PROSPECTUS SUPPLEMENT Filed pursant to
(To Prospectus dated March 16, 2001) Rule 424(b)(2)
Registration Statement
No. 333-56302
13,200,000 Shares
PEPSICO, INC.
CAPITAL STOCK
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PepsiCo is selling all of the shares.
The shares trade on the New York Stock Exchange under the symbol "PEP." On
April 9, 2001, the last sale price of the shares as reported on the New York
Stock Exchange was $41.50 per share. We intend to redesignate the shares of
PepsiCo capital stock to be sold under this prospectus supplement as shares of
PepsiCo common stock upon consummation of our merger with The Quaker Oats
Company.
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Per Share Total
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Public offering price................................. $40.50 $534,600,000
Underwriting discount ................................ $.81 $10,692,000
Proceeds, before expense, to PepsiCo ................. $39.69 $523,908,000
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The shares will be ready for delivery on or about April 16, 2001.
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Merrill Lynch & Co.
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The date of this prospectus supplement is April 9, 2001.
TABLE OF CONTENTS
Prospectus Supplement Page Prospectus Page
---- ----
Underwriting ............. S-3 Where You Can Find More Information ...... 3
PepsiCo .................................. 4
Legal Matters ............ S-4 The Merger ............................... 4
Use of Proceeds .......................... 5
Description of PepsiCo Stock ............. 5
Plan of Distribution ..................... 9
Legal Matters ............................10
Experts ..................................10
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You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We
have not, and the underwriter has not, authorized anyone to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We are not, and the underwriter is not,
making an offer of these securities in any jurisdiction where the offer is not
permitted. You should assume that the information appearing in this prospectus
supplement, the accompanying prospectus and the documents incorporated by
reference is accurate only as of their respective dates. Our business,
financial condition, results of operations and prospects may have changed since
those dates.
S-2
UNDERWRITING
Subject to the terms and conditions described in an underwriting agreement
and any related terms agreement between us and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, as underwriter, we have agreed to sell to the underwriter,
and the underwriter has agreed to purchase from us, 13,200,000 shares of
capital stock.
The underwriter has agreed to purchase all of the shares sold under the
underwriting agreement if any of the shares are purchased.
We have agreed to indemnify the underwriter against certain liabilities,
including liabilities under the Securities Act, or to contribute to payments
the underwriter may be required to make in respect of those liabilities.
The underwriter is offering the shares, subject to prior sale, when, as
and if issued to and accepted by it, subject to approval of legal matters by
its counsel, including the validity of the shares, and other conditions
contained in the underwriting agreement, such as the receipt by the underwriter
of officers' certificates and legal opinions. The underwriter reserves the
right to withdraw, cancel or modify offers to the public and to reject orders
in whole or in part.
Commissions and Discounts
The underwriter has advised us that it proposes initially to offer the
shares to the public at the public offering price on the cover page of this
prospectus supplement and to dealers at that price less a concession not in
excess of $.48 per share. The underwriter may allow, and the dealers may
reallow, a discount not in excess of $.10 per share to other dealers. After the
public offering, the public offering price, concession and discount may be
changed.
The expenses of the offering, not including the underwriting discount, are
estimated at $300,000 and are payable by us.
No Sales of Similar Securities
We have agreed, with exceptions, not to sell or transfer any capital stock
for 45 days after the date of this prospectus supplement without first
obtaining the written consent of Merrill Lynch. Specifically, we have agreed
not to directly or indirectly:
o offer, pledge, sell or contract to sell any capital stock;
o sell any option or contract to purchase any capital stock;
o purchase any option or contract to sell any capital stock;
o grant any option, right or warrant for the sale of any capital stock;
o lend or otherwise dispose of or transfer any capital stock; and
o enter into any swap or other agreement that transfers, in whole or in
part, the economic consequences of ownership of any capital stock
whether any such swap or transaction is to be settled by delivery of
shares or other securities, in cash or otherwise.
