SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement / / Confidential, for Use of the Com-
mission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
PEPSICO, INC.
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(Name of Registrant as Specified in Its Charter)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
PEPSICO, INC.
Purchase, New York 10577-1444
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To our Shareholders:
The Annual Shareholders' Meeting will be held at PepsiCo's World
Headquarters at 700 Anderson Hill Road, Purchase, New York, on Wednesday, May 1,
1996, from 9:00 A.M. to 11:00 A.M., Eastern Daylight Saving Time, to:
1. Elect directors.
2. Approve the appointment of independent auditors.
3. Act upon four shareholder proposals set forth in the attached Proxy
Statement.
4. Transact such other business as may properly come before the Meeting.
The Board of Directors has fixed the close of business on March 8, 1996
as the record date for determining shareholders entitled to notice of and to
vote at the Meeting. Only shareholders of record at the close of business on
that date are entitled to vote at the Meeting.
PepsiCo hopes that as many shareholders as possible will personally
attend the Meeting. If you plan to attend, please check the box provided on your
proxy card. Upon receipt of your proxy with the box checked, we will send you an
admission card.
Whether or not you plan to attend the Meeting, please complete the
enclosed proxy card, and sign, date and return it promptly so that your shares
will be represented. Sending in your proxy will not prevent you from voting in
person at the Meeting.
By order of the Board of Directors,
March 28, 1996 EDWARD V. LAHEY, JR.
Secretary
<PAGE>
PepsiCo, Inc.
Purchase, New York 10577-1444 March 28, 1996
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of PepsiCo, Inc. ("PepsiCo") of proxies to be voted at
the Annual Meeting of Shareholders to be held on Wednesday, May 1, 1996, and at
any adjournment thereof.
The Board requests that all shareholders complete the enclosed proxy
card, and sign, date and return it as promptly as possible. Since many
shareholders cannot personally attend, it is necessary that a large number be
represented by proxy. The holders of record of a majority of the outstanding
shares must be present in person or represented by proxy at the Annual Meeting
in order to hold the Meeting.
Any shareholder returning a proxy may revoke it by casting a ballot at
the Meeting. Any proxy not revoked will be voted as specified by the
shareholder. If no choice is indicated, a proxy will be voted in accordance with
the Board of Directors' recommendations.
At March 8, 1996, the record date, there were 788,475,034 shares of
PepsiCo Capital Stock outstanding and entitled to one vote each at the Annual
Meeting. These shares were registered in the names of 170,707 shareholders and,
as far as is known to PepsiCo, no person owns beneficially more than 5% of the
outstanding Capital Stock.
This Proxy Statement is first being mailed on or about March 28, 1996.
<PAGE> 2
ELECTION OF DIRECTORS (PROXY ITEM NO. 1)
Thirteen directors are to be elected at the Annual Meeting, to hold
office from election until the next Annual Meeting of Shareholders, or until
their successors are duly elected and qualified. The following nominees have
been proposed by the Board of Directors:
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JOHN F. AKERS, former Chairman of the Board and Chief Executive Officer of
International Business Machines Corporation, has been a member of PepsiCo's
Board since 1991. Mr. Akers joined IBM in 1960 and was Chairman and Chief
Executive Officer from 1986 until 1993. He is also a director of Hallmark Cards,
Inc., Lehman Brothers Holdings, Inc., The New York Times Company, Springs
Industries, Inc. and Zurich Insurance Company--U.S. Mr. Akers is 61 years old.
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ROBERT E. ALLEN, Chairman of the Board and Chief Executive Officer of AT&T
Corp., has been a member of PepsiCo's Board since 1990. He began his career at
AT&T in 1957 when he joined Indiana Bell. He was elected President and Chief
Operating Officer of AT&T in 1986, and assumed his present responsibilities in
1988. He is also a director of Bristol-Myers Squibb Company and Chrysler Corp.
Mr. Allen is 61 years old.
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WAYNE CALLOWAY, Chairman of the Board of PepsiCo, was elected to PepsiCo's Board
in 1983. Mr. Calloway joined PepsiCo in 1967, became President and Chief
Operating Officer of Frito-Lay, Inc. in 1976, and became Chairman of the Board
and Chief Executive Officer of Frito-Lay in 1978. Mr. Calloway became Executive
Vice President and Chief Financial Officer of PepsiCo in 1983, President and
Chief Operating Officer in 1985, and Chief Executive Officer in 1986, a position
he will hold until April 1, 1996. He assumed his current position in 1986. Mr.
Calloway is a director of Citicorp, General Electric Company and Exxon
Corporation. Mr. Calloway is 60 years old.
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ROGER A. ENRICO, Vice Chairman of the Board of PepsiCo, and Chairman and Chief
Executive Officer, PepsiCo Worldwide Restaurants, was elected to PepsiCo's Board
in 1987. He joined PepsiCo in 1971. In 1983 Mr. Enrico became President and
Chief Executive Officer of Pepsi-Cola USA. He became President and Chief
Executive Officer of PepsiCo Worldwide Beverages in 1986, Chairman and Chief
Executive Officer of Frito-Lay, Inc. in 1991 and Chairman and Chief Executive
Officer of PepsiCo Worldwide Foods in 1992, assuming his present positions as
Vice Chairman of PepsiCo in 1993, and Chairman and Chief Executive Officer,
PepsiCo Worldwide Restaurants in 1994. Effective April 1, 1996, Mr. Enrico will
become PepsiCo's Chief Executive Officer. He is also a member of the Board of
Directors of Dayton Hudson Corporation, the A. H. Belo Corporation and The
Prudential Insurance Company of America. Mr. Enrico is 51 years old.
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RAY L. HUNT, Chairman and Chief Executive Officer of Hunt Oil Company and
Chairman, Chief Executive Officer and President, Hunt Consolidated, Inc., was
elected to PepsiCo's Board effective April 1, 1996. Mr. Hunt began his
association with Hunt Oil Company in 1958 and has held his current position
since 1976. He is also a director of Dresser Industries, Inc., Security Capital
Group, Ergo Science, Inc. and Texas Commerce Bank. Mr. Hunt is 52 years old.
<PAGE> 3
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JOHN J. MURPHY, Chairman of the Board of Dresser Industries, Inc. was elected a
director of PepsiCo in 1984. Mr. Murphy joined Dresser in 1952 and was elected
its Chairman and Chief Executive Officer in 1983. Mr. Murphy served as Chief
Executive Officer until November 1995. He is also a director of NationsBank
Corporation and Kerr-McGee Corporation. Mr. Murphy is 64 years old.
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STEVEN S REINEMUND was elected a director effective April 1, 1996. Mr. Reinemund
began his career with PepsiCo as a senior operating officer of Pizza Hut, Inc.
in 1984. He became President and Chief Executive Officer of Pizza Hut in 1986,
and President and Chief Executive Officer of Pizza Hut Worldwide in 1991. In
1992, Mr. Reinemund assumed his current position as President and Chief
Executive Officer of Frito-Lay, Inc. He is also a director of Aviall, Inc. and
Provident Life & Accident Insurance Co. Mr. Reinemund is 47 years old.
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SHARON PERCY ROCKEFELLER was elected a director in 1986. She is President and
Chief Executive Officer of WETA public stations in Washington, D.C., a position
she has held since 1989, and was a member of the Board of Directors of WETA from
1985 to 1989. She is a member of the Board of Directors of Public Broadcasting
Service, Washington, D.C. and was a member of the Board of Directors of the
Corporation for Public Broadcasting until 1992. Mrs. Rockefeller has also been a
Member of the Democratic National Committee. Mrs. Rockefeller is 51 years old.
