless the context requires otherwise, the estate or
personal representative of a director.
(3) "Expenses" means expenses of every kind in
defending a proceeding, including counsel fees.
(4) "Liability" means the obligation to pay a
judgment, settlement, penalty, fine (including an
excise tax assessed with respect to an employee benefit
plan), or reasonable expenses incurred with respect to
a proceeding.
(4a) "Officer", "employee", or "agent" includes,
unless the context requires otherwise, the estate or
personal representative of a person who acted in that
capacity.
(5) "Official capacity" means: (i) when used with
respect to a director, the office of director in a
corporation; and (ii) when used with respect to an
individual other than a director, as contemplated in
G.S. 55-8-56, the office in a corporation held by the
officer or the employment or agency relationship
undertaken by the employee or agent on behalf of the
corporation. "Official capacity" does not include
service for any other foreign or domestic corporation
or any partnership, joint venture, trust, employee
benefit plan, or other enterprise.
(6) "Party" includes an individual who was, is,
or is threatened to be made a named defendant or
respondent in a proceeding.
(7) "Proceeding" means any threatened, pending,
or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative and
whether formal or informal.
Section 55-8-51. Authority to indemnify.
(a) Except as provided in subsection (d), a
corporation may indemnify an individual made a party to
a proceeding because he is or was a director against
liability incurred in the proceeding if:
(1) He conducted himself in good faith;
and
(2) He reasonably believed (i) in the
case of conduct in his official capacity with the
corporation, that his conduct was in its best
interests; and (ii) in all other cases, that his
conduct was at least not opposed to its best
interest; and
(3) In the case of any criminal
proceeding, he had no reasonable cause to believe
his conduct was unlawful.
(b) A director's conduct with respect to an
employee benefit plan for a purpose he reasonably
believed to be in the interests of the participants in
and beneficiaries of the plan is conduct that satisfied
the requirement of subsection (a)(2)(ii).
(c) The termination of a proceeding by judgment,
order, settlement, conviction, or upon a plea of no
contest or its equivalent is not, of itself,
determinative that the director did not meet the
standard of conduct described in this section.
(d) A corporation may not indemnify a director
under this section:
(1) In connection with a proceeding by
or in the right of the corporation in which the
director was adjudged liable to the corporation;
or
<PAGE II-3>
(2) In connection with any other
proceeding charging improper personal benefit to
him, whether or not involving action in his
official capacity, in which he was adjudged liable
on the basis that personal benefit was improperly
received by him.
(e) Indemnification permitted under this section
in connection with a proceeding by or in the right of
the corporation that is concluded without a final
adjudication on the issue of liability is limited to
reasonable expenses incurred in connection with the
proceeding.
(f) The authorization, approval or favorable
recommendation by the board of directors of a
corporation of indemnification, as permitted by this
section, shall not be deemed an act or corporate
transaction in which a director has a conflict of
interest, and no such indemnification shall be void or
voidable on such ground.
Section 55-8-52. Mandatory indemnification.
Unless limited by its articles of incorporation, a
corporation shall indemnify a director who was wholly
successful, on the merits or otherwise, in the defense of
any proceeding to which he was a party because he is or was
a director of the corporation against reasonable expenses
incurred by him in connection with the proceeding.
Section 55-8-53. Advance for expenses.
Expenses incurred by a director in defending a
proceeding may be paid by the corporation in advance of the
final disposition of such proceeding as authorized by the
board of directors in the specific case or as authorized or
required under any provision in the articles of
incorporation or bylaws or by any applicable resolution or
contract upon receipt of an undertaking by or on behalf of
the director to repay such amount unless it shall ultimately
be determined that he is entitled to be indemnified by the
corporation against such expenses.
Section 55-8-54. Court-ordered indemnification.
Unless a corporation's articles of incorporation
provide otherwise, a director of the corporation who is a
party to a proceeding may apply for indemnification to the
court conducting the proceeding or to another court of
competent jurisdiction. On receipt of an application, the
court after giving any notice the court considers necessary
may order indemnification if it determines:
(1) The director is entitled to mandatory
indemnification under G.S. 55-8-52, in which case the
court shall also order the corporation to pay the
director's reasonable expenses incurred to obtain
court-ordered indemnification;
(2) The director is fairly and reasonably
entitled to indemnification in view of all the relevant
circumstances, whether or not he met the standard of
conduct set forth in G.S. 55-8-51 or was adjudged
liable as described in G.S. 55-8-51(d), but if he was
adjudged so liable his indemnification is limited to
reasonable expenses incurred.
Section 55-8-55. Determination and authorization of
indemnification.
(a) A corporation may not indemnify a director
under G.S. 55-8-51 unless authorized in the specific
case after a determination has been made that
indemnification of the director is permissible in the
circumstances because he has met the standard of
conduct set forth in G.S. 55-8-51.
<PAGE II-4>
(b) The determination shall be made:
(1) By the board of directors by
majority vote of a quorum consisting of directors
not at the time parties to the proceeding;
(2) If a quorum cannot be obtained
under subdivision (1), by majority vote of a
committee duly designated by the board of
directors (in which designation directors who are
parties may participate), consisting solely of two
or more directors not at the time parties to the
proceeding;
(3) By special legal counsel
(i) selected by the board of directors or its
committee in the manner prescribed in subdivision
(1) or (2); or (ii) if a quorum of the board of
directors cannot be obtained under subdivision (1)
and a committee cannot be designated under
subdivision (2), selected by majority vote of the
full board of directors (in which selected
directors who are parties may participate); or
(4) By the shareholders, but shares
owned by or voted under the control of directors
who are at the time parties to the proceeding may
not be voted on the determination.
(c) Authorization of indemnification and
evaluation as to reasonableness of expenses shall be
made in the same manner as the determination that
indemnification is permissible, except that if the
determination is made by special legal counsel,
authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those
entitled under subsection (b)(3) to select counsel.
Section 55-8-56. Indemnification of officers, employees, and
agents.
Unless a corporation's articles of incorporation
provide otherwise:
(1) An officer of the corporation is entitled to
mandatory indemnification under G.S. 55-8-52, and is
entitled to apply for court-ordered indemnification
under G.S. 55-8-54, in each case to the same extent as
a director;
(2) The corporation may indemnify and advance
expenses under this Part to an officer, employee, or
agent of the corporation to the same extent as to a
director; and
(3) A corporation may also indemnify and advance
expenses to an officer, employee, or agent who is not a
director to the extent, consistent with public policy,
that may be provided by its articles of incorporation,
bylaws, general or specific action of its board of
directors, or contract.
Section 55-8-57. Additional indemnification and insurance.
(a) In addition to and separate and apart from the
indemnification provided for in G.S. 55-8-51, 55-8-52,
55-8-54, 55-8-55 and 55-8-56, a corporation may in its
articles of incorporation or bylaws or by contract or
resolution indemnify or agree to indemnify any one or more
of its directors, officers, employees, or agents against
liability and expenses in any proceeding (including without
limitation a proceeding brought by or on behalf of the
corporation itself) arising out of their status as such or
their activities in any of the foregoing capacities;
provided, however, that a corporation may not indemnify or
agree to indemnify a person against liability or expenses he
may incur on account of his activities which were at the
time taken known or believed by him to be clearly in
conflict with the best interests of the corporation. A
corporation may likewise and to the same extent indemnify or
agree to indemnify any person who, at the request of the
corporation, is or was serving as a director, officer,
partner, trustee, employee, or agent of another foreign
<PAGE II-5>
or domestic corporation, partnership, joint venture, trust or
other enterprise or as a trustee or administrator under an
employee benefit plan. Any provision in any articles of
incorporation, bylaw, contract, or resolution permitted
under this section may include provisions for recovery from
the corporation of reasonable costs, expenses, and
attorney's fees in connection with the enforcement of rights
to indemnification granted therein and may further include
provisions establishing reasonable procedures for
determining and enforcing the rights granted therein.
(b) The authorization, adoption, approval, or
favorable recommendation by the board of directors of a
public corporation of any provision in any articles of
incorporation, bylaw, contract or resolution, as permitted
in this section, shall not be deemed an act or corporate
transaction in which a director has a conflict of interest,
and no such articles of incorporation or bylaw provision or
contract or resolution shall be void or voidable on such
grounds. The authorization, adoption, approval, or
favorable recommendation by the board of directors of a
nonpublic corporation of any provision in any articles of
incorporation, bylaw, contract or resolution, as permitted
in this section, which occurred prior to July 1, 1990, shall
not be deemed an act or corporate transaction in which a
director has a conflict of interest, and no such articles of
incorporation, bylaw provision, contract or resolution shall
be void or voidable on such grounds. Except as permitted in
G.S. 55-8-31, no such bylaw, contract, or resolution not
adopted, authorized, approved or ratified by shareholders
shall be effective as to claims made or liabilities asserted
against any director prior to its adoption, authorization,
or approval by the board of directors.
(c) A corporation may purchase and maintain insurance
on behalf of an individual who is or was a director,
officer, employee, or agent of the corporation or who, while
a director, officer, employee, or agent of the corporation,
is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint
venture, trust, employee benefit plan, or other enterprise,
against liability asserted against or incurred by him in
that capacity or arising from his status as a director,
officer, employee, or agent, whether or not the corporation
would have power to indemnify him against the same liability
under any provision of this act.
Section 55-8-58. Application of Part.
(a) If articles of incorporation limit indemnification
or advance for expenses, indemnification and advance for
expenses are valid only to the extent consistent with the
articles.
(b) This Part does not limit a corporation's power to
pay or reimburse expenses incurred by a director in
connection with his appearance as a witness in a proceeding
at a time when he has not been made a named defendant or
respondent to the proceeding.
(c) This Part shall not affect rights or liabilities
arising out of acts or omissions occurring before the
effective date of this act.
(ii) Section 3.07 of Article III of the By-Laws of the
Company provides as follows:
Unless the Board of Directors shall determine
otherwise, the Corporation shall indemnify, to the full
extent permitted by law, any person who was or is, or
who is threatened to be made, a party to an action,
suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact
that he, his testator or intestate, is or was a
director, officer or employee of the Corporation, or is
or was serving at the request of the Corporation, as a
director, officer or employee of another enterprise,
against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection
with such action, suit or proceeding. Such
indemnification may, in the discretion of the Board,
include advances of a director's, officer's or
employee's expenses prior to final disposition of such
action, suit or proceeding. The right of
indemnification provided for in this Section 3.07 shall
not exclude any rights to which such persons may
otherwise be entitled to contract or as a matter of
law.
<PAGE II-6>
(iii) Officers and directors of the Company are
presently covered by insurance which (with certain
exceptions and within certain limitations) indemnifies them
against any losses arising from any alleged wrongful act
including any alleged error or misstatement or misleading
statement or wrongful act or omission or neglect of duty.
Item 16. Exhibits.
1 Form of Distribution Agreement.
3 Restated Articles of Incorporation.
4 (a) Indenture, dated as of
December 14, 1994, between PepsiCo, Inc. and
The Chase Manhattan Bank (National
Association) as Trustee.
(b) Forms of Debt Securities (included
as Exhibits A and B to the Indenture filed
herewith as Exhibit 4(a)).
(c) Form of Fixed Rate Note.
(d) Form of Floating Rate Note.
(e) Form of Debt Warrant Agreement.
(f) Form of Debt Warrant Certificate
(included as Annex A to the form of Debt
Warrant Agreement filed herewith as Exhibit
4(e)).
5 Opinion and consent of Douglas
Cram, Esq., Vice President and Assistant
General Counsel of the Company.
8 Opinion and consent of Matthew
M. McKenna, Esq., Vice President, Taxes of
the Company.
12 PepsiCo, Inc. and Subsidiaries
Statement of Computation of Ratio of Earnings
to Fixed Charges (Unaudited).
15 Letter from KPMG Peat Marwick LLP
regarding unaudited interim financial
information ("Accountants' Acknowledgment"), incorporated
herein by reference to Exhibit 15 to the
Company's Quarterly Reports on Form 10-Q for
the twelve weeks ended March 25, 1995, the
twelve and twenty-four weeks ended June, 17,
1995 and the twelve and thirty-six weeks
ended September 9, 1995.
23(a) Consent and Acknowledgment of KPMG Peat
Marwick LLP.
(b) The consent of Douglas Cram, Esq.
is contained in his opinion filed as
Exhibit 5 to this Registration Statement.
(c) The consent of Matthew M. McKenna,
Esq. is contained in his opinion filed as
Exhibit 8 to this Registration Statement.
24 Power of Attorney of PepsiCo, Inc.
and certain of its officers and directors,
incorporated herein by reference to
Exhibit 24 to the Company's Annual Report on
Form 10-K for the fiscal year ended
December 31, 1994.
25 Form T-1 Statement of
Eligibility and Qualification under the Trust
Indenture Act of 1939 of The Chase Manhattan
Bank (National Association).
<PAGE II-7>
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made of the securities registered
hereby, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any
facts or events arising after the effective date
of this Registration Statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth in
this Registration Statement; and
(iii) To include any material
information with respect to the plan of
distribution not previously disclosed in this
Registration Statement or any material change to
such information in this Registration Statement.
provided, however, that the undertakings set forth in
paragraphs (i) and (ii) above do not apply if the
information required to be included in a post-effective
amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in this Registration
Statement;
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide
offering thereof; and
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in
this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item
15 above, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed
in such Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the
securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Securities Act
of 1933 and will be governed by the final adjudication of
such issue.
<PAGE S-1>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
PepsiCo, Inc. certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and
has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in
Purchase, New York on the 14th day of November, 1995.
PEPSICO, INC.
By: /s/ LAWRENCE F. DICKIE
-----------------------------
Lawrence F. Dickie
(Attorney-in-Fact)
Vice President, Associate General
Counsel and Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons
in the capacities and on the date indicated:
<TABLE>
<CAPTION>
<S> <C> <C>
Signature Title Date
D. WAYNE CALLOWAY* Chairman of the November 14, 1995
(D. Wayne Calloway Board,
Chief Executive
Officer and
Director
ROBERT G. DETTMER* Executive Vice November 14, 1995
(Robert G. Dettmer) President and
Chief Financial
Officer
ROBERT L. CARLETON* Senior Vice
(Robert L. Carleton) President and
Controller
(Chief Accounting November 14, 1995
Officer)
JOHN F. AKERS*
(John F. Akers) Director November 14, 1995
ROBERT E. ALLEN*
(Robert E. Allen) Director November 14, 1995
ROGER A. ENRICO Vice Chairman of
(Roger Enrico)* the Board and
Chairman and Chief
Executive Officer, November 14, 1995
PepsiCo Worldwide
Restaurants
JOHN J. MURPHY*
(John J. Murphy.) Director November 14, 1995
ANDRALL E. PEARSON*
(Andrall E. Pearson) Director November 14, 1995
SHARON PERCY
ROCKEFELLER*
(Sharon Percy Director November 14, 1995
Rockefeller)
ROGER B. SMITH*
(Roger B. Smith) Director November 14, 1995
ROBERT H. STEWART,
III*
(Robert H. Stewart, Director November 14, 1995
III)
<PAGE S-2>
FRANKLIN A. THOMAS
(Franklin A. Thomas) Director November 14, 1995
P. ROY VAGELOS*
(P. Roy Vagelos) Director November 14, 1995
ARNOLD R. WEBER*
(Arnold R. Weber) Director November 14, 1995
By: /s/ LAWRENCE F. DICKIE
---------------------------
(Lawrence F. Dickie)
Attorney-in-Fact
S-2
INDEX TO EXHIBITS
DESCRIPTION EXHIBIT NO.
Form of Distribution Agreement 1
*Restated Articles of Incorporation of 3
PepsiCo, Inc., which is incorporated herein
by reference from Exhibit 4(a) to PepsiCo's
Registration Statement on Form S-3
(Registration No. 57181).
*Indenture, dated as of December 14, 1994, 4(a)
between PepsiCo, Inc. and The Chase Manhattan
Bank (National Association) as Trustee, which
is incorporated herein by reference from
Exhibit 4(a) to PepsiCo's Registration
Statement on Form S-3 (Registration No.
57181).
*Forms of Debt Securities (included as (b)
Exhibits A and B to the Indenture which is
incorporated herein by reference from Exhibit
4(a) to PepsiCo's Registration Statement on
Form S-3 (Registration No. 57181)).
Form of Fixed Rate Note (c)
Form of Floating Rate Note (d)
Form of Debt Warrant Agreement (e)
*Form of Debt Warrant Certificate (included (f)
as Exhibit A to the form of Debt Warrant
Agreement which is incorporated herein by
reference from Exhibit 4(e) to this
Registration Statement).
Opinion and Consent of Douglas Cram, Esq., 5
Vice President and Assistant General Counsel
of the Company
Opinion and Consent of Matthew M. McKenna, 8
Esq., Vice President, Taxes of the Company
(to be filed by amendment)
PepsiCo, Inc. and Subsidiaries Statement of 12
Computation of Ratio of Earnings to Fixed
Charges (Unaudited)
Letter from KPMG Peat Marwick LLP regarding 15
unaudited interim financial ("Accountants'
Acknowledgment") information, incorporated
herein by reference to Exhibit 15 to the
Company's Quarterly Reports on Form 10-Q for
the twelve weeks ended March 25, 1995, the
twelve and twenty-four weeks ended June 17,
1995 and the twelve and thirty-six weeks
ended September 9, 1995.
Consent and Acknowledgment of KPMG Peat 23(a)
Marwick LLP
*The consent of Douglas Cram, Esq. is
contained in his opinion filed as Exhibit 5
to this Registration Statement
*The consent of Matthew M. McKenna, Esq. is
contained in his opinion filed as Exhibit 8
to this Registration Statement
*Power of Attorney of PepsiCo and certain of 24
its officers and directors, incorporated
herein by reference to Exhibit 24 to
PepsiCo's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994
Form T-1 Statement of Eligibility and 25
Qualification under the Trust Indenture Act
of 1939 of The Chase Manhattan Bank (National
Association) (to be filed as an amendment)
__________________________________________
*Incorporated by reference
</TABLE>
PEPSICO, INC.
$4,587,000,000
Debt Securities and Warrants
U.S. DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT, dated as of
_________________, 1995, between PepsiCo, Inc., a corporation
organized under the laws of the State of North Carolina (the
"Company"), and _________________, a corporation organized under
the laws of the State of _________________ (the "Bank").
W I T N E S S E T H:
WHEREAS, the Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement
on Form S-3, File No. 33-_____________ (the "Registration
Statement"), including a prospectus (the "Prospectus"), relating
to $4,587,000,000 in aggregate offering price of the Company's
Debt Securities and Warrants (as such terms are defined in the
Prospectus); and
WHEREAS, the Bank has agreed to participate in the offer
and sale of Debt Securities and Warrants (sometimes referred to
collectively as the "Securities") to investors on the terms and
conditions set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions. Capitalized terms used in this
Agreement and not otherwise defined herein have the meanings
ascribed to such terms by the Prospectus; provided, however, that
in the event of a conflict between the Prospectus and any
applicable Supplement regarding the definition of any capitalized
term used herein, the definition set forth in the applicable
Supplement will govern; and provided, further, that the terms
"Registration Statement", "Prospectus", "Pricing Supplement", and
"Prospectus Supplement", as used herein, (a) include, in each
case, the documents (if any) incorporated by reference therein,
and (b) refer, in each case, to such document as supplemented or
otherwise amended from time to time.
SECTION 2. Appointment of Bank as Agent. From the date
hereof and until the expiration or earlier termination of this
Agreement, the Bank will be the agent of the Company with respect
to the distribution and sale of the Securities, and will use
reasonable efforts, consistent with standard industry practice,
to solicit offers for the purchase of the Securities upon the
terms and conditions set forth in the Prospectus and, with
respect to Securities of a given series, in the applicable
Pricing Supplement or Prospectus Supplement (each such supplement
a "Supplement" or an "applicable Supplement"), provided, however,
that the Bank will not be required to solicit offers to purchase
Securities issued pursuant to a Supplement that does not name the
Bank as an agent. All sales of Securities resulting from a
solicitation made or an offer to purchase received by the Bank in
its capacity as agent during the term of this Agreement will be
subject to the provisions of this Section 2 and to all other
provisions of this Agreement not specifically limited to sales of
Securities made to the Bank as underwriter and/or as purchaser
for its own account.
(a) Non-Exclusive Agency. The Bank acknowledges and agrees
that its agency hereunder is non-exclusive and that its
obligations as agent hereunder will continue notwithstanding the
offer or sale of Securities by the Company directly to investors
(including the Bank as purchaser for its own account), to
underwriters (including the Bank as underwriter, as contemplated
by Section 3 below), and/or through other agents, as the Company
may, in its sole discretion, elect. The obligations of the Bank
in its capacity as agent hereunder, and the obligations of each
other person that has been authorized by the Company to act as
its agent in soliciting offers to purchase Securities, shall be
several and not joint.
(b) Solicitation of Offers by Bank as Agent; Rights of
Acceptance and Rejection of Offers. The Bank may reject, and
will not be required to communicate to the Company, any offer to
purchase Securities that it reasonably deems unacceptable. The
Company will have the sole right to accept any offer to purchase
Securities and may reject any such offer in whole or in part.
The Company will in no event approve any solicitation of offers
or accept any offers to purchase Securities the aggregate public
offering price of which, together with the aggregate public
offering price of all Securities previously sold by the Company
(whether through or to any agents or underwriters or otherwise),
would exceed the sum of $4,062,000,000, or, with respect to
Securities of a given series, would exceed the maximum aggregate
public offering price stated in the applicable Supplement.
(c) Commissions. As consideration for the sale of Securities
of a given series that occurs as a result of a solicitation made
or an offer to purchase received by the Bank in its capacity as
agent, the Company will pay the Bank the commission identified in
the applicable Supplement, which commission will be expressed as
a percentage of the aggregate public offering price of such
Securities. Payment of the commission will be made on the
Settlement Date (as defined in Section 11(c) hereof), in U.S.
dollars or such other currency as the Company and the Bank may
agree in writing, by discount from the proceeds of the sale of
such Securities or by such other means as may be agreed to in
writing by the Company and the Bank and set forth in the
applicable Terms Agreement (hereinafter defined). Any provision
of this Agreement to the contrary notwithstanding, the Bank will
not be entitled to payment of any commission with respect to the
sale of a given Security unless (i) the sale of such Security
shall have occurred as a result of a solicitation made or an
offer to purchase received by the Bank in its capacity as agent
hereunder, on the terms and conditions set forth herein and in
the applicable Terms Agreement, (ii) the Bank shall have been
named as an agent in the applicable Supplement, and (iii) such
Security shall have been sold by the Company directly to a
third-party investor without the Bank acquiring legal title
thereto.
(d) Termination or Suspension of Solicitations by Bank as
Agent. The Company may at any time require the Bank to terminate
or temporarily suspend the solicitation of offers to purchase
Securities. Upon receipt of written notice from the Company to
the Bank directing the Bank to terminate or suspend solicitations
of offers to purchase Securities, until (in the case of a
temporary suspension) such time as may be indicated in such
notice or in any subsequent notice from the Company to the Bank,
the Bank will forthwith terminate or suspend such solicitations
(as the case may be). The provisions of this paragraph
notwithstanding, the termination or suspension by the Company of
the Bank's solicitation of offers to purchase Securities will not
(except under the circumstances contemplated in Section 6 or
Section 9(b) hereof) relieve or otherwise affect the Bank's
obligation to purchase any Securities the Bank shall have agreed
to purchase in its capacity as underwriter, or the Company's
obligation to sell any Securities it shall have agreed to sell to
a third-party investor through the Bank in its capacity as agent,
in either case as set forth in an applicable Terms Agreement that
shall have been executed and delivered by both the Company and
the Bank.