This lockup provision applies to capital stock and to securities
convertible into or exchangeable or exercisable for or repayable with capital
stock. We, however, may issue (1) shares upon the exercise of an option or
warrant or the conversion of a security outstanding on the date of this
prospectus supplement or issued in connection with the merger with The Quaker
Oats Company, (2) shares or options to purchase shares granted pursuant to our
existing and future employee benefit plans, (3) shares pursuant to any
non-employee director stock plan or dividend reinvestment plan and (4) shares
issuable in the merger.
S-3
New York Stock Exchange Listing
The shares are listed on the New York Stock Exchange under the symbol
"PEP."
Price Stabilization and Short Positions
Until the distribution of the shares of capital stock is completed, SEC
rules may limit the underwriter from bidding for and purchasing our capital
stock. However, the underwriter may engage in transactions that stabilize the
price of the capital stock, such as bids or purchases to peg, fix or maintain
that price.
If the underwriter creates a short position in the capital stock in
connection with this offering, i.e. if it sells more shares than are listed on
the cover of this prospectus supplement, the underwriter may reduce that short
position by purchasing shares in the open market. Purchases of the capital
stock to stabilize its price or to reduce a short position may cause the price
of the capital stock to be higher than it might be in the absence of such
purchases.
Neither we nor the underwriter make any representation or prediction as to
the direction or magnitude of any effect that the transactions described above
may have on the price of the capital stock. In addition, neither we nor the
underwriter make any representation that the underwriter will engage in these
transactions or that these transactions, once commenced, will not be
discontinued without notice.
Other Relationships
The underwriter has acted as our financial advisor in connection with the
proposed merger with Quaker. In addition, the underwriter and its affiliates
have engaged in, and may in the future engage in, investment banking and other
commercial dealings in the ordinary course of business with us. The underwriter
has received customary fees and commissions for these transactions.
LEGAL MATTERS
Legal matters relating to our capital stock offered hereby will be passed
upon for us by Robert F. Sharpe, Jr., Senior Vice President, General Counsel
and Secretary of PepsiCo, and Davis Polk & Wardwell, New York, New York. Legal
matters relating to our capital stock offered hereby will be passed upon for
the underwriters by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New
York. Skadden, Arps, Slate, Meagher & Flom LLP has from time to time
represented, and may continue to represent, PepsiCo and its affiliates in
certain legal matters.
S-4
PROSPECTUS
13,200,000 Shares
PEPSICO, INC.
CAPITAL STOCK
-----------------------
We may offer from time to time shares of our capital stock, 1 2/3 cents
par value. Specific terms of these offerings will be provided in supplements to
this prospectus. You should read this prospectus and any supplement carefully
before you invest.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is March 16, 2001.
You should rely only on the information contained in or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
different information. We are not making an offer of these securities in any
jurisdiction where the offer is not permitted. You should not assume that the
information contained in or incorporated by reference in this prospectus is
accurate as of any date other than the date on the front of this prospectus.
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TABLE OF CONTENTS
Page
----
Where You Can Find More Information............................................3
PepsiCo........................................................................4
The Merger ....................................................................4
Use of Proceeds................................................................5
Description of PepsiCo Stock...................................................5
Plan of Distribution...........................................................9
Legal Matters.................................................................10
Experts.......................................................................10
About this Prospectus
This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process. Under this shelf process, we may
sell the securities described in this prospectus in one or more offerings. This
prospectus provides you with a general description of the securities we may
offer. Each time we sell securities, we will provide a prospectus supplement
that will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement together with additional information described under the heading
"Where You Can Find More Information."
2
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document that we file at
the Public Reference Room of the SEC at 450 Fifth Street, NW, Washington, D.C.
20549. You may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. You may also inspect our filings at the
regional offices of the SEC located at Citicorp, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and 7 World Trade Center, New York, New York
10048 or over the Internet at the SEC's website at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until we sell all of the securities:
(a) PepsiCo, Inc. and The Quaker Oats Company joint Proxy
Statement/Prospectus dated March 15, 2001 (other than the information
contained under the caption "Chapter Two - Information about the
meetings and voting");
(b) Annual Report on Form 10-K for the fiscal year ended December 30,
2000; and
(c) The description of PepsiCo's capital stock contained in PepsiCo's
registration statement on Form 8-B filed on December 11, 1986.