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CHRISTOPHER A. SINCLAIR was elected a director effective April 1, 1996. Mr.
Sinclair is President and Chief Executive Officer of PepsiCo Foods & Beverages
International, a position he has held since 1993. Prior to this position, Mr.
Sinclair served as President and Chief Executive Officer of Pepsi-Cola
International. During his 12-year career at PepsiCo, Mr. Sinclair has also
served as Vice President of Marketing for Frito-Lay, Vice President of Marketing
and Sales for Pepsi-Cola Bottling Group, and President of Pepsi-Cola Company's
Central Division. He is a director of Mattel, Inc., Perdue Farms, Inc. and the
Woolworth Corporation. Mr. Sinclair is 45 years old.
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FRANKLIN A. THOMAS was elected to PepsiCo's Board in 1994. Mr. Thomas has been
President of the Ford Foundation since 1979. From 1967 to 1977, he was President
and Chief Executive Officer of the Bedford-Stuyvesant Restoration Corporation.
From 1977 to 1979 Mr. Thomas had a private law practice in New York City. He is
also a director of ALCOA, AT&T, Citicorp and Cummins Engine Company, Inc. Mr.
Thomas is 61 years old.
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P. ROY VAGELOS, former Chairman of the Board and Chief Executive Officer of
Merck & Co., Inc., has been a member of PepsiCo's Board since 1992. Dr. Vagelos
joined Merck in 1975 and became President and Chief Executive Officer in 1985.
He became a director in 1984, and Chairman in 1986, retiring from that position
in 1994. Dr. Vagelos is also a director of The Estee Lauder Companies Inc., The
Prudential Insurance Company of America, McDonnell Douglas Corporation and
Chairman of the Board of Regeneron Pharmaceuticals Inc. Dr. Vagelos is 66 years
old.
<PAGE> 4
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CRAIG E. WEATHERUP was elected a director effective April 1, 1996. Mr. Weatherup
is currently President and Chief Executive Officer of Pepsi-Cola North America,
a position he has held since 1991. He joined Pepsi-Cola as Marketing Director
for the Far East in 1974, was named Senior Vice President, Sales and Marketing
of the Pepsi-Cola Group in 1982, and President of the division in 1986. He was
appointed President of the Pepsi-Cola Company in February, 1988. Mr. Weatherup
is 50 years old.
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ARNOLD R. WEBER was elected to PepsiCo's Board in 1978, and is Chairman of the
Audit Committee. Dr. Weber is Chancellor of Northwestern University and has held
various government positions including Executive Director of the Cost of Living
Council and Associate Director of the Office of Management and Budget. He is a
director of Aon Corp., Burlington Northern, Inc., Inland Steel Company, The
Tribune Co. and Deere Co. Dr. Weber is 66 years old.
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Should any of the foregoing nominees for director become unavailable for
any reason, the persons named in the enclosed proxy intend to vote for such
other persons as the present Board may designate.
Three PepsiCo directors have reached the Board's retirement age and are
not standing for re-election. Andrall E. Pearson was PepsiCo's President and
Chief Operating Officer from 1971 through 1984 and he has served on PepsiCo's
Board for 26 years. Roger B. Smith, former Chairman and CEO of General Motors
Corp., was a member of the Board for 7 years. Robert H. Stewart, III, Vice
Chairman of Bank One, Texas, N.A., has been a member of the Board for 31 years,
since PepsiCo was founded in 1965 by Herman Lay and Donald Kendall. Together
these directors have provided distinguished service and guidance to the
Corporation.
Board Meetings and Committees of the Board. PepsiCo's Board held six
meetings during the year. Because of its compact, independent structure, the
Board does not operate through a variety of Committees and all outside directors
serve on the two existing committees. Matters such as nominations for Board
membership or issues raised by shareholders are dealt with by the full Board.
The Audit Committee, which was established in 1967, held two meetings
in 1995. The Committee reviews external and internal audit plans and activities,
reviews PepsiCo's annual financial statements, reviews PepsiCo's system of
internal financial controls, approves the fees for audit, audit-related and
nonaudit services provided by the independent auditors, and recommends to the
Board the annual selection of independent auditors.
The Compensation Committee, which has been active under various names
since 1955, also held two meetings during 1995. The Compensation Committee has
responsibility for administering PepsiCo's incentive plans, setting policies
that govern executives' annual compensation and long-term incentives, and
reviews management performance, development and succession.
Average attendance by incumbent directors at Board and Committee
meetings was approximately 99%. No incumbent director attended fewer than 90% of
the total number of Board and Committee meetings.
<PAGE> 5
OWNERSHIP OF CAPITAL STOCK BY DIRECTORS AND EXECUTIVE OFFICERS. The
following table sets forth, as of March 8, 1996, the shares of PepsiCo Capital
Stock beneficially owned by each director (including nominees), by each named
executive officer individually, and by all directors and executive officers as a
group:
Name of Individual or Number of Shares
Number of Persons in Group Beneficially Owned(1)(2)
-------------------------- ------------------------
John F. Akers.......................................... 12,463
Robert E. Allen........................................ 3,070
Wayne Calloway......................................... 2,131,516
Roger A. Enrico........................................ 327,637
Ray L. Hunt............................................ 0
John J. Murphy......................................... 10,509
Andrall E. Pearson..................................... 99,577
Steven S Reinemund..................................... 300,225
Sharon Percy Rockefeller............................... 30,958
Christopher A. Sinclair................................ 165,513
Roger B. Smith......................................... 6,022
Robert H. Stewart, III................................. 63,000
Franklin A. Thomas..................................... 500
P. Roy Vagelos......................................... 3,318
Craig E. Weatherup..................................... 790,554
Arnold R. Weber........................................ 20,008
Robert G. Dettmer...................................... 471,479
Robert L. Carleton..................................... 98,458
Edward V. Lahey, Jr.................................... 338,745
All directors and executive officers as a group (21 persons)..5,095,733
- ----------------------------
(1) Each director and executive officer has sole voting and investment
power with respect to the shares listed above, except that voting and investment
power over a total of 471,862 shares is shared with their spouses or children.
The shares shown include 4,541,522 shares of PepsiCo Capital Stock with respect
to which certain directors and executive officers have a right to acquire
beneficial ownership within 60 days.
(2) Such shares do not include 764,500 shares or options in the
aggregate, held by children or spouses of directors or executive officers, or by
foundations or estates of which directors and executive officers serve as
trustees or directors, as to which beneficial ownership is disclaimed. The
shares shown also do not include the following number of PepsiCo Capital Stock
equivalents, which are held in PepsiCo's deferred income program: Robert E.
Allen 11,861 shares; Robert G. Dettmer 138,168 shares; Roger A. Enrico 8,568
shares; John J. Murphy 3,070 shares; Andrall E. Pearson 6,949 shares; Roger B.
Smith 17,897 shares; Franklin A. Thomas 1,400 shares; Craig E. Weatherup 6,930
shares; Arnold R. Weber 2,381 shares; and all directors and executive officers
as a group 197,224 shares.
Directors and executive officers as a group own less than 1% of
outstanding Capital Stock.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT. A Securities and
Exchange Commission Form 4 filed on behalf of Robert G. Dettmer, PepsiCo's
Executive Vice President and Chief Financial Officer, inadvertently omitted one
option exercise occurring during the month for which the Form 4 was timely
filed. Once the omission was discovered, an amendment was promptly filed.