(e) Scope of Agency. In soliciting offers to purchase
Securities, the Bank will be acting solely as an agent for the
Company. The Bank will use its best efforts consistent with
standard industry practice to assist the Company in obtaining
performance by each purchaser whose offer to purchase Securities
has been solicited by the Bank and accepted by the Company, but
the Bank will not have any liability to the Company in the event
that any such purchase is not consummated for any reason. If the
Company shall default in its obligations to deliver Securities to
a purchaser whose offer it has accepted, the Company will hold
the Bank harmless against any loss, claim, damage, or liability
arising from or as a result of such default and will pay to the
Bank the commission the Bank would have received had such sale
been consummated.
SECTION 3. Purchase and Sale of Securities by Bank as
Underwriter. The Company and the Bank may agree upon one or more
sales of Securities to the Bank as underwriter, for resale to
investors on the terms set forth in the Prospectus and in any
applicable Supplement. All sales of Securities made to the Bank
in its capacity as underwriter during the term of this Agreement
will be subject to the provisions of this Section 3 and to all
other provisions of this Agreement not specifically limited to
sales of Securities through the Bank as agent and/or to the Bank
as purchaser for its own account.
(a) Bank's Obligation to Purchase Securities; Multiple
Underwriters. In the event that the Bank is the sole underwriter
with respect to a particular series of Securities, the Bank will
be obligated to purchase all of the Securities of such series.
In the event that the Bank is one of two or more underwriters
with respect to a particular series of Securities, the applicable
Terms Agreement will specify the aggregate public offering price
of the Securities that each of the Bank and such other
underwriter or underwriters will be obligated to purchase, such
obligations to be several and not joint.
(b) Discounts. All Securities of any series to be sold to
the Bank in its capacity as underwriter will be sold at a
discount from the price at which such Securities are to be sold
to the public. Such discount will be identified in the
applicable Terms Agreement, expressed as a percentage of the
aggregate public offering price of such Securities. Any
provision of this Agreement to the contrary notwithstanding, the
Bank will not be entitled to any discount with respect to the
purchase of a given Security unless (i) the Bank shall have
purchased such Security with a view, at the time of such
purchase, to the immediate resale thereof to a third-party
investor, unless the Company shall have otherwise agreed in the
applicable Terms Agreement, and (ii) the Bank shall have been
named as an underwriter in the applicable Supplement. It is
expressly acknowledged and agreed that the Bank may, in its
capacity as underwriter with respect to any given series of
Securities, sell such Securities to one or more dealers that are
not parties to this Agreement or the applicable Terms Agreement,
and may allow to such dealers a discount from the public offering
price of such Securities, provided that the aggregate of all such
discounts allowed by the Bank to such dealers with respect to
such Securities will not exceed the discount received by the Bank
from the Company with respect to such Securities.
SECTION 4. Terms Agreement; Administrative Procedures. No
agreement for the purchase of Securities by the Bank in its
capacity as underwriter or through the Bank in its capacity as
agent will be deemed to exist until the terms of such agreement
shall have been put in writing, substantially in the form of the
attached Exhibit I, and such writing shall have been signed by
both the Company and the Bank (any such signed writing a "Terms
Agreement"). In the event of a conflict between any provision of
a Terms Agreement with respect to Securities of a given series
and any term of the applicable Supplement, the terms of the
applicable Supplement will govern.
Each of the Company and the Bank agrees that it will perform
its respective administrative obligations with respect to the
offer and sale of Securities as set forth in the Administrative
Procedures attached to this Agreement as Exhibit II. Each Terms
Agreement will incorporate all applicable terms and provisions of
this Agreement and the Administrative Procedures as fully as
though such terms and provisions were expressly stated therein.
SECTION 5. Delivery of Certain Documents, Certificates, and
Opinions. Prior to or contemporaneously with the execution and
delivery of this Agreement by the Bank (or, in respect of
paragraph (g) below, at such later date or dates as indicated in
such paragraph), the Bank has received or will receive the
following documents:
(a) the opinion of Douglas Cram, Esq., Vice President and
Assistant General Counsel of the Company, or such other counsel
as may be selected by the Company and agreed to by the Bank (Mr.
Cram or such other counsel each, successively, the "Company's
Counsel"), dated as of the effective date of the Registration
Statement (the "Effective Date"), substantially in the form of
Annex A hereto,
(b) the opinion of Cahill Gordon & Reindel, special counsel
to the Bank, or such other counsel as may be selected by the Bank
and agreed to by the Company (Cahill Gordon & Reindel or such
other counsel each, successively, the "Bank's Counsel"), dated as
of the Effective Date, substantially in the form of Annex B
hereto,
(c) the opinion of Matthew M. McKenna, Esq., Vice President,
Taxes, of the Company, or such other tax counsel as may be
selected by the Company and agreed to by the Bank (Mr. McKenna or
such other counsel each, successively, the "Tax Counsel"), dated
as of the Effective Date, substantially in the form of Annex C
hereto,
(d) a certificate of the Secretary or the Assistant Secretary
of the Company, dated as of the Effective Date, substantially in
the form of Annex D hereto,
(e) a certificate of the Executive Vice President and Chief
Financial Officer and the Senior Vice President and Treasurer of
the Company, dated as of the Effective Date, substantially in the
form of Annex E hereto, and
(f) an Auditors' Letter (as hereinafter defined) with respect
to the preceding fiscal quarter of the Company, dated as of a
date no later than 14 business days following the date on which
the Company shall have filed its Quarterly Report on Form 10-Q
with respect to such fiscal quarter (or its Annual Report on Form
10-K for the year in which such fiscal quarter occurred, as the
case may be).
(g) At such time as any form of Shelf Warrant Agreement is
filed by the Company as an amendment and/or exhibit to the
Registration Statement, and at such time as any Prospectus
Supplement relating to one or more series of Shelf Warrants is
filed by the Company as a supplement to the Prospectus, the Bank
will receive an opinion of the Company's Counsel, an opinion of
the Bank's Counsel, and an opinion of the Tax Counsel, each dated
as of the date such exhibit is filed or the effective date of
such amendment or supplement, as the case may be, substantially
in the forms attached hereto as Annex A, Annex B, and Annex C,
respectively, modified as appropriate to address such series of
Shelf Warrants and the related Warrant Agreement and Prospectus
Supplement, provided, however, that such opinion of the Company's
Counsel will be limited to the opinions described in paragraphs
(5) and (8) of Annex A hereto, modified as appropriate to address
such Warrant Agreement, and to the opinions described in
paragraphs (6), (7), and (11) of Annex A hereto, modified as
appropriate to address such series of Shelf Warrants and the
applicable Prospectus Supplement. The Bank will also receive a
certificate of the Secretary or an Assistant Secretary of the
Company, dated as of the date such exhibit is filed or the
effective date of such amendment or supplement, as the case may
be, certifying that such series of Shelf Warrants, and the
related Warrant Agreement, Prospectus Supplement, and form of
Warrant Certificate, have been approved by the Board of Directors
of the Company. The receipt by the Bank of such opinions and
certificate will be a condition precedent to the Bank's
obligation to solicit offers for the purchase of such series of
Shelf Warrants, but will not be a condition precedent to the
Bank's continued obligation to solicit offers for the purchase of
any other Securities in its capacity as agent hereunder.
SECTION 6. Certain Conditions Precedent to Bank's
Obligations. The Bank's obligation to solicit offers to purchase
Securities in its capacity as agent, and its obligation to
purchase any Securities in its capacity as underwriter, will in
all cases be subject to the accuracy of the representations and
warranties of the Company set forth in Section 7 hereof or in the
applicable Terms Agreement (as the case may be), to receipt of
the opinions and certificates to be delivered to the Bank
pursuant to the terms of Sections 5 and 9 hereof or the
provisions of the applicable Terms Agreement (as the case may
be), to the accuracy of the statements of the Company's officers
made in each certificate to be furnished as provided herein or in
the applicable Terms Agreement (as the case may be), to the
performance and observance by the Company of all covenants and
agreements contained herein or in the applicable Terms Agreement
(as the case may be) on its part to be performed and observed, in
each case at the time of solicitation by the Bank of offers to
purchase Securities, at the time the Company accepts any offer to
purchase Securities through the Bank in its capacity as agent or
by the Bank in its capacity as underwriter, as the case may be,
and at the time of purchase, and (in each case) to the following
additional conditions precedent, when and as specified:
(a) As of the Settlement Date for any Securities to be
purchased through the Bank in its capacity as agent or by the
Bank in its capacity as underwriter (for purposes of this
paragraph (a), the "Applicable Settlement Date"), and with
respect to the period from the date of the applicable Terms
Agreement to and including the Applicable Settlement Date:
(i) there shall not have occurred (A) any material
adverse change specified in the most recent Auditors' Letter
delivered to the Bank in accordance with the provisions of
paragraph (b) below, or any material adverse change (or
development involving a prospective material adverse change)
in the business, properties, earnings, or financial condition
of the Company and its subsidiaries on a consolidated basis,
(B) any suspension or material limitation of trading in the
Company's capital stock by the Commission or the New York
Stock Exchange, Inc. (the "NYSE"), or (C) any decrease by
Moody's Investors Services, Inc. or Standard & Poor's
Corporation with respect to the ratings of any of the debt
securities issued or guaranteed by the Company (the events
described in the foregoing clauses A through C the
"Company-Specific Events"), the effect of any of which
Company-Specific Events shall have made it impracticable, in
the reasonable judgment of the Bank, to market such
Securities, such judgment to be based on relevant market
conditions;
(ii) there shall not have occurred (A) any suspension
or material limitation of trading in securities generally on
the NYSE or the establishment of minimum prices on the NYSE,
(B) a declaration of a general moratorium on commercial
banking activities in New York by either Federal or New York
State authorities, or (C) any outbreak or material escalation
of hostilities or other national or international calamity or
crisis (the events described in the foregoing clauses A
through C the "Market Events"), the effect of any of which
Market Events shall have made it impracticable, in the
reasonable judgment of the Bank, to market such Securities,
such judgment to be based on relevant market conditions,
including, without limitation, the impact of such Market
Event on debt securities having substantially similar
characteristics; and
(iii) there shall not have been issued any stop order
suspending the effectiveness of the Registration Statement
nor shall any proceedings for that purpose have been
instituted or threatened.
(b) The Bank will receive, upon execution and delivery of
this Agreement and any applicable Terms Agreement and thereafter
on a quarterly basis throughout the term of this Agreement, a
letter from KPMG Peat Marwick LLP ("KPMG"), or such other
independent certified public accountants as may be selected by
the Company (KPMG or such other independent certified public
accountants each, successively, the "Company's Auditors"),
setting forth certain information with respect to the preceding
fiscal quarter of the Company, provided, that on or prior to the
Settlement Date for the first sale of Securities resulting from a
solicitation made or an offer to purchase received by the Bank in
its capacity as agent, or on or prior to the Settlement Date for
the first sale of Securities made to the Bank in its capacity as
underwriter, (1) the Bank shall have delivered to the Company's
Auditors a letter setting forth certain representations in
substantially the form of Annex F hereto, or (2) the Bank's
Counsel shall have delivered to the Company's Auditors an opinion
in substantially the form of Annex G hereto. Each letter from
the Company's Auditors to the Bank will be dated as of a date no
later than 14 business days following the date on which the
Company shall have filed its Quarterly Report on Form 10-Q with
respect to such fiscal quarter (or its Annual Report on Form 10-K
for the year in which such fiscal quarter occurred, as the case
may be) and will state substantially as follows (each such letter
an "Auditors' Letter"):
(i) they are independent certified public accountants
within the meaning of the Securities Act of 1933, as amended
(the "Securities Act"), and the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the respective
applicable rules and regulations of the Commission
thereunder;
(ii) in their opinion the most recent audited financial
statements of the Company and the financial statement
schedules of the Company audited by them and included or
incorporated in the Registration Statement and/or the
Prospectus comply as to form in all material respects with
the applicable accounting requirements of the Securities Act
and the Exchange Act and the respective applicable published
rules and regulations thereunder;
(iii) on the basis of: a reading of the financial
statements of the Company and its subsidiaries on a
consolidated basis (which may be unaudited) included or
incorporated by reference in the Registration Statement
and/or the Prospectus; a reading of the minutes of the
meetings of the Board of Directors of the Company held
subsequent to the date of the most recent audited financial
statements of the Company included or incorporated by
reference in the Registration Statement and/or the Prospectus
to a specified date not more than five New York Business Days
prior to the date of the applicable Auditors' Letter; and
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the
Company and its subsidiaries as to transactions and events
subsequent to the date of the most recent financial
statements of the Company included or incorporated by
reference in the Registration Statement and/or the Prospectus
to a specified date not more than five New York Business Days
prior to the date of such Auditors' Letter (which procedures
and inquiries do not constitute an audit made in accordance
with generally accepted auditing standards), nothing came to
their attention which caused them to believe that:
1. the unaudited financial statements, if
any, included or incorporated by reference in the
Registration Statement and/or the Prospectus do not
comply as to form in all material respects with
applicable accounting requirements of the Securities Act
and the Exchange Act and the respective applicable
published rules and regulations thereunder, or are not
in conformity with generally accepted accounting
principles applied on a basis substantially consistent
with that of the audited consolidated financial
statements included or incorporated by reference in the
Registration Statement and/or the Prospectus;
2. during the period from the first day
following the date of the last financial statements
(which may be unaudited) of the Company included or
incorporated by reference in the Registration Statement
and/or the Prospectus, to a specified date not more than
five New York Business Days from the date of the
applicable Auditors' Letter, there has been any (i)
decrease in the outstanding capital stock of the Company
or in the consolidated shareholders' equity of the
Company other than a decrease resulting from a normal
dividend distribution or change in the foreign currency
translation adjustment account or (ii) increase in the
consolidated long-term debt of the Company resulting
from the issuance of long-term debt, in any case greater
than 3% as compared with amounts shown in the unaudited
condensed consolidated balance sheet at the end of the
Company's immediately preceding fiscal quarter, except
in each case for decreases or increases, as the case may
be, that the Registration Statement and/or the
Prospectus disclose have occurred or may occur or that
are described in such letter; or during such period
there were any decreases in consolidated net sales or in
consolidated total or per share amounts of income from
continuing operations or of net income, as compared with
the corresponding period in the preceding year, except,
in each case, for decreases that the Registration
Statement and/or the Prospectus disclose have occurred
or may occur or that are described in such letter; or
3. the amounts included in any unaudited
"capsule" financial information derived from the general
accounting records of the Company and included or
incorporated by reference in the Registration Statement
and/or the Prospectus and the amounts used to compute
the ratios set forth in the table of "Ratio of Earnings
to Fixed Charges", if any, included in the Registration
Statement and/or the Prospectus do not agree with the
corresponding amounts in the audited or unaudited
financial statements or schedules prepared by the
Company, as the case may be, from which such amounts
were derived or that the computation of the ratios set
forth in the aforementioned table is not arithmetically
correct;
(iv) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of
the Company and its subsidiaries) set forth in the
Registration Statement and/or the Prospectus and in Exhibit
12 to the Registration Statement, including certain
information included or incorporated in Items 1, 6, 7 and 11
of the Company's most recent Annual Report on Form 10-K,
incorporated by reference in the Registration Statement
and/or the Prospectus, and the information included in the
"Management's Discussion and Analysis of Financial Condition
and Results of Operations" included or incorporated by
reference in the Company's most recent Quarterly Reports on
Form 10-Q, incorporated in the Registration Statement and/or
the Prospectus, agrees with the general accounting records of
the Company and its subsidiaries or schedules prepared by the
Company, excluding any questions of legal interpretation; and
(v) if unaudited pro forma financial statements are
included or incorporated in the Registration Statement and/or
the Prospectus, on the basis of a reading of the unaudited
pro forma financial statements, carrying out certain
procedures specified by the Bank, inquiries of certain
officials of the Company who have responsibility for
financial and accounting matters, and proving the arithmetic
accuracy of the application of the unaudited pro forma
adjustments to the historical amounts in the unaudited pro
forma financial statements, nothing came to their attention
which caused them to believe that the unaudited pro forma
financial statements do not comply in form in all material
respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X or that the unaudited pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
(c) On each Settlement Date, the Bank shall have received
from the Company such appropriate further information,
certificates, and documents as the Company and the Bank shall
have agreed, as reflected in the applicable Terms Agreement.
SECTION 7. Representations and Warranties of the
Company. The Company represents and warrants to the Bank that,
as of the date hereof, as of each date on which the Company and
the Bank execute and deliver a Terms Agreement, as of each date
the Company issues and sells Securities through the Bank in its
capacity as agent or to the Bank in its capacity as underwriter,
and as of each date the Registration Statement or the Prospectus
is amended or supplemented, the following statements are and
shall be true:
(a) (i) The Registration Statement has become effective and
no stop order suspending the effectiveness of the Registration
Statement is in effect nor, to the Company's knowledge, are any
proceedings for such purpose pending before or threatened by the
Commission, (ii) as of the Effective Date, the Company met the
applicable requirements for use of Form S-3 under the Securities
Act with respect to the registration under the Securities Act of
$4,587,000,000 in aggregate public offering price of Debt
Securities and Warrants, and (iii) as of the Effective Date, the
Registration Statement met the requirements set forth in Rule
415(a)(1)(x) under the Securities Act and complied in all
material respects with said Rule.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated or to be incorporated by
reference in the Prospectus complies or will comply, in all
material respects, with the applicable provisions of the Exchange
Act and the rules and regulations of the Commission thereunder,
(ii) the Registration Statement does not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, (iii) the Registration Statement and the
Prospectus comply, in all material respects, with the Securities
Act and the rules and regulations of the Commission thereunder,
and (iv) the Prospectus does not contain any untrue statement of
a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations and warranties (1) as to
information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity
with information furnished in writing to the Company by the Bank
expressly for use in the Registration Statement or the Prospectus
or any amendment or supplement thereto, or (2) as to that part of
the Registration Statement that constitutes the Statement of
Eligibility and Qualification of the Trustee (the "Form T-1")
under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
(c) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the State of
North Carolina, has the corporate power and authority to own its
property and to conduct its business as described in the
Prospectus, and is duly qualified to transact business as a
foreign corporation and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing
of property requires such qualification, except to the extent
that the failure to be so qualified or in good standing would not
have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(d) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed, and
delivered by the Company and (assuming due authorization, valid
execution, and delivery thereof by the Trustee) is a valid and
binding agreement of the Company, enforceable against the Company
in accordance with its terms, except as such enforceability may
be limited by the laws of bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium, or similar laws relating to
creditors' rights generally, by any other federal or state laws,
by rights of acceleration, by general principles of equity, or by
the discretion of any court before which any proceeding therefor
may be brought.
(e) This Agreement has been duly authorized, executed, and
delivered by the Company and (assuming due authorization, valid
execution, and delivery by the Bank) is a valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforceability of any
term or provision hereof (including, without limitation, the
Company's indemnity obligations under Section 12 hereof) may be
limited by the laws of bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium, or similar laws relating to
creditors' rights generally, by rights of acceleration, by any
other federal or state law. by general principles of equity, or
by the discretion of any court before which any proceeding
therefor may be brought.
(f) The respective forms of Terms Agreement and Debt Warrant
Agreement filed by the Company as exhibits to the Registration
Statement, and the form of any Shelf Warrant Agreement to be
filed by the Company as an exhibit to the Registration Statement,
have been or will be duly authorized by the Company and, assuming
valid execution and delivery by the Company and due
authorization, valid execution, and delivery by each of the other
parties thereto, each such agreement will be a valid and binding
agreement of the Company, enforceable against the Company in
accordance with its respective terms, except as such
enforceability may be limited by the laws of bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium, or
similar laws relating to creditors' rights generally, by any
other federal or state laws, by general principles of equity, or
by the discretion of any court before which any proceeding
therefor may be brought.
(g) The Securities have been duly authorized and, when
issued, executed, and authenticated in accordance with the
provisions of the Indenture, or when countersigned by the Warrant
Agent in accordance with the provisions of the applicable Warrant
Agreement, as the case may be, and delivered to and duly paid for
in accordance with the applicable provisions of the Prospectus,
any applicable Supplement, and Section 11(c) hereof, will be
entitled to the benefits of the Indenture or the applicable
Warrant Agreement, as the case may be, and will be valid and
binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, except as such
enforceability may be limited by the laws of bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium, or
similar laws relating to creditors' rights generally, by any
other federal or state laws, by rights of acceleration, if
applicable, by general principles of equity, or by the discretion
of any court before which any proceeding therefor may be brought.
(h) The execution and delivery of and performance by the
Company of its obligations under this Agreement, the Securities,
the Indenture, any Warrant Agreement, and any Terms Agreement, as
the case may be, will not contravene any provision of any
applicable law or of the Restated Charter or By-Laws of the
Company, or of any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the
Company and its subsidiaries taken as a whole, or of any
judgment, order, or decree of any governmental body, agency, or
court having jurisdiction over the Company or any of its
subsidiaries, and no consent, approval, authorization, or order
of or qualification with any governmental body or agency is, to
the Company's knowledge, required for the performance by the
Company of its obligations under this Agreement, the Securities,
the Indenture, or any Warrant Agreement or Terms Agreement,
except such as may be required by Blue Sky laws or other
securities laws of the various states in which the Securities are
offered and sold.
(i) There has not been any material adverse change (or
development involving a prospective material adverse change) in
the business, properties, earnings, or financial condition of the
Company and its subsidiaries on a consolidated basis from that
set forth in the Company's last periodic report filed with the
Commission under the Exchange Act and the rules and regulations
promulgated thereunder.
(j) There are no legal or governmental proceedings pending
or, to the Company's knowledge, threatened, to which the Company
or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject
that is required to be described in the Registration Statement or
the Prospectus and is not so described, or any applicable
statute, regulation, contract, or other document that is required
to be described in the Registration Statement or the Prospectus
that is not so described.
SECTION 8. Authority, Compliance with Laws. As of the
date hereof, as of each date on which the Company and the Bank
execute and deliver a Terms Agreement, as of each date the
Company issues and sells Securities through the Bank in its
capacity as agent or to the Bank in its capacity as underwriter,
and as of each date the Registration Statement or the Prospectus
is amended or supplemented, the following statements are and
shall be true:
(a) Each of this Agreement and any Terms Agreement has been
duly authorized, executed, and delivered by the Bank and
(assuming due authorization, valid execution, and delivery
thereof by the Company) is a valid and binding agreement of the
Bank, enforceable against the Bank in accordance with its
respective terms, except as the enforceability of any such terms
or provisions (including, without limitation, the Bank's agency
obligations under Section 2 hereof and the Bank's indemnification
obligations under Section 12 hereof) may be limited by the laws
of bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium, or similar laws relating to creditors' rights
generally, by any other federal or state laws, by general
principles of equity, or by the discretion of any court before
which any proceeding therefor may be brought.
(b) Neither the execution and delivery of this Agreement or
any Terms Agreement by the Bank nor the performance by the Bank
of its obligations hereunder or thereunder is precluded by any
provision of any applicable federal or state law (including,
without limitation, the Blue Sky laws of any jurisdiction, to the
extent that such laws apply to the Bank), or of any term or
provision of the Charter or By-Laws of the Bank, any agreement
or other instrument binding upon the Bank, or any judgment,
order, or decree of any governmental body, agency, or court
having jurisdiction over the Bank, and all consents, approvals,
authorizations, and orders of and qualifications with all
governmental bodies and agencies that are, to the Bank's
knowledge, required for the performance by the Bank of its
obligations under this Agreement or any Terms Agreement have been
obtained, except such as may be required by Blue Sky laws or
other securities laws of the various states in which the
Securities are offered and sold.
