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 / No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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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
PepsiCo will hold its Annual Shareholders' Meeting at our World
Headquarters at 700 Anderson Hill Road, Purchase, New York, on Wednesday, May 7,
1997, at 11:00 A.M. Eastern Daylight Saving Time, to:
0 Elect directors.
0 Approve the appointment of independent auditors.
0 Act upon three shareholder proposals in the attached Proxy Statement.
0 Transact any other business that may properly come before the Meeting.
If you own shares of PepsiCo stock as of the close of business on March 14,
1997 (the Record Date), you can vote those shares by proxy or at the Meeting.
If you plan to attend the Meeting, please check the box on your proxy card,
so that we may 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 in the enclosed postage-paid
envelope so that your shares will be represented. 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 voting at the Meeting.
By order of the Board of Directors,
March 28, 1997 EDWARD V. LAHEY, JR.
Secretary
<PAGE> 1
PepsiCo, Inc.
Purchase, New York 10577-1444
March 28, 1997
PROXY STATEMENT
The Board of Directors of PepsiCo, Inc. ("PepsiCo") is soliciting
proxies to be voted at the Annual Meeting of Shareholders to be held on
Wednesday, May 7, 1997, and at any adjournment of the Meeting. We are sending
this Proxy Statement in connection with the proxy solicitation.
At March 14, 1997, the record date, there were 1,541,460,586 shares of
PepsiCo Capital Stock outstanding and entitled to one vote each at the Annual
Meeting. These shares were registered in the names of 214,860 shareholders and,
as far as we know, no person owns beneficially more than 5% of the outstanding
Capital Stock.
PepsiCo is making its first mailing of this Proxy Statement on March
28, 1997.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
PROXY ITEM NO. 1 - ELECTION OF DIRECTORS............................................... 2
Ownership of Capital Stock by Directors and Executive Officers......................... 4
Board Meetings and Committees of the Board............................................. 4
Directors Compensation..................................................................5
Executive Compensation
Compensation Committee Report..................................................5
Compensation Committee Interlocks and Insider Participation....................7
Summary Compensation Table.....................................................8
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values.......9
Option Grants in Last Fiscal Year.............................................10
Long-Term Incentive Plan Awards...............................................11
Performance Graph.............................................................12
Pension Plan Table............................................................12
Compliance with Section 16(a) of the Exchange Act......................................13
PROXY ITEM NO. 2 - APPROVAL OF AUDITORS................................................13
PROXY ITEMS NOS. 3, 4 AND 5 - SHAREHOLDER PROPOSALS
Election of President and COO.................................................13
Cumulative Voting.............................................................14
Cap Non-Performance-Based Executive Compensation..............................15
Other Matters .....................................................................16
Quorum and Voting .....................................................................16
1998 Shareholders' Proposals...........................................................17
General................................................................................17
</TABLE>
<PAGE> 2
ELECTION OF DIRECTORS (PROXY ITEM NO. 1)
The Board of Directors proposes the following thirteen nominees for
election as directors at the Annual Meeting. The directors will hold office from
election until the next Annual Meeting of Shareholders, or until their
successors are elected and qualified.
- --------------------------------------------------------------------------------
JOHN F. AKERS, 62, 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., W.R. Grace & Co. and Zurich Insurance Company--U.S.
- --------------------------------------------------------------------------------
ROBERT E. ALLEN, 62, 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.
- --------------------------------------------------------------------------------
WAYNE CALLOWAY, 61, Chairman of the Board of PepsiCo from 1986 to November
1996, 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 held until April 1996. Mr. Calloway is
a director of Citicorp, General Electric Company and Exxon Corporation.
- --------------------------------------------------------------------------------
ROGER A. ENRICO, 52, was elected as PepsiCo's Chief Executive Officer in
April and Chairman of the Board in November 1996. Mr. Enrico was elected to
PepsiCo's Board in 1987. He joined PepsiCo in 1971, and became President and
Chief Executive Officer of Pepsi-Cola USA in 1983, 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. In addition to his duties as PepsiCo's Chairman
and CEO, he is also Chairman and Chief Executive Officer, PepsiCo Worldwide
Restaurants, a position he has held since 1994. Mr. Enrico is a member of the
Board of Directors of Dayton Hudson Corporation, the A. H. Belo Corporation and
The Prudential Insurance Company of America.