<PAGE> 6
REMUNERATION OF DIRECTORS. Directors who are employees receive no
additional remuneration for serving as directors. All other directors receive
annual retainers of $70,000 and an annual grant of PepsiCo Capital Stock with a
value of approximately $30,000 on the date of the grant. Directors may elect to
defer payment of their retainers and stock grants. If the stock grant is
deferred, the only investment option available is PepsiCo Capital Stock
equivalents, payable only in cash. Deferrals may not be made for less than one
year.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Executive Pay Policy
PepsiCo's executive compensation programs are designed to enable it to
recruit, retain and motivate a large group of talented and diverse domestic and
international executives. This is essential for PepsiCo to achieve its
challenging worldwide performance objectives and to continue to achieve
outstanding shareholder returns. As a result, the Committee has determined that
executive compensation opportunities, including those for PepsiCo's Chief
Executive Officer ("CEO"), should create incentives for superior performance and
consequences for below target performance.
The Compensation Committee annually examines short-term and long-term
compensation levels for the CEO and other senior executives against a survey of
the compensation practices of a group of leading consumer product companies.
This review is validated against surveys of the compensation practices of a
broader range of major companies, including the Fortune 50. Together these
companies are referred to as the "survey companies." These reviews also compare
PepsiCo's short and long-term results with the performance of the survey
companies, to ensure a pay for performance linkage. The survey companies include
some, but not all, of the companies covered in the Standard & Poor's 500
Beverage, Food and Restaurant Indices included on the Performance Graph on page
8.
The Committee believes that our executive compensation programs have
met their objectives. PepsiCo has been able to attract and retain the executive
talent necessary to support a corporation which has more than doubled its sales
over the last six years, while providing superior shareholder returns.
Specific Compensation Programs
PepsiCo's executive compensation mix includes a base salary, annual
cash bonus awards, and long-term incentive compensation in the form of
performance units and stock options. Overall, these programs are intended to be
performance-oriented, with the principal portion of executive compensation
opportunities tied to achievement of annual objectives and long-term shareholder
returns. It is the Committee's intention that substantially all executive
compensation be deductible for federal income tax purposes.
Salary ranges for the CEO and the other executive officers are based on
the underlying accountabilities of each executive's position, which are reviewed
on a regular basis and benchmarked against similar positions among the survey
companies. These salary ranges are targeted at the upper end of salaries for
similar positions at the survey companies, however, individual salaries are
capped at $1 million.
<PAGE> 7
Bonus awards for PepsiCo's CEO and executive officers are paid based on
PepsiCo's overall performance against specified earnings targets set in advance
in accordance with the shareholder approved 1994 Executive Incentive
Compensation Plan. The amount of the award an executive is eligible to receive
will increase if higher earnings per share targets are achieved. No payment will
be made if the minimum earnings target is not met. Once those earnings targets
are achieved, the Committee exercises its discretion to determine the exact
amount of the bonus to be paid to each executive officer. In determining the
bonus of executive officers other than the CEO, the Committee considers
PepsiCo's performance as well as subjective personal factors such as quality of
strategic plans, organizational and management development and special project
or idea leadership. The CEO's bonus is based on the Committee's subjective
assessment of a broad range of performance measures, including PepsiCo's
financial results, strategic position, market share and performance compared to
the broad range of major companies included in the survey companies.
Long-term awards, made under the shareholder approved 1994 Long-Term
Incentive Plan (the "LTIP"), have generally been granted every other year in the
form of performance units and stock options. Pro rata awards may be made
off-cycle to participants who are promoted or newly hired. Performance units are
paid after four years based on achieving earnings per share growth targets set
in advance by the Committee. Stock options are granted at market value on the
date of grant and increase in value only to the extent of appreciation in
PepsiCo's Capital Stock. Most become exercisable at the end of four years, and
are exercisable thereafter for six years. PepsiCo's CEO and other executive
officers are given the opportunity to choose the mix of performance units and
stock options in their long-term awards. The CEO and most executives have
elected 100% stock options.
PepsiCo's executives may also participate in the Company's benefit
programs, including the Company's retirement plans, its medical, savings and
other benefit plans and its SharePower Stock Option Plan under which all
full-time employees receive annual grants of options to purchase shares of
PepsiCo stock equal in amount to 10% of that individual's previous year's salary
and bonus. Executive officers receive their annual SharePower awards under the
LTIP. In addition, executives are eligible to participate in the Company's
income deferral programs.
Performance Evaluation
The Committee meets without the CEO to evaluate his performance, and
with the CEO to evaluate the performance of other executive officers. The 1995
salaries, bonuses and long-term incentive awards for the corporation's CEO and
executive officers set forth on page 9 were reviewed and approved at meetings of
the Compensation Committee held in January 1995 and January 1996.
Decisions on executive officers' salaries and salary increases were
based on individual performance evaluations. As described above, decisions on
senior executive officers' bonus awards were based on PepsiCo's performance
against established earnings targets and on individual performance. Last year
PepsiCo exceeded the minimum earnings targets.
The CEO's 1995 salary was capped at $1 million. The primary performance
measures used to determine the CEO's 1995 bonus award were earnings results, the
strength of PepsiCo's strategic position and its five-year earnings per share
growth and total return to shareholders as compared to the survey companies.
With respect to earnings per share growth and total shareholder return, PepsiCo
ranked in the top one-third of the survey companies. The overall performance
measures were not assigned specific weights, but rather were weighted
subjectively by each member of the Compensation Committee. PepsiCo's fiscal 1995
earnings per share growth (adjusted for significant unusual items) was 12.7%.
Long-term incentive awards (other than SharePower and pro rata awards) were not
made to the executive officers last year.
<PAGE> 8
The Performance Graph on page 8 compares PepsiCo's five year cumulative
total return to the Standard & Poor's 500 Stock Index and the Standard & Poor's
500 Beverage, Food and Restaurant Indices. PepsiCo's compounded annual total
shareholder return for the five years ended December 31, 1995 was 18.5%.
COMPENSATION COMMITTEE:
JOHN F. AKERS ROGER B. SMITH
ROBERT E. ALLEN ROBERT H. STEWART, III
JOHN J. MURPHY FRANKLIN A. THOMAS
ANDRALL E. PEARSON P. ROY VAGELOS
SHARON PERCY ROCKEFELLER ARNOLD R. WEBER
Compensation Committee Interlocks and Insider Participation. Andrall E.
Pearson, who serves as a member of the Compensation Committee, was PepsiCo's
President and Chief Operating Officer until 1984.
Performance Graph
Set forth below is a graph showing the five-year cumulative total
return of PepsiCo Capital Stock as compared with Standard & Poor's 500 Stock
Index and the weighted average of Standard & Poor's 500 Beverage (Soft Drink),
Food and Restaurant Indices. The information presented is based on a calendar
year, and the composite index is weighted based on 1995 sales.