(c) The Bank has delivered and will deliver a copy of the
Prospectus (as the same may be amended as of the date of such
delivery, together with all applicable Supplements), to each
person who has agreed to purchase Securities as to which the Bank
is named as an agent or underwriter, in each case in accordance
with all applicable federal and state laws. The Bank has not
made and will not make any representation, warranty, or other
statement to any third party in connection with the solicitation,
offer, sale, or distribution of any of the Securities that is or,
at the time it is made, will be in violation of any applicable
federal or state law.
SECTION 9. Agreements. The Company and the Bank agree as
follows:
(a) Prior to the filing by the Company of any amendment to
the Registration Statement or of any Supplement that shall name
the Bank as agent or underwriter, the Company will afford the
Bank or the Bank's Counsel a reasonable opportunity to review and
comment on the same, provided, however, that the foregoing
requirement will not apply to any of the Company's filings with
the Commission required to be filed pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act. Subject to the
foregoing sentence, the Company will promptly cause each
applicable Supplement to be filed with or transmitted for filing
with the Commission in accordance with Rule 424(b) or 424(c)
under the Securities Act or pursuant to such other rule or
regulation of the Commission as then deemed appropriate by the
Company. The Company will promptly advise the Bank of (i) the
filing and effectiveness of any amendment to the Registration
Statement other than by virtue of the Company's filing any report
required to be filed under the Exchange Act and the filing of any
supplement to the Prospectus other than a Pricing Supplement,
(ii) any request by the Commission for any amendment to the
Registration Statement, for any amendment or supplement to the
Prospectus, or for any information from the Company, (iii) the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose, and (iv) the
receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding
for such purpose. The Company will use reasonable efforts to
prevent the issuance of any such stop order or notice of
suspension of qualification and, if issued, to obtain as soon as
reasonably possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to any series
of Securities is required to be delivered under the Securities
Act, any event occurs or condition exists as a result of which
the Prospectus would include an untrue statement of a material
fact, or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, or if it is necessary to amend or
supplement the Prospectus in order to comply with the Securities
Act, the Exchange Act, the respective rules and regulations of
the Commission thereunder, or any other applicable law, the
Company will promptly notify the Bank, by telephone or by
facsimile (in either case with written confirmation from the
Company by mail), to cease use and distribution of the Prospectus
(and all then existing supplements thereto) and to suspend all
efforts to solicit offers to purchase Securities in its capacity
as agent or to suspend all efforts to resell the Securities in
its capacity as underwriter or dealer, as the case may be, and
the Bank will promptly comply with the terms of such notice. If
the Company thereafter decides to amend or supplement the
Registration Statement or the Prospectus to correct such
statement or omission or to effect such compliance, it will
promptly advise the Bank of such decision, either by telephone or
telecopier (in either case with confirmation from the Company by
mail) and, at the Company's expense, will promptly prepare and
cause to be filed with the Commission an appropriate amendment or
supplement to the Registration Statement or the Prospectus, as
the case may, and will supply the Bank with one signed copy of
any such amended Registration Statement and as many copies of any
such amended or supplemented Prospectus as the Bank may
reasonably request. If such amendment or supplement is
satisfactory in the reasonable judgment of the Bank to correct
such statement or omission or to effect such compliance, then
upon the effective date of such amendment to the Registration
Statement or the filing with the Commission of such amendment or
supplement to the Prospectus, as the case may be, the Bank may
resume solicitation of offers to purchase such Securities or the
resale of such Securities as the case may be, in accordance with
the terms hereof. Any other provision of this Agreement to the
contrary notwithstanding, if any event or condition contemplated
in the first sentence of this paragraph (b) shall occur before
the Settlement Date for any sale of Securities to be made through
the Bank in its capacity as agent, or before the Bank has
completed distribution of any Securities it may have purchased in
its capacity as underwriter, the Company will forthwith prepare
and cause to be filed with the Commission an amendment or
supplement to the Registration Statement or the Prospectus, as
the case may be, satisfactory in the reasonable judgment of the
Bank to correct such statement or omission or to effect such
compliance, and the Company will supply the Bank with one signed
copy of such amended Registration Statement and as many copies of
such amended or supplemented Prospectus as the Bank may
reasonably request, provided, however, that the expense of
preparing, filing, and supplying copies to the Bank of any such
amendment or supplement will be borne by the Company only for the
nine-month period immediately following the purchase of such
Securities by the Bank and thereafter will be borne by the Bank.
(c) The Company will furnish to the Bank, without charge, one
signed copy of the Registration Statement (including exhibits)
and all amendments thereto that shall become effective, and as
many copies of the Prospectus, any documents incorporated by
reference therein, and any supplements and amendments thereto as
the Bank may reasonably request, in each case within a reasonable
period of time following the date on which this Agreement is
executed and delivered by the Company and the Bank, or the date
on which such document becomes effective, or the date on which
such document is requested by the Bank, as applicable.
(d) The Company will, with such assistance from the Bank as
the Company may reasonably request, endeavor to qualify the
Securities for offer and sale under the Blue Sky laws or other
securities laws of such jurisdictions as the Bank shall
reasonably request and will maintain such qualifications for as
long as required with respect to the offer, sale, and
distribution of the Securities.
(e) From the date of any Terms Agreement providing for the
purchase of Securities by the Bank in its capacity as an
underwriter hereunder to and including the corresponding
Settlement Date, the Company will not, without the Bank's prior
consent (which consent may not be unreasonably withheld), offer,
sell, or contract to sell to, or announce any offering of any
Securities to be distributed by, any underwriter other than the
Bank pursuant to any underwriting agreement or other similar
agreement (including a distribution agreement) between the
Company and one or more third parties. It is expressly
understood and agreed that the foregoing will not prohibit or
restrict any sale of Securities outside the United States or any
sale of Securities by the Company directly to one or more
investors, through the Bank as agent hereunder, or through any
other agent of the Company.
(f) The Company will make generally available to its security
holders earnings statements that satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder.
(g) Each time the Registration Statement or Prospectus is
amended or supplemented by the Company's periodic filings
pursuant to the Exchange Act, or by any means or for any purpose
other than by the filing of a Pricing Supplement or for a change
the Company reasonably deems to be immaterial, the Company will
make available to the Bank, promptly upon request, (i) an
officers' certificate, dated the date of such amendment or
supplement to the Registration Statement or the Prospectus, as
the case may be, in substantially the form of Annex E hereto, and
(ii) a written opinion of the Company's Counsel, dated the date
of such amendment or supplement to the Registration Statement or
the Prospectus, as the case may be, as to the matters addressed
in paragraphs (1), (8), (9), (10) and (11) of Annex A hereto,
provided, however, that in lieu of such opinion, counsel last
furnishing such an opinion to the Bank (including the opinion to
be delivered pursuant to paragraph (a) of Section 5 hereof) may
furnish to the Bank a letter stating that the Bank may rely on
such last opinion to the same extent as though it were dated the
date of such letter (except that statements in such last opinion
will be deemed to relate to the Registration Statement or the
Prospectus as amended and supplemented as of the date of such
letter).
(h) Each time the Registration Statement or the Prospectus is
amended or supplemented to set forth amended or supplemental
financial information, or amended or supplemental financial
information is incorporated by reference in the Registration
Statement or the Prospectus, the Company will cause the Company's
Auditors to forthwith furnish the Bank with a letter
substantially in the form of an Auditors' Letter, dated the
effective date of such amendment or supplement, as the case may
be, as to such amended or supplemental financial information;
provided, however, that the foregoing requirement will not apply
to any of the Company's filings with the Commission required to
be filed pursuant to Sections 13(a), 13(c), 14, or 15(d) of the
Exchange Act, and provided, further, that the delivery of such
letter by the Company's Auditors to the Bank will be in addition
to, and not in lieu of, any Auditors' Letter to be delivered to
the Bank pursuant to paragraph 6(b) of this Agreement.
(i) As of the date hereof, as of each date on which the
Company and the Bank execute and deliver a Terms Agreement, as of
each date the Company issues and sells Securities through the
Bank in its capacity as agent or to the Bank in its capacity as
underwriter, and as of each date the Registration Statement or
the Prospectus is amended or supplemented, the Bank has disclosed
and will disclose to the Company the purchase of any Security
made by the Bank as principal, for its own account, and not with
a view to the immediate sale or resale of such Security to a bona
fide third-party investor.
SECTION 10. Fees and Expenses. The Company will pay all
costs, fees, and expenses arising in connection with the sale of
any Securities through the Bank in its capacity as agent or to
the Bank in its capacity as underwriter and in connection with
the performance by the Bank of its related obligations hereunder
and under any Terms Agreement, including the following: (i)
expenses incident to the preparation and filing of the
Registration Statement and the Prospectus and all amendments and
supplements thereto, (ii) expenses incident to the issuance and
delivery of such Securities, (iii) the fees and disbursements of
the Company's Counsel, the Tax Counsel, the Company's Auditors,
the Trustee, and the Trustee's counsel, (iv) expenses incident to
the qualification of such Securities under Blue Sky laws and
other applicable state securities laws in accordance with the
provisions of Section 9(d) hereof, including related filing fees
and the reasonable fees and disbursements of the Bank's Counsel
in connection therewith and in connection with the preparation of
any survey of Blue Sky laws (a "Blue Sky Survey"), (v) expenses
incident to the printing and delivery to the Bank, in the
quantities hereinabove stated, of copies of the Registration
Statement and all amendments thereto and of the Prospectus and
all amendments and supplements thereto, (vi) expenses incident to
the printing and delivery to the Bank, in such quantities as the
Bank shall reasonably request, of copies of the Indenture, any
Warrant Agreement, and any Blue Sky Survey, (vii) any fees
charged by rating agencies for the rating of such Securities,
(viii) the fees and expenses, if any, incurred with respect to
any applicable filing with the National Association of Securities
Dealers, and (ix) the reasonable fees and disbursements of the
Bank's Counsel incurred in connection with the offering and sale
of such Securities, including reasonable fees for the issuance of
any opinion to be delivered by the Bank's Counsel hereunder;
provided, however, that the Bank will pay all costs, fees, and
expenses incurred by the Bank in connection with the purchase of
Securities by the Bank for its own account or with respect to the
resale of Securities purchased by the Bank in its capacity as
underwriter hereunder, including all transfer taxes, advertising
expenses, and fees and expenses of the Bank's Counsel incident to
the resale of any such Securities. The immediately preceding
proviso notwithstanding, the Company will, upon demand, reimburse
the Bank for all reasonable out-of-pocket expenses incurred by
the Bank in connection with a purchase by the Bank as underwriter
that is not consummated as a result of a material failure by the
Company to perform its obligations hereunder, including, without
limitation, a default by the Company with respect to any of the
representations or warranties set forth in Section 7 hereof.
SECTION 11. Inspection; Place of Delivery; Payment.
(a) Inspection. The Company agrees to have available for
inspection, checking, and packaging by the Bank or its appointed
agent, at the office of the Trustee in Brooklyn, New York, the
Securities to be sold through or to the Bank as agent or
underwriter hereunder, not later than 1:00 P.M. on the New York
Business Day prior to the applicable Settlement Date.
(b) Place of Delivery of Documents, Certificates and
Opinions. The documents, certificates and opinions required to
be delivered to the Bank pursuant to Sections 5 and 6 of this
Agreement will be delivered at the offices of the Bank's Counsel,
or at such other location as may be agreed upon by the Company
and the Bank, not later than 12:00 p.m., New York time, in each
case on the date or dates indicated in the applicable Section, or
at such other time as the Bank and the Company may agree upon in
writing.
(c) Payment. Delivery of Securities sold by or through the
Bank as underwriter or agent will be made to the Bank on the date
that the Company receives payment in full of the aggregate
purchase price therefor, discounted as provided in the applicable
Supplement with respect to Securities purchased by the Bank as
underwriter or (unless otherwise set forth in the applicable
Terms Agreement) discounted as provided in paragraph 2(c) hereof
regarding payment of the commission set forth in the applicable
Supplement with respect to Securities sold through the Bank as
agent (each such date a "Settlement Date"), in the currency
specified in such Securities and in the applicable Supplement, by
wire transfer of immediately available funds to an account
designated in writing by the Company or by such other means as
may be agreed upon by the Company and the Bank and set forth in
the applicable Terms Agreement.
SECTION 12. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold the Bank and
each person, if any, who controls the Bank within the meaning of
either Section 15 of the Securities Act or Section 20 of the
Exchange Act, harmless from and against any and all losses,
claims, damages, or liabilities to which the Bank come subject
under the Securities Act, the Exchange Act, or any other federal
or state law or regulation, at common law or otherwise, insofar
as such losses, claims, damages, or liabilities (and actions in
respect thereof) arise out of, are based upon, or are caused by
any untrue statement or allegedly untrue statement of a material
fact contained in the Registration Statement or the Prospectus or
in any amendment or supplement thereto, or arise out of, are
based upon or are caused by any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the
Company agrees to reimburse each such indemnified party for any
reasonable legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the Company
will not be liable to the extent that such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out
of, are based upon, or are caused by any such untrue statement or
omission or allegedly untrue statement or omission included in or
omitted from the Registration Statement or the Prospectus in
reliance upon and in conformity with information furnished to the
Company by the Bank in writing expressly for use in the
Registration Statement or the Prospectus or any amendment or
supplement thereto, and provided, further, that any amount
payable by the Company to the Bank pursuant to the provisions of
this paragraph shall be offset by the amount of any losses,
claims, damages, and liabilities sustained or incurred by the
Company arising out of or in connection with a violation by the
Bank of the provisions of paragraph (c) of Section 8 hereof
(except to the extent that such violation occurs as a direct
result of a violation by the Company of its obligations under
paragraphs (b) or (c) of Section 9 hereof), as such amounts are
finally determined by a court of competent jurisdiction.
(b) The Bank agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration
Statement, and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to the Bank, but only with
respect to such losses, claims, damages, and liabilities (and
actions in respect thereof) that arise out of, are based upon, or
are caused by any untrue statement or omission or allegedly
untrue statement or omission included in or omitted from the
Registration Statement or the Prospectus in reliance upon and in
conformity with information furnished to the Company by the Bank
in writing expressly for use in the Registration Statement or the
Prospectus or any amendment or supplement thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to either
paragraph (a) or (b) of this Section 12, such person (the
"indemnified party") will promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the
indemnified party, will retain counsel reasonably satisfactory to
the indemnified party to represent the indemnified party and any
others the indemnifying party may designate in such proceeding
and will pay the fees and disbursements of such counsel related
to such proceeding. In any such proceeding, any indemnified
party will have the right to retain its own counsel, but the fees
and expenses of such counsel will be borne by the indemnified
party unless (i) the indemnifying party and the indemnified party
shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the
indemnifying party will not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to
any local counsel) for all such indemnified parties and that all
such reasonable fees and expenses will be reimbursed as they are
incurred. Such firm will be designated in writing by the Bank
(in the case of parties indemnified pursuant to the second
preceding paragraph) or by the Company (in the case of parties
indemnified pursuant to the first preceding paragraph), as the
case may be. The indemnifying party will not be liable for any
settlement of any proceeding effected without its written
consent, but if settled with such consent, or if there shall be a
final judgment for the plaintiff, the indemnifying party agrees
to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. The
immediately preceding sentence notwithstanding, if at any time an
indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses
of counsel as contemplated by the third sentence of this
paragraph, the indemnifying party agrees that it will be liable
for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party will, without the
prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are
the subject matter of such proceeding. Any provision of this
paragraph (c) to the contrary notwithstanding, no failure by an
indemnified party to notify the indemnifying party as required
hereunder will relieve the indemnifying party from any liability
it may have had to an indemnified party otherwise than under this
Section 12.
(d) If the indemnification provided for in paragraph (a) or
(b) of this Section 12 is unavailable to an indemnified party or
is insufficient in respect of any losses, claims, damages, or
liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying the indemnified
party thereunder, will contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims,
damages, or liabilities (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company, on the
one hand, and the Bank, on the other, from the offering of
Securities as to which the Bank was a named agent or underwriter,
or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, on the one
hand, and the Bank, on the other, in connection with the
statements or omissions that resulted in such losses, claims,
damages, or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company,
on the one hand, and the Bank, on the other, in connection with
the offering of Securities as to which the Bank was a named agent
or underwriter will be deemed to be in the same proportion as the
total net proceeds received by the Company from the offering of
such Securities bears to the total discounts and commissions
received by the Bank from the Company in respect thereof. The
relative fault of the Company, on the one hand, and of the Bank,
on the other, will be determined by reference to, among other
things, whether the untrue or allegedly untrue statement of a
material fact or the omission or alleged omission to state a
material fact relates to information supplied or to be supplied
by the Company or by the Bank and the parties' relative intent,
knowledge, access to information, and opportunity to correct or
prevent such statement or omission.
(e) The Company and the Bank agree that it would not be just
or equitable if contribution pursuant to paragraph (d) above were
determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable
considerations referred to therein. The amount paid or payable
by an indemnified party as a result of the losses, claims,
damages, and liabilities referred to in paragraph (d) above will
be deemed to include, subject to the limitations set forth above,
any reasonable legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or
defending any such action or claim. Any other provisions of this
Section 12 to the contrary notwithstanding, (i) the Bank will not
be required to contribute to the Company any amount in excess of
the amount by which the aggregate public offering price of all
Securities as to which the Bank was a named agent or underwriter
exceeds the amount of losses, claims, damages, and liabilities
sustained or incurred by the Bank arising out of, based upon, or
caused by any untrue statement or omission or allegedly untrue
statement or omission included in or omitted from the
Registration Statement or the Prospectus (other than in reliance
upon and in conformity with information furnished to the Company
by the Bank in writing expressly for use in the Registration
Statement or the Prospectus or any amendment or supplement
thereto), (ii) any amount payable by the Company or the Bank, as
the case may be (the "Contributing Party"), pursuant to the
provisions of this paragraph or paragraph (d) of this Section 12
shall be offset by the amount of any losses, claims, damages, and
liabilities sustained or incurred by the other party arising out
of or in connection with a violation (x) by the Bank of the
provisions of paragraph (c) of Section 8 hereof (if the Company
is the Contributing Party) or (y) by the Company of its
obligations under paragraphs (b) or (c) of Section 9 hereof (if
the Bank is the Contributing Party), in each case as such amounts
are finally determined by a court of competent jurisdiction, and
(iii) no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) will be
entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(f) The remedies provided for in this Section 12 are not
exclusive and will not limit any rights or remedies that may
otherwise be available to any indemnified party at law or in
equity.
SECTION 13. Termination. This Agreement will
automatically terminate upon the expiration of the offering to
which the Prospectus relates and may be earlier terminated by the
Company or the Bank upon the giving of written notice of such
termination to the other party hereto in accordance with the
provisions of Section 15 hereof, provided, however, that if the
Company and the Bank shall have executed a Terms Agreement for
the purchase of Securities by the Bank in its capacity as
underwriter, this Agreement may not be terminated by the Bank
prior to delivery of and payment for such Securities except upon
the failure of any of the conditions precedent described in
Section 6(a) hereof, and provided, further, that if the Company
and the Bank shall have executed a Terms Agreement for the
purchase of Securities through the Bank as agent, this Agreement
may not be terminated by the Bank prior to delivery of and
payment for such Securities unless and until the Bank shall have
exercised best efforts consistent with standard industry practice
to assist the Company in obtaining performance by each purchaser
whose offer to purchase such Securities is reflected in such
Terms Agreement.
SECTION 14. Representations and Indemnities to Survive.
The respective agreements of the Company and the Bank set forth
in Sections 2(e),4, 9(b), 9(f), 10, 12, and 18 hereof, the
representations and warranties of the Company set forth in
Section 7 hereof, the representations and warranties of the Bank
set forth in Section 8 hereof, and the statements and opinions of
the Company and its officers set forth in the documents to be
delivered by the Company to the Bank as provided in paragraphs
5(a), 5(c), 5(d), 5(e), and 6(c) hereof, will survive delivery of
and payment for any Securities as contemplated hereunder and will
survive termination of this Agreement in accordance with the
provisions of Section 13 above.
SECTION 15. Notices. Except as otherwise specifically
provided herein, all communications hereunder will be in writing
and will be effective one business day after having been
delivered by hand, mailed via Express Mail, deposited with
Federal Express or any nationally recognized commercial courier
service for "next day" delivery, or telecopied and confirmed in
writing (by telecopied facsimile or otherwise) to the respective
addresses or telecopier numbers set forth on the signature page
hereto, or to such other address or telecopier number as either
party may hereafter designate to the other in writing. The
foregoing notwithstanding, copies of any Terms Agreement and of
any certificate or opinion to be delivered by the Company to the
Bank under paragraphs 5(a), 5(c), 5(d), 5(e), 5(f), or 9(g)
hereof will be deemed delivered if executed by all required
signatories and telecopied to the Company and/or the Bank, as the
case may be, with receipt confirmed in writing (by telecopied
facsimile or otherwise). In the event that any Terms Agreement
or any such certificate or opinion is delivered via telecopier as
contemplated in the preceding sentence, the parties will use best
efforts to ensure that "original" copies of such documents will
be distributed promptly thereafter.
SECTION 16. Successors; Non-Transferability. This
Agreement will inure to the benefit of and be binding upon the
parties hereto, their respective successors, and the officers,
directors, and controlling persons referred to in Section 12
hereof. No other person will have any right or obligation
hereunder. Neither party to this Agreement may assign its rights
hereunder without the written consent of the other party.
SECTION 17. Counterparts. This Agreement may be signed
in any number of counterparts, each of which will be an original,
with the same effect as if the signatures thereto and hereto were
upon the same instrument.
SECTION 18. Applicable Law. This Agreement will be
governed by and construed in accordance with the laws of the
State of New York without regard to principles of conflicts of
law.
SECTION 19. Headings. The headings of the sections of
this Agreement have been inserted for convenience of reference
only and will not affect the construction of any of the terms or
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Distribution Agreement as of the __ day of _________________.
PEPSICO, INC.
By:
Name: _________________
Title: _________________
Notice Information:
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, New York 10577
Telephone No.:
Facsimile No.:
Attention:
[NAME OF BANK]
By:
Name: _________________
Title: _________________
Notice Information:
[NAME OF BANK]
[ADDRESS]
Telephone No.: _________________
Facsimile No.: _________________
Attention: _________________
ANNEX A
[PEPSICO LETTERHEAD]
_______________, 199
[Name and Address of Bank]
Dear Sirs:
I am Vice President and Assistant General Counsel of
PepsiCo, Inc., a corporation organized under the laws of the
State of North Carolina (the "Company"). I have acted as counsel
for the Company in connection with the registration of
$4,587,000,000 in aggregate offering price of the Company's Debt
Securities and Warrants (collectively, the "Securities") that
may, from time to time, be issued by the Company (i) with respect
to Debt Securities, under the Indenture, dated as of December
14, 1994, between the Company and The Chase Manhattan Bank
(National Association), as Trustee (the "Indenture"), (ii) with
respect to Debt Warrants, under the Debt Warrant Agreement
(hereinafter defined) to be entered into by the Company and The
Chase Manhattan Bank (National Association), as Warrant Agent,
and (iii) with respect to Shelf Warrants, under one or more
warrant agreements to be entered into by the Company and one or
more warrant agents.
You have requested my opinion pursuant to Section 5(a)
of the Distribution Agreement to be executed and delivered by you
and the Company in substantially the form attached hereto as
Exhibit A (the "Distribution Agreement"). In connection with
such opinion, I have examined the Registration Statement on Form
S-3, File No. 33-___________ (the "Registration Statement"),
filed by the Company with the Securities and Exchange Commission
(the "Commission") with respect to the Securities, and have
examined such records, certificates, and other documents,
certified or otherwise authenticated to my satisfaction, have
made such inquiries of officers and employees of the Company, and
have made such other examinations as, in each case, I have deemed
necessary or appropriate. I have assumed the genuineness of all
signatures on all documents examined by me and the conformity to
originals of all copies submitted to me.