- --------------------------------------------------------------------------------
RAY L. HUNT, 53, 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 in April 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 Electronic Data Systems Corporation.
- --------------------------------------------------------------------------------
JOHN J. MURPHY, 65, former Chairman of the Board and Chief Executive
Officer of Dresser Industries, Inc., was elected a director of PepsiCo in 1984,
and is Chairman of the Compensation Committee. 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, and as Chairman until
December 1996. He is also a director of NationsBank Corporation, Kerr-McGee
Corporation and CARBO Ceramics Inc.
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STEVEN S REINEMUND, 48, was elected a director in April 1996. Mr. Reinemund
began his career with PepsiCo as a senior operating officer of Pizza Hut, Inc.
in 1984. He became
<PAGE> 3
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
became President and Chief Executive Officer of Frito-Lay, Inc., and assumed his
current position as Chairman and Chief Executive Officer of the Frito-Lay
Company in April 1996. He is also a director of Provident Life & Accident
Insurance Co.
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SHARON PERCY ROCKEFELLER, 52, 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.
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FRANKLIN A. THOMAS, 62, was elected to PepsiCo's Board in 1994. 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. Mr. Thomas was President of the Ford Foundation from 1979 to
April 1996 and is currently a consultant to the TFF Study Group, a non-profit
organization assisting development in southern Africa. He is also a director of
ALCOA, Citicorp, Cummins Engine Company, Inc. and Lucent Technologies.
- --------------------------------------------------------------------------------
P. ROY VAGELOS, 67, 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.
- --------------------------------------------------------------------------------
KARL M. VON DER HEYDEN, 60, was elected as PepsiCo's Chief Financial
Officer and Vice Chairman of the Board in September 1996. Mr. von der Heyden was
Co-Chairman and Chief Executive Officer of RJR Nabisco from March through May
1993 and Chief Financial Officer from 1989 to 1993. He served as President and
Chief Executive Officer of Metallgesellschaft Corp. from 1993 to 1994. Mr. von
der Heyden has also been a senior advisor to the Clipper Group, a private
merchant bank, since 1994. Mr. von der Heyden is a director of Federated
Department Stores, Inc.
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CRAIG E. WEATHERUP, 51, was elected a director in April 1996. Mr. Weatherup
is currently Chairman and Chief Executive Officer of the Pepsi-Cola Company, a
position he has held since July 1996. 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 1988, President and Chief
Executive Officer of Pepsi-Cola North America in 1991, and served as PepsiCo's
President in 1996. Mr. Weatherup is also a director of Federated Department
Stores, Inc.
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ARNOLD R. WEBER, 67, was elected to PepsiCo's Board in 1978, and is
Chairman of the Audit Committee. Dr. Weber is Chancellor of Northwestern
University and was the University's President from 1985 to 1995. He 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.
- --------------------------------------------------------------------------------
<PAGE> 4
If any of these nominees for director becomes unavailable, the persons
named in the enclosed proxy intend to vote for any alternate designated by the
present Board.
OWNERSHIP OF CAPITAL STOCK BY DIRECTORS AND EXECUTIVE OFFICERS. The
following table shows, as of March 14, 1997, 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................................................. 28,307
Robert E. Allen............................................... 9,521
Wayne Calloway................................................ 5,661,834
Roger A. Enrico............................................... 1,711,418
Ray L. Hunt................................................... 3,381
John J. Murphy................................................ 24,399
Steven S Reinemund............................................ 604,896
Sharon Percy Rockefeller...................................... 65,422
Franklin A. Thomas............................................ 4,381
P. Roy Vagelos................................................ 40,017
Karl M. von der Heyden........................................ 20,000
Craig E. Weatherup............................................ 1,586,060
Arnold R. Weber............................................... 43,397
Robert L. Carleton............................................ 199,140
Edward V. Lahey, Jr........................................... 679,807
All directors and executive officers as a group (17 persons).. 10,918,034
- -----------------------
(1) Certain directors or executive officers share voting and investment
power over 618,827 shares of PepsiCo Capital Stock with their spouses or
children. The shares shown include 9,311,632 shares of PepsiCo Capital Stock
which certain directors and executive officers have a right to acquire within 60
days.
(2) The shares shown do not include the following number of PepsiCo Capital
Stock equivalents, which are held in PepsiCo's deferred income program: John F.