Cumulative Total Return
Dec-90 Dec-91 Dec-92 Dec-93 Dec-94 Dec-95
------ ------ ------ ------ ------ ------
PepsiCo, Inc. $100 $132 $164 $164 $149 $233
S&P Avg of 3 Ind Grps $100 $146 $166 $177 $186 $269
S&P 500 $100 $130 $140 $155 $157 $215
<PAGE> 9
<TABLE>
Summary Compensation Table
Long-Term
Annual Compensation Compensation
----------------------------------------------------------------------
Awards Payouts
-----------------------------
<CAPTION>
Securities
Under- Long-Term
Other Annual lying Incentive Plan All Other
Name and Principal Compensation Options Payouts Compensa-
Position Year Salary ($) Bonus ($) ($) (#) ($) tion($)(1)
- ------------------------ ---- ---------- --------- ----------- --------- ------ ----------
Wayne Calloway
<S> <C> <C> <C> <C> <C> <C> <C>
Chairman of the 1995 925,000 2,425,000 103,234(2) 5,801 0 2,927
Board and Chief 1994 968,269 1,975,000 120,786(2) 359,276 0 3,416
Executive Officer 1993 1,191,154 1,700,000 91,340(2) 5,423 0 3,830
Robert G. Dettmer
Executive Vice 1995 521,539 486,280 14,707 17,703 0 203,020(3)
President and Chief 1994 482,808 347,355 19,373 120,532 0 225,797(3)
Financial Officer 1993 445,769 302,200 13,210 1,861 0 121,193(3)
Roger A. Enrico
Vice Chairman of the
Board; Chairman and 1995 771,539 784,690 113,885(2) 2,780 0 2,638
Chief Executive Officer, 1994 735,404 611,730 79,754(2) 52,273 1,340,036(4) 2,823
PepsiCo Worldwide 1993 678,077 543,200 10,817 2,692 0 2,986
Restaurants
Robert L. Carleton 1995 310,275 249,480 11,040 1,002 0 0
Senior Vice President 1994 297,050 188,410 10,761 66,705 0 0
and Controller 1993 270,977 163,740 9,732 1,003 0 0
Edward V. Lahey, Jr.
Senior Vice 1995 388,269 315,900 10,816 1,264 0 1,643
President, General 1994 370,692 229,950 10,362 86,819 0 1,827
Counsel and Secretary 1993 335,769 210,800 10,142 1,304 0 1,994
</TABLE>
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(1) The amounts indicated for each named executive officer include a
portion of the annual cost of life insurance policies on the lives of its key
employees paid by PepsiCo. PepsiCo is reimbursed for its payments from the
proceeds of the policy in the event a covered employee dies while employed by
PepsiCo.
(2) Included in this amount are benefits from the use of corporate
transportation ($62,855 in 1995, $79,257 in 1994 and $51,557 in 1993 for Mr.
Calloway; $65,612 in 1995 and $42,757 in 1994 for Mr. Enrico).
(3) Of the $203,020 in 1995, $3,053 is for life insurance (see (1)) and
$199,967 is preferential earnings on income deferred by Mr. Dettmer since 1978.
In order to earn a preferential return, Mr. Dettmer elected a risk feature under
which, if he terminated his employment, he would forfeit all his deferred
income. In 1994, $225,797 represents 3,823 for life insurance and $221,974 for
preferential earnings, and in 1993, $121,193 represents $4,495 for life
insurance and $116,698 for preferential earnings. Earnings for 1994 on Mr.
Dettmer's deferred income were for five quarters.
(4) Payment of this amount has been deferred by Mr. Enrico. The amount
vested as a result of PepsiCo's achievement of a 10% cumulative earnings per
share growth target over a four-year period.
<PAGE> 10
<TABLE>
Option Grants in Last Fiscal Year
---------------------------------
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation for
Individual Grants Ten-Year Option Term
------------------------------------------------------------- ------------------------------
<CAPTION>
Number of
Securities % of Total
Under- Options
lying Granted to Exercise
Options Employees in or Base
Granted Fiscal Year Price Expiration
Name (#) (1) ($/Sh) Date 5% ($)(2) 10% ($)(2)
- ---------------------- --------- --- ---------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Wayne Calloway 5,801 (3) 0.12 46.00 6/30/05 167,818 425,284
Robert G. Dettmer 1,707 (3) 0.03 46.00 6/30/05 49,382 125,144
15,996 (4) 0.32 38.6875 1/27/04 389,188 986,280
Roger A. Enrico 2,780 (3) 0.06 46.00 6/30/05 80,423 203,808
Robert L. Carleton 1,002 (3) 0.02 46.00 6/30/05 28,987 73,459
Edward V. Lahey, Jr. 1,264 (3) 0.03 46.00 6/30/05 36,566 92,667
All PepsiCo
Shareholders - - 46.00 - 22.8 billion(5) 57.8 billion(5)
</TABLE>
- ---------------
(1) Does not include approximately 8,218,000 options granted to
approximately 134,000 employees under PepsiCo's SharePower Stock Option Plan.
(2) The 5% and 10% rates of appreciation were set by the SEC and are not
intended to forecast future appreciation, if any, of PepsiCo's stock. If
PepsiCo's stock does not increase in value, then the option grants described in
the table will be valueless.
(3) Twenty percent of these options becomes exercisable one year after the
grant date, July 1, 1995, and an additional twenty percent becomes exercisable
each year thereafter.
(4) These options become exercisable on February 1, 1998.
(5) These amounts do not include dividends and are based on the number of
shares of PepsiCo Capital Stock outstanding on December 31, 1995.
<PAGE> 11
<TABLE>
Aggregated Option Exercises in Last Fiscal Year
-----------------------------------------------
and FY-End Option Values
------------------------
<CAPTION>
Shares Ac- Number of Securities Under-
quired on Value lying Unexercised Options at Value of Unexercised In-the-
Name Exercise(#) Realized FY-End Money Options at FY-End(1)
- ------------------- ----------- -------- --------------------- --------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Wayne Calloway 200,000 $7,966,215 1,628,128 1,507,498 $69,500,676 $49,858,035
Robert G. Dettmer 49,683 1,938,809 343,050 269,977 13,847,924 5,244,799
Roger A. Enrico 250,000 11,273,688 244,639 635,530 10,208,373 26,688,636
Robert L. Carleton 0 0 5,006 123,320 149,042 2,346,304
Edward V. Lahey, Jr. 0 0 267,441 182,805 11,044,520 3,576,304
</TABLE>
- ----------
(1) The closing price of PepsiCo Capital Stock on December 29, 1995, the
last trading day prior to PepsiCo's fiscal year end, was $55.875.
<TABLE>
Pension Plan Table
The following table sets forth the approximate annual benefits payable
upon normal retirement at age 65 after January 1, 1996 for the following
remuneration classifications and years of service:
<CAPTION>
Remuneration Years of Service
-------------------- -------------- -------------- -------------- -------------- --------------
20 25 30 35 40
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
$500,000 197,680 222,100 246,520 270,940 295,940
$750,000 297,680 334,600 371,520 408,440 445,940
$1,000,000 397,680 447,100 496,520 545,940 595,940
$1,250,000 497,680 559,600 621,520 683,440 745,940
$1,500,000 597,680 672,100 746,520 820,940 895,940
$1,750,000 697,680 784,600 871,520 958,440 1,045,940
$2,000,000 797,680 897,100 996,520 1,095,940 1,195,940
$2,250,000 897,680 1,009,600 1,121,520 1,233,440 1,345,940
$2,500,000 997,680 1,122,100 1,246,520 1,370,940 1,495,940
$2,750,000 1,097,680 1,234,600 1,371,520 1,508,440 1,645,940
$3,000,000 1,197,680 1,347,100 1,496,520 1,645,940 1,795,940
$3,250,000 1,297,680 1,459,600 1,621,520 1,783,440 1,945,940
$3,500,000 1,397,680 1,572,100 1,746,520 1,920,940 2,095,940
</TABLE>
<PAGE> 12
The compensation covered by the Pension Plans (as defined below) is
based on the combined amounts set forth under the headings "Salary" and "Bonus"
of the Summary Compensation Table for each of the above-named executive
officers. The years of credited service as of January 1, 1996 for the executive
officers named on the Summary Compensation Table are as follows: Wayne Calloway
- -- 29 years; Robert G. Dettmer -- 23 years; Roger A. Enrico -- 24 years; Robert