Capitalized terms used herein and not otherwise defined
have the meanings ascribed to those terms by the Prospectus filed
as part of the Registration Statement (the "Prospectus").
[Name of Bank]
_____________, 199
Page 2
On the basis of the foregoing and having regard for
such legal considerations as I have deemed relevant, it is my
opinion that:
1. The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of North Carolina, has the corporate power and
authority to own its properties and to conduct its business as
described in the Prospectus, and is duly qualified to do business
as a foreign corporation in each jurisdiction where the conduct
of its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to be
so qualified would not have a material adverse effect on the
financial condition of the Company and its subsidiaries taken as
a whole.
2. The Distribution Agreement has been duly
authorized and, when executed and delivered by the Company,
assuming due authorization and execution by you, will be a valid
and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as limited by (i)
the laws of bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium, or similar laws affecting creditors'
rights generally, (ii) any other applicable federal or state law,
including any law limiting rights of indemnity or contribution,
(iii) equitable principles of general applicability, and (iv) the
discretion of any court in which a proceeding for enforceability
may be brought.
3. The Indenture has been duly authorized, executed,
and delivered by the Company and, assuming due authorization and
execution by the Trustee, is qualified under the Trust Indenture
Act of 1939, as amended, and is a valid and binding obligation of
the Company, enforceable against the Company in accordance with
its terms, except as limited by (i) the laws of bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium, or
similar laws affecting creditors' rights generally, (ii) any
other applicable federal or state law, (iii) rights of
acceleration in accordance with the terms of the Indenture, (iv)
equitable principles of general applicability, and (v) the
discretion of any court in which a proceeding for enforceability
may be brought.
4. The forms of Debt Securities included as Exhibits
4(b) and 4(c) to the Registration Statement were established in
accordance with the provisions of Section 202(iii) of the
Indenture.
5. The form of Debt Warrant Agreement included as
Exhibit 4(e) to the Registration Statement (the "Debt Warrant
Agreement") has been duly authorized and, assuming valid
execution and delivery by the Company and due authorization,
valid execution, and delivery by the Warrant Agent, will be a
valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as limited by
(i) the laws of bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium, or similar laws affecting
creditors' rights generally, (ii) any other applicable federal or
state law, (iii) equitable [Name of Bank]
_____________, 199
Page 3
principles of general applicability, and (iv) the discretion of
any court in which a proceeding for enforceability may be
brought.
6. The form of Debt Warrant Certificate included as
Exhibit 4(f) to the Registration Statement complies with the
provisions of Section 1.02 of the Debt Warrant Agreement.
7. The Debt Securities and Debt Warrants have been
duly authorized and, when issued by the Company and (i)
authenticated by the Trustee in accordance with the applicable
provisions of the Indenture (with respect to Debt Securities) or
(ii) countersigned by the Warrant Agent in accordance with the
applicable provisions of the Debt Warrant Agreement and (iii)
delivered to and duly paid for by the purchasers thereof in
accordance with the applicable provisions of the Prospectus, any
applicable Supplement, and the Distribution Agreement, will be
valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms, except as
limited by (a) the laws of bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, or similar
laws affecting creditors' rights generally, (b) any other
applicable federal or state law, (c) rights of acceleration in
accordance with the terms of the Indenture (with respect to Debt
Securities), (d) equitable principles of general applicability,
and (e) the discretion of any court in which a proceeding for
enforceability may be brought.
8. The execution and delivery of and performance by
the Company of its obligations under the Distribution Agreement,
the Indenture, the Debt Warrant Agreement, the Debt Securities,
and the Debt Warrants will not contravene any provision of the
Restated Charter or By-Laws of the Company, or of any agreement
or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries
taken as a whole, or, to my knowledge after due inquiry, of any
judgment, order, or decree of any governmental body, agency, or
court having jurisdiction over the Company or any of its
subsidiaries. No consent, approval, authorization, or order of
or qualification with any governmental body or agency is required
for the performance by the Company of its obligations under the
Distribution Agreement, the Indenture, the Debt Warrant
Agreement, the Debt Securities, or the Debt Warrants, except as
may be required by the Blue Sky laws or other securities laws of
the various states in which the Debt Securities and Warrants may
be offered and sold.
[Name of Bank]
_____________, 199
Page 4
9. To the extent that each of the statements
described below constitutes a summary of the legal matters,
documents, or proceedings referred to therein, such statements
fairly present the information called for with respect thereto
and fairly summarize the matters referred to therein:
(i) statements in the Prospectus under
the captions "Description of Debt Securities",
"Description of Warrants--Debt Warrants", and
"Plan of Distribution";
(ii) statements in the Registration
Statement under the caption "Item
15--Indemnification of Directors and Officers";
(iii) statements in the Company's
annual report on Form 10-K for the fiscal year
ended December 31, 1994 under the caption "Item
3--Legal Proceedings"; and
(iv) statements in Part II of the
Company's quarterly reports on Form 10-Q for the
twelve weeks ended March 25, 1995, the
twelve and twenty-four weeks ended June 17,
1995 and the twelve and thirty-six weeks
ended September 9, 1995, respectively, under the
caption "Item 1--Legal Proceedings".
10. To my knowledge after due inquiry, there is no
legal or governmental proceeding pending or threatened, no
statute or regulation, and no agreement, instrument, or other
document to which, in any case, the Company or any of its
subsidiaries is a party, or by which, in any case, any of the
properties of the Company or its subsidiaries is bound, that is
required to be described in the Registration Statement, the
Prospectus, or any applicable Pricing Supplement or Prospectus
Supplement, or that is required to be filed as an exhibit to the
Registration Statement, that is not so described or filed.
11. Based solely upon my participation in the
preparation of the Registration Statement and the documents
included or incorporated by reference therein, and without
independent check or verification I am (i) of the opinion that
each document incorporated by reference in the Prospectus (except
for financial statements and schedules, as to which I express no
opinion), at the time it was filed with the Commission, complied
as to form and in all material respects with the Securities
Exchange Act of 1934, as amended, and with the rules and
regulations of the Commission thereunder, (ii) of the opinion
that the Registration Statement (except for the financial
statements and schedules included or incorporated by reference
therein and except for that part of the Registration Statement
that constitutes the Statement of Eligibility and Qualification
of the Trustee (the "Form T-1"), as to which I express no
opinion), at the time it became effective, complied as to form
and in all material respects with the Securities Act of 1933, as
amended, and with the rules and regulations of the Commission
thereunder, and (ii) of
[Name of Bank]
_____________, 199
Page 5
the belief that each part of the Registration Statement (except
for financial statements and
schedules included or incorporated by reference therein and
except for that part of the Registration Statement that
constitutes the Form T-1, as to which I express no belief), did
not, at the time the Registration Statement became effective,
contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading.
The opinions and belief expressed in paragraph 7 above
(except as to due authorization of the Debt Securities and Debt
Warrants), in paragraph 9 above as to the statements in the
Prospectus under the captions "Description of Debt Securities",
"Description of Warrants--Debt Warrants", and "Plan of
Distribution", and in paragraph 11 above do not, in any case,
address any provision of the Commodity Exchange Act, as amended,
or the rules, regulations, or interpretations of the Commodity
Futures Trading Commission, as may be applicable to any Debt
Securities whose principal and/or interest payments will be
determined by reference to one or more currency exchange rates,
commodity prices, equity indices, or other variable factors, or
as may be applicable to any Debt Warrants relating to any such
Debt Securities. None of the opinions and beliefs expressed
herein address, or should in any way be deemed to apply to, Shelf
Warrants or any warrant agreement relating to any one or more
series of Shelf Warrants.
The opinions expressed above do not address, and should
in no way be deemed to address, compliance with any laws other
than the laws of the State of New York, the corporation laws of
the State of North Carolina, and the federal laws of the United
States of America.
This opinion is being furnished to you in accordance
with the provisions of Section 5(a) of the Distribution Agreement
and is solely for the benefit of, and may be relied upon solely
by, you and your counsel. This opinion is not intended for, and
may not be relied upon by, any other person or entity without my
prior written consent.
Very truly yours,
ANNEX B
[FORM OF OPINION OF CAHILL GORDON & REINDEL]
, 199
(212) 701-3000
To the Bank Named in the
Attached Distribution Agreement
Gentlemen:
This opinion is being furnished to you (the "Bank")
pursuant to Section 5(b) of the Distribution Agreement dated as
of ___________________, 199_ (the "Distribution Agreement";
capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to such terms in the Distribution
Agreement) between the Bank and PepsiCo, Inc. (the "Company")
relating to the proposed issuance and sale from time to time by
the Company of up to $4,062,000,000 aggregate principal amount of
the Company's debt securities (the "Debt Securities") and
warrants to purchase debt securities (the "Debt Warrants" and,
together with the Debt Securities, the "Securities"), to be
issued under the Indenture dated as of December 14, 1994 (the
"Indenture"), between the Company and The Chase Manhattan Bank
(National Association), as Trustee (the "Trustee") or the Debt
Warrant Agreement to be entered into by the Company and one or
more agents (each a "Warrant Agent") in substantially the form
filed as an exhibit to the Registration Statement (the "Debt
Warrant Agreement"). A registration statement on Form S-3 (File
No. 33-___________) (such registration statement, including all
documents filed as part thereof or incorporated by reference
therein, is herein called the "Registration Statement"),
including a prospectus (such prospectus, including the documents
incorporated therein by reference, is herein called the
"Prospectus"), relating to the Securities was filed by the
Company with the Securities and Exchange Commission (the
"Commission") on _________________, 1995. The Registration
Statement was declared effective by the Commission on
_________________, 1995.
We advise you that in our opinion:
1. each of the Distribution Agreement and the Debt Warrant
Agreement, when duly authorized, executed and delivered by the
Company (assuming the due authorization, valid execution and
delivery thereof by the other parties thereto) will be a valid
and binding agreement of the Company, enforceable against the
Company in accordance with its terms except as the
enforceability thereof may be limited by the laws of bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now or hereafter in effect relating to
creditors' rights generally, by any other federal or state laws
or by general principles of equity or the discretion of the court
before which any proceeding therefor may be brought;
2. the Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended, and has been duly authorized,
executed and delivered by the Company and (assuming due
authorization, valid execution and delivery thereof by the
Trustee) is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as the
enforceability thereof may be limited by the laws of bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now ore hereafter in effect relating to
creditors' rights generally, by any other federal or state laws,
rights of acceleration, or by general principles of equity or the
discretion of the court before which any proceeding therefor may
be brought;
3. the Securities have been duly authorized and when
issued and delivered by the Company and authenticated by the
Trustee or the Warrant Agent, as the case may be, in accordance
with the provisions of the Indenture or the Debt Warrant
Agreement, as the case may, and duly paid for by the purchasers
thereof, will be entitled to the benefits of the Indenture or the
Debt Warrant Agreement, as the case may be, and will be valid and
binding obligations of the Company, enforceable in accordance
with their respective terms except as the enforceability thereof
may be limited by the laws of bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights generally, by any other federal or state laws, rights of
acceleration, or by general principles of equity or the
discretion of the court before which any proceeding may be
brought;
4. The statements in the Prospectus under the captions
"Description of Debt Securities", "Description of Warrants --
Debt Warrants" and "Plan of Distribution" in each case insofar as
such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
5. the Registration Statement has become effective under
the Securities Act of 1933, as amended (the "Act") and no
proceedings for a stop order are pending or, to the best of our
knowledge, threatened;
6. except for financial statements, schedules and other
financial or statistical data and the Statement of Eligibility
and Qualification on Form T-1 of the Trustee, as to which we have
not been requested to, and do not express any opinion, the
Registration Statement and Prospectus comply as to form in all
material respects with the requirements of the Act and all
applicable rules and regulations thereunder.
We have participated in conferences with officers and other
representatives of the Company, counsel for the Company,
representatives of the Company's Accountant and the Bank's
representatives at which the contents of the Registration
Statement and the Prospectus and related matters were discussed
and, although we are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of any
of the statements contained in the Registration Statement and the
Prospectus (except to the extent stated in paragraph 4 above), on
the basis of the foregoing, relying as to materiality to a large
extent upon the opinions of officers and other representatives of
the Company, no facts have come to our attention which lead us to
believe that (A) the Registration Statement at the time such
Registration Statement became effective contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or (B) the Prospectus, as of its date,
contained an untrue statement of a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading (it being understood that we have not been requested
to and do not express any comment on (i) financial statements,
related schedules and other financial and statistical data, or
(ii) the Statement to Eligibility and Qualification on Form T-1
of the Trustee).
The opinion in paragraph (3) above (except as to due
authorization of the Securities), the opinions in paragraph (4)
above as to the statements in the Prospectus under the captions
"Description of Debt Securities" and "Description of Debt
Warrants" and the opinion and belief in paragraph (6) and clause
(B) above do not address any application of the Commodity
Exchange Act, as amended (or amending legislation now pending
before Congress), or the rules, regulations orders or
interpretations of the Commodity Futures Trading Commission to
Securities the payments of principal or interest on which will be
determined by reference to one or more currency exchange rates,
commodity prices, equity indices or other factors. In addition,
for the purpose of the opinions in paragraphs (3) and (4) above,
we have assumed that (a) the Securities will conform both in form
and with the requirements set forth in the Indenture or the Debt
Warrant Agreement, as the case may be, and (b) none of the terms
of the Securities not contained in the forms examined by us will
violate any applicable law or be unenforceable. The opinions in
paragraph (4) above are based solely on our participation in the
preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto (but not including documents
incorporated therein by reference) and are without independent
check or verification except as specified. In connection with
our opinion in paragraph (3) above, we note that, as of the date
of this opinion, a judgment for money in any action based upon an
obligation denominated in a currency other than currency of the
United States, a federal or state court in New York shall render
or enter a judgment or decree in the foreign currency of the
underlying obligation. Such judgment or decree shall be
converted into currency of the United States at the rate of
exchange prevailing on the date of entry of the judgment or
decree.
Very truly yours,
ANNEX C
_________________, 199
[To the Bank Named on the Attached Schedule A]
Dear Sirs:
I am Vice President, Taxes of PepsiCo, Inc., a corporation
organized under the laws of the State of North Carolina (the
"Company"). I have acted as tax counsel for the Company in
connection with the registration of $4,587,000,000 in aggregate
offering price of the Company's Debt Securities and Warrants
(collectively, the "Securities") that may, from time to time, be
issued by the Company.
You have requested my opinion pursuant to Section 5(c) of the
Distribution Agreement to be executed and delivered by you and
the Company in substantially the form attached hereto as Exhibit
A (the "Distribution Agreement"). In connection with such
opinion, I have examined the Registration Statement on Form S-3,
File No. 33-_________________ (the "Registration Statement"),
filed by the Company with the Securities and Exchange Commission
(the "Commission") with respect to the Securities, including the
form of prospectus contained therein (the "Prospectus"). All
capitalized terms used herein and not otherwise defined have the
meanings ascribed to such terms by the Prospectus.
On the basis of my review of the Registration Statement, it is my
opinion that if the offering of the Securities is conducted in
the manner described in the Prospectus, and if the terms of any
series of Securities are as contemplated by the Prospectus, then
the statements contained in the section of the Prospectus
entitled "United States Tax Considerations" accurately describe
certain United States federal income tax consequences of
ownership and disposition of the Securities, except with respect
to Debt Warrants and Shelf Warrants, which consequences will be
discussed in the applicable Prospectus Supplement to be filed
hereafter.
I do not purport to be expert in, or to express any opinion
concerning, the laws of any jurisdiction other than the federal
laws of the United States of America.
This opinion is being furnished to you in accordance with the
provisions of Section 5(c) of the Distribution Agreement and is
solely for the benefit of, and may be relied upon solely by, you
and your counsel. This opinion is not intended for, and may not
be relied upon by, any other person or entity without my prior
written consent.
Very truly yours,
SECRETARY'S CERTIFICATE
I, Edward V. Lahey, Jr., the duly qualified, elected,
and acting Secretary of PepsiCo, Inc., a company organized
under the laws of the State of North Carolina (the
"Company"), hereby certify as follows:
1. Attached hereto as Exhibit A is a true and complete
copy of the Restated Articles of Incorporation of the
Company, certified as of _________________ by the Secretary
of State of the State of North Carolina. No further
amendments or supplements to the Restated Articles of
Incorporation have been proposed to or approved by the Board
of Directors or shareholders of the Company.
2. Attached hereto as Exhibit B is a true, correct,
and complete copy of the By-Laws of the Company. Such
By-Laws have been in effect at all times since January 22,
1987.
3. Attached hereto as Exhibits C-1 and C-2 are copies
of resolutions adopted by the Board of Directors of the
Company on _______________-_ relating to the issuance of
short-term and long-term debt securities, which resolutions
are in effect as of the date hereof.
4. The documents described below have been duly
authorized, executed (except as otherwise indicated below),
and filed by the Company with the Securities and Exchange
Commission:
(a) the Registration Statement on Form S-3, File No.
33-_________________, filed by the Company on
_________________, 1995 (the "Registration Statement"),
relating to $_________________ in aggregate offering price
of the Company's Debt Securities and Warrants (as such terms
are defined in the Registration Statement), a copy of which
is attached hereto as Exhibit D;
(b) the Indenture, dated as of December 14, 1994,
between the Company and The Chase Manhattan Bank (National
Association), as trustee, which is incorporated by reference
from Exhibit 4(a) to PepsiCo's Registration Statement on
Form S-3 (Registration No. 57181);
(c) the form of Debt Warrant Agreement that may be
entered into by the Company and The Chase Manhattan Bank
(National Association), as warrant agent, a copy of which is
incorporated by reference from Exhibit 4(e) to PepsiCo's
Registration Statement on Form S-3 (Registration No. 33-
57181); and
(d) the form of Distribution Agreement that may be
entered into by the Company and one or more agents and
underwriters in connection with the offer and sale of the
Debt Securities and Warrants, a copy of which is attached as
Exhibit 1 to the Registration Statement.
5. The Debt Securities may be issued from time to
time, in substantially the forms attached hereto as Exhibit
E (with respect to Fixed Rate Debt Securities) and Exhibit F
(with respect to Floating Rate Debt Securities), on such
terms as shall be determined by any two of the following
officers of the Company: (i) the Chairman of the Board and
Chief Executive Officer (the "Chairman"), (ii) the Executive
Vice President and Chief Financial Officer (the "Executive
Vice President"), (iii) the Senior Vice President and
Treasurer (the "Treasurer"), and (iv) such other officer of
the Company as may be designated by the Chairman, the
Executive Vice President, or the Treasurer pursuant to the
Delegation of Authority attached hereto as Exhibit G (any
two of the Chairman, the Executive Vice President, the
Treasurer, and such other officer hereinafter referred to as
the "Authorized Persons"), provided, that such terms will in
no event violate or conflict with the terms and provisions
set forth in the Indenture or the Prospectus or (to the
extent that the terms of an applicable Pricing Supplement
supersede the terms and provisions of the Prospectus) the
applicable Pricing Supplement.
6. The Debt Warrants may be issued from time to time,
alone or together with one or more series of Debt
Securities, in substantially the form attached hereto as
Exhibit H, on such terms as shall be determined by any two
Authorized Persons, provide- that such terms will in no
event violate or conflict with the terms and provisions of
the Debt Warrant Agreement or the Prospectus or (to the
extent that the terms of an applicable Prospectus Supplement
supersede the terms and provisions of the Prospectus) the
applicable Prospectus Supplement.
7. The persons named below are duly qualified,
elected, and acting officers of the Company, have been duly
elected or appointed to the offices set forth opposite their
respective names, have held such offices at all times
relevant to the preparation of the Registration Statement,
and hold such offices as of the date hereof. The signatures
set forth below opposite the names of such persons are the
genuine signatures of such persons.
Randall C. Barnes Senior Vice
President and __________________
Treasurer
D. Wayne Calloway Chairman of the
Board and Chief
Executive _______________
Officer
Douglas Cram Vice President
and Assistant
General Counsel _______________
Robert G. Dettmer Executive Vice
President and
Chief Financial _______________
Officer
Lawrence F. Dickie Vice President
and Associate _______________
General Counsel
Karen L. Halby Vice President
and Tax Counsel _______________
Matthew M. McKenna Vice President,
Taxes _______________
Sandra Wijnberg Vice President,
Corporate
Finance and _______________
Assistant
Treasurer
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed the seal of the Company as of the day of
______________, 1995.
________________________
Edward V. Lahey, Jr.
Secretary
I, Douglas Cram, a Vice President of the Company,
hereby certify that Edward V. Lahey, Jr. is the duly
qualified, elected, and acting Senior Vice President,
General Counsel, and Secretary of the Company, has been duly
elected or appointed to such offices, has held such offices
at all times relevant to the preparation of the Registration
Statement, holds such offices as of the date hereof, and
that the signature set forth below is his genuine signature.
Edward V. Lahey, Jr. Senior Vice
President,
General Counsel __________________
and Secretary
IN WITNESS WHEREOF, I have hereunto set my hand as of
the ___ day of ______________, 1995.
________________________
Douglas Cram
Vice President
ANNEX E
OFFICERS' CERTIFICATE
Robert G. Dettmer, Executive Vice President and Chief
Financial Officer, and Randall C. Barnes, Senior Vice President
and Treasurer, of PepsiCo, Inc., a corporation organized under
the laws of the State of North Carolina (the "Company"), each
hereby certifies as follows:
1. I have examined the Company's Registration Statement on
Form S-3, File No. 33-_________________ (the "Registration
Statement"), as filed by the Company with the Securities and
Exchange Commission (the "Commission") on _________________,
including all of the documents filed as exhibits thereto.
Capitalized terms used herein and not otherwise defined have the
meanings ascribed to such terms by the prospectus filed as part
of the Registration Statement (such prospectus hereinafter the
"Prospectus").
2. To the best of my knowledge, no proceedings for the
merger, consolidation, liquidation, or dissolution of the Company
or the sale of all or substantially all of its assets are pending
or contemplated.
3. To the best of my knowledge, there has not been any
material adverse change in the financial condition, earnings,
business, or operations of the Company and its subsidiaries,
taken as a whole, from that described in the Registration
Statement.
4. To my knowledge, after due inquiry, I am of the belief
that the Registration Statement (i) contains no untrue statement
of a material fact regarding the Company or any of its
consolidated subsidiaries and (ii) does not omit to state any
material fact necessary to make any such statement, in light of
the circumstances under which it was made, not misleading.
IN WITNESS WHEREOF, I have hereunto set my hand as of the
___ of ______________, 1995.
______________________
Name:
Title:
______________________
Name:
Title:
ANNEX F
[Letterhead of Bank]
Gentlemen:
In connection with the placement of any debt securities or
warrants to purchase debt securities (the "Securities") to be
issued by PepsiCo, Inc., [Name of financial intermediary(ies)],
as principal or agent, will be reviewing certain information
relating to PepsiCo, Inc. that will be included (or incorporated
by reference) in the Registration Statement on Form S-3 (File No.
33-_________________) of PepsiCo, Inc. pursuant to which the
Securities have been registered (the "Registration Statement"),
which may be delivered to investors and utilized by them as a
basis for their investment decision. This review process,
applied to the information relating to PepsiCo, Inc., is
substantially consistent with the due diligence review process
that an underwriter would perform in connection with this
placement of securities. We are knowledgeable with respect to
the due diligence review process that an underwriter would
perform in connection with a placement of securities registered
pursuant to the Securities Act of 1933. We hereby request that
you deliver to us a "comfort" letter in substantially the same
form as the "draft" comfort letter delivered to PepsiCo, Inc. for
the immediately preceding fiscal quarter of PepsiCo, Inc.
concerning the financial statements of PepsiCo, Inc. and certain
statistical and other data included in the Registration
Statement.