Akers 1,119 shares; Robert E. Allen 26,379 shares; Roger A. Enrico 17,136
shares; Ray L. Hunt 1,119 shares; John J. Murphy 7,386 shares; Franklin A.
Thomas 5,154 shares; P. Roy Vagelos 1,119 shares; Craig E. Weatherup 13,860
shares; Arnold R. Weber 4,831shares; and all directors and executive officers as
a group 82,623 shares.
Directors and executive officers as a group own less than 1% of outstanding
Capital Stock.
BOARD MEETINGS AND COMMITTEES OF THE BOARD. PepsiCo's Board held six
regular meetings and one telephonic meeting 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. The
full Board deals with matters such as nominations for Board membership or issues
raised by shareholders.
The Audit Committee, which was established in 1967, held two meetings in
1996. The Committee reviews external and internal audit plans and activities,
our annual financial statements,
<PAGE> 5
and our system of internal financial controls. The Audit Committee 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 since 1955, held four
meetings during 1996. The Compensation Committee administers PepsiCo's incentive
plans, sets 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 93%. No incumbent director attended fewer than 75% of the
total number of Board and Committee meetings.
DIRECTORS COMPENSATION. Directors who are employees receive no additional
pay for serving as directors. All other directors receive annual retainers of
$70,000 and an annual grant of options to buy $120,000 worth of PepsiCo Capital
Stock. Directors may convert up to $90,000 of their option grant into PepsiCo
Capital Stock at a ratio of three options for one share. Directors may also
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 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
12.
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 seven years, while providing superior shareholder returns over
that period.
<PAGE> 6
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.
Bonus awards for PepsiCo's CEO and executive officers are paid based on
PepsiCo's overall performance against specified earnings growth 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 and special 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, in
general, other executive officers are given the opportunity to choose the mix of
performance units and stock options in their long-term awards. 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
In April 1996, Roger A. Enrico succeeded D. Wayne Calloway as CEO.
References to CEO in this section apply to both individuals. The Committee meets
without the CEO to evaluate his performance, and with the CEO to evaluate the
performance of other executive officers. The 1996 salaries, bonuses and
long-term incentive awards for the corporation's CEO and executive officers set
forth on page 8 were reviewed and approved at meetings of the Compensation
Committee held during 1996 and in January 1997.
<PAGE> 7
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.
The salary of each CEO in 1996 was less than $1 million. Reimbursement for
relocation expenses incurred by Mr. Enrico in connection with assumption of his
new responsibilities are not included as salary. The primary performance
measures used to determine the CEO's 1996 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. The
overall performance measures were not assigned specific weights, but rather were
weighted subjectively by each member of the Compensation Committee. PepsiCo's
fiscal 1996 earnings per share growth (before one time charges) declined 5%.
Long-term incentive awards were made to the CEO and to other executive
officers last year. These included special awards to Messrs. Enrico, Reinemund
and Weatherup. The level of long-term incentive awards are based on comparisons
with awards at the survey companies. These long-term awards, which are intended
as incentives for future performance and are not based on past corporate
performance, are targeted at the upper end of awards for similar positions at
the survey companies.
The Performance Graph on page 12 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 28, 1996 was 13.6%.
COMPENSATION COMMITTEE:
JOHN F. AKERS SHARON PERCY ROCKEFELLER
ROBERT E. ALLEN FRANKLIN A. THOMAS
RAY L. HUNT P. ROY VAGELOS
JOHN J. MURPHY ARNOLD R. WEBER
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. Andrall E.
Pearson, who served as a member of the Compensation Committee until he retired
in April 1996, was PepsiCo's President and Chief Operating Officer until 1984.