You may request a copy of these filings at no cost, by writing PepsiCo,
Inc., Manager, Shareholder Relations, 700 Anderson Hill Road, Purchase, New
York 10577-1444 or telephoning (914) 253-3055.
3
PEPSICO
PepsiCo is among the most successful consumer products companies in the
world. PepsiCo consists of Frito-Lay, Inc., the world's largest manufacturer
and distributor of snack chips, Pepsi-Cola Company, the world's second largest
refreshment beverage company, and Tropicana Products, Inc., the largest seller
and marketer of branded juices in the world. Our brands are among the best
known in the world and are available in about 190 countries. Our brands include
Lays and Ruffles potato chips, Doritos tortilla chips, Tostitos tortilla chips,
Cheetos cheese flavored snacks, Pepsi-Cola, Mountain Dew, Diet Pepsi, Aquafina
water, Lipton Brisk and Tropicana Pure Premium.
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Our principal executive offices are located at 700 Anderson Hill Road,
Purchase, New York 10577-1444, and our telephone number is (914) 253-2000. We
maintain a website at www.pepsico.com where general information about us is
available. We are not incorporating the contents of the website into this
prospectus.
THE MERGER
PepsiCo, Inc. and The Quaker Oats Company have entered into a Merger
Agreement dated December 2, 2000 that provides for the combination of the two
companies.
Quaker is an international marketer of foods and beverages. Quaker is a
major participant in the food industry in the United States and Canada and is a
leading manufacturer of hot cereals, pancake syrups, grain-based snacks,
cornmeal, hominy grits and value-added rice products. In addition, in the
United States, Quaker is the second-largest manufacturer of pancake mixes and
value-added pasta products and is among the four largest manufacturers of
ready-to-eat cereals. Quaker manufactures and markets its products in many
countries throughout Europe, Asia and Latin America. Quaker also manufactures
and markets Gatorade active thirst quencher, which is the leading sports drink
in the United States and Canada. Quaker also manufactures and markets Gatorade
in Europe, Asia and Latin America.
If we complete the merger, holders of Quaker common stock will receive,
for each share of Quaker common stock, 2.3 shares of PepsiCo common stock,
subject to adjustment as described in the PepsiCo and Quaker joint proxy
statement/prospectus incorporated herein by reference. Holders of Quaker common
stock will not be entitled to receive, in exchange for each share of Quaker
common stock they hold, shares of PepsiCo common stock with a value in excess
of $105.00, determined on the basis of the market price of PepsiCo capital
stock. In the event that the value to be received would exceed $105.00, each
share of Quaker common stock will be exchanged for shares of PepsiCo common
stock with a value of $105.00, based on the market price of PepsiCo capital
stock. In addition, each share of Quaker Series B ESOP convertible preferred
stock will be exchanged for one share of a newly created class of PepsiCo
convertible preferred stock with rights substantially identical to the rights
of the Quaker Series B ESOP convertible preferred stock. PepsiCo shareholders
will continue to own their existing shares of PepsiCo capital stock after the
merger, which will be redesignated as PepsiCo common stock upon the
consummation of the merger.
We estimate that PepsiCo will issue approximately 315 million shares of
PepsiCo common stock to Quaker shareholders in the merger, based on the number
of shares of Quaker common stock expected to be outstanding at the time of the
merger and assuming that 2.3 shares of PepsiCo common stock are issued for each
share of Quaker common stock. These shares will represent approximately 18% of
the outstanding shares of PepsiCo common stock immediately after the merger.
PepsiCo shares held by PepsiCo shareholders before the merger will represent
approximately 82% of the outstanding shares of PepsiCo common stock immediately
after the merger.
4
The shares offered hereby will be issued after the record date for
determining the holders of the shares of capital stock entitled to vote at the
special meeting of PepsiCo shareholders called to approve the merger. As a
result, the shares offered hereby will not be entitled to vote at the special
meeting.
The closing of the sale of the shares offered hereby is not conditioned
upon the consummation of the merger. If the merger is not consummated for any
reason, purchasers of the shares offered hereby will remain holders of the
shares.