Very truly yours,
[Name of financial
intermediary]
ANNEX G
[Letterhead of Cahill Gordon & Reindel]
Gentlemen:
In connection with the placement of any debt securities or
warrants to purchase debt securities (the "Securities") to be
issued by PepsiCo, Inc., [Name of financial intermediary(ies)],
as principal or agent, will be reviewing certain information
relating to PepsiCo, Inc. that will be included (or incorporated
by reference) in the Registration Statement on Form S-3 (File No.
33-_________________) of PepsiCo, Inc. pursuant to which the
Securities have been registered (the "Registration Statement"),
which may be delivered to investors and utilized by them as a
basis for their investment decision. In our opinion, [Name of
financial intermediary(ies)] has a statutory due diligence
defense under Section 11 of the Securities Act of 1933 (the
"Act"). We are knowledgeable with respect to the due diligence
review process that an underwriter would perform in connection
with a placement of securities registered pursuant to the Act.
We hereby request that you deliver to [Name of financial
intermediary(ies)] a "comfort" letter in substantially the same
form as the "draft" comfort letter delivered to PepsiCo, Inc. for
the immediately preceding fiscal quarter of PepsiCo, Inc.
concerning the financial statements of PepsiCo, Inc. and certain
statistical and other data included in the Registration
Statement.
Very truly yours,
Cahill Gordon & Reindel
Exhibit 4(c)
Fixed Rate Note
REGISTERED REGISTERED
No. $
CUSIP:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street,
New York, New York) to the issuer or its agent for registration
of transfer or exchange or for payment, then this certificate
shall be registered in the name of Cede & Co. (or such other name
as may be requested by an authorized representative of The
Depository Trust Company), and ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL.
Unless and until this certificate is exchanged in whole or
in part for Notes in certificated form, this certificate may not
be transferred except as a whole by The Depository Trust Company
to a nominee thereof or by a nominee thereof to The Depository
Trust Company or another nominee of The Depository Trust Company
or by The Depository Trust Company or any nominee to a successor
depository or nominee of such successor depository.
PEPSICO, INC.
FIXED RATE NOTE
ISSUE PRICE:
INTEREST RATE: MATURITY DATE:
INTEREST ACCRUES FROM: INTEREST PAYMENT DATES:
REDEEMABLE: SPECIFIED CURRENCY:
Yes ( ) No ()
INITIAL REDEMPTION DATE: APPLICABILITY OF MODIFIED
PAYMENT UPON ACCELERATION:
INITIAL REDEMPTION
PERCENTAGE: If yes, state Issue Price:
ANNUAL REDEMPTION
PERCENTAGE REDUCTION: SINKING FUND:
OPTION TO ELECT REPAYMENT: APPLICABILITY OF ANNUAL
INTEREST PAYMENTS:
Yes ( ) No ( )
OPTIONAL REPAYMENT
DATE(S):
OPTIONAL REPAYMENT
PRICE(S):
PepsiCo, Inc., a North Carolina corporation (together with
its successors and assigns, the "Issuer"), for value received,
hereby promises to pay to Cede & Co., or the registered assignees
thereof, the principal sum of ______________ dollars on the
Scheduled Maturity Date specified above (except to the extent
redeemed or repaid prior to such Scheduled Maturity Date) and to
pay interest thereon at the Interest Rate per annum specified
above from the Interest Accrual Date specified above until the
principal hereof is paid or duly made available for payment
(except as provided below) on the Scheduled Maturity Date, such
interest payments to commence on the Interest Payment Date next
succeeding the Interest Accrual Date specified above, and on the
Scheduled Maturity Date (or any redemption or repayment date);
provided, however, that if the Interest Accrual Date occurs
between a Record Date, as defined below, and the next succeeding
Interest Payment Date, interest payments will commence on the
second Interest Payment Date succeeding the Interest Accrual Date
to the registered holder of this Note on the Record Date with
respect to such second Interest Payment Date; and provided,
further, that if this Note is subject to "Annual Interest
Payments", interest payments shall be made annually in arrears.
Interest on this Note will accrue from the most recent
Interest Payment Date to which interest has been paid or duly
provided for, or, if no interest has been paid or duly provided
for, from the Interest Accrual Date, until the principal hereof
has been paid or duly made available for payment (except as
provided below). The interest so payable and punctually paid or
duly provided for on any Interest Payment Date will, subject to
certain exceptions described herein, be paid to the person in
whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the date 15 calendar days
prior to an Interest Payment Date (whether or not a New York
Business Day) (each such date a "Record Date"); provided,
however, that interest payable on the Maturity Date (or any
redemption or repayment date) will be payable to the person in
whose name this Note is registered on such date.
Payment of the principal and any premium and interest due on
this Note at the Scheduled Maturity Date (or any redemption or
repayment date) will be made in immediately available funds upon
surrender of this Note at the office or agency of the Trustee, as
defined on the reverse hereof, maintained for that purpose in The
City of New York, or at such other paying agency as the Issuer
may determine. Payment of the principal of and premium, if any,
and interest on this Note will be made in the currency indicated
above; provided, however, that U.S. dollar payments of interest,
other than interest due at maturity or any date of redemption or
repayment, will be made by U.S. dollar check mailed to the
address of the person entitled thereto as such address shall
appear in the Security Register on the applicable Record Date. A
Holder of U.S. $10,000,000 or more in aggregate principal amount
of Notes having the same Interest Payment Date will be entitled
to receive payments of interest, other than interest due at
maturity or any date of redemption or repayment, by wire transfer
of immediately available funds if appropriate wire transfer
instructions have been received by the Trustee in writing not
less than 15 calendar days prior to the applicable Interest
Payment Date. If this Note is denominated in a Specified
currency, payments of interest hereon will be made by wire
transfer of immediately available funds to an account maintained
by the Holder hereof with a bank located outside the United
States, if appropriate wire transfer instructions have been
received by the Trustee in writing not less than 15 calendar days
prior to the applicable Interest Payment Date. If such wire
transfer instructions are not so received, such interest payments
will be made by check payable in such Specified Currency mailed
to the address of the person entitled thereto as such address
shall appear in the Security Register on the applicable Record
Date.
Reference is hereby made to the further provisions of this
Note set forth after the caption reading "Further Provisions of
Note", which further provisions shall for all purposes have the
same effect as if set forth at this place. In the event of an
inconsistency between any provision set forth above and any
provision set forth in "Further Provisions of Note", the
description above shall govern.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by
manual signature, this Note shall not be entitled to any benefit
under the Indenture, as defined in Further Provisions of Note, or
be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be
duly executed
under its corporate seal.
DATED: PEPSICO, INC.
By:
_
Authorized Officer
By:
_
Authorized Officer
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes referred
to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION),
as Trustee
By:
_
Authorized Officer
[FURTHER PROVISIONS OF NOTE]
This Note is one of a duly authorized issue of Notes having
maturities not less than nine months from the date of issue (the
"Notes"). The Notes are issuable under an Indenture, dated as of
December 14, 1994 (herein called the "Indenture"), between the
Issuer and The Chase Manhattan 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 of the Issuer, the Trustee, and Holders of
the Notes, the terms upon which the Notes are, and are to be,
authenticated and delivered, and the definitions of capitalized
terms used herein and not otherwise defined herein. The terms of
individual Notes may vary with respect to interest rates,
interest rate formulas, issue dates, maturity dates, or
otherwise, all as provided in the Indenture. To the extent not
inconsistent herewith, the terms of the Indenture are hereby
incorporated by reference herein.
The Notes will not be subject to any sinking fund and,
unless otherwise provided on the face hereof in accordance with
the provisions of the following two paragraphs, will not be
redeemable or subject to repayment at the option of the holder
prior to maturity.
Unless otherwise indicated on the face of this Note, this
Note may not be redeemed prior to the Scheduled Maturity Date.
If so indicated on the face of this Note, this Note may be
redeemed in whole or in part at the option of the Issuer on or
after the Initial Redemption Date specified on the face hereof on
the terms set forth on the face hereof, together with interest
accrued and unpaid hereon to the date of redemption (except as
provided below). If this Note is subject to "Annual Redemption
Percentage Reduction," the Initial Redemption Percentage
indicated on the face hereof will be reduced on each anniversary
of the Initial Redemption Date by the Annual Redemption
Percentage Reduction specified on the face hereof until the
redemption price of this Note is 100% of the principal amount
hereof, together with interest accrued and unpaid hereon to the
date of redemption (except as provided below). Notice of
redemption shall be mailed to the registered Holders of the Notes
designated for redemption at their addresses as the same shall
appear on the Security Register not less than 30 nor more than 60
days prior to the date fixed for redemption, subject to all the
conditions and provisions of the Indenture. In the event of
redemption of this Note in part only, a new Note or Notes for the
amount of the unredeemed portion hereof shall be issued in the
name of the holder hereof upon the cancellation hereof.
Unless otherwise indicated on the face of this Note, this
Note shall not be subject to repayment at the option of the
holder prior to the Maturity Date. If so indicated on the face of
this Note, this Note will be subject to repayment at the option
of the holder on the Optional Repayment Date or Dates specified
on the face hereof on the terms set forth herein. On any
Optional Repayment Date, this Note will be repayable in whole or
in part in increments of ________ or, if this Note is denominated
in ____________, in increments of ___ units of such Specified
Currency (provided that any remaining principal amount hereof
shall not be less than the minimum authorized denomination
hereof) at the option of the holder hereof at a price equal to
100% of the principal amount to be repaid, together with interest
accrued and unpaid hereon to the date of repayment (except as
provided below). For this Note to be repaid at the option of the
holder hereof, the Trustee must receive at its Corporate Trust
Office in the Borough of Manhattan, The City of New York, at
least 15 but not more than 30 days prior to the date of
repayment, (i) this Note with the form entitled "Option to Elect
Repayment" below duly completed or (ii) a telegram, telex,
facsimile transmission, or a letter from a member of a national
securities exchange or the National Association of Securities
Dealers, Inc. or a commercial bank or a trust company in the
United States setting forth the name of the Holder of this Note,
the principal amount hereof, the certificate number of this Note
or a description of this Note's tenor and terms, the principal
amount hereof to be repaid, a statement that the option to elect
repayment is being exercised thereby, and a guarantee that this
Note, together with the form entitled "Option to Elect Repayment"
duly completed, will be received by the Trustee not later than
the fifth New York Business Day after the date of such telegram,
telex, facsimile transmission, or letter; provided, that such
telegram, telex, facsimile transmission, or letter shall only be
effective if this Note and form duly completed are received by
the Trustee by such fifth New York Business Day. Exercise of such
repayment option by the holder hereof shall be irrevocable. In
the event of repayment of this Note in part only, a new Note or
Notes for the amount of the unpaid portion hereof shall be issued
in the name of the holder hereof upon the cancellation hereof.
Interest payments on this Note will include interest accrued
to but excluding the Interest Payment Dates or the Maturity Date
(or any earlier redemption or repayment date), as the case may
be. Interest payments for this Note will be computed and paid on
the basis of a 360-day year of twelve 30-day months. If any
Interest Payment Date or Principal Payment Date (including the
Maturity Date) on this Note would fall on a day that is not a New
York Business Day, the payment of interest and/or principal (and
premium, if any) that would otherwise be payable on such date
will be postponed to the next succeeding New York Business Day,
and no additional interest on such payment will accrue as a
result of such postponement.
In the case where the Interest Payment Date or the Scheduled
Maturity Date (or any redemption or repayment date) does not fall
on a New York Business Day, payment of interest, premium, if any,
or principal otherwise payable on such date need not be made on
such date, but may be made on the next succeeding New York
Business Day with the same force and effect as if made on such
Interest Payment Date or on the Scheduled Maturity Date (or any
redemption or repayment date), and no interest shall accrue for
the period from and after such Interest Payment Date or the
Scheduled Maturity Date (or any redemption or repayment date) to
such next succeeding New York Business Day.
This Note and all the obligations of the Issuer hereunder
are direct, unsecured obligations of the Issuer and rank without
preference or priority among themselves and pari passu with all
other existing and future unsecured and unsubordinated
indebtedness of the Issuer, subject to certain statutory
exceptions in the event of liquidation upon insolvency.
This Note, and any Note or Notes issued upon transfer or
exchange hereof, is issuable only in fully registered form,
without coupons, and, if denominated in U.S. dollars, is issuable
only in denominations of U.S. $ ______ and any integral multiple
of U.S. $1,000 in excess thereof. If this Note is denominated in
a Specified Currency, then, unless a higher minimum denomination
is required by applicable law, it is issuable only in
denominations of the equivalent of U.S. $ ________ (rounded down
to an integral multiple of 1,000 units of such Specified
Currency), or any amount in excess thereof which is an integral
multiple of 1,000 units of such Specified Currency, as determined
by reference to the noon dollar buying rate in New York City for
cable transfers of such Specified Currency published by the
Federal Reserve Bank of New York (the "Market Exchange Rate") on
the New York Business Day immediately preceding the date of
issuance.
Except as set forth below, if the principal of, premium, if
any, or interest on, this Note is payable in a Specified Currency
and such Specified Currency is not available to the Issuer for
making payments hereon due to the imposition of exchange controls
or other circumstances beyond the control of the Issuer or is no
longer used by the government of the country issuing such
currency or for the settlement of transactions by public
institutions within the international banking community, then the
Issuer will be entitled to satisfy its obligations to the Holder
of this Note by making such payments in U.S. dollars on the basis
of the noon buying rate in the City of New York for cable
transfers of such Specified Currency published by the Federal
Reserve Bank of New York (the "Market Exchange Rate") on the
second New York Business Day prior to the applicable payment date
or, if the Market Exchange Rate in effect on such date cannot by
readily determined, then on the basis of the highest bid
quotation (assuming European-style quotation -- i.e., Specified
Currency per U.S. dollar) on the second New York Business Day
prior to the applicable payment date from three recognized
foreign exchange dealers in the City of New York (one of which
may be the Company) for the purchase of the aggregate amount of
the Specified Currency payable on such payment date, for
settlement on such payment date, and at which the applicable
dealer timely commits to execute a contract. Any payment made
under such circumstances in U.S. dollars where the required
payment is in a Specified Currency other than U.S. dollars will
not constitute an Event of Default.
If payments of principal, premium, if any, or interest, if
any, with respect to this Note are required to be made in a
composite currency and the composition of such composite currency
is at any time altered (whether by the addition, elimination,
combination, or subdivision of one or more components, by
adjustment of the ratio of any component to the composite unit,
or by any combination of such events), then the company will be
entitled to satisfy its payment obligations hereunder by making
such payments in such composite currency as altered.
All determinations referred to above made by the Issuer or
its agent shall be at its sole discretion and shall, in the
absence of manifest error, be conclusive to the extent permitted
by law for all purposes and binding on the Holder of this Note.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the
rights and obligations of the Issuer and the rights of the
Holders of the Notes of each series under the Indenture at any
time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Notes
at the time Outstanding of each series to be affected by such
amendment or modification. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal
amount of the Notes of each series at the time Outstanding, on
behalf of the Holders of all Notes of such series, to waive
compliance by the Issuer 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 shall 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 herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Note.
The Indenture contains provisions setting forth certain
conditions to the institution of proceedings by Holders of Notes
with respect to the Indenture or for any remedy under the
Indenture.
If an Event of Default with respect to the Notes shall occur
and be continuing, the principal amount hereof may be declared
due and payable in the manner and with the effect provided in the
Indenture.
If the face hereof indicates that this Note is subject to
"Modified Payment upon Acceleration," then (i) if the principal
hereof is declared to be due and payable as referred to in the
preceding paragraph, the amount of principal due and payable with
respect to this Note shall be limited to the aggregate principal
amount hereof multiplied by the sum of the Issue Price specified
on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from
the Original Issue Date to the date of declaration, which
amortization shall be calculated using the "interest method"
(computed in accordance with generally accepted accounting
principles in effect on the date of declaration), (ii) for the
purpose of any vote of Securityholders taken pursuant to the
Indenture prior to the acceleration of payment of this Note, the
principal amount hereof shall equal the amount that would be due
and payable hereon, calculated as set forth in clause (i) above,
if this Note were declared to be due and payable on the date of
any such vote and (iii) for the purpose of any vote of
Securityholders taken pursuant to the Indenture following the
acceleration of payment of this Note, the principal amount hereof
shall equal the amount of principal due and payable with respect
to this Note, calculated as set forth in clause (i) above.
No reference herein to the Indenture and no provision of
this Note or of the Indenture shall alter or impair the
obligation of the Issuer, which is absolute and unconditional, to
pay the principal of and interest on this Note at the times,
place, and rate, and in the coin or currency, herein prescribed.
So long as this Note shall be outstanding, the Issuer will
cause to be maintained an office or agency for the payment of the
principal of and premium, if any, and interest on this Note as
herein provided in the City of New York, and an office or agency
in said City of New York for the registration of transfer or
exchange of the Notes. The Issuer may designate other agencies
for the payment of said principal, premium, if any, and interest
at such place or places (subject to applicable laws and
regulations) as the Issuer may decide. So long as there shall be
such an agency, the Issuer shall keep the Trustee advised of the
names and locations of such agencies, if any are so designated.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note is
registrable in the Security Register, upon surrender of this Note
for registration of transfer at the Corporate Trust Office or any
other applicable Place of Payment, duly endorsed, or accompanied
by a written instrument of transfer in form satisfactory to the
Issuer and the Security Registrar duly executed, by the Holder
hereof or his or her attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and
for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
No service charge shall be made for any such registration or
transfer or exchange, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge payable
in connection therewith.
The Issuer, the Trustee, and any agent of the Issuer or the
Trustee may treat the Person in whose name this Note is
registered as the owner hereof for the purpose of receiving
payments as herein provided and for all other purposes, whether
or not this Note is overdue, and neither the Issuer, the Trustee,
nor any such agent shall be affected by notice to the contrary.
This Note shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall 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 ZIP CODE OF
ASSIGNEE]
the within Note and all rights thereunder, hereby irrevocably
constituting and appointing such person attorney to transfer such
note on the books of the Issuer, with full power of substitution
in the premises.
Dated:
NOTE: The signature to this assignment must correspond with
the name as written upon the face of the within Note in every
particular without alteration or enlargement or any change
whatsoever.
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs
the Issuer to repay the within Note (or portion thereof specified
below) pursuant to its terms at a price equal to the principal
amount thereof, together with interest to the Optional Repayment
Date, to the undersigned at
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(Please print or typewrite name and address of the undersigned)
If less than the entire principal amount of the within Note
is to be repaid, specify the portion thereof which the holder
elects to have repaid: ___________________; and specify the
denomination or denominations (which shall not be less than the
minimum authorized denomination) of the Notes to be issued to the
holder for the portion of the within Note not being repaid (in
the absence of any such specification, one such Note will be
issued for the portion not being repaid):
____________________________.
Dated: ____________________
_______________________________________
The signature on this Option to
Elect Repayment must correspond with the name as written upon the
face of the within instrument in every particular without
alteration or enlargement.
Exhibit 4(d)
Floating Rate Note
REGISTERED REGISTERED
No. $
CUSIP:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street,
New York, New York) to the issuer or its agent for registration
of transfer or exchange or for payment, then this certificate
shall be registered in the name of Cede & Co. (or such other name
as may be requested by an authorized representative of The
Depository Trust Company), and ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest
herein.
Unless and until this certificate is exchanged in whole or
in part for Notes in certificated form, this certificate may not
be transferred except as a whole by The Depository Trust Company
to a nominee thereof or by a nominee thereof to The Depository
Trust Company or another nominee of The Depository Trust Company
or by The Depository Trust Company or any nominee to a successor
depository or nominee of such successor depository.
PEPSICO, INC.
FLOATING RATE NOTE
ISSUE PRICE: ORIGINAL ISSUE DATE: MATURITY DATE:
BASE RATE: SPREAD (PLUS OR SPREAD
MINUS): MULTIPLIER:
INTEREST ACCRUES INTEREST PAYMENT INTEREST RESET
FROM: PERIOD: PERIOD:
INDEX MATURITY: INITIAL INTEREST INITIAL INTEREST
RESET DATE: RATE:
INTEREST PAYMENT INTEREST DETERMIN- INTEREST RESET DATES:
DATES: ATION DATES:
MINIMUM INTEREST MAXIMUM INTEREST SPECIFIED CURRENCY:
RATE: RATE:
REDEEMABLE: OPTION TO ELECT CALCULATION AGENT:
YES ____ NO____ REPAYMENT:
YES____ NO____
INITIAL REDEMP- OPTIONAL REPAYMENT ALTERNATIVE RATE
TION DATE: DATE(S): EVENT SPREAD:
INITIAL REDEMP- OPTIONAL REPAY-
TION PERCENTAGE: MENT PRICE(S):
ANNUAL REDEMP- SINKING FUND: ORIGINAL YIELD TO
TION PERCENTAGE MATURITY:
REDUCTION:
PepsiCo, Inc., a North Carolina corporation (together with
its successors and assigns, the "Issuer"), for value received,
hereby promises to pay to Cede & Co., or the registered assignees
thereof, the principal sum of _______________dollars on the
Scheduled Maturity Date specified above (except to the extent
redeemed or repaid prior to such Scheduled Maturity Date) and to
pay interest thereon, from the Interest Accrual Date specified
above, at a rate per annum equal to the Initial Interest Rate
specified above until the Initial Interest Reset Date specified
above, and thereafter at a rate per annum determined in
accordance with the Formula Rate set forth above, or to the
extent not specified above, as determined in accordance with the
provisions set forth under the Further Provisions of Note hereof
until the principal hereof is paid or duly made available for
payment. The Issuer will pay interest in arrears monthly,
quarterly, semiannually, or annually as specified above on each
Interest Payment Date (as specified above), such interest
payments to commence on the first Interest Payment Date next
succeeding the Interest Accrual Date specified above, and on the
Scheduled Maturity Date (or any redemption or repayment date);
provided, however, that if the Interest Accrual Date occurs
between a Record Date, as defined below, and the next succeeding
Interest Payment Date, interest payments will commence on the
second Interest Payment Date succeeding the Interest Accrual Date
to the registered Holder of this Note on the Record Date with
respect to such second Interest Payment Date; and provided,
further, that if an Interest Payment Date or the Maturity Date or
redemption or repayment date would fall on a day that is not a
Business Day, as defined under the Further Provisions of Note
hereof, such Interest Payment Date, Scheduled Maturity Date or
redemption or repayment date shall be the following day that is a
New York Business Day.
Interest on this Note will accrue from the most recent date
to which interest has been paid or duly provided for, or, if no
interest has been paid or duly provided for, from the Interest
Accrual Date, until the principal hereof has been paid or duly
made available for payment. The interest so payable and
punctually paid or duly provided for on any Interest Payment Date
will, subject to certain exceptions described herein, be paid to
the person in whose name this Note (or one or more predecessor
Notes) is registered at the close of business on the date 15
calendar days prior to an Interest Payment Date (whether or not a
New York Business Day) (each such date a "Record Date");
provided, however, that interest payable on the Scheduled
Maturity Date (or any redemption or repayment date) will be
payable to the person in whose name this Note is registered on
such date.