<PAGE> 8
<TABLE>
Summary Compensation Table
<CAPTION>
Long-Term
Annual Compensation Compensation
----------------------------------------- -----------------------------
Awards Payouts
-----------------------------
Securities
Under-
lying Long-Term All Other
Name and Principal Other Annual Options Incentive Plan Compensa-
Position Year Salary ($) Bonus ($) Compensation ($) (#)(1) Payouts ($) tion($)(2)
- ------------------------- ----- ---------- --------- --------------- ------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Wayne Calloway 1996 925,000 1,300,000 121,526(3) 686,857 0 1,895
Director, Former Chairman 1995 925,000 2,425,000 103,234(3) 11,602 0 2,927
of the Board and Chief 1994 968,269 1,975,000 120,786(3) 718,552 0 3,416
Executive Officer
Roger A. Enrico (4) 1996 880,500 1,300,000 910,408(3) 1,732,141 1,745,029(5) 2,281
Chairman of the Board and 1995 771,539 784,690 113,885(3) 5,560 0 2,638
Chief Executive Officer 1994 735,404 611,730 79,754(3) 104,546 1,340,036(5) 2,823
Steven S Reinemund (6) 1996 715,769 1,053,005 7,263 1,143,841 120,940 0
Director; Chairman and 1995 - - - - - -
Chief Executive Officer, 1994 - - - - - -
Frito-Lay Company
Craig E. Weatherup (6) 1996 723,346 925,025 59,553(3) 1,169,441 0 5,789(7)
Director; Chairman and 1995 - - - - - -
Chief Executive Officer, 1994 - - - - - -
Pepsi-Cola Company
Robert L. Carleton 1996 330,058 162,580 11,563 109,997 0 0
Senior Vice President 1995 310,275 249,480 11,040 2,004 0 0
and Controller 1994 297,050 188,410 10,761 133,410 0 0
Edward V. Lahey, Jr. 1996 411,636 233,435 21,523 164,629 0 1,211
Senior Vice President, 1995 388,269 315,900 10,816 2,528 0 1,643
General Counsel and 1994 370,692 229,950 10,362 173,638 0 1,827
Secretary
- ---------------
</TABLE>
(1) Options are reflected on a post-split basis.
(2) PepsiCo pays a portion of the annual cost of life insurance policies on
the lives of its key employees. These amounts are included here. If a covered
employee dies while employed by PepsiCo, PepsiCo is reimbursed for its payments
from the proceeds of the policy.
(3) This amount includes benefits from the use of corporate transportation
($82,339 in 1996; $62,855 in 1995 and $79,257 in 1994 for Mr. Calloway; $92,929
in 1996; $65,612 in 1995 and $42,757 in 1994 for Mr. Enrico; $35,435 in 1996 for
Mr. Weatherup). It also includes reimbursement of relocation and tax related
expenses of $777,311 relative to Mr. Enrico's relocation in connection with his
new responsibilities.
<PAGE> 9
(4) Mr. Enrico became Chief Executive Officer on April 1, 1996 and Chairman
of the Board on November 14, 1996. Previously, he was Vice Chairman of the
Board, and is Chairman and Chief Executive Officer, PepsiCo Worldwide
Restaurants.
(5) This amount vested as a result of PepsiCo's achievement of a
predetermined cumulative earnings per share growth target over a four-year
period. Mr. Enrico deferred payment of this amount.
(6) Mr. Reinemund and Mr. Weatherup were not executive officers in 1995 and
1994. Mr. Reinemund became Chairman and Chief Executive Officer, Frito-Lay
Company, and was elected a Director on April 1, 1996. Previously, he was
President and Chief Executive Officer of Frito-Lay, Inc. Mr. Weatherup became
Chairman and Chief Executive Officer, Pepsi-Cola Company, in July 1996 and was
elected a Director on April 1, 1996. Previously, he was President and Chief
Executive Officer of Pepsi-Cola North America.
(7) Of this amount, $1,471 is for life insurance (see (1)) and $4,318 is
preferential earnings on income deferred by Mr. Weatherup since 1986. In order
to earn a preferential return, Mr. Weatherup elected a risk feature under which,
if he terminated his employment, he would forfeit all his deferred income.
<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 250,000 7,096,463 3,793,038 2,915,071 79,070,042 44,715,364
Roger A. Enrico 0 0 601,382 2,891,097 12,502,252 27,580,958
Steven S Reinemund 0 0 595,424 1,834,643 9,463,107 6,819,131
Craig E. Weatherup 0 0 1,576,512 2,031,507 31,421,653 15,602,802
Robert L. Carleton 0 0 131,140 235,509 1,715,112 1,230,306
Edward V. Lahey, Jr. 72,792 1,812,728 651,934 340,395 12,565,283 1,724,145
- ----------
</TABLE>
(1) The closing price of PepsiCo Capital Stock on December 27, 1996, the
last trading day prior to PepsiCo's fiscal year end, was $29.625.