L. Carleton -- 21 years and Edward V. Lahey, Jr. -- 30 years.
Computation of Benefits. PepsiCo's executive officers are participants
in PepsiCo's Retirement Plan and PepsiCo's Pension Equalization Plan (which was
adopted in 1975 to provide those benefits otherwise payable under the Retirement
Plan but for ERISA limitations). Such Plans are hereinafter referred to as the
"Pension Plans." Annual benefits payable under the Pension Plans to employees
with 5 or more years of service at age 65 are, for the first 10 years of
credited service, 30% of the employee's highest consecutive five-year average
annual earnings plus an additional 1% of the employee's highest consecutive
five-year average annual earnings for each additional year of credited service
over 10 years, less .43% of final average earnings not to exceed Social Security
covered compensation multiplied by years of service (not to exceed 35 years).
APPROVAL OF AUDITORS (PROXY ITEM NO. 2)
The Audit Committee has recommended that KPMG Peat Marwick LLP continue
as PepsiCo's independent auditors for 1996. They have served as PepsiCo's
independent auditors since 1990. They have been paid approximately $9.4 million
for audit and audit-related services rendered for 1995. Representatives of KPMG
Peat Marwick LLP will be available to answer questions at the Annual Meeting and
are free to make statements during the course of the meeting.
The Board of Directors recommends that shareholders vote FOR
this resolution.
SHAREHOLDERS' PROPOSALS
Where proposals were submitted by more than one shareholder, PepsiCo
will only list the primary filer's name, address and number of shares held.
Information regarding co-filers will be furnished to any person, orally or in
writing as requested, promptly upon the receipt of any oral or written request
therefor.
Political Non-Partisanship (Proxy Item No. 3)
Mrs. Evelyn Y. Davis, of the Watergate Office Building, 2600 Virginia
Avenue, N.W., Washington, D.C. 20037, who owns 450 shares of PepsiCo Capital
Stock, has advised PepsiCo that she intends to introduce from the floor the
following resolution for the reasons stated:
"RESOLVED: That the stockholders of PepsiCo assembled in Annual
Meeting in person and by proxy, hereby recommend that the Corporation
affirm its political non-partisanship. To this end the following
practices are to be avoided:
(a) The handing of contribution cards of a single political party to
an employee by a supervisor.
<PAGE> 13
(b) Requesting an employee to send a political contribution to an
individual in the Corporation for a subsequent delivery as part of
a group of contributions to a political party or fund raising
committee.
(c) Requesting an employee to issue personal checks blank as to payee
for subsequent forwarding to a political party, committee or
candidate.
(d) Using supervisory meetings to announce that contribution cards of
one party are available and that anyone desiring cards of a
different party will be supplied one on request to his supervisor.
(e) Placing a preponderance of contribution cards of one party at
mail station locations
Reasons: The Corporation must deal with a great number of governmental
units, commissions and agencies. It should maintain scrupulous political
neutrality to avoid embarrassing entanglements detrimental to its business.
Above all, it must avoid the appearance of coercion in encouraging its
employees to make political contributions against their personal
inclinations. The Troy (Ohio) News has condemned partisan solicitation for
political purposes by managers in a local company (not PepsiCo). Last year,
the owners of 35,922,013 shares, representing approximately 6.7% of shares
voting, voted FOR this proposal.
If you AGREE, please mark your proxy FOR this resolution."
Board of Directors' Response: PepsiCo, like all corporations, is
subject to many federal and state laws and regulations that govern corporate
involvement in partisan political activity, and we fully comply with these laws
and regulations. Some of the practices listed above are, in fact, already
prohibited by either federal or state regulations.
PepsiCo encourages its employees to participate voluntarily in civic
and community affairs. We also respect the right of each employee to exercise
lawfully his or her constitutional right to participate independently in the
political process.
PepsiCo's policies, together with federal and state laws and
regulations, are more than sufficient to meet the concern raised by this
proposal.
Last year, the proposal was soundly defeated.
The Board of Directors recommends that shareholders vote AGAINST this
resolution.
Cumulative Voting (Proxy Item No. 4)
John J. Gilbert, who owns 768 shares of PepsiCo Capital Stock, and John
J. Gilbert and/or Margaret R. Gilbert, 29 East 64th Street, New York, New York
10021-7043, co-trustees of 3,800 shares of PepsiCo Capital Stock under the will
of Caston J. Gilbert, have advised PepsiCo of their intention to introduce from
the floor the following resolution for the reasons stated:
"RESOLVED: That the stockholders of PepsiCo, Inc., assembled in annual
meeting in person and by proxy, hereby request the Board of Directors to
take the steps necessary to provide for cumulative voting in the election
of directors, which means each stockholder shall be entitled to as many
votes as shall equal the number of shares he or she owns multiplied by the
number of
<PAGE> 14
directors to be elected, and he or she may cast all of such votes for a
single candidate, or any two or more of them as he or she may see fit.
Reasons: Continued strong support along the lines we suggest were shown
at the last annual meeting when 25%, an increase over the previous year,
12,869 owners of 142,104,425 shares, were cast in favor of this proposal.
The vote against included 14,576 unmarked proxies.
A California law provides that all state pension holdings and state
college funds, invested in shares must be voted in favor of cumulative
voting proposals, showing increasing recognition of the importance of this
democratic means of electing directors.
The National Bank Act provides for cumulative voting. In many cases
companies get around it by forming holding companies without cumulative
voting. Banking authorities have the right to question the capability of
directors to be on banking boards. In many cases authorities come in after
and say the director or directors were not qualified. We were delighted to
see the SEC has finally taken action to prevent bad directors from being on
boards of public companies. The SEC should have hearings to prevent such
persons becoming directors before they harm investors.
We think cumulative voting is the answer to find new directors for
various committees. Some recommendations have been made to carry out the
CERES 10 points. The 11th should be, in our opinion, having cumulative
voting and ending staggered boards.
When Alaska became a state it took away cumulative voting over our
objections. The Valdez oil spill might have been prevented if environmental
directors were elected through cumulative voting. The huge derivative
losses might have also been prevented with cumulative voting.
Many successful corporations have cumulative voting. Example, Pennzoil
defeated Texaco in that famous case. Ingersoll-Rand also having cumulative
voting won two awards. FORTUNE magazine ranked it second in its industry as
'America's Most Admired Corporations' and the WALL STREET TRANSCRIPT noted
'on almost any criteria used to evaluate management, Ingersoll-Rand
excels.' In 1994 and 1995 they raised their dividend.
Lockheed-Martin, as well as VWR Corporation now have a provision that
if anyone has 40% of the shares cumulative voting applies, it applies at
the latter company.
In 1995 American Premier adopted cumulative voting. Allegheny Power
System tried to take away cumulative voting, as well as put in a stagger
system, and stockholders defeated it, showing stockholders are interested
in their rights.
If you agree, please mark your proxy FOR; if disagreeing mark AGAINST.