Payment of the principal and any premium and interest due on
this Note at the Scheduled Maturity Date (or any redemption or
repayment date) will be made in immediately available funds upon
surrender of this Note at the Corporate Trust Office of the
Trustee, as defined on the reverse hereof, maintained for that
purpose in The City of New York, or at such other paying agency
as the Issuer may determine. Payment of the principal of and
premium, if any, and interest on this Note will be made in the
currency indicated above; provided, however, that U.S. dollar
payments of interest, other than interest due at maturity or any
date of redemption or repayment, will be made by U.S. dollar
check mailed to the address of the person entitled thereto as
such address shall appear in the Security Register on the
applicable Record Date. A Holder of U.S. $10,000,000 or more in
aggregate principal amount of Notes having the same Interest
Payment Date will be entitled to receive payments of interest,
other than interest due at maturity or any date of redemption or
repayment, by wire transfer of immediately available funds if
wire transfer instructions have been received by the Trustee in
writing not less than 15 calendar days prior to the applicable
Interest Payment Date. If this Note is denominated in a currency
other than U.S. dollars, payments of Interest hereon will be made
by wire transfer of immediately available funds to an account
maintained by the Holder hereof with a bank located outside the
United States, if appropriate wire transfer instructions have
been received by the Trustee in writing not less than 15 calendar
days prior to the applicable Interest Payment Date. If such wire
transfer instructions are not so received, such interest payments
will be made by check payable in such Specified Currency marked
to the address of the person entitled thereto as such address
shall appear in the Security Register on the applicable Record
Date.
Reference is hereby made to the further provisions of this
Note set forth after the caption reading "Further Provisions of
Note", which further provisions shall for all purposes have the
same effect as if set forth at this place. In the event of an
inconsistency between any provision set forth above and any
provision set forth in "Further Provisions of Note", the
description above shall govern.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to under the Further Provisions
of Note hereof by manual signature, this Note shall not be
entitled to any benefit under the Indenture, as defined under the
Further Provisions of Note hereof, or be valid or obligatory for
any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be
duly executed under its corporate seal.
DATED: PEPSICO, INC.
By: Authorized Officer
By:
Authorized Officer
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes
referred to in the within-
mentioned Indenture.
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Trustee
By:
_________________________________
Authorized Officer
[FURTHER PROVISIONS OF NOTE]
This Note is one of a duly authorized issue of Notes having
maturities not less than nine months from the date of issue (the
"Notes"). The Notes are issuable under an Indenture, dated as of
December 14, 1994 (herein called the "Indenture"), between the
Issuer and The Chase Manhattan 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 of the Issuer, the Trustee and the Holders
of the Notes, the terms upon which the Notes are, and are to be,
authenticated and delivered, and the definitions of capitalized
terms used herein and not otherwise defined herein. The terms of
individual Notes may vary with respect to interest rates,
interest rate formulas, issue dates, maturity dates, or
otherwise, all as provided in the Indenture. To the extent not
inconsistent herewith, the terms of the Indenture are hereby
incorporated by reference herein.
The Notes will not be subject to any sinking fund and,
unless otherwise provided on the face hereof in accordance with
the provisions of the following two paragraphs, will not be
redeemable or subject to repayment at the option of the holder
prior to maturity.
Unless otherwise indicated on the face of this Note, this
Note may not be redeemed prior to the Scheduled Maturity Date.
If so indicated on the face of this Note, this Note may be
redeemed in whole or in part at the option of the Issuer on or
after the Initial Redemption Date specified on the face hereof on
the terms set forth on the face hereof, together with interest
accrued and unpaid hereon to the date of redemption. If this Note
is subject to "Annual Redemption Percentage Reduction," the
Initial Redemption Percentage indicated on the face hereof will
be reduced on each anniversary of the Initial Redemption Date by
the Annual Redemption Percentage Reduction specified on the face
hereof until the redemption price of this Note is 100% of the
principal amount hereof, together with interest accrued and
unpaid hereon to the date of redemption. Notice of redemption
shall be mailed to the registered Holders of the Notes designated
for redemption at their addresses as the same shall appear on the
Security Register not less than 30 nor more than 60 days prior to
the date fixed for redemption, subject to all the conditions and
provisions of the Indenture. In the event of redemption of this
Note in part only, a new Note or Notes for the amount of the
unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.
Unless otherwise indicated on the face of this Note, this
Note shall not be subject to repayment at the option of the
Holder prior to the scheduled Maturity Date. If so indicated on
the face of this Note, this Note will be subject to repayment at
the option of the Holder on the Optional Repayment Date or Dates
specified on the face hereof on the terms set forth herein. On
any Optional Repayment Date, this Note will be repayable in whole
or in part in increments of $_____ or, if this Note is
denominated in _________________ in increments of _____ units of
such Specified Currency (provided that any remaining principal
amount hereof shall not be less than the minimum authorized
denomination hereof) at the option of the holder hereof at a
price equal to 100% of the principal amount to be repaid,
together with interest accrued and unpaid hereon to the date of
repayment. For this Note to be repaid at the option of the Holder
hereof, the Trustee must receive at its Corporate Trust Office in
the Borough of Manhattan, the City of New York, at least 15 but
not more than 30 days prior to the date of repayment, (i) this
Note with the form entitled "Option to Elect Repayment" below
duly completed or (ii) a telegram, telex, facsimile transmission,
or a letter from a member of a national securities exchange or
the National Association of Securities Dealers, Inc. or a
commercial bank or a trust company in the United States setting
forth the name of the Holder of this Note, the principal amount
hereof, the certificate number of this Note or a description of
this Note's tenor and terms, the principal amount hereof to be
repaid, a statement that the option to elect repayment is being
exercised thereby and a guarantee that this Note, together with
the form entitled "Option to Elect Repayment" duly completed,
will be received by the Trustee not later than the fifth New York
Business Day after the date of such telegram, telex, facsimile
transmission, or letter; provided, that such telegram, telex,
facsimile transmission, or letter shall only be effective if this
Note and form duly completed are received by the Trustee by such
fifth New York Business Day. Exercise of such repayment option
by the Holder hereof shall be irrevocable. In the event of
repayment of this Note in part only, a new Note or Notes for the
amount of the unpaid portion hereof shall be issued in the name
of the holder hereof upon the cancellation hereof.
This Note will bear interest at the rate determined in
accordance with the applicable provisions below by reference to
the Base Rate shown on the face hereof based on the Index
Maturity, if any, shown on the face hereof (i) plus or minus the
Spread, if any, or (ii) multiplied by the Spread Multiplier, if
any, specified on the face hereof. Commencing with the Initial
Interest Reset Date specified on the face hereof, the rate at
which interest on this Note is payable shall be reset as of each
Interest Reset Date (as used herein, the term "Interest Reset
Date" shall include the Initial Interest Reset Date). The
Interest Reset Dates will be the Interest Reset Dates specified
on the face hereof; provided, however, that (i) the interest rate
in effect for the period from the Interest Accrual Date to the
Initial Interest Reset Date will be the Initial Interest Rate and
(ii) the interest rate in effect hereon for the 15 days
immediately prior to the Schedule Maturity Date hereof (or, with
respect to any principal amount to be redeemed or repaid, any
redemption or repayment date) shall be that in effect on the
fifteenth calendar day preceding the Schedule Maturity Date
hereof or such date of redemption or repayment, as the case may
be. If any Interest Reset Date would otherwise be a day that is
not a New York Business Day, such Interest Reset Date shall be
postponed to the next succeeding day that is a New York Business
Day, except that if the Base Rate specified on the face hereof is
LIBOR and such New York Business Day is in the next succeeding
calendar month, such Interest Reset Date shall be the next
preceding New York Business Day.
"Business Day" when used in conjunction with a designated
city means any day other than a Saturday or Sunday that is
neither a legal holiday nor a day on which banking institutions
are authorized or required by law or regulation to be closed in
(i) London, England (with respect to a Debt Security the
principal of or interest on which will be determined by reference
to LIBOR), (ii) Brussels, Belgium (with respect to a Debt
Security dominated in ECUs or whose principal or interest will be
determined by reference to the relative value of the ECU), or
(iii) the financial center of the country issuing the Specified
Currency (with respect to a Debt Security denominated in a
Specified Currency other than the ECU or whose principal or
interest will be determined by reference to the relative value of
any Specified Currency other than the ECU). See also "New York
Business Day".
"Business Day Convention" means the convention for adjusting
any relevant date if it would otherwise fall on a day that is not
a Business Day. The following terms, when used in conjunction
with the term "Business Day Convention" and a date, shall mean
that an adjustment will be made if that date would otherwise fall
on a day that is not a Business Day so that:
(i) if "Following" is specified, that date will be the
first following day that is a Business Day;
(ii) if "Modified Following" or "Modified" is
specified, that date will be the first following day that is a
Business Day unless that day falls in the next calendar month, in
which case that date will be the first preceding day that is a
Business Day; and
(iii) if "Preceding" is specified, that date will be
the first preceding day that is a Business Day.
"CD Rate" with respect to any Interest Determination Date
means the rate set forth in H.15(519) for the period for the
specified Index Maturity under the caption "CDs (Secondary
Market)". If such rate does not appear in H.15(519) by 9:00 a.m.,
New York City time, on the Calculation Date relating to such
Interest Determination Date, the rate for such Interest
Determination Date will be the rate set forth in Composite 3:30
P.M. Quotations for U.S. Government Securities for such Interest
Determination Date for the Index Maturity under the caption
"Certificates of Deposit". If such rate does not appear in either
H.15(519) or Composite 3:30 P.M. Quotations for U.S. Government
Securities by 3:00 p.m., New York City time, on the Calculation
Date relating to such Interest Determination Date, the rate for
such Interest Determination Date will be the arithmetic mean of
the secondary market offered rates of three leading nonbank
dealers in negotiable U.S. dollar certificates of deposit in New
York City as of 10:00 a.m., New York City time, for such Interest
Determination Date for negotiable U.S. Dollar certificates of
deposit of major United States money market banks with a
remaining maturity closest to the Index Maturity and in an amount
that is representative for a single transaction in the relevant
market at the relevant time.
"Calculation Date" when used with respect to any Interest
Determination Date means the date by which the applicable
interest rate must be determined, which date will be the earlier
of (i) the tenth calendar day following such Interest
Determination Date or, if such date is not a New York Business
Day, the first New York Business Day occurring after such 10-day
period, or (ii) the New York Business Day immediately preceding
the applicable Interest Payment Date or Scheduled Maturity Date,
as the case may be.
"Commercial Paper Rate" with respect to any Interest
Determination Date means the Money Market Yield (see below) of
the rate set forth in H.15(519) for that day opposite the Index
Maturity under the caption "Commercial Paper". If such rate does
not appear in H.15(519) by 9:00 a.m., New York City time, on the
Calculation Date relating to such Interest Determination Date,
the rate for such Interest Determination Date will be the Money
Market Yield of the rate set forth in Composite 3:30 P.M.
Quotations for U.S. Government Securities for such Interest
Determination Date in respect of the Index Maturity under the
caption "Commercial Paper" (with an Index Maturity of one month
or three months being deemed to be equivalent to an Index
Maturity of 30 days or 90 days, respectively). If such rate does
not appear in either H.15(519) or Composite 3:30 P.M. Quotations
for U.S. Government Securities by 3:00 p.m., New York City time,
on the Calculation Date relating to such Interest Determination
Date, the rate for such Interest Determination Date will be the
Money Market Yield of the arithmetic mean of the offered rates of
three leading dealers of U.S. commercial paper in New York City
as of 11:00 a.m., New York City time, for such Interest
Determination Date for U.S. dollar commercial paper of the Index
Maturity placed for industrial issuers whose bond rating is "AA"
or the equivalent from a nationally recognized rating agency.
"Composite 3:30 P.M. Quotations for U.S. Government
Securities" means the daily statistical release designated as
such, or any successor publication, published by the Federal
Reserve Bank of New York.
"Federal Funds Rate" with respect to any Interest
Determination Date means the rate set forth in H.15(519) for that
day opposite the caption "Federal Funds (Effective)". If such
rate does not appear in H.15(519) by 9:00 a.m., New York City
time, on the Calculation Date relating to such Interest
Determination Date, the rate for such Interest Determination Date
will be the rate set forth in Composite 3:30 P.M. Quotations for
U.S. Government Securities for such Interest Determination Date
under the caption "Federal Funds/Effective Rate". If such rate
does not appear in either H.15(519) or Composite 3:30 P.M.
Quotations for U.S. Government Securities by 3:00 p.m., New York
City time, on the Calculation Date relating to such Interest
Determination Date, the rate for such Interest Determination Date
will be the Money Market Yield of the arithmetic mean for the
last transaction in overnight U.S. dollar Federal Funds by three
leading brokers of U.S. dollar Federal Funds transactions in New
York City as of 11:00 a.m., New York City time, for such Interest
Determination Date.
"H.15(519)" means the weekly statistical release designated
as such, or any successor publication, published by the Board of
Governors of the Federal Reserve System.
"Index Maturity" means the period of maturity of the
applicable instrument or obligation.
"Interest Determination Date" with respect to any Interest
Reset Date means the date two Business Days prior to such
Interest Reset Date.
"Libor" with respect to any Interest Determination Date will
be the rate for deposits in U.S. dollars or the Specified
Currency (as the case may be) for a period of the Index Maturity
that which appears on the Telerate Page: (a) 3740 (for
Australian Dollars); (b) 3740 (for Canadian Dollars); (c) 3750
(for Swiss Francs); (d) 3750 (for Deutsche Marks); (e) 3740 (for
French Francs); (f) 3750 (for Pound Sterling); (g) 3740 (for
Italian Lire); (h) 3750 (for Japanese Yen); (i) 3740 (for Spanish
Pesetas); (j) 3750 (for U.S. dollars), and (k) 3750 (for European
Currency Units) as of 11:00 a.m., London Time, on such Interest
Determination Date. If such rate does not appear on the specified
Telerate Page by 9:00 a.m., New York City time, on such Interest
Determination Date, the rate for such Interest Determination Date
will be determined on the basis of the rates at which deposits in
U.S. dollars or the Specified Currency (as the case may be) are
offered by four major banks in the London interbank market as of
approximately 11:00 a.m., London time, on such Interest
Determination Date to prime banks in the London interbank market
for a period of the Index Maturity commencing on the applicable
Interest Reset Date and in an amount that is representative for a
single transaction in the relevant market at the relevant time.
The Calculation Agent will request the principal London office of
each such bank to provide a quotation of its rate. If at least
two quotations are provided, the rate for such Interest
Determination Date will be the arithmetic mean of the quotations.
If fewer than two quotations are provided as requested, the rate
for such Interest Reset Date will be the arithmetic mean of the
rates quoted by major banks in New York City or in the relevant
financial center of the country issuing the Specified Currency
(as the case may be) as of 11:00 a.m., local time in New York
City or in such financial center (as the case may be), on such
Interest Determination Date for loans in U.S. dollars or in the
Specified Currency (as the case may be) to leading European banks
for a period of the Index Maturity commencing on such Interest
Reset Date and in an amount that is representative for a single
transaction in the relevant market at the relevant time.
"Maturity Date" means the date on which the entire principal
amount outstanding under a Debt Security becomes due and payable,
whether on the Scheduled Maturity Date or by declaration of
acceleration, call for redemption, or otherwise.
"Money Market Yield" means, in respect of any security with
a maturity of nine months or less, the rate for which is quoted
on a bank discount basis, a yield (expressed as a percentage)
calculated in accordance with the following formula:
Money Market Yield = D X 360 X 100
360 - (D X M)
where "D" refers to the per annum rate for a security, quoted on
a bank discount basis and expressed as a decimal, and "M" refers
to the actual number of days in the applicable Interest Period.
"New York Business Day" means any day other than a Saturday
or Sunday that is neither a legal holiday nor a day on which
banking institutions are authorized or required by law,
regulation, or executive order, to be closed in the City of New
York and: (i) with respect to any Debt Security denominated or
payable in ECUs, that is also a Brussels Business Day, (ii) with
respect to any Debt Security denominated or payable in any other
Specified Currency, that is also a Business Day in the financial
center of the country issuing such Specified Currency, and (iii)
with respect to any Debt Security the principal of or interest on
which will be determined by reference to LIBOR, that is also a
London Business Day. See also "Business Day".
"Prime Rate" with respect to any Interest Determination Date
means the rate set forth in H.15(519) for that day opposite the
caption "Bank Prime Loan". If such rate does not appear in
H.15(519) by 9:00 a.m., New York City time, on the Calculation
Date relating to such Interest Determination Date, the rate for
such Interest Determination Date will be the arithmetic mean of
the rates of interest publicly announced by each bank that
appears on the Reuters Screen NYMF Page as such bank's prime rate
or base lending rate as in effect for that Interest Determination
Date as quoted on the Reuters Screen NYMF Page for such Interest
Determination Date or, if fewer than four rates appear on the
Reuters Screen NYMF Page for such Interest Determination Date,
the rate will be the arithmetic mean of the rates of interest
publicly announced by three major banks in New York City as its
U.S. dollar prime rate or base lending rate as in effect for such
Interest Determination Date. Each change in the prime rate or
base lending rate of any bank so announced by such bank will be
effective as of the effective date of the announcement or, if no
effective date is specified, as of the date of the announcement.
"US Treasury Bill Rate" with respect to any Interest
Determination Date means the rate at which United States Treasury
bills are auctioned, as set forth in H.15(519) for that day
opposite the Index Maturity under the caption "U.S. Government
Security/Treasury Bills/Auction Average (Investment)". If such
rate does not appear in H.15(519) by 9:00 a.m., New York City
time, on the Calculation Date relating to such Interest
Determination Date, the rate for such Interest Determination Date
will be the Bond Equivalent Yield (as defined below) of the
auction average rate for those Treasury bills as announced by the
United States Department of the Treasury. If United States
Treasury bills of the Index Maturity are not auctioned during any
period of seven consecutive calendar days ending on and including
any Friday, and a U.S. Treasury Bill Rate would have been
available on the applicable Interest Determination Date if such
Treasury bills had been auctioned during that seven day period,
an Interest Determination Date will be deemed to have occurred on
the day during that seven-day period on which such Treasury bills
would have been auctioned in accordance with the usual practices
of the United States Department of the Treasury, and the rate for
that Interest Determination Date will be the Bond Equivalent
Yield of the rate set forth in H.15(519) for that day opposite
the Index Maturity under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market". If such interest
rate does not appear in H.15(519) by 3:00 p.m., New York City
time, on the Calculation Date relating to such Interest
Determination Date, the rate for such Interest Determination Date
will be the Bond Equivalent Yield of the arithmetic mean of the
secondary market bid rates of three primary United States
Government dealers in New York City as of approximately 3:30
p.m., New York City time, for such Interest Determination Date
for the issue of United States Treasury bills with a remaining
maturity closest to the Index Maturity.
For the purposes of this definition, the term "Bond
Equivalent Yield" is to be calculated in accordance with the
following formula:
Bond Equivalent Yield = D X N X 100
360 - (D X M)
where "D" refers to the per annum rate for the security, quoted
on a bank discount basis and expressed as a decimal, "N" refers
to 365 or 366, as the case may be, and "M" refers to the actual
number of days in the applicable Interest Period.
Notwithstanding the foregoing, the interest rate hereon
shall not be greater than the Maximum Interest Rate, if any, or
less than the Minimum Interest Rate, if any, specified on the
face hereof. The Calculation Agent shall calculate the interest
rate hereon in accordance with the foregoing on or before each
Calculation Date. The Trustee shall have no responsibility for
determinations made by the Calculation Agent of the interest
rates hereon. The interest rate on this Note will in no event be
higher than the maximum rate permitted by New York law, as the
same may be modified by United States Federal law of general
application.
At the request of the Holder hereof, the Calculation Agent
will provide to the Holder hereof the interest rate hereon then
in effect and, if determined, the interest rate that will become
effective as of the next Interest Reset Date.
Interest payments on this Note will be equal to the amount
of interest accrued from (and including) the Interest Accural
Date or from (and including) the last date to which interest has
been paid, as the case may be, to (but excluding) the applicable
Interest Payment Date, except that interest payable on the
Maturity Date will include interest accrued to (but excluding)
the Maturity Date. If any Interest Payment Date (other than the
Maturity Date) for any Floating Rate Debt Security would
otherwise be a day that is not a New York Business Day, the
payment of interest that would otherwise be payable on such date
will be postponed to the next succeeding New York Business Day
provided, however, that if the interest rate is determined by
reference to LIBOR and such next succeeding New York Business Day
falls in the next succeeding calendar month, such Interest
Payment Date will be the immediately preceding New York Business
Day. If the Maturity Date falls on this Note on a day that is
not a New York Business Day, the payment of principal, premium,
if any, and interest, if any, otherwise payable on such date will
be postponed to the next succeeding New York Business Day, and no
interest on such payment will accrue as a result of such
postponement.
Accrued interest on this Note will be calculated by
multiplying the principal amount hereof by an accrued interest
factor. The accrued interest factor will be computed as the sum
of the interest factors calculated for each day in the period for
which interest is being paid. The interest factor for any day in
such period will be computed by dividing the interest rate in
effect on such day by ________.
This Note and all the obligations of the Issuer hereunder
are direct, unsecured obligations of the Issuer and rank without
preference or priority among themselves and pari passu with all
other existing and future unsecured and unsubordinated
indebtedness of the Issuer, subject to certain statutory
exceptions in the event of liquidation upon insolvency.
This Note, and Note or Notes issued upon transfer or
exchange hereof, is issuable only in fully registered form,
without coupons, and, if denominated in U.S. dollars, is issuable
only in denominations of U.S. $_______ and any integral multiple
of U.S. $1,000 in excess thereof. If this Note is denominated in
a Specified Currency, then, unless a higher minimum denomination
is required by applicable law, it is issuable only in
denominations of the equivalent of U.S. $_______ (rounded down to
an integral multiple of 1,000 units of such Specified Currency),
or any amount in excess thereof which is an integral multiple of
1,000 units of such Specified Currency, as determined by
reference to the noon dollar buying rate in New York City for
cable transfers of such Specified Currency published by the
Federal Reserve Bank of New York (the "Market Exchange Rate") on
the New York Business Day immediately preceding the date of
issuance.
Except as set forth below, if the principal of, premium, if
any, or interest on, this Note is payable in a Specified Currency
and such Specified Currency is not available to the Issuer for
making payments hereon due to the imposition of exchange controls
or other circumstances beyond the control of the Issuer or is no
longer used by the government of the country issuing such
currency or for the settlement of transactions by public
institutions within the international banking community, then the
Issuer will be entitled to satisfy its obligations to the Holder
of this Note by making such payments in U.S. dollars on the basis
of the highest bid quotation (assuming European-style quotation
- -- i.e., Specified Currency per U.S. dollar) on the second New
York Business Day prior to the applicable payment date from the
recognized foreign exchange dealers in the City of New York (one
of which may be the Company) for the purchase of the aggregate
amount of the Specified Currency payable on such payment date,
for settlement on such payment date, and at which the applicable
dealer timely commits to execute a contract. If no such bid
quotations are available, payments will be made in the Specified
Currency. Any payment made under such circumstances in U.S.
dollars where the required payment is in a Specified Currency
other than U.S. dollars will not constitute an Event of Default.
If payments of principal, premium, if any, or interest, if
any, with respect to this Note are required to be made in a
composite currency and the composition of such composite currency
is at any time altered (whether by the addition, elimination,
combination, or subdivision of one or more components, by
adjustment of the ratio of any component to the composite unit,
or by any combination of such events), then the Company will be
entitled to satisfy its payment obligations hereunder by making
such payments in such composite currency as altered.
All determinations referred to above made by the Issuer or
its agent shall be at its sole discretion and shall, in the
absence of manifest error, be conclusive to the extent permitted
by law for all purposes and binding on the Holder of this Note.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the
rights and obligations of the Issuer and the rights of the
Holders of the Notes of each series under the Indenture at any
time by the Issuer and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Notes
at the time Outstanding of each series to be affected by such
amendment or modification. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal
amount of the Notes of each series at the time Outstanding, on
behalf of the Holders of all Notes of such series, to waive
compliance by the Issuer 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 shall 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 herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Note.