<PAGE> 10
<TABLE>
Option Grants in Last Fiscal Year
---------------------------------
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation for
Individual Grants Option Term
- ------------------------------------------------------------------------------- -------------------------------
Number of % of Total
Securities Options
Under- Granted to Exercise
lying Employees in or Base
Options Fiscal Year Price Expiration
Name Granted (#) (1) ($/Sh) Date 5% ($)(2) 10% ($)(2)
- --------------------- -------- --------- -------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Wayne Calloway 8,169 (3) 0.021 35.50 6/30/06 182,379 462,185
678,688 (4) 1.747 29.46875 1/25/06 12,577,947 31,874,988
Roger A. Enrico 3,901 (3) 0.010 35.50 6/30/06 87,093 220,710
260,360 (4) 0.670 31.6875 1/25/06 5,188,480 13,148,626
87,816 (5) 0.226 31.6875 1/27/04 1,328,601 3,182,230
1,000,000 (6) 2.573 29.46875 1/25/06 18,532,739 46,965,598
380,064 (4) 0.978 29.46875 1/25/06 7,043,627 17,849,933
Steven S Reinemund 3,061 (3) 0.008 35.50 6/30/06 68,339 173,185
106,512 (4) 0.274 31.6875 1/25/06 2,122,582 5,379,039
8,492 (5) 0.022 31.6875 1/27/04 128,479 307,729
700,000 (7) 1.801 29.46875 1/25/09 18,269,281 50,585,757
325,776 (4) 0.838 29.46875 1/25/06 6,037,521 15,300,265
Craig E. Weatherup 3,185 (3) 0.008 35.50 6/30/06 71,108 180,200
106,512 (4) 0.274 31.6875 1/25/06 2,122,582 5,379,039
33,968 (5) 0.087 31.6875 1/27/04 513,914 1,230,914
700,000 (7) 1.801 29.46875 1/25/09 18,269,281 50,585,757
325,776 (4) 0.838 29.46875 1/25/06 6,037,521 15,300,625
Robert L. Carleton 1,405 (3) 0.004 35.50 6/30/06 31,368 79,492
108,592 (4) 0.279 29.46875 1/25/06 2,012,507 5,100,088
Edward V. Lahey, Jr. 1,741 (3) 0.004 35.50 6/30/06 38,869 98,502
162,888 (4) 0.419 29.46875 1/25/06 3,018,761 7,650,132
All PepsiCo - - 35.50 - 34.5 Billion (8) 87.4 Billion (8)
Shareholders
- ----------
</TABLE>
(1) Does not include approximately 11,546,000 options granted to
approximately 129,900 employees under PepsiCo's SharePower Stock Option Plan.
<PAGE> 11
(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, 1996, and an additional twenty percent becomes exercisable
each year thereafter.
(4) These options become exercisable on February 1, 2000.
(5) These options become exercisable on February 1, 1998.
(6) These options become exercisable on January 25, 2001.
(7) These options become exercisable on January 25, 2004.
(8) These amounts do not include dividends and are based on the number of
shares of PepsiCo Capital Stock outstanding on December 31, 1996.
<TABLE>
Long-Term Incentive Plans - Awards In Last Fiscal Year
------------------------------------------------------
<CAPTION>
Estimated Future Payouts under Non-Stock Price-
Based Plans
---------------------------------------------------
Number of Period Until
Performance Maturation or
Name Units Payout (1) Threshold (2) Target (2) Maximum (2)
- ------------------------- ---------------- ---------------- ------------------ --------------- ----------------
<S> <C> <C> <C> <C> <C>
Steven S Reinemund 8,492 2 years $67,273 $269,090 $269,090
</TABLE>
(1) This award is a pro-rated award from the 1994 Performance Share Grant,
which was granted to Mr. Reinemund on April 1, 1996.
(2) The target payout is based on 10% Cumulative Earnings per Share Growth
("CE/SG") for the years ended 1994 through 1997. In the event that the
Corporation achieves 9% CE/SG, the participant receives 75% of the target, 8%
CE/SG results in a 50% payment, 7% CE/SG results in a 25% payment and below 7%
CE/SG would result in $0 payout.
<PAGE> 12
PERFORMANCE GRAPH. The graph below shows 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 1996 sales.