The merger is subject to shareholder approval and other conditions, all of
which are described in the joint proxy/prospectus of PepsiCo and Quaker which
is incorporated herein by reference.
USE OF PROCEEDS
Unless otherwise indicated in a prospectus supplement, PepsiCo intends to
use the net proceeds from the sale of the shares for general corporate
purposes. The principal reason for the offering is to facilitate the accounting
treatment of the proposed merger as a "pooling-of-interests."
DESCRIPTION OF PEPSICO STOCK
The following summary of the terms of the PepsiCo stock is not meant to be
complete and is qualified by reference to the relevant provisions of North
Carolina law and the PepsiCo restated articles of incorporation and by-laws.
Copies of the PepsiCo restated articles of incorporation and by-laws are
incorporated by reference and will be sent to holders of shares of PepsiCo
capital stock, Quaker common stock and Quaker Series B ESOP convertible
preferred stock upon request. See "Where You Can Find More Information" above.
Authorized PepsiCo Stock
Prior to Completion of the Merger. Under the PepsiCo restated articles of
incorporation, PepsiCo's authorized capital stock consists of 3.6 billion
shares of capital stock, 1 2/3 cents par value. As of March 9, 2001, there were
issued and outstanding 1,449,944,403 shares of capital stock.
Following Completion of the Merger. At the PepsiCo special shareholders'
meeting to be held to consider the merger with Quaker, holders of PepsiCo
capital stock will be asked to approve an amendment to PepsiCo's restated
articles of incorporation authorizing 3 million shares of PepsiCo convertible
preferred stock to be issued in connection with the merger and changing the
designation of PepsiCo "capital stock" to PepsiCo "common stock" at the closing
date of the merger. If the merger is completed, PepsiCo's authorized share
capital will consist of 3.6 billion shares of PepsiCo common stock and 3
million shares of PepsiCo convertible preferred stock.
PepsiCo Capital Stock
PepsiCo Capital Stock Outstanding. The outstanding shares of PepsiCo
capital stock (to be redesignated "common stock") are, and the shares of
PepsiCo common stock to be issued pursuant to the merger will be, duly
authorized, validly issued, fully paid and non-assessable.
Voting Rights. Each holder of a share of PepsiCo capital stock is, and
each holder of a share of PepsiCo common stock will be, entitled to one vote
for each share held of record on the applicable record date on all matters
submitted to a vote of shareholders.
5
Dividend Rights. Holders of PepsiCo capital stock are, and holders of
PepsiCo common stock will be, entitled to receive dividends as may be declared
from time to time by PepsiCo's board of directors out of funds legally
available therefor.
Rights upon Liquidation. Holders of PepsiCo capital stock are, and holders
of PepsiCo common stock will be, entitled to share pro rata, upon any
liquidation or dissolution of PepsiCo, in all remaining assets available for
distribution to shareholders after payment or providing for PepsiCo's
liabilities and the liquidation preference of any outstanding PepsiCo
convertible preferred stock.
Preemptive Rights. Holders of PepsiCo capital stock do not have, and
holders of PepsiCo common stock will not have, preemptive rights to purchase,
subscribe for or otherwise acquire any unissued or treasury shares or other
securities.
PepsiCo Convertible Preferred Stock to be Issued in the Merger
If the merger is consummated, we will issue PepsiCo convertible preferred
stock that will contain rights substantially identical to the terms of the
Quaker Series B ESOP convertible preferred stock. Shares of PepsiCo convertible
preferred stock will be issued only to Fidelity Trust Management Co. or any
duly appointed successor trustee, as trustee of The Quaker 401(k) Plan for
Salaried Employees, as amended from time to time, which we refer to as the
Quaker ESOP. The following summary of the terms of the new PepsiCo convertible
preferred stock is qualified by reference to the complete terms of the PepsiCo
convertible preferred stock, which are set forth in the form of PepsiCo's
amended and restated articles of incorporation and which are filed as an
exhibit to this registration statement. Copies of the form of PepsiCo's amended
and restated articles of incorporation will be sent to shareholders upon
request.
