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| PBG > SEC Filings for PBG > Form 8-K on 23-Jan-2009 | All Recent SEC Filings |
23-Jan-2009
Entry into a Material Definitive Agreement
On January 14, 2009, PepsiCo Holdings LLC, a subsidiary of The Pepsi Bottling Group, Inc. ("PCH"), and Frito Lay Manufacturing LLC, a subsidiary of PepsiCo, Inc. ("FLM"), entered into an agreement relating to the sale and distribution of certain Frito-Lay snack products in the Russian Federation (the "Distribution Agreement"). The Distribution Agreement is effective as of January 1, 2009, and replaces a similar agreement between PCH and FLM, which expired on December 31, 2008.
Under the Distribution Agreement, FLM has granted PCH the right to sell and distribute snack food products under the "Lays", "Lays Max", "Cheetos" and "Hrusteam" trademarks in the Russian Federation. The Distribution Agreement, which is governed by Russian law, has a term of five years. Notwithstanding this term, the Distribution Agreement shall automatically terminate six months after the termination of PR Beverages Limited, the Russian joint venture between The Pepsi Bottling Group and PepsiCo, or the termination of any master bottling appointment that PepsiCo has issued to PR Beverages Limited.
Pursuant to the Distribution Agreement, each year by October 31st, the parties shall discuss and agree to a business forecast and a price list for products to be sold by FLM to PCH in the following year. Under the Distribution Agreement, FLM shall determine and bear all costs related to marketing and trade support, and PCH must ensure that it maintains a sufficient sales force to permit PCH to achieve the sales volume plan determined by FLM consistent with the agreed-to annual forecast. PCH is also required to maintain adequate warehouse capacity throughout the Russian Federation to support the anticipated volume of products to be sold.
The above description of the Distribution Agreement is qualified in its entirety by reference to the Distribution Agreement which will be attached as an exhibit to The Pepsi Bottling Group's Annual Report on Form 10-K for the fiscal year ended December 27, 2008, which will be filed in February 2009.
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