CUMULATIVE TOTAL RETURN
Dec-91 Dec-92 Dec-93 Dec-94 Dec-95 Dec-96
------ ------ ------ ------ ------ ------
PepsiCo, Inc. $100 $124 $124 $112 $176 $190
S&P 500 100 108 118 120 165 203
S&P Avg. of 3 Industry 100 114 121 127 183 210
Groups
<TABLE>
Pension Plan Table
------------------
When an executive retires at the normal retirement age (65), the
approximate annual benefits payable after January 1, 1997 for the following pay
classifications and years of service are:
<CAPTION>
Remuneration Years of Service
-------------------- -------------- -------------- -------------- -------------- --------------
20 25 30 35 40
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
$500,000 197,420 221,780 246,130 270,490 295,490
$750,000 297,420 334,280 371,130 407,990 445,490
$1,000,000 397,420 446,780 496,130 545,490 595,490
$1,250,000 497,420 559,280 621,130 682,990 745,490
$1,500,000 597,420 671,780 746,130 820,490 895,490
$1,750,000 697,420 784,280 871,130 957,990 1,045,490
$2,000,000 797,420 896,780 996,130 1,095,490 1,195,490
$2,250,000 897,420 1,009,280 1,121,130 1,232,990 1,345,490
$2,500,000 997,420 1,121,780 1,246,130 1,370,490 1,495,490
$2,750,000 1,097,420 1,234,280 1,371,130 1,507,990 1,645,490
$3,000,000 1,197,420 1,346,780 1,496,130 1,645,490 1,795,490
$3,250,000 1,297,420 1,459,280 1,621,130 1,782,990 1,945,490
$3,500,000 1,397,420 1,571,780 1,746,130 1,920,490 2,095,490
</TABLE>
<PAGE> 13
The pay covered by the Pension Plans noted below is based on the salary and
bonus shown in the Summary Compensation Table on page 8 for each of the above
executive officers. The years of credited service as of January 1, 1997 for the
executive officers named on the Summary Compensation Table are as follows: Wayne
Calloway -- 30 years; Roger A. Enrico -- 25 years; Steven S Reinemund -- 12
years; Craig E. Weatherup -- 22 years; Robert L. Carleton -- 22 years and Edward
V. Lahey, Jr. -- 31 years.
Computation of Benefits. PepsiCo's executive officers participate in
PepsiCo's Retirement Plan and PepsiCo's Pension Equalization Plan (which was
adopted in 1975 to provide benefits that would have been payable under the
Retirement Plan except for ERISA limitations). The annual benefits payable under
these two 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).
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. A Securities and
Exchange Commission Form 4 was not filed on time to report one stock purchase by
Dr. P. Roy Vagelos. Once the omission was discovered, a Form 4 was promptly
filed.
APPROVAL OF AUDITORS (PROXY ITEM NO. 2)
The Audit Committee recommended that KPMG Peat Marwick LLP continue as
PepsiCo's independent auditors for 1997. They have been PepsiCo's independent
auditors since 1990. They were paid approximately $9.4 million for audit and
audit-related services rendered for 1996. Representatives of KPMG Peat Marwick
LLP will be available to answer questions at the Annual Meeting and are free to
make statements during the meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THIS
RESOLUTION.
SHAREHOLDERS' PROPOSALS
If proposals are submitted by more than one shareholder, PepsiCo will only
list the primary filer's name, address and number of shares held. We will
provide oral or written information about co-filers promptly if we receive an
oral or written request for the information.
Election of President and COO (Proxy Item No. 3)
------------------------------------------------
Mrs. Evelyn Y. Davis, of the Watergate Office Building, 2600 Virginia
Avenue, N.W., Washington, D.C. 20037, who owns 900 shares of PepsiCo Capital
Stock, has advised PepsiCo that she intends to introduce the following
resolution for the reasons stated:
"RESOLVED: That the stockholders of PepsiCo recommend that the Board of
Directors take the necessary steps to appoint a President and Chief
Operating Officer of the parent company.
REASONS: We do have a CEO of PepsiCo as well as several presidents of
subsidiary companies. A company of the size and stature of PepsiCo ought to
have a defined number two man as well as a number one man. Now is the time
for the Board to appoint number two. Waiting
<PAGE> 14
any longer is, in our opinion, not in the best interests of the corporation
and its stockholders. Uncertainty about succession should be cleared up now.
If you AGREE, please mark your proxy FOR this proposal."