Ranking. The PepsiCo convertible preferred stock to be issued in the
merger will have the same relative rank as the Quaker Series B ESOP convertible
preferred stock, and will therefore rank ahead of the PepsiCo common stock with
respect to the payment of dividends and the distribution of assets in the event
of a liquidation or dissolution of PepsiCo.
Dividends. Subject to the rights of the holders of any PepsiCo stock
ranking senior to the PepsiCo convertible preferred stock, holders of the
PepsiCo convertible preferred stock will receive cumulative cash dividends
when, as and if declared by the PepsiCo board of directors. Dividends of $5.46
per share per year will accrue on a daily basis, payable quarterly in arrears
on the fifteenth of January, April, July and October to holders of record at
the start of business on that dividend payment date.
So long as any shares of PepsiCo convertible preferred stock are
outstanding, no dividend will be declared or paid on any other series of stock
of the same rank, unless dividends on the PepsiCo convertible preferred stock
are paid. If full cumulative dividends on the PepsiCo convertible preferred
stock have not been paid, PepsiCo will not pay any dividends or make any other
distributions on any other class of stock or series of PepsiCo stock ranking
junior until full cumulative dividends on the PepsiCo convertible preferred
stock have been paid.
Voting Rights. Holders of the PepsiCo convertible preferred stock will be
entitled to vote as one class with the holders of PepsiCo common stock on all
matters submitted to stockholders. The vote of each holder of PepsiCo
convertible preferred stock will be equivalent to the number of shares of
PepsiCo common stock into which the PepsiCo convertible preferred stock
outstanding would have converted into on the relevant record date, rounded to
the nearest one-tenth. Whenever the conversion price is adjusted for dilution,
the voting rights of the PepsiCo convertible preferred stock will be similarly
adjusted.
Except as otherwise required by law, holders of the PepsiCo convertible
preferred stock will not have any special voting rights and their consent will
not be required, except to the extent that they are entitled to vote with the
holders of the PepsiCo common stock, for the taking of any corporate action.
The approval of at least two-thirds of
6
the outstanding shares of the PepsiCo convertible preferred stock, voting
separately as a series, will be required if an alteration of PepsiCo's restated
articles of incorporation, as amended, would adversely affect their rights.
Rights upon Liquidation, Dissolution or Winding Up. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of PepsiCo, the
holders of the PepsiCo convertible preferred stock will be entitled to receive,
before any distribution is made to the holders of PepsiCo's common stock or any
other series of stock ranking junior, a liquidation preference in the amount of
$78.00 per share, plus accrued and unpaid dividends. If the amounts payable
with respect to the PepsiCo convertible preferred stock and any other stock of
the same rank are not paid in full, the holders of the PepsiCo convertible
preferred stock will share pro rata in any distribution of assets. After
payment of the full amount to which they are entitled, the holders of shares of
PepsiCo convertible preferred stock will not be entitled to any further right
or claim to any of the remaining assets of PepsiCo.
Neither the merger or consolidation nor the sale of all or any portion of
the assets of PepsiCo will be deemed to be a dissolution, liquidation or
winding up of the affairs of PepsiCo, but the holders of PepsiCo convertible
preferred stock will nevertheless be entitled to the rights as described under
"Consolidation, Merger, Etc." below.
Mandatory Redemption by PepsiCo. PepsiCo must redeem the PepsiCo
convertible preferred stock upon termination of the Quaker ESOP in accordance
with the ESOP's terms. PepsiCo will redeem all then outstanding shares of
PepsiCo convertible preferred stock for a per share amount equal to the greater
of $78.00 plus accrued and unpaid dividends or the fair market value of PepsiCo
convertible preferred stock. PepsiCo, at its option, may make payment in cash
or in shares of PepsiCo common stock or in a combination of shares and cash.
Optional Redemption by the Holders. Holders of the PepsiCo convertible
preferred stock may elect to redeem their shares if PepsiCo enters into any
consolidation or merger or similar business combination in which PepsiCo
exchanges its common stock for property other than qualifying employer
securities, as described below. Upon notice from PepsiCo of the agreement and
the material terms of the transaction, each holder of PepsiCo convertible
preferred stock will have the right to elect, by written notice to PepsiCo, to
receive a cash payment equal to the greater of the fair market value of the
shares of PepsiCo convertible preferred stock to be so redeemed or $78.00 per
share plus accrued and unpaid dividends.