NOTE: PROXIES NOT MARKED WILL BE VOTED AGAINST THIS RESOLUTION.
Board of Directors' Response: Resolutions with regard to cumulative
voting submitted by these shareholders at previous annual meetings have been
defeated by a wide margin. The present system of voting for the election of
directors, under which the holders of a majority of the shares elect a Board
representing all shareholders, has served well and avoids the conflict created
where a director is elected by a narrow constituency.
The Board of Directors recommends that shareholders vote AGAINST this
resolution.
<PAGE> 15
Smokefree Restaurants (Proxy Item No. 5)
The Sisters of St. Dominic of Caldwell, 1 Ryerson Avenue, Caldwell, New
Jersey 07006, who own 2,800 shares of PepsiCo Capital Stock, have, along with
other religious institutions, submitted the following resolution for the reasons
stated:
"WHEREAS--the EPA says exposure to environmental tobacco smoke (ETS)
causes cancer in exposed healthy nonsmokers. The U.S. Public Health
Service, National Academy of Sciences, National Cancer Institute, National
Institute for Occupational Safety and Health, World Health Organization,
American Medical Association and American Cancer Society agree.
-- The effect of ETS on children annually causes 150,000 - 300,000 lower
respiratory infections (LRI), 7,500 - 15,000 hospitalizations for LRI,
400,000 - 1,000,000 attacks of asthma, 8,000 - 26,000 new cases of asthma,
respiratory symptoms of irritation, middle ear effusion, and significant
reduction in lung functions.
-- Millions of children visit our facilities. In doing so they are often
involuntarily exposed to ETS. The Texas Attorney General has sued five
fast-food restaurant chains, charging them with jeopardizing customers' and
employees' health.
-- For restaurant workers like waiters and bartenders, the risk of getting
lung cancer is 50% higher than the risk for others (The Journal of the
American Medical Association). 'Restaurant waiters had about 1.5 times as
great a likelihood of developing lung cancer as the general public' (The
New York Times 7/28/93).
-- Research also shows that employee and patron smoking costs money in the
form of higher health insurance premiums, cleaning costs, fire, and fire
insurance.
-- Failure to provide a safe eating environment may put our Company at risk
of being sued by nonsmoking employees, patrons, and/or the parents of
children who develop health problems from ETS exposure.
-- In 1994 McDonalds became smokefree in all its company-owned facilities,
joining other large chains such as Arbys and our own Taco Bell.
-- A federal study (5-19-95) confirmed earlier findings that banning
smoking in restaurants does not hurt their business and might even improve
it, the Center for Disease Control and Prevention revealed May 18, 1995;
RESOLVED that shareholders request the Board of Directors to adopt a
policy making all our restaurants smokefree by 1997. We request the policy
include stipulations that, beginning in 1997, all new franchisees'
facilities be smokefree and all renewals of franchise agreements include
smokefree facilities in the agreements.
Supporting Statement. Our Company has no smokefree policy covering all
its facilities and franchisees. Yet data shows children and workers are
liable to be victims of ETS inhaled in those restaurants. As for children's
risk, John Banshaf, Executive Director of Action on Smoking and Health,
says this 'demands immediate action to protect the most vulnerable and
helpless nonsmokers: millions of infants, toddlers, and other young
children.' As for workers, THE MILWAUKEE JOURNAL editorialized (7/1/93)
regarding smoking bans in restaurants: 'Some courageous establishments have
already done that, while others, fearing the loss of patrons, have
<PAGE> 16
hesitated. . . .It's true that many smokers find it hard to break the
link between food, drink and smoke. Yet the study provides all the more
reason for proprietors of such places to insist on the break. It's hardly
fair for smokers to endanger the health of workers for the sake of a few
puffs.'
If you agree, please vote 'YES.'"
Board of Directors' Response: Several thousand of our restaurants are
completely smoke-free and many others provide nonsmoking areas for patrons. All
of our restaurants prohibit smoking in the kitchens and smoking by employees
while on duty and all of our restaurants follow local, state and federal
non-smoking regulations. In addition, PepsiCo's corporate headquarters is
smoke-free and all of PepsiCo's divisions ban smoking in their headquarters.
PepsiCo's restaurants have taken a very responsive approach on this
public policy issue. In 1993, after determining that a large majority of its
customers preferred a smoke-free environment, Taco Bell made all of its
company-operated restaurants smoke-free. In addition, it has urged its
franchisees to do the same. Similarly, Pizza Hut and KFC have made over 1,800 of
their company-operated restaurants smoke-free, in markets where customers have
expressed a preference on smoke-free facilities, or where a local non-smoking
ordinance has been passed.
In today's competitive quick service environment, where consumers have
many restaurant choices, a flat ban on smoking that targets only our restaurants
puts us at a competitive disadvantage. That is why Taco Bell, KFC and Pizza Hut
joined with other members of The National Council of Chain Restaurants in
publicly endorsing federal legislation that would prohibit or restrict smoking
in all public facilities. This would put all restaurants, ours and everyone
else's, on an equal footing where we can compete on the basis of our value,
quality and service.
Last year, the proposal was soundly defeated.
The Board of Directors recommends that shareholders vote AGAINST this
resolution.
Code of Conduct (Proxy Item No. 6)
The National Council of the Churches of Christ in the USA, 475
Riverside Drive, New York, NY 10115-0050, which owns 100 shares of PepsiCo
Capital Stock, has, along with several other shareholders, submitted the
following resolution for the reasons stated:
"WHEREAS PepsiCo's Code of Conduct functions as the company's policy
for worldwide business conduct. In it, PepsiCo promotes:
-- adherence to highest standards of personal and professional
integrity and to avoid any situation that might reflect
unfavorably on us . . . as a Company;
-- precedence of ethical standards;
-- achievement of equality of opportunity for all employees;
-- 'fostering economic growth . . . [which] strengthens both
understanding and peace;'
-- protecting the environment and 'maintaining open and constructive
communication with local community and business leaders in order
to bring to fruition mutually acceptable objectives;'
<PAGE> 17
-- stating 'its position on issues of national and international
importance which may have an impact upon it or its
operations throughout the world.'
We commend PepsiCo for creating such forward looking guidelines.
However, we believe these guidelines fall short in vitally important areas
and that, in fact, PepsiCo's international conduct, at times, may conflict
with the company's own guidelines.
For example, take the case of PepsiCo's expanding involvement in the
police state of Burma, one of the world's most repressive countries, as
confirmed by Amnesty International and the U.S. State Department. Human
rights monitors agree the July, 1995 release of Burma leader, Aung San Suu
Kyi, has not lessened human rights violations against her or against the
Burmese people. Many human rights groups believe PepsiCo's controversial
business operations under the illegitimate military junta in fact hurts our
reputation more than it builds respect in the world community. Furthermore,
a clear case can be made that PepsiCo's Burma involvement strengthens the
repressive military government through payment of tax dollars, providing
legitimacy to an ostracized government by investing there and portraying
the country in a positive light which helps counter growing international
criticism. We believe, this conflicts with our company's pledge to
strengthen understanding and peace. In fact, Pepsi has done a special
report on its Burma operations which, we believe, acts as an apology for
Pepsi's involvement.
But Burma is only one example. PepsiCo also does business in other
countries with controversial human rights records: Indonesia, China,
Guatemala, Saudi Arabia, Turkey and Thailand.