BOARD OF DIRECTORS' RESPONSE: Your Board of Directors does not believe that
either the Corporation's operations or succession planning require appointment
of a President or Chief Operating Officer. There are several well qualified
senior executives responsible for the Corporation's principal businesses and
financial matters. This is an effective system for managing the Corporation's
business and affairs and provides ample support to Mr. Enrico, who was appointed
CEO less than one year ago.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THIS
RESOLUTION.
Cumulative Voting (Proxy Item No. 4)
------------------------------------
John J. Gilbert, 29 East 64th Street, New York, New York 10021-7043, who
owns 1,536 shares of PepsiCo Capital Stock, has advised PepsiCo of his 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 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 27.26%, an increase over the previous year,
11,649 owners of 157,086,870 shares, were cast in favor of this proposal.
The vote against included 12,729 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.
With all the troubles Pepsi is having it is all the more reason to have
cumulative voting to bring about directors who may be able to help. 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.
<PAGE> 15
Lockheed-Martin, as well as VWR Corporation now have a provision that
if anyone has 40% or more of the shares cumulative voting applies, it does
apply 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 this resolution; otherwise it
is automatically cast against it, unless you have marked to abstain."
BOARD OF DIRECTORS' RESPONSE: Resolutions about cumulative voting submitted
by this shareholder 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.
Cap Non-Performance-Based Executive Compensation at $1 Million (Proxy Item No.5)
- -------------------------------------------------------------------------------
The International Brotherhood of Teamsters General Fund, 25 Louisiana
Avenue, N.W., Washington, D.C. 20001, which owns 100 shares of PepsiCo Capital
Stock, has submitted the following resolution for the reasons stated:
"Resolved: That the shareholders of PepsiCo, Inc. request that the
Board of Directors establish a policy that no executive will be compensated
more than $1 million per year, regardless of when such compensation is
paid, unless the compensation is paid in accordance with a
performance-based plan disclosed to shareholders and approved by a majority
of the vote in a separate shareholder vote before the payment of the
compensation.
Supporting Statement:
Recently the New York Times ran an investigative series which focused
on deferred compensation which can be a detriment to shareholders in a
number of ways.
Deferred compensation can obscure the exact extent of compensation. Too
often, all references to deferred compensation are to be found in the
footnotes. For example, in Pepsi's proxy a footnote explains that in 1995
Mr. Dettmer earned "$199,967 [in] preferential earnings on income" which he
had deferred since 1978. It is unclear what interest rate is being earned.
The proxy also notes, in another footnote, that in 1994 Mr. Enrico deferred
$1,340,036.
Deferred compensation can also prevent shareholders from exercising
their right to vote on certain compensation plans. Internal Revenue Code
Section 162(m) which eliminated the business expense deduction for annual
compensation of over $1 million, with some exceptions, was designed to give
shareholders the ability to rein in excessive executive compensation. In
approving this law, Congress did not declare that executives be paid less
than $1 million. Rather, Congress said that shareholders must approve
performance-based compensation package of more than $1 million to preserve
tax advantages.
<PAGE> 16
One loophole corporate lawyers have exploited to avoid paying taxes and
at the same time to avoid seeking shareholder approval has been to put
ever-increasing amounts in deferred compensation. This seems to circumvent
part of the intent of the IRS Code by depriving shareholders of their
prerogative to vote.
Board members are closest to executive performance, yet Pepsi's unusual
board and committee structure may serve to create a board that is
disinclined to challenge such packages. The fact that there is no
independent nominating committee, for example, allows executives a great
deal of power in selecting who will make compensation decisions. The
current compensation committee is made up of a number of executives and
former executives, who themselves have faced criticism for their pay
packages. Deferred compensation should not be used as a way to obscure
compensation figures or to deprive shareholders of their right to make such
decisions.
For the above reasons we urge you to vote FOR the proposal."
BOARD OF DIRECTORS' RESPONSE: As shown on page 8, all of PepsiCo's senior
executives are paid non-performance based compensation--a salary--of less than
$1 million. All bonus and long-term incentives paid to executive officers are
tied to performance-based compensation plans approved by shareholders in 1987
and 1994.
The deferrals referred to by the Teamsters General Fund relate to a payment
election made by a former executive officer in 1977 with respect to a long-term
performance-based award, and a 1993 deferral election made by Mr. Enrico with
respect to a long-term performance-based award made to him in 1990. Contrary to
the Teamsters proposal, payments of these deferrals are fully deductible and are
not inconsistent in any way with the plans approved by shareholders.
