1. Replacing responsibility. The Director is compensated and compensated by PepsiCo, to the extent permitted by law, of any liabilities and assessment resulting from a lawsuit, pending action or procedure, investigation or investigation, whether civil, criminal, administrative or otherwise (each called «action»). , fines, penalties and amounts paid in comparison (with or without judicial authorization), as well as all interest, investments, excise duties or other taxes paid or payable in connection with or in relation to any of the aforementioned taxes (each of these liabilities and charges is referred to as «responsibility»), due to the Director because of his or her status as a director or member of a Board of Directors of PepsiCo , or because of something the director did or did not do in such functions. A compensation agreement in this regard is a contract between the individual director or officer and the company that the director or official serves. These agreements promise (1) lawyer`s fees in advance and (2) loss (compensation) on behalf of a person if he is mentioned in an action in his or her capacity as director or official of the company. 18. Counter-parts. This agreement can be executed in one or more counterparties, all considered as the same agreement and taking effect if one or more counters have been signed by each party and delivered to the other. First, a written compensation agreement may include definitions of important concepts. The written agreement may involve, for example. B, a comprehensive definition of the types of «expenses» for which compensation and advance are possible, as well as the types of «procedures» for which the individual is entitled in advance.
For example, a written compensation agreement could specify that the individual is entitled to compensation or promotion, even if the individual is only a witness in a proceeding, and not just if the person is a designated party. Third, the written agreement can set out the procedures to be followed in the event of a compensation or progress dispute. The written agreement may, among other things, constitute a presumption of compensation or progress. The agreement will also provide a mechanism for resolving issues relating to the amounts or positions at issue. The agreement may also provide for an expedited dispute resolution process. Perhaps most importantly, the agreement provides for so-called «tolls,» which is the reimbursement of expenses that must be incurred by a person in order to obtain compensation or promotion rights. It is only when the IRS is exhausted that the insurance agency is required to make a payment in accordance with the policy. Typically, it is a director or an officer`s company that pays the IRS by paying the upfront costs, such as the cost of transferring legal fees to directors and officers.
This type of insurance policy is commonly referred to as «Side A» insurance. The idea here is to protect directors and officers from having to pay the IRS in person if the company is not in a position to go bankrupt. NOTE the need for protection against such litigation and the requirement to facilitate the continuation of the effective services of the Director of PepsiCo, PepsiCo wishes to ensure compensation, promotion, reimbursement and insurance of certain debts and expenses of the Director to the extent permitted by law; If these agreements are well structured, they provide comprehensive protection, so that individuals have the right to hire a lawyer at the company`s expense whenever they need protection, either because they are investigated (even informally) by a regulator, are charged with misconduct in a court action, or are called to testify in a case.