Thus, we believe the PepsiCo Code needs significant expansion. Entirely
absent from the present Code is clear human rights criteria. For example,
Levi Strauss, in its Guidelines for Country Selection, states, 'We should
not initiate or renew contractual relationships in countries where there
are pervasive violations of human rights.' Other companies, such as Reebok
and Phillips-Van Heusen, make commitments in their codes to honor human
rights.
RESOLVED the shareholders request the Board of Directors to review and
update the PepsiCo Code of Conduct and report revisions to the shareholders
and employees by September 1996. In its review, the Board shall include a
section advising PepsiCo on making decisions on investing in or withdrawing
from countries where there is a pattern of on-going and systematic
violation of human rights, where a government is illegitimate or where
there is a call by human rights advocates, pro-democracy organizations or
legitimately elected representatives for economic sanctions against their
country.
Board of Directors' Response: In 1994, PepsiCo revised its Worldwide
Code of Conduct. The Code, which promotes the highest standards of ethics and
integrity as it relates to our international business practices, states: "Our
objective is to be nonpolitical and to continue to be a good corporate citizen
wherever we operate." We believe this is the best way to operate a worldwide
business and firmly believe international commerce strengthens both
understanding and peace.
We do not agree with the actions of governments of every place we
operate. However, due to the long-term nature of PepsiCo's businesses and the
inevitability of political and social change, we long ago concluded that it is
neither prudent nor appropriate for us to establish our own country-by-country
foreign policy. Instead, we rely on the laws and foreign policy created by the
U.S.
<PAGE> 18
government. The filers' proposal would put PepsiCo in the untenable position of
having to assess and respond to any number of political and ideological
disagreements which may arise wherever we do business.
Last year, the proposal was soundly defeated.
The Board of Directors recommends that shareholders vote AGAINST this
resolution.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before
the Meeting. If matters other than the foregoing should arise at the Meeting, it
is intended that the shares represented by proxies will be voted in accordance
with the judgment of the persons named in the proxy.
QUORUM AND VOTING
Quorum. Under North Carolina law, abstentions and broker nonvotes are
counted for purposes of determining whether a quorum is present at the Meeting.
(Under New York Stock Exchange rules, a broker may, absent instruction from a
beneficial owner, vote shares on routine proposals. A broker nonvote occurs when
a broker does not have discretionary voting power with respect to nonroutine
proposals, such as a merger, and has not received voting instruction from the
beneficial owner.)
Voting. Under PepsiCo's By-Laws, a majority of the shares of Capital
Stock present in person or by proxy and entitled to vote is required for passage
of a proposal (except for the election of directors, which requires a majority
of votes cast to elect). Therefore, abstentions are not counted as "for" or
"against" votes, but are counted in the total number of votes present for
passage of a proposal. This has the effect of requiring a higher vote for
passage. Broker nonvotes are not shares entitled to vote, are not counted in the
total number of votes, and thus have no effect on the outcome of voting.
Shares held in PepsiCo's Employee Stock Ownership Plan (the "ESOP")
cannot be voted unless a proxy card is signed and returned. If cards
representing shares held in the ESOP are not returned, those shares will be
voted by the trustees in the same proportion as the shares for which signed
cards are returned by other participants.
Confidentiality. PepsiCo's policy is that proxies identifying
individual shareholders are private except as necessary to determine compliance
with law or assert or defend legal claims, or in a contested proxy solicitation,
or in the event that a shareholder makes a written comment on a proxy card or an
attachment to it. PepsiCo retains an independent organization to tabulate
shareholder votes and certify voting results.
1997 SHAREHOLDERS' PROPOSALS
PepsiCo welcomes comments or suggestions from its shareholders,
including any recommendations shareholders may have as to future directors of
the Company. In the event that a shareholder desires to have a proposal formally
considered at the 1997 Annual Shareholders' Meeting, and included in the Proxy
Statement for that Meeting, the proposal must be received in writing by PepsiCo
on or before November 27, 1996.
<PAGE> 19
GENERAL
The costs relating to this Proxy Statement, the proxy and the Annual
Meeting are being borne by PepsiCo.
In addition to the solicitation of proxies by mail, PepsiCo intends to
request brokers and bank nominees to solicit proxies from their principals and
will pay such brokers and bank nominees their expenses in that connection.
To assure the presence in person or by proxy of the necessary quorum
for holding the meeting, PepsiCo has employed the firm of Georgeson & Company,
Inc. to assist in soliciting proxies by mail, telephone, telegraph and personal
interview for fees estimated at approximately $21,000.
In addition, employees of PepsiCo (none of whom will receive any
additional compensation therefor) may solicit proxies.
The Annual Report to Shareholders for 1995, which includes financial
statements, has been mailed with this Proxy Statement or previously delivered to
shareholders and does not form a part of the material for the solicitation of
proxies. In an effort to reduce postage costs, we have sent materials at bulk
mail rates. If, upon receipt of your proxy material, you have not received the
Annual Report, please write or call PepsiCo's Manager of Shareholder Relations,
at PepsiCo, Inc., Purchase, NY 10577 or (914) 253-3055.
Please complete, sign, and date the enclosed proxy card, which is
revocable as described herein, and mail it promptly in the enclosed postage-paid
envelope.
By order of the Board of Directors,
EDWARD V. LAHEY, JR.
Secretary
<PAGE> 19
APPENDIX
PEPSICO, INC.
March 28, 1996
Dear Shareholder:
I'm delighted to tell you 1995 was a great year for PepsiCo. Our stock was up
54%.
There's great confidence in the investment community today that the future for
PepsiCo is very bright. I certainly share that confidence. In fact I think the
opportunity for PepsiCo today is bigger than ever -- even for a company that's
already grown sales and ongoing operating profits at an average of about 15% a
year for 30 years. On behalf of the entire management team, let me say we're all
personally committed to making the most of that opportunity.
Please note that for your convenience we've included on the inside back cover of
your annual report a list of our shareholder services and telephone numbers. As
always, we welcome your comments.
Your proxy card is attached below. Please read the enclosed proxy statement,
then vote and return the card at your earliest convenience.
Sincerely,
WAYNE CALLOWAY
----------------------------
Wayne Calloway
Chairman and
Chief Executive Officer
DIRECTIONS TO PEPSICO, INC. WORLD HEADQUARTERS
PURCHASE, NEW YORK
[LOCAL AREA MAP IS PROVIDED IN PRINTED PROXY STATEMENT SHOWING MAIN ROADS
SURROUNDING PEPSICO WORLD HEADQUARTERS IN PURCHASE, NEW YORK.]
BY CAR FROM NEW YORK
WEST SIDE--MANHATTAN--BRONX
West Side Highway/Henry Hudson Parkway to Cross County Parkway East. Take
Hutchinson River Parkway Northbound to Exit 28 (Lincoln Avenue, Port Chester).
Left on Lincoln Avenue and proceed one (1) mile to PepsiCo on right.
EAST SIDE - MANHATTAN
East Side Drive to Bronx via Triboro Bridge. Take the Bruckner Expressway (278)
North to the Hutchinson River Parkway Exit 28 (Lincoln Avenue, Port Chester),
and follow directions above.
EAST SIDE - BRONX
Hutchinson River Parkway North to Exit 28 (Lincoln Avenue, Port Chester), and
follow directions above.
BROOKLYN, QUEENS & J.F. KENNEDY AIRPORT
Van Wyck Expressway (678) to the Bronx Whitestone Bridge to Hutchinson River
Parkway North. Take Exit 28 (Lincoln Avenue, Port Chester), and follow
directions above.