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 ones listed in this Proxy Statement arise at
the Meeting, the persons named in the proxy will vote the shares represented by
the proxy according to their judgment.
QUORUM AND VOTING
QUORUM. Under North Carolina law, abstentions and broker nonvotes are
counted to determine whether a quorum is present at the Meeting. (Under New York
Stock Exchange rules, a broker may, if the broker does not have instruction from
a beneficial owner, vote shares on routine proposals. A broker does not have
discretionary voting power with respect to nonroutine proposals, such as a
merger. If the broker has not received voting instructions regarding nonroutine
proposals from the beneficial owner, the broker cannot vote on those proposals.
This is referred to as a broker nonvote.)
<PAGE> 17
VOTING. 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.
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 and entitled to vote 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 they 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, the trustees will vote those shares 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.
1998 SHAREHOLDERS' PROPOSALS
PepsiCo welcomes comments or suggestions from its shareholders, including
any recommendations shareholders may have as to future directors of the Company.
If a shareholder wants to have a proposal formally considered at the 1998 Annual
Shareholders' Meeting, and included in the Proxy Statement for that Meeting, we
must receive the proposal in writing on or before November 27, 1997.
GENERAL
PepsiCo will pay the costs relating to this Proxy Statement, the proxy and
the Annual Meeting.
In addition to the solicitation of proxies by mail, PepsiCo intends to ask
brokers and bank nominees to solicit proxies from their principals and will pay
the brokers and bank nominees their expenses for the solicitation.
To be sure that we have the necessary quorum to hold the Annual Meeting,
PepsiCo has hired the firm of Georgeson & Company, Inc. to help in soliciting
proxies by mail, telephone, telegraph and personal interview for fees estimated
at approximately $21,000.
Employees of PepsiCo may also solicit proxies. They will not receive any
additional pay for the solicitation.
<PAGE> 18
The Annual Report to Shareholders for 1996, which includes financial
statements, was mailed with this Proxy Statement or was previously delivered to
shareholders and is not part of the material for the solicitation of proxies. To
reduce postage costs, we sent materials at bulk mail rates. If you have not
received the Annual Report by the time you receive your Proxy Statement, 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 can be
revoked by voting at the meeting, and mail it promptly in the enclosed
postage-paid envelope.
By order of the Board of Directors,
EDWARD V. LAHEY, JR.
Secretary
<PAGE>
APPENDIX -- PROXY CARD 1
PEPSICO, INC.
March 28, 1997
YOUR PROXY CARD IS ATTACHED BELOW.
PLEASE READ THE ENCLOSED PROXY STATEMENT, THEN VOTE AND RETURN THE
CARD AT YOUR EARLIEST CONVENIENCE.
<TABLE>
<CAPTION>
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 and 5.
VOTE FOR ITEMS 1 AND 2.
- -------------------------------------- -----------------------------------------------------------------------------------------
<S> <C> <C>
1. Election of Directors 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
S.P. Rockefeller / / / / 3. Shareholder Proposal / / / / / /
F.A. Thomas (Proxy Statement p. 13)
P.R. Vagelos
K.M. von der Heyden
C.E. Weatherup
A.R. Weber
4. Shareholder Proposal / / / / / /
(Proxy Statement p. 14)
------------------------------------
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 and 5. be sent to you
Receipt is 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>
<PAGE>
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.
PEPSICO, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
May 7, 1997
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 7, 1997 at 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)
<PAGE>
PROXY CARD 2
PEPSICO, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
May 7, 1997
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 7, 1997 at 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)
<PAGE>
<TABLE>
<CAPTION>
V FOLD AND DETACH HERE V
- -----------------------------------------------------------------------------------------------------------------------------------
/ 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 and 5.
VOTE FOR ITEMS 1 AND 2.
- -------------------------------------- -----------------------------------------------------------------------------------------
<S> <C> <C>
1. Election of Directors 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
S.P. Rockefeller / / / / 3. Shareholder Proposal / / / / / /
F.A. Thomas (Proxy Statement p. 13)
P.R. Vagelos
K.M. von der Heyden
C.E. Weatherup
A.R. Weber
4. Shareholder Proposal / / / / / /
(Proxy Statement p. 14)
------------------------------------
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 and 5.
Receipt is 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 -----------
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