| SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 |
| FORM 11-K |
| (Mark One) |
| /x/ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the Year Ended December 31, 2002 |
| or |
| / / | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from ____ to ____
Commission file number: 001-15019 |
| A. | Full title of the plan and the address of the plan, if different from that of the issuer named below: |
| PEPSIAMERICAS,
INC. SALARIED 401(k) PLAN |
| B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
| PEPSIAMERICAS, INC. |
| 4000 Dain Rauscher Plaza, 60
South Sixth Street Minneapolis, Minnesota 55402 |
| SIGNATURES |
| Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrative Committee has duly caused this Annual Report to be signed on its behalf by the undersigned hereunto duly authorized. |
| PEPSIAMERICAS, INC. SALARIED 401(K) PLAN |
| Dated: | June 27, 2003 | By: | /s/ Anne Sample |
| Anne Sample | |||
| Senior Vice President –Human Resources |
| PEPSIAMERICAS,
INC. SALARIED 401(K) PLAN AS OF DECEMBER 31, 2002 AND 2001 TOGETHER WITH INDEPENDENT AUDITORS' REPORT |
| PEPSIAMERICAS,
INC. SALARIED 401(K) PLAN AS OF DECEMBER 31, 2002 AND 2001 TOGETHER WITH INDEPENDENT AUDITORS' REPORT CONTENTS |
| Page |
| Independent auditors' report | F-4 |
| Financial Statements: |
| Statement of net assets available for benefits | F-5 |
| Statement of changes in net assets available for benefits | F-6 |
| Notes to financial statements | F-7 to F-13 |
| Consent of independent auditors | Exhibit 23 |
| Independent Auditors' Report
To the Administrative Committee of PepsiAmericas, Inc. Salaried 401(k) Plan Minneapolis, Minnesota |
| We have audited the accompanying statement of net assets available for benefits of PepsiAmericas, Inc. Salaried 401(k) Plan (the “Plan”) as of December 31, 2002 and 2001, and the related statement of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits. |
| We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. |
| In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2002 and 2001, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America. |
| /s/ OSTROW REISIN BERK & ABRAMS, LTD. |
| Chicago, Illinois June 20, 2003 |
| F-4 |
| PEPSIAMERICAS, INC. SALARIED 401(k) PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS |
| December 31, | 2002 | 2001 | |||||
| Assets: | |||||||
| Plan interest in PepsiAmericas, Inc. Defined Contribution Master Trust | $ | 185,186,162 | $ | 189,654,199 | |||
| Contributions receivable: | |||||||
| Participant | 317,275 | ||||||
| Employer, net of forfeitures | 233,480 | ||||||
| Total assets | 185,186,162 | 190,204,954 | |||||
| Liabilities: | |||||||
| Expenses payable | 35,935 | 217,693 | |||||
| Total liabilities | 35,935 | 217,693 | |||||
| Net assets available for benefits | $ | 185,150,227 | $ | 189,987,261 | |||
| See notes to financial statements |
| F-5 |
| PEPSIAMERICAS, INC. SALARIED 401(k) PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS |
| Years ended December 31, | 2002 | 2001 | |||||
| Additions to net assets attributed to: | |||||||
| Net investment loss
from the PepsiAmericas, Inc. Defined Contribution Master Trust |
$ | ( 14,901,917 | ) | $ | ( 12,480,169 | ) | |
| Contributions: | |||||||
| Participant | 11,940,888 | 10,214,690 | |||||
| Employer | 11,365,439 | 6,798,137 | |||||
| Total additions, net | 8,404,410 | 4,532,658 | |||||
| Deductions from net assets attributed to: | |||||||
| Participant's withdrawals | 12,261,118 | 15,598,223 | |||||
| Administrative expenses | 980,326 | 642,282 | |||||
| Total deductions | 13,241,444 | 16,240,505 | |||||
| Transfers from other plans (Note 5) | 17,292,565 | ||||||
| Increase (decrease) in net assets | ( 4,837,034 | ) | 5,584,718 | ||||
| Net assets available for benefits: | |||||||
| Beginning of year | 189,987,261 | 184,402,543 | |||||
| End of year | $ | 185,150,227 | $ | 189,987,261 | |||
| See notes to financial statements |
| F-6 |
| PEPSIAMERICAS, INC. SALARIED 401(k) PLAN NOTES TO FINANCIAL STATEMENTS |
| 1. | Description of Plan |
| The following brief description of the PepsiAmericas, Inc. Salaried 401(k) Plan (the “Plan”) (as amended and restated January 1, 2001) (formerly known as the PepsiAmericas, Inc. Salaried Retirement Savings Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. |
| General: |
| The Plan is a defined contribution plan which covers eligible employees of PepsiAmericas, Inc. and those of its subsidiary companies which adopt the Plan, with any company having adopted the Plan along with PepsiAmericas, Inc. being considered an Employer. Any salaried, non-union employee who has met limited employment requirements and has elected to participate in the Plan is considered a participant. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). |
| Contributions: |
| Participant contributions are made to the Plan through periodic payroll deductions in amounts ranging from 2% to 15% of base salary, in 1% increments. Participant contributions made via periodic payroll deductions are matched in equal amounts by Employer contributions up to a 6% limit. Effective January 1, 2002 the employer contributes 2% of compensation for all eligible participants. Effective October 1, 2001, the Plan was amended to allow participants to contribute up to 15% of base salary. |
| The total annual pre-tax contributions by a participant were limited in 2002 to $11,000 and in 2001 to $10,500 (as adjusted to reflect changes in the cost of living pursuant to Section 402(g) of the Internal Revenue Code) or the appropriate percentage of the participant's total compensation during the year. |
| Plan termination: |
| Although it has not expressed any intent to do