LA GUARDIA AIRPORT
Grand Central Parkway East to Whitestone Expressway Exit. Cross the
Whitestone Bridge North to Hutchinson River Parkway North. Take Exit 28 (Lincoln
Avenue, Port Chester), and follow directions above.
FROM LONG ISLAND
Long Island Expressway or the Grand Central Parkway to the Cross Island Parkway.
Cross Island Parkway West to the Throgs Neck Bridge. Cross Throgs Neck Bridge
North and travel North on New England Thruway (Route 95) to Hutchinson River
Parkway North to Exit 28 (Lincoln Avenue, Port Chester), and follow directions
above.
FROM WEST OF HUDSON RIVER - TAPPAN ZEE BRIDGE
Cross Tappan Zee Bridge South. Follow Cross Westchester (Interstate 287) to
Exit 8E. (Route 127 Harrison, Westchester Avenue). Stay on Westchester Avenue
and turn left onto Anderson Hill Road. Proceed about four (4) miles to PepsiCo
on right.
FROM CONNECTICUT - MERRITT PARKWAY
Take the Merritt Parkway South, which becomes the Hutchinson River Parkway, to
Exit 28 (Lincoln Avenue, Port Chester). Turn right and proceed one (1) mile to
PepsiCo on right.
NEW ENGLAND THRUWAY
Follow the New England Thruway to Exit for Cross Westchester Expressway,
Westbound. Take Exit 9 North, Hutchinson River Parkway, to Exit 28 (Lincoln
Avenue, Port Chester). Turn left onto Lincoln Avenue and proceed one (1) mile to
PepsiCo on right.
FROM NORTHERN WESTCHESTER
Take 684 South to Westchester Airport Exit, Route 120 South. Left on Purchase
Street to Anderson Hill Road, left on Anderson Hill Road to PepsiCo on right.
<TABLE>
V FOLD AND DETACH HERE V (See reverse side for directions)
- -----------------------------------------------------------------------------------------------------------------------------------
/ X / PLEASE MARK
VOTES AS IN
THIS EXAMPLE
- -----------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 3, 4, 5 AND 6.
VOTE FOR ITEMS 1 AND 2.
- -------------------------------------- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Election of Director Nominees:
J.F. Akers,
R.E. Allen, W. Calloway,
R.A. Enrico, R.L. Hunt,
J.J. Murphy,
S.S Reinemund FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
S.P. Rockefeller / / / / 3. Shareholder Proposal / / / / / / 6. Shareholder Proposal / / / / / /
C.A. Sinclair (Proxy Statement p. 12) Proxy Statement p.16)
F.A. Thomas
P.R. Vagelos
C.E. Weatherup
A.R. Weber
4. Shareholder Proposal / / / / / /
(Proxy Statement p. 13)
- ------------------------------------
WITHHELD FOR: (Write that nominee's
name above.) 5. Shareholder Proposal / / / / / /
(Proxy Statement p. 15)
2. Approval of / / / / / /
Auditors FOR AGAINST ABSTAIN
Where no voting instructions are given, the I PLAN TO ATTEND MEETING
shares represented by this Proxy will be If you check this box to the / /
VOTED FOR Items No. 1 and 2 and VOTED right an admission card will
AGAINST Items No. 3, 4, 5 and 6. be sent to you
Receipt hereby acknowledged of the PepsiCo Notice of Meeting and Proxy
Statement. IMPORTANT: Please sign exactly as your name or names appear
on this proxy. Where shares are held jointly, both holders should
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give your full title as such. If the holder is a
corporation, execute in full corporate name by authorized officer.
Signature---------------------------------- Date------------ Signature------------------------------------- Date ------------
</TABLE>
PEPSICO, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
May 1, 1996
THIS PROXY IS SOLICITED ON BEHALF OF PEPSICO'S BOARD OF DIRECTORS
The undersigned hereby appoints Roger A. Enrico and Edward V. Lahey,
Jr., and each of them, proxies for the undersigned, with full power of
substitution, to vote all shares of PepsiCo, Inc. Capital Stock which the
undersigned may be entitled to vote at the Annual Meeting of Shareholders of
PepsiCo, Inc., in Purchase, New York, on Wednesday, May 1, 1996 from 9:00 A.M.
to 11:00 A.M., or at any adjournment thereof, upon the matters set forth on the
reverse side and described in the accompanying Proxy Statement and upon such
other business as may properly come before the meeting or any adjournment
thereof.
PLEASE MARK THIS PROXY AS INDICATED ON THE REVERSE SIDE TO VOTE ON ANY
ITEM. IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS, PLEASE SIGN THE REVERSE SIDE; NO BOXES NEED TO BE CHECKED.
(Continued and to be signed on other side)
<TABLE>
V FOLD AND DETACH HERE V (See reverse side for directions)
- -----------------------------------------------------------------------------------------------------------------------------------
/ X / PLEASE MARK
VOTES AS IN
THIS EXAMPLE
- -----------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST Items 3, 4, 5 and 6.
VOTE FOR ITEMS 1 AND 2.
- -------------------------------------- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Election of Director Nominees:
J.F. Akers,
R.E. Allen, W. Calloway,
R.A. Enrico, R.L. Hunt,
J.J. Murphy,
S.S Reinemund FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
S.P. Rockefeller / / / / 3. Shareholder Proposal / / / / / / 6. Shareholder Proposal / / / / / /
C.A. Sinclair (Proxy Statement p. 12) Proxy Statement p.16)
F.A. Thomas
P.R. Vagelos
C.E. Weatherup
A.R. Weber
4. Shareholder Proposal / / / / / /
(Proxy Statement p. 13)
- ------------------------------------
WITHHELD FOR: (Write that nominee's
name above.) 5. Shareholder Proposal / / / / / /
(Proxy Statement p. 15)
2. Approval of / / / / / /
Auditors FOR AGAINST ABSTAIN
Where no voting instructions are given, the
shares represented by this Proxy will be
VOTED FOR Items No. 1 and 2 and VOTED
AGAINST Items No. 3, 4, 5 and 6.
Receipt hereby acknowledged of the PepsiCo Notice of Meeting and Proxy
Statement. IMPORTANT: Please sign exactly as your name or names appear
on this proxy. Where shares are held jointly, both holders should
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give your full title as such. If the holder is a
corporation, execute in full corporate name by authorized officer.
Signature------------------------------------- Date ------------
</TABLE>
PEPSICO, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
May 1, 1996
THIS PROXY IS SOLICITED ON BEHALF OF PEPSICO'S BOARD OF DIRECTORS
The undersigned hereby appoints Roger A. Enrico and Edward V. Lahey,
Jr., and each of them, proxies for the undersigned, with full power of
substitution, to vote all shares of PepsiCo, Inc. Capital Stock which the
undersigned may be entitled to vote at the Annual Meeting of Shareholders of
PepsiCo, Inc., in Purchase, New York, on Wednesday, May 1, 1996 from 9:00 A.M.
to 11:00 A.M., or at any adjournment thereof, upon the matters set forth on the
reverse side and described in the accompanying Proxy Statement and upon such
other business as may properly come before the meeting or any adjournment
thereof.
PLEASE MARK THIS PROXY AS INDICATED ON THE REVERSE SIDE TO VOTE ON ANY
ITEM. IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS, PLEASE SIGN THE REVERSE SIDE; NO BOXES NEED TO BE CHECKED.
(Continued and to be signed on other side)