The Indenture contains provisions setting forth certain
conditions to the institution of proceedings by Holders of Notes
with respect to the Indenture or for any remedy under the
Indenture.
If an Event of Default with respect to the Notes shall occur
and be continuing, the principal amount hereof may be declared
due and payable in the manner and with the effect provided in the
Indenture.
No reference herein to the Indenture and no provisions of
this Note or of the Indenture shall alter or impair the
obligation of the Issuer, which is absolute and unconditional, to
pay the principal of and interest on this Note at the times,
place, and rate, and in the coin or currency, herein prescribed.
So long as this Note shall be outstanding, the Issuer will
cause to be maintained an office or agency for the payment of the
principal of and premium, if any, and interest on this Note as
herein provided in the City of New York, and an office or agency
in said City of New York for the registration, transfer, or
exchange of the Notes. The Issuer may designate other agencies
for the payment of said principal, premium, if any, and interest
at such place or places (subject to applicable laws and
regulations) as the Issuer may decide. So long as there shall be
such an agency, the Issuer shall keep the Trustee advised of the
names and locations of such agencies, if any are so designated.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note is
registerable in the Security Register, upon surrender of this
Note for registration of transfer at the Corporate Trust Office
of the Trustee or any other applicable Place of Payment, duly
endorsed, or accompanied by a written instrument of transfer in
form satisfactory to the Issuer and the Security Registrar duly
executed, by the Holder hereof or his or her attorney duly
authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or
transferees.
No service charge shall be made for any such registration or
transfer or exchange, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge payable
in connection therewith.
The Issuer, the Trustee, and any agent of the Issuer or the
Trustee may treat the Person in whose name this Note is
registered as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or
not this Note is overdue, and neither the Issuer, the Trustee,
nor any such agent shall be affected by notice to the contrary.
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall 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 ZIP CODE OF
ASSIGNEE]
the within Note and all rights thereunder, hereby irrevocably
constituting and appointing such person attorney to transfer such
note on the books of the Issuer, with full power of substitution
in the premises.
Dated:
NOTE: The signature to this assignment must correspond with
the name as written upon the face of the within Note in every
particular without alteration or enlargement or any change
whatsoever.
Exhibit 4(e)
PEPSICO, INC.
and
THE CHASE MANHATTAN BANK
(National Association),
Debt Warrant Agent
_______________________
DEBT WARRANT AGREEMENT
Dated as of _________________
DEBT WARRANT AGREEMENT, dated as of ______________, between
PEPSICO, INC., a North Carolina corporation (hereinafter the
"Company"), and THE CHASE MANHATTAN BANK (National
Association), as Debt Warrant Agent (hereinafter the "Debt
Warrant Agent").
WHEREAS, the Company has filed with the Securities and
Exchange Commission a Registration Statement on Form S-3 (the
"Registration Statement") providing for the issuance of up to
$2,500,000,000 in aggregate public offering price of its debt
securities, consisting of note, bonds, and other evidences of
unsecured indebtedness (the "Debt Securities"), warrants to
purchase Debt Securities (the "Debt Warrants"), and other
warrants, options, and unsecured contractual obligations of the
Company (the "Shelf Warrants");
WHEREAS, any Debt Warrants will be represented by one or
more warrant certificates in global or definitive form (each
such certificate a "Debt Warrant Certificate"); and
WHEREAS, the Company desires the Debt Warrant Agent to act
on behalf of the Company in connection with the issuance,
exchange, exercise, and replacement of the Debt Warrant
Certificates, and in this Agreement wishes to set forth, among
other things, the form and provisions of the Debt Warrant
Certificates and the terms and conditions on which they may be
issued, exchanged, exercised, and replaced;
NOW, THEREFORE, in consideration of the premises and of
the mutual agreements herein contained, the parties hereto
agree as follows (all capitalized terms used herein and not
otherwise defined have the meanings ascribed to such terms in
the Prospectus filed as part of the Registration Statement):
ARTICLE I
ISSUANCE OF DEBT WARRANTS AND EXECUTION AND DELIVERY
OF DEBT WARRANT CERTIFICATES
SECTION 1.01. Issuance of Debt Warrants. The designation
and particular terms of any Debt Warrant shall be as set forth
in the applicable Prospectus Supplement and in the Debt Warrant
Certificate relating thereto. Debt Warrants may be issued
separately or together with one or more Debt Securities of any
series and, if issued together with any such Debt Securities,
may be separately transferable after the date indicated in the
applicable Prospectus Supplement and in the Debt Warrant
Certificate relating thereto (such date the "Detachability
Date"). A Debt Warrant Certificate may evidence one or more
Debt Warrants. Each Debt Warrant evidenced by a a Debt Warrant
Certificate shall represent the right, subject to the
provisions contained herein and therein, to purchase one or
more Debt Securities of a designated series in such principal
amount as shall be designated therein.
SECTION 1.02. Execution and Delivery of Debt Warrant
Certificates. Debt Warrant Certificates may be issued in
global or definitive form, payable to the order of the bearer
or the registered holder thereof, in substantially the form set
forth in Annex A hereto. Each Debt Warrant Certificate will be
dated the date of its authentication by the Debt Warrant Agent
and may have such letters, numbers, or other marks of
identification or designation and such legends or endorsements
printed, lithographed, or engraved thereon as may be approved
by the officers of the Company executing the same (such
execution to be conclusive evidence of such approval) and as
are not inconsistent with the provisions of this Agreement, or
as may be required to comply with any law, rule, or regulation
applicable thereto, including any rule or regulation of any
stock exchange on which the Debt Warrants may be listed. The
Debt Warrant Certificates shall be signed on behalf of the
Company by any two of its Chairman of the Board and Chief
Executive Officer (the "Chairman"), its Executive Vice
President and Chief Financial Officer (the "Executive Vice
President"), or any of its Vice Presidents, under its corporate
seal, and attested by its Secretary or Assistant Secretary.
Such signatures may be manual or facsimile signatures of such
authorized officers and may be imprinted or otherwise
reproduced on the Debt Warrant Certificates. The seal of the
Company may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted, or otherwise reproduced on the
Debt Warrant Certificates.
No Debt Warrant Certificate shall be valid for any
purpose, and no Debt Warrant evidenced thereby shall be
exercisable, until such Debt Warrant Certificate has been
countersigned by the manual signature of the Debt Warrant
Agent. Such signature by the Debt Warrant Agent upon any Debt
Warrant Certificate executed by the Company shall be conclusive
evidence that the Debt Warrant Certificate so countersigned has
been duly issued hereunder.
In case any officer of the Company who shall have signed
any of the Debt Warrant Certificates shall cease to be such
officer before the Debt Warrant Certificates so signed shall
have been countersigned and delivered by the Debt Warrant
Agent, such Debt Warrant Certificates may be countersigned and
delivered notwithstanding that the person who signed such Debt
Warrant Certificates ceased to be such officer of the Company;
and any Debt Warrant Certificate may be signed on behalf of the
Company by such persons as, at the actual date of the execution
of such Debt Warrant Certificate, shall be the proper officers
of the Company, although at the date of the execution of this
Agreement any such person was not such officer.
The terms "holder" or "holder of a Debt Warrant
Certificate" as used herein shall mean:
1. with respect to any Debt Warrant Certificate in
bearer form: (a) if the Debt Warrants represented thereby were
issued together with Debt Securities that are not immediately
detachable, the registered owner of the Debt Securities to
which such Debt Warrant Certificate was initially attached, and
(b) after the Detachability Date, the bearer of such Debt
Warrant Certificate;
2. with respect to any Debt Warrant Certificate in
registered form: (a) if the Debt Warrants represented thereby
were issued together with Debt Securities that are not
immediately detachable, the registered owner of the Debt
Securities to which such Debt Warrant Certificate was initially
attached, and (b) after the Detachability Date, the person in
whose name the Debt Warrant Certificate shall be registered
upon the books to be maintained by the Debt Warrant Agent for
that purpose.
The Company will or will cause the registrar of the Debt
Securities to at all times make available to the Debt Warrant
Agent such information regarding the holders of the any Debt
Securities to which any Debt Warrants are attached as may be
necessary to keep the records of the Debt Warrant Agent up to
date.
SECTION 1.03. Issuance of Debt Warrant Certificates.
Debt Warrant Certificates evidencing the right to purchase up
to [$2,500,000,000] in aggregate public offering price of Debt
Securities (except as provided in Section 2.03(c), 3.02, or
3.04 hereof) may be executed by the Company and delivered to
the Debt Warrant Agent upon the execution of this Agreement or
from time to time thereafter. The Debt Warrant Agent shall,
upon receipt of Debt Warrant Certificates duly executed on
behalf of the Company in accordance with the terms hereof,
countersign such Debt Warrant Certificates and deliver the same
to the holders thereof upon and in accordance with the order of
the Company. Subsequent to such original issuance of the Debt
Warrant Certificates, the Debt Warrant Agent shall countersign
a Debt Warrant Certificate only if such Debt Warrant
Certificate is issued in exchange or substitution for one or
more previously countersigned Debt Warrant Certificates or,
with respect to Debt Warrant Certificates in registered form,
in connection with the transfer thereof, as provided in Section
2.03(c) below.
ARTICLE II
EXERCISE PRICE, DURATION, AND EXERCISE
OF DEBT WARRANTS
SECTION 2.01. Exercise Price. During the period from and
including
, 19 , to and including
, 19 , the exercise price of each Debt Warrant will be [
% of the principal amount of the Debt Securities] [$
] [plus [accrued amortization of the original issue discount]
[accrued interest] from the most recently preceding
]. [During the period from , 19
, to and including , 19 ,
the exercise price of each Debt Warrant will be [ % of the
principal amount of the Debt Securities] [$ ] [plus
[accrued amortization of the original issue discount] [accrued
interest] from the most recently preceding
].] [In each case the original issue discount will be
amortized at a % annual rate, computed on [an annual] [a
semi-annual] basis using a 360-day year consisting of twelve 30-
day months.] Such purchase price of Debt Securities is
referred to in this Agreement as the "Exercise Price". [The
original issue discount for each $ in
aggregate principal amount of Debt Securities is $
.]
SECTION 2.02. Duration of Debt Warrants. Each Debt
Warrant may be exercised in whole [at any time, as specified
herein, on or after [the date hereof] [
19 ,] and at or before 5:00 PM New York time on
, 19 (each day during such period may hereinafter be
referred to as an "Exercise Date")] [on the following specific
dates: [list of dates] (each an "Exercise Date")], or such
later date as may be selected by the Company, in a written
statement to the Debt Warrant Agent and with notice to the
holders of the Debt Warrants (such date of expiration is herein
referred to as the "Expiration Date"). Each Debt Warrant not
exercised at or before 5:00 PM New York time on the Expiration
Date shall become void, and all rights of the holder of the
Debt Warrant Certificate evidencing such Debt Warrant under
this Agreement shall cease.
SECTION 2.03. Exercise of Debt Warrants.
(a) On any Exercise Date specified in Section 2.02, any
whole number of Debt Warrants may be exercised by delivery to
the Debt Warrant Agent of the applicable Debt Warrant
Certificate, together with the form of election to purchase
Debt Securities set forth on the reverse side of the Debt
Warrant Certificate properly completed and duly executed, and
by paying in full, in U.S. dollars or in the Specified
Currency, as the case may be, [by certified check or official
bank check or by bank wire transfer] [by bank wire transfer]
[in immediately available funds] to the Debt Warrant Agent the
Exercise Price for each Debt Warrant, such delivery and payment
to be made at [the corporate trust office of the Debt Warrant
Agent] or such other place as the Company and the Debt Warrant
Agent shall hereafter agree in writing. The date on which the
duly completed and executed Debt Warrant Certificate and
payment in full of the Exercise Price are received by the Debt
Warrant Agent shall be deemed to be the date on which the
applicable Debt Warrant is exercised. The Debt Warrant Agent
shall deposit all funds received by it in payment of the
Exercise Price in an account of the Company maintained with it
and shall advise the Company by telephone or by facsimile
transmission or other form of electronic communication
available to both parties at the end of each day on which a
[payment] [wire transfer] for the exercise of such Debt
Warrants is received of the amount so deposited to its account.
The Debt Warrant Agent shall promptly confirm such telephone
advice to the Company in writing.
(b) The Debt Warrant Agent shall, from time to time, as
promptly as practicable, advise the Company and the Trustee of
(i) the number of Debt Warrants exercised, (ii) the
instructions of the holders of the Debt Warrant Certificates
evidencing such Debt Warrants with respect to delivery of the
Debt Securities, (iii) delivery of Debt Warrant Certificates
evidencing the balance, if any, of the Debt Warrants remaining
after such exercise, and (iv) such other information as the
Company or the Trustee shall reasonably require.
(c) As soon as practicable after the exercise of any Debt
Warrant, the Company shall issue, pursuant to the Indenture, in
authorized denominations, to or upon the order of the holder of
the Debt Warrant Certificate evidencing such Debt Warrant, the
Debt Securities to which such holder is entitled, registered in
[such name or names as may be directed by such holder] [the
name of the registered holder of such Debt Securities]. If
fewer than all of the Debt Warrants evidenced by such Debt
Warrant Certificate are exercised, the Company shall execute,
and an authorized officer shall manually countersign and
deliver, a new Debt Warrant Certificate evidencing the number
of such Debt Warrants remaining unexercised.
(d) The Company shall not be required to pay any stamp or
other tax or other governmental charge required to be paid in
connection with any transfer involved in the issuance of Debt
Securities and the Company shall not be required to issue or
deliver any Debt Security unless or until the person requesting
the issuance thereof shall have paid to the Company the amount
of such tax or governmental charge or shall have established to
the satisfaction of the Company that such tax or other
governmental charge has been paid or that no such tax or other
governmental charge is payable.
ARTICLE III
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS
OF DEBT WARRANT CERTIFICATES
SECTION 3.01. No Rights as a Holder of Debt Securities
Conferred by Debt Warrants or Debt Warrant Certificates. No
Debt Warrant Certificate or Debt Warrant evidenced thereby
shall entitle the holder thereof to any of the rights of a
holder of Debt Securities, including, without limitation, the
right to receive payments of principal, premium, if any, or
interest, if any, on the Debt Securities to which such Debt
Warrant or Debt Warrant Certificate relates, or to enforce any
of the covenants in the Indenture with respect to such Debt
Securities.
SECTION 3.02. Lost, Stolen, Mutilated, or Destroyed Debt
Warrant Certificates. Upon receipt by the Debt Warrant Agent
of evidence reasonably satisfactory to it of the ownership and
loss, theft, destruction, or mutilation of any Debt Warrant
Certificate and of indemnity reasonably satisfactory to the
Debt Warrant Agent and, in the case of mutilation, upon
surrender of such Debt Warrant Certificate to the Debt Warrant
Agent for cancellation, in the absence of notice to the Company
and the Debt Warrant Agent that such Debt Warrant Certificate
has been transferred or acquired, and subject to the provisions
of Section 3.03 below, such Debt Warrant Certificate shall be
replaced by a new Debt Warrant Certificate reflecting the
identical terms of such lost, stolen, destroyed, or mutilated
Debt Warrant Certificate.
SECTION 3.03. Transfer, Exchange or Replacement of Debt
Warrants and Debt Warrant Certificates. Any Debt Warrant
Certificate attached to one or more Debt Securities will be
transferred, exchanged, or replaced only together with the Debt
Security or Debt Securities to which such Debt Warrant
Certificate is attached, and only for the purpose of affecting,
or in conjunction with, a transfer, exchange, or replacement of
such Debt Security or Debt Securities. Prior to the
Detachability Date, each transfer, exchange, or replacement of
an attached Debt Security by the Trustee shall operate also to
transfer the related Debt Warrants. After the Detachability
Date, each transfer of an attached Debt Security shall be made
only upon surrender, at the corporate trust office of the Debt
Warrant Agent, of the Debt Warrant Certificates evidencing the
related Debt Warrants and of such appropriate instruments of
registration or transfer and of such written transfer
instructions as shall be in form and substance satisfactory to
the Company and the Debt Warrant Agent. Debt Warrant
Certificates may be transferred or exchanged, after the
Detachability Date, for Debt Warrant Certificates in other
denominations evidencing the related Debt Warrants, provided
that such other Debt Warrant Certificates evidence the same
number of Debt Warrants as the Debt Warrant Certificates so
surrendered. The Debt Warrant Agent shall keep, at its
corporate trust office, books in which it shall register Debt
Warrant Certificates and all exchanges and transfers of
outstanding Debt Warrant Certificates. No service charge shall
be made for any exchange [or registration of transfer] of Debt
Warrant Certificates, but the Company may require payment of a
sum sufficient to cover any stamp or other tax or other
governmental charge that may be imposed in connection with any
such exchange [or registration of transfer]. Whenever any Debt
Warrant Certificates are so surrendered for exchange [or
registration of transfer], an authorized officer of the Debt
Warrant Agent shall manually countersign and deliver to the
person or persons entitled thereto a Debt Warrant Certificate
or Debt Warrant Certificates duly authorized and executed by
the Company, as so requested. The Debt Warrant Agent shall not
be required to effect any exchange [or registration of
transfer] which will result in the issuance of a Debt Warrant
Certificate evidencing a fraction of a Debt Warrant. All Debt
Warrant Certificates issued upon any exchange [or registration
of transfer] of Debt Warrant Certificates shall be valid
obligations of the Company, evidencing the same obligations and
entitled to the same benefits under this Agreement as the Debt
Warrant Certificates surrendered for such exchange [or
registration of transfer].
SECTION 3.04. Treatment of Holders of Debt Warrant
Certificates. Debt Warrants issued in bearer form shall be
transferable by delivery and shall be deemed negotiable by the
bearer of the related Debt Warrant Certificate, which bearer
may be treated by the Company, the Debt Warrant Agent, and all
other persons dealing with such bearer as the absolute owner
thereof for all purposes and as the person entitled to exercise
the rights represented by the Debt Warrants evidenced thereby,
any notice to the contrary notwithstanding. Debt Warrants
issued in registered form shall be transferable only on the
books of the Debt Warrant Agent and in accordance with the
applicable terms and conditions hereof, and every holder of
such a Debt Warrant Certificate, by accepting the same,
consents and agrees with the Company, the Debt Warrant Agent,
and with every subsequent holder of such Debt Warrant
Certificate that until the transfer of the Debt Warrant
Certificate is registered on the books of the Debt Warrant
Agent (or, prior to the Detachability Date, on the register
maintained by the registrar of the related Debt Securities),
the Company and the Debt Warrant Agent (or the registrar of the
related Debt Securities, as the case may be), may treat such
registered holder as the absolute owner thereof for all
purposes and as the person entitled to exercise the rights
represented by the Debt Warrants evidenced thereby, any notice
to the contrary notwithstanding.
SECTION 3.05. Cancellation of Debt Warrant Certificates.
Any Debt Warrant Certificate surrendered for exchange or
registration of transfer, or for exercise of the Debt Warrants
evidenced thereby, shall be delivered to the Debt Warrant
Agent, and all Debt Warrant Certificates so surrendered or
delivered to the Debt Warrant Agent shall be promptly canceled
by the Debt Warrant Agent and shall not be reissued and, except
as expressly provided otherwise by this Agreement, no Debt
Warrant Certificate shall be issued in exchange or in lieu
thereof. The Debt Warrant Agent shall destroy all canceled
Debt Warrant Certificates and deliver a certificate of such
destruction to the Company.
ARTICLE IV
CONCERNING THE DEBT WARRANT AGENT
SECTION 4.01. Debt Warrant Agent. The Company hereby
appoints The Chase Manhattan Bank (National Association) as
Debt Warrant Agent of the Company in respect of the Debt
Warrants and the related Debt Warrant Certificates upon the
terms and subject to the conditions herein set forth, and The
Chase Manhattan Bank (National Association) hereby accepts such
appointment. The Debt Warrant Agent shall have the powers and
authority granted to and conferred upon it in the Debt Warrant
Certificates and hereby and such further powers and authority
to act on behalf of the Company as the Company may hereafter
grant to or confer upon it by a signed, written instrument.
All of the terms and provisions with respect to such powers and
authority contained in the Debt Warrant Certificates are
subject to and governed by the terms and provisions hereof.
SECTION 4.02. Conditions of Debt Warrant Agent's
Obligations. The Debt Warrant Agent accepts its obligations
herein set forth upon the terms and conditions hereof,
including the following, to all of which the Company agrees and
to all of which the rights of the holders the Debt Warrant
Certificates shall at all times be subject.
(a) Compensation and Indemnification. The Company agrees
promptly to pay the Debt Warrant Agent the compensation to be
agreed upon with the Company for all services rendered by the
Debt Warrant Agent and to reimburse the Debt Warrant Agent for
reasonable out-of-pocket expenses (including counsel fees)
incurred by the Debt Warrant Agent in connection with the
services rendered by it hereunder. The Company also agrees to
indemnify the Debt Warrant Agent for, and to hold it harmless
against, any loss, liability, or expense incurred without
negligence or bad faith on the part of the Debt Warrant Agent,
arising out of or in connection with its acting as Debt Warrant
Agent hereunder, as well as the costs and expenses of defending
against any claim of such liability.
(b) Agent for the Company. In acting under this
Agreement and in connection with the Debt Warrants and Debt
Warrant Certificates, the Debt Warrant Agent is acting solely
as agent of the Company and does not assume any fiduciary
obligation or relationship of agency or trust for or with any
of the holders of Debt Warrants or Debt Warrant Certificates or
the beneficial owners thereof.
(c) Counsel. The Debt Warrant Agent may consult with
counsel satisfactory to it, and the advice of such counsel
shall be full and complete authorization and protection in
respect of any action taken, suffered, or omitted by it
hereunder in good faith and in accordance with the advice of
such counsel.
(d) Documents. The Debt Warrant Agent shall be protected
and shall incur no liability for or in respect of any action
taken or thing suffered by it in reliance upon any provision of
any Debt Warrant or Debt Warrant Certificate or any notice,
direction, consent, certificate, affidavit, statement, or other
paper or document delivered to it in accordance with the
provisions hereof reasonably believed by it to be genuine and
to have been presented or signed by the proper parties.
(e) Certain Transactions. The Debt Warrant Agent and its
officers, directors, and employees may own or acquire any
interest in Debt Warrants with the same rights that it or they
would have if it were not the Debt Warrant Agent hereunder,
and, to the extent permitted by applicable law, it or they may
engage or be interested in any financial or other transaction
with the Company and may act on, or as depository, trustee, or
agent for, any committee or body of holders of Debt Securities
or any other obligations of the Company as freely as if it were
not the Debt Warrant Agent hereunder. Nothing in this Debt
Warrant Agreement shall be deemed to prevent the Debt Warrant
Agent from acting as Trustee under the Indenture.
(f) No Liability for Invalidity. The Debt Warrant Agent
shall have no liability with respect to any invalidity of this
Agreement or any of the Debt Warrants or Debt Warrant
Certificates.
(g) No Liability for Interest. The Debt Warrant Agent
shall have no liability for interest on any monies at any time
received by it pursuant to any of the provisions of this
Agreement or of the Debt Warrants or Debt Warrant Certificates.
(h) No Responsibility for Representations. The Debt
Warrant Agent shall not be responsible for any of the Company's
recitals or representations herein or in the Debt Warrant
Certificates.