Additionally, holders of the PepsiCo convertible preferred stock may
redeem their shares, upon certification to PepsiCo, as follows:
o when and to the extent necessary to provide for distributions
required to be made to participants under, or to satisfy an
investment election provided to participants in accordance with, the
Quaker ESOP, the redemption price will be the fair market value of
the shares of PepsiCo convertible preferred stock to be so redeemed;
or
o when and to the extent necessary to make any payments of principal,
interest or premium due and payable under (a) any loan agreement
between the ESOP trustee and the lenders, (b) any refinancing of or
substitution for the foregoing, or (c) any other indebtedness
incurred by the holder for the benefit of the Quaker ESOP, the
redemption price will be the greater of the fair market value of the
shares of PepsiCo convertible preferred stock to be so redeemed or
$78.00 plus accrued and unpaid dividends.
Once shares of PepsiCo convertible preferred stock are called for
redemption, dividends will cease to accrue on those shares, those shares will
no longer be deemed to be outstanding and all rights in respect of those shares
will cease, except the right to receive the redemption price. If less than all
of the outstanding shares of PepsiCo convertible preferred stock are to be
redeemed, PepsiCo will either redeem a portion of the shares of each holder pro
rata or will select the shares to be redeemed by lot, at the election of the
PepsiCo board of directors.
Conversion into PepsiCo Common Stock. On or prior to any date fixed for
redemption, a holder of the PepsiCo convertible preferred stock may elect to
convert any or all of his or her shares into shares of PepsiCo common stock at
a conversion rate per share equal to:
7
o the actual exchange ratio used in the merger, multiplied by
o the number of shares of Quaker common stock that would have been
received if one share of Quaker Series B ESOP convertible preferred
stock had been converted immediately prior to the effective time of
the merger.
One share of Quaker Series B ESOP convertible preferred stock is convertible
into approximately 2.1576 shares of Quaker common stock as of March 13, 2001.
The conversion rate may be adjusted pursuant to customary anti-dilution
provisions.
Cash will be paid in lieu of fractional shares.
PepsiCo will reserve the number of shares of PepsiCo common stock issuable
upon the conversion of all the shares of PepsiCo convertible preferred stock
then outstanding. PepsiCo will prepare and will use its best efforts to obtain
and keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and will comply with all requirements
as to registration or qualification of the PepsiCo common stock, in order to
enable PepsiCo lawfully to issue and deliver to each holder of record of
PepsiCo convertible preferred stock such number of shares of PepsiCo common
stock as will from time to time be sufficient to effect the conversion of all
shares of PepsiCo convertible preferred stock then outstanding and convertible
into shares of PepsiCo common stock.
Consolidation, Merger, Etc. If PepsiCo consummates a consolidation or
merger or similar business combination in which the outstanding shares of
PepsiCo common stock are exchanged solely for, or converted solely into, stock
that constitutes "employer securities" within the meaning of Section 409(1) of
the Internal Revenue Code of 1986, as amended, and "qualifying employer
securities" within the meaning of Section 407(d)(5) of the Employee Retirement
Income Security Act of 1974, as amended, then the shares of PepsiCo convertible
preferred stock of that holder will be converted into and exchanged for
preferred stock of the issuer of such securities. The preferred stock will have
the same powers, preferences and rights that the PepsiCo convertible preferred
stock had immediately prior to such transaction.
If PepsiCo consummates a consolidation or merger or similar business
combination in which the outstanding shares of PepsiCo common stock are
exchanged solely for or converted into other stock or securities or cash or any
other property, or any combination, other than any consideration which is
constituted solely of qualifying employer securities, then the outstanding
shares of PepsiCo convertible preferred stock will be deemed to have been
automatically converted immediately prior to the consummation into the number
of shares of PepsiCo common stock into which such shares of PepsiCo convertible
preferred stock could have been converted at such time. Each share of PepsiCo
convertible preferred stock will be converted into or exchanged for the
aggregate amount of stock, securities, cash or other property receivable by a
holder of the number of shares of PepsiCo common stock into which such shares
of PepsiCo convertible preferred stock could have been converted immediately
prior to such transaction. Under these circumstances, each holder would have
the right to redeem the PepsiCo convertible preferred stock as described under
"Optional Redemption by the Holders" above.
Preemptive Rights. Holders of the PepsiCo convertible preferred stock will
not have preemptive rights to purchase, subscribe for or otherwise acquire any
unissued or treasury shares or other securities.
Transfer Agent and Registrar
The Bank of New York is the transfer agent and registrar for PepsiCo
capital stock and, after the merger, will be the transfer agent and registrar
for PepsiCo common stock and PepsiCo convertible preferred stock.
8
Stock Exchange Listing
The PepsiCo capital stock is listed on the New York Stock Exchange under
the symbol "PEP." It is a condition to the merger that the shares of PepsiCo
common stock issuable in the merger be approved for listing on the New York
Stock Exchange at or prior to the closing, subject to official notice of
issuance. The shares of PepsiCo capital stock offered hereby, when they are
redesignated as PepsiCo common stock, will also be listed on the New York Stock
Exchange.
PLAN OF DISTRIBUTION
We may sell the shares of capital stock offered pursuant to this
prospectus in one or more transactions in any of three ways (or in any
combination): (a) through underwriters or dealers, including Merrill Lynch,
Pierce, Fenner & Smith Incorporated; (b) directly to a limited number of
purchasers or to a single purchaser; or (c) through agents. The prospectus
supplement will set forth the terms of the offering of such shares, including
(a) the name or names of any underwriters, dealers or agents and the
amounts of shares underwritten or purchased by each of them,
(b) the initial public offering price of the shares and the proceeds to
us and any discounts, commissions or concessions allowed or reallowed
or paid to dealers, and
(c) any securities exchanges on which the shares may be listed.
Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale of any shares, the shares will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of
sale. The shares may be either offered to the public through underwriting
syndicates represented by managing underwriters, or directly by underwriters.
Generally, the underwriters' obligations to purchase the shares will be subject
to certain conditions precedent. The underwriters will be obligated to purchase
all of the shares if they purchase any of the shares.
We may sell the shares through agents from time to time. The prospectus
supplement will name any agent involved in the offer or sale of the shares and
any commissions we pay to them. Generally, any agent will be acting on a best
efforts basis for the period of its appointment.
We may authorize underwriters, dealers or agents to solicit offers by
certain purchasers to purchase the shares from us at the public offering price
set forth in the prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. The
contracts will be subject only to those conditions set forth in the prospectus
supplement, and the prospectus supplement will set forth any commissions we pay
for solicitation of these contracts.
Agents and underwriters may be entitled to indemnification by us against
certain civil liabilities, including liabilities under the Securities Act, or
to contribution with respect to payments which the agents or underwriters may
be required to make in respect thereof. Agents and underwriters may be
customers of, engage in transactions with, or perform services for us in the
ordinary course of business.
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LEGAL MATTERS
The validity of the shares of capital stock in respect of which this
prospectus is being delivered will be passed on for us by Robert F. Sharpe,
Jr., Senior Vice President, General Counsel and Secretary of PepsiCo.
EXPERTS
The consolidated financial statements of PepsiCo , Inc. and Subsidiaries
as of December 30, 2000 and December 25, 1999 and for each of the years in the
three-year period ended December 30, 2000 have been incorporated by reference
into this registration statement in reliance upon the report of KPMG LLP,
independent accountants, incorporated by reference herein, and upon the
authority of such firm as experts in accounting and auditing.
The audited financial statements of Quaker incorporated in the PepsiCo and
Quaker joint proxy statement/prospectus by reference to Quaker's Annual Report
on Form 10-K for the year ended December 31, 2000 have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports
with respect thereto, and have been incorporated by reference in this
registration statement in reliance upon the authority of said firm as experts
in accounting and auditing in giving said reports.
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