(i) No Implied Obligations. The Debt Warrant Agent shall
be obligated to perform only such duties as are specifically
set forth herein and in the Debt Warrant Certificates and no
implied duties or obligations shall be read into this Agreement
or the Debt Warrant Certificates against the Debt Warrant
Agent. The Debt Warrant Agent shall not be under any
obligation to take any action hereunder which may tend to
involve it in any expense or liability, the payment of which
within a reasonable time is not, in its reasonable opinion,
assured to it. The Debt Warrant Agent shall not be accountable
or under any duty or responsibility for the use by the Company
of any of the Debt Warrant Certificates authenticated by the
Debt Warrant Agent and delivered by it to the Company pursuant
to this Agreement, or for the application by the Company of the
proceeds of the Debt Warrants. The Debt Warrant Agent shall
have no duty or responsibility in case of any default by the
Company in the performance of its covenants or agreements
contained herein or in the Debt Warrant Certificates or in the
case of the receipt of any written demand from a holder of any
Debt Warrant with respect to such default, including, without
limiting the generality of the foregoing, any duty or
responsibility to initiate or attempt to initiate any
proceedings at law or otherwise or, except as provided in
Section 5.02 hereof, to make any demand upon the Company.
SECTION 4.03. Resignation and Appointment of Successor.
(a) The Company agrees, for the benefit of the holders of
the Debt Warrants, that there shall at all times be a Debt
Warrant Agent hereunder until all the Debt Warrants issued
hereunder have expired or are otherwise no longer exercisable.
(b) The Debt Warrant Agent may at any time resign as such
agent by giving written notice to the Company of such intention
on its part, specifying the date on which its desired
resignation shall become effective; provided that such date
shall not be less than three months after the date on which
such notice is given unless the Company otherwise agrees in
writing. The Debt Warrant Agent hereunder may be removed at
any time by the filing with it an instrument in writing signed
by or on behalf of the Company and specifying such removal and
the date upon which such removal shall become effective. Such
resignation or removal shall take effect upon the appointment
by the Company, as hereinafter provided, of a successor Debt
Warrant Agent (which shall be a bank or trust company
authorized under the laws of the jurisdiction of its
organization to exercise corporate trust powers) and the
acceptance of such appointment by such successor Debt Warrant
Agent. The obligation of the Company under Section 4.02(a)
shall continue to the extent set forth therein notwithstanding
the resignation or removal of the Debt Warrant Agent.
(c) In case at any time the Debt Warrant Agent shall
resign, be removed, or shall for any reason be incapable of
acting hereunder, or shall be adjudged a bankrupt or insolvent,
or shall file a petition seeking relief under the Federal
Bankruptcy Code, as now constituted or hereafter amended, or
under any other applicable Federal or State bankruptcy law or
similar law, or make an assignment for the benefit of its
creditors or consent to the appointment of a receiver or
custodian of all or any substantial part of its property, or
shall admit in writing its inability to pay or meet its debts
as they mature, or if a receiver or custodian of it or of all
or any substantial part of its property shall be appointed, or
if an order of any court shall be entered for relief against it
under the provisions of the Federal Bankruptcy Code, as now
constituted or hereafter amended, or under any other applicable
Federal or State bankruptcy or similar law, or if any public
officer shall have taken charge or control of the Debt Warrant
Agent or of its property or affairs for the purpose of
rehabilitation, conservation, or liquidation, a successor Debt
Warrant Agent, qualified as aforesaid, shall be appointed by
the Company by an instrument in writing, filed with such
successor Debt Warrant Agent. Upon the appointment as
aforesaid of a successor Debt Warrant Agent and acceptance by
such successor Debt Warrant Agent of such appointment, the Debt
Warrant Agent shall cease to be Debt Warrant Agent hereunder.
(d) Any successor Debt Warrant Agent appointed hereunder
shall execute, acknowledge, and deliver to its predecessor and
to the Company a signed instrument accepting such appointment
hereunder, and thereupon such successor Debt Warrant Agent,
without any further act, deed, or conveyance, shall become
vested with all the authority, rights, powers, trusts,
immunities, duties, and obligations of such predecessor with
like effect as if originally named as Debt Warrant Agent
hereunder, and such predecessor, upon payment of its charges
and disbursements then unpaid, shall thereupon become obligated
to transfer, deliver, and pay over, and such successor Debt
Warrant Agent shall be entitled to receive, all monies,
securities, and other property on deposit with or held by such
predecessor in its capacity as Debt Warrant Agent hereunder.
(e) Any corporation into which the Debt Warrant Agent may
be merged or converted or any corporation with which the Debt
Warrant Agent may be consolidated, or any corporation resulting
from any merger, conversion, or consolidation to which the Debt
Warrant Agent shall be a party, or any corporation to which the
Debt Warrant Agent shall sell or otherwise transfer all or
substantially all of its assets and business, shall be the
successor Debt Warrant Agent under this Agreement without the
execution or filing of any paper or any further act on the part
of any of the parties hereto, provided that such corporation is
qualified as aforesaid.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. Amendment. This Agreement may be amended
by the parties hereto, without the consent of the holders of
any Debt Warrants issued hereunder, for the purpose of curing
any ambiguity, or of curing, correcting, or supplementing any
defective provision contained herein, or for the purpose of
making any other provisions with respect to matters or
questions arising under this Agreement as the Company and the
Debt Warrant Agent may deem necessary or desirable; provided
that such action shall not adversely affect the interests of
such holders.
SECTION 5.02. Notices and Demands to the Company and Debt
Warrant Agent. If the Debt Warrant Agent shall receive any
notice or demand addressed to the Company by the holder of a
Debt Warrant pursuant to the provisions hereof or of the
related form of Debt Warrant Certificate, the Debt Warrant
Agent shall promptly forward such notice or demand to the
Company.
SECTION 5.03. Addresses. Any communication from the Debt
Warrant Agent to the Company with respect to this agreement
shall be addressed to PepsiCo, Inc., 700 Anderson Hill Road,
Purchase, New York 10577, Attention: __________, and any
communication from the Company to the Debt Warrant Agent with
respect to this Agreement shall be addressed to the principal
corporate trust office of the Debt Warrant Agent, Attention:
Corporate Trust Department (or such other address as shall be
hereafter specified in writing by the Debt Warrant Agent or the
Company, as the case may be).
SECTION 5.04. Notices to Holders of Debt Warrants. Any
notice to holders of Debt Warrants that are required or
permitted by the provisions of this Agreement to be given shall
be given (a) with respect to Debt Warrants issued in registered
form, by first class mail postage prepaid to such holder's
address as appears on the books of the Debt Warrant Agent (or,
prior to the Detachability Date, on the books of the registrar
of the Debt Securities), or (b) with respect to Debt Warrants
issued in bearer form, by publication at least once in a daily
morning newspapers in New York City and in London.
SECTION 5.05. Applicable Law. The validity,
interpretation, and performance of the terms and provisions of
this Agreement and of each Debt Warrant and Debt Warrant
Certificate issued hereunder shall be governed by and construed
in accordance with the laws of the State of New York.
SECTION 5.06. Delivery of Prospectus. The Company will
furnish to the Debt Warrant Agent sufficient copies of the
Prospectus and of each applicable Prospectus Supplement and
Pricing Supplement relating to the Debt Warrants and the
related Debt Securities, and the Debt Warrant Agent agrees that
upon the exercise of any Debt Warrant the Debt Warrant Agent
will deliver to the holder of such Debt Warrant, prior to or
concurrently with the delivery of the Debt Securities issued
upon such exercise, copies of the Prospectus (as amended or
supplemented as of such date), together with all such
applicable Supplements.
SECTION 5.07. Obtaining of Governmental Approvals. The
Company will obtain, file, and keep effective any and all
permits, consents, and approvals of governmental agencies and
authorities and all securities acts filings under United States
Federal and state laws as shall be necessary for the valid
issuance, sale, and transfer of the Debt Warrants and the
related Debt Securities.
SECTION 5.08. Persons Having Rights under this Agreement.
Nothing in this Agreement shall give to any person other than
the Company, the Debt Warrant Agent, and the holders of the
Debt Warrants any right, remedy, or claim under or by reason of
this Agreement.
SECTION 5.09. Headings. The captions and headings used
herein are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions
hereof.
SECTION 5.10. Counterparts. This Agreement may be
executed in any number of counterparts, each of which as so
executed shall be deemed to be an original, but shall together
constitute but one and the same instrument.
SECTION 5.11. Inspection of Agreement. A copy of this
Agreement shall be available at all reasonable times at the
principal corporate trust office of the Debt Warrant Agent for
inspection by the holder of any Debt Warrant.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by one of their respective authorized
officers as of the day and year first above written.
PEPSICO, INC.
By____________________________________
Title:
THE CHASE MANHATTAN BANK
(National Association)
By____________________________________
Title:
ANNEX A
FORM OF DEBT WARRANT CERTIFICATE
[Face of Debt Warrant Certificate]
[Form of Legend if Debt Warrants are not immediately detachable
from Debt Securities: This Debt Warrant cannot be transferred
or exchanged prior to__________, 19__, unless attached to the
[designate Debt Securities] to which this Debt Warrant
relates.]
THIS DEBT WARRANT SHALL BE EXERCISABLE ONLY
IF COUNTERSIGNED BY THE DEBT WARRANT
AGENT AS PROVIDED BELOW
PEPSICO, INC.
WARRANT TO PURCHASE
$______ in aggregate principal amount of ____________Debt
Securities due _______________, 19__
VOID AFTER 5:00 P.M., NEW YORK TIME, ON_____________, 19__
No. [CUSIP No. ]
This certifies that [the bearer] [_______________or its
registered assigns] is the [owner] [registered owner] of the
Warrant[s] identified above (the "Debt Warrant[s]"), [each]
such Debt Warrant entitling such [bearer] [registered owner] to
purchase, at any time after 5:00 p.m., New York time,
on___________, 19__, and on or before 5:00 p.m., New York time,
on___________, 19__, (or such later date as may be designated
by the Company by written notice to the holder as provided in
the Debt Warrant Agreement, dated as of ___________, 19__ (the
"Debt Warrant Agreement") between PepsiCo, Inc. (the "Company")
and The Chase Manhattan Bank (National Association) as debt
warrant agent (the "Debt Warrant Agent")), $________ in
aggregate principal amount of the Debt Securities, [designate
series] (the "Debt Securities") to be issued by the Company
under the Indenture, dated as of December 2, 1993 (the
"Indenture"), between the Company and The Chase Manhattan Bank
(National Association) as trustee (the "Trustee").
The Debt Warrant[s] represented hereby shall be
exercisable only in accordance with the terms and provisions
set forth herein, in the Debt Warrant Agreement, and in the
Indenture. Copies of the Debt Warrant Agreement and the
Indenture may be obtained at the corporate trust office of the
Debt Warrant Agent located at ___________________. All
capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to such terms by the Debt Warrant
Agreement.
[Reverse of Debt Warrant Certificate]
The exercise price of [each] [such] Debt Warrant shall be
calculated as follows: (a) during the period from and including
_______________ 19__, to and including _______________, 19__,
the exercise price of [each] [such] Debt Warrant will be [___%
of the principal amount of the underlying Debt Securities]
[$___________] [plus [accrued amortization of the original
issue discount] [accrued interest] from the most recently
preceding __________], (b) during the period from
_____________, 19__, to and including _______________, 19__,
the exercise of [each] [such] Debt Warrant will be [___% of the
principal amount of the related Debt Securities] [$___________]
[plus [accrued amortization of the original issue discount]
[accrued interest] from the most recently preceding _________],
and (c) in each case (as applicable), [the original issue
discount will be amortized at an annual rate of ___%, computed
on [an annual] [a semi-annual] basis, using a [360-day year
consisting of twelve 30-day months] [the original issue
discount for each $__________ in aggregate principal amount of
Debt Securities will be _________] (such exercise price the
"Exercise Price").
The [holder] [registered holder] may exercise the Debt
Warrant[s] evidenced hereby by delivery to the Debt Warrant
Agent of this Debt Warrant Certificate, together with the form
of election to purchase set forth below properly completed and
duly executed, and by paying in full, in lawful money of [the
United States] [________________], [$]_____________, by
[certified check or official bank check or by] bank wire
transfer, in each case, in immediately available funds, the
Exercise Price for [such Debt Warrant] [each Debt Warrant to be
exercised], payable to the [order of] [an account designated in
writing by] the Company, such delivery and payment to be made
at the corporate trust office of Debt Warrant Agent at the
address specified below, or to such successor debt warrant
agent at such other address as the Company may hereafter notify
the [holder] [registered holder] in writing.
Any whole number of Debt Warrants evidenced by this Debt
Warrant Certificate may be exercised to purchase Debt
Securities in registered form upon such terms and conditions as
are set forth in the Prospectus and [the] [any] applicable
Supplement[s]. [Upon exercise of fewer than all of the Debt
Warrants evidenced hereby, there shall be issued to the
[holder] [registered holder] a new Debt Warrant Certificate
evidencing the number of Debt Warrants remaining unexercised.]
[If the Debt Warrant[s] represented hereby is not
immediately detachable from the underlying Debt Securities,
[each] such Debt Warrant may be exchanged or transferred prior
to __________, 19__,only together with the underlying Debt
Securities and only for the purpose of effecting, or in
conjunction with, an exchange or transfer of such Debt
Securities. After such date, [each] such Debt Warrant and all
rights hereunder, may be transferred by delivery as hereinabove
provided and the Company and the Debt Warrant Agent may treat
the bearer hereof as the owner for all purposes.]
[If the Debt Warrant[s] represented hereby are immediately
detachable from the underlying Debt Securities, [each] such
Debt Warrant may be registered for transfer or exchange upon
delivery of this Debt Warrant Certificate as hereinabove
provided.]
This Debt Warrant Certificate shall not entitle the
[holder] [registered holder] hereof to any of the rights of a
holder of the underlying Debt Securities, including, without
limitation, the right to receive payments of principal,
premium, if any, or interest, if any, on such Debt Securities
or to enforce any of the covenants of the Indenture.
Neither this Debt Warrant Certificate nor the Debt
Warrant[s] represented hereby shall be valid or obligatory for
any purpose until countersigned by the Debt Warrant Agent.
Dated as of ___________, 19__
PEPSICO, INC.
By_____________________
Title:
[ ], as Debt Warrant Agent,
By______________________________________
Authorized Officer
Further Instructions for Exercise of Debt Warrant[s]
To exercise the Debt Warrants evidenced hereby, the holder
must complete the information required below and present this
Debt Warrant Certificate in person or by [registered] mail to
the Debt Warrant Agent at the address set forth below. This
Debt Warrant Certificate, completed and duly executed, must be
received by the Debt Warrant Agent together with payment in
full of the Exercise Price in accordance with the terms hereof.
The undersigned hereby irrevocably elects to exercise
[the] [___ of the] Debt Warrant[s] evidenced hereby and to
purchase [$]________ in aggregate principal amount of the
underlying Debt Securities to which such Debt Warrant[s]
relate[s]. By executing this instrument as indicated below,
the undersigned represents that [he/she/it] has tendered
payment for such Debt Securities in accordance with the
provisions set forth herein. The undersigned requests that
said principal amount of Debt Securities be in the authorized
denominations, registered in such names, and delivered as
specified below.
Dated:
_____________________________
Name _________________________________
[ ]
_____________________________
Address
_______________________________
(Insert Social Security or Other
Identifying Number of Holder)
_______________________________
Signature ______________________________
The Debt Warrants evidenced hereby may be exercised at the
following address:
Attention:
[Instructions as to form and delivery of Debt Securities
and Debt Warrant Certificates evidencing unexercised Debt
Warrants to be provided as appropriate.]
[If Registered Debt Warrant]
Assignment
(Form of Assignment To Be Executed Upon
Transfer of Debt Warrants Evidenced Hereby)
FOR VALUE RECEIVED, _____________________________ hereby sells,
assigns and transfers unto
Please insert social security or other
identifying number
____________________________________
_____________________________
____________________________________
(Please print name and address
including zip code)
_______________________________________________________________
__________
[__________ of] the Debt Warrant[s] represented by the within
Debt Warrant Certificate and does hereby irrevocably constitute
and appoint _________________________________ as Attorney to
transfer said Debt Warrant[s] on the books of the Debt Warrant
Agent with full power of substitution in the premises.
Dated:
_____________________________________
Signature
(Signature must conform in all respects
to name of holder as specified on the face
of this Debt Warrant Certificate and must bear
a signature guaranteed by a bank, trust
company, or member broker of the New York,
Midwest, or Pacific Stock Exchange.)
Signature Guaranteed:
_______________________________
November 14, 1995
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, New York 10577
Dear Sir or Madam:
I am Vice President and Assistant General Counsel of
PepsiCo, Inc. (the "Company"), and have acted as its counsel
in connection with the registration under the Securities Act
of 1933, as amended (the "Act") of $4,587,000,000 of (i) the
Company's debt securities, consisting of notes, debentures,
and other evidences of unsecured indebtedness (the "Debt
Securities"), proposed to be issued under an Indenture,
dated as of December 14, 1994, between the Company and the
Chase Manhattan Bank (National Association), as Trustee (the
"Indenture"), included as an exhibit to the Registration
Statement (as defined below), (ii) warrants to purchase Debt
Securities (the "Debt Warrants"), proposed to be issued
under a debt warrant agreement to be entered into between
the Company and The Chase Manhattan Bank, (National
Association), as Debt Warrant Agent (the "Debt Warrant
Agreement"), in substantially the form included as an
exhibit to the Registration Statement, and (iii) other
warrants, options, and unsecured contractual obligations of
the Company (the "Shelf Warrants"), proposed to be issued
under one or more shelf warrant agreements to be entered
into between the Company and The Chase Manhattan Bank
(National Association), or such other bank or trust company
as may be identified in any supplement to the Prospectus
filed as part of the Registration Statement (any such
agreement a "Shelf Warrant Agreement"), in substantially the
form to be filed as an exhibit to the Registration Statement
at or prior to the issuance of any Shelf Warrants subject
thereto.
You have requested my opinion in connection with the
Registration Statement on Form S-3 relating to the Debt
Securities, Debt Warrants and Shelf Warrants (collectively,
the "Securities"), which Registration Statement is being
filed by the Company with the Securities and Exchange on
this date (the "Registration Statement").
It is my opinion that the Securities have been duly
authorized and will be duly, validly and legally issued and
will be binding obligations of the Company when (i) with
respect to the Debt Warrants, the Debt Warrant Agreement
shall have been duly authorized, executed, and delivered,
(ii) with respect to any Shelf Warrant, the applicable Shelf
Warrant Agreement shall have been duly authorized, executed,
and delivered, (iii) the applicable provisions of the Act,
of any other federal securities laws, and of the laws
of such other jurisdictions as may be applicable to the
Securities, shall have been complied with, and (iv) the
Securities shall have been duly executed, authenticated, and
delivered against payment therefore in the manner described
in the aforementioned Registration Statement after it has
become effective under the Act.
The opinion expressed above should not be deemed to
encompass compliance with any laws other than those of the
State of New York, the corporation laws of the State of
North Carolina, and the federal laws of the United States of
America.
I hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the use of my
name in the Registration Statement under the caption "Legal
Matters". In giving this consent, I do not admit that I am
in the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ DOUGLAS CRAM
Douglas Cram
Vice President and Assistant General
Counsel
Exhibit 23 (a)
Consent of Independent Auditors
The Board of Directors
PepsiCo, Inc.
We consent to the use of our audit report dated February 7,
1995 on the consolidated financial statements and schedule
of PepsiCo, Inc. and subsidiaries as of December 31, 1994
and December 25, 1993 and for each of the years in the three
year period ended December 31, 1994 incorporated herein by
reference in the Registration Statement on Form S-3 and in
the related prospectus of PepsiCo, Inc. pertaining to the
registration of $2,500,000,000 principal amount of debt
securities and warrants for PepsiCo, Inc. and to the
reference to our Firm under the heading "Experts" in the
Registration Statement.
Our report refers to PepsiCo Inc.'s adoption of the
Financial Accounting Standards Board's Statement of
Financial Accounting Standards No. 112, "Employers'
Accounting for Postemployment Benefits," and the change in
the method of calculating the market-related value of
pension plan assets used in the determination of pension
expense in 1994, and PepsiCo's adoption of the Financial
Accounting Standards Board's Statements of Financial
Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" and No. 109,
"Accounting for Income Taxes" in 1992.
/s/ KPMG PEAT MARWICK LLP
New York, New York
November 14, 1995
EXHIBIT 12
PEPSICO, INC. AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges (page 1 of 2)
(in millions except ratio amounts, unaudited)
36 Weeks Ended
9/9/95 9/3/94
Earnings:
Income before income taxes and
cumulative effect of accounting
changes $2,132.8 $1,940.9
Joint ventures and minority
interests, net (a) (11.7) (17.2)
Amortization of capitalized
interest 3.5 3.4
Interest expense 481.5 433.9
Amortization of debt
discount 0.3 0.2
Interest portion of rent
expense (b) 111.0 99.6
-------- ------
Earnings available for fixed
charges $2,717.4 $2,460.8
-------- --------
-------- --------
Fixed Charges:
Interest expense $ 481.5 $ 433.9
Capitalized interest 5.8 4.0
Amortization of
debt discount 0.3 0.2
Interest portion of
rent expense (b) 111.0 99.6
----- -----
Total fixed charges $ 598.6 $ 537.7
----- -----
----- -----
Ratio of Earnings
to Fixed Charges 4.54 4.58
---- ----
---- ----
(a) Prior year amounts have been restated to adjust for the effects
of joint ventures and minority interests. The inclusion of
these items did not have a material impact on the previously
reported ratio of earnings to fixed charges.
(b) One-third of net rent expense is the portion deemed
representative of the interest factor.
<PAGE>
PEPSICO, INC. AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges (page 2 of 2)
(in millions except ratio amounts, unaudited)
53 Weeks
Ended 52 Weeks Ended
-------------------------
12/31/94 12/25/93 12/26/92 12/28/91 12/29/90
Earnings: (c) (c)
Income from continuing
operations before income
taxes and cumulative
effect of accounting
changes $2,664.4 $2,422.5 $1,898.8 $1,659.7 $1,653.8
Joint ventures and
minority interests,
net (a) (19.6) (5.8) (0.6) (6.1) (17.9)
Amortization of
capitalized interest 5.2 5.0 5.0 4.5 5.3
Interest expense 645.0 572.7 586.1 613.7 686.0
Amortization of
debt discount 0.3 0.2 0.3 0.3 0.3
Interest portion of net
rent expense (b) 150.0 134.4 121.4 103.4 87.4
----- ----- ----- ----- ----
Earnings available for
fixed charges $3,445.3 $3,129.0 $2,611.0 $2,375.5 $2,414.9
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Fixed Charges:
Interest expense $ 645.0 $ 572.7 $ 586.1 $ 613.7 $686.0
Capitalized interest 4.7 6.5 6.6 10.0 8.6
Amortization of
debt discount 0.3 0.2 0.3 0.3 0.3
Interest portion of net
rent expense (b) 150.0 134.4 121.4 103.4 87.4
----- ----- ----- ----- ----
Total fixed charges $ 800.0 $ 713.8 $ 714.4 $ 727.4 $782.3
----- ----- ----- ----- -----
----- ----- ----- ----- -----
Ratio of Earnings
to Fixed Charges 4.31 4.38 3.65 3.27 3.09
---- ---- ---- ---- ----
---- ---- ---- ---- ----
(a) Prior year amounts have been restated to adjust for the effects
of joint ventures and minority interests. The inclusion of
these items did not have a material impact on the previously
reported ratio of earnings to fixed charges.
(b) One-third of net rent expense is the portion deemed
representative of the interest factor.
(c) To improve comparability, the 1991 and 1990 amounts have been
restated to report, under the equity method of accounting, the
results of previously consolidated snack food businesses in
Spain, Portugal and Greece, which were contributed to the Snack
Ventures Europe joint venture with General Mills, Inc. in late
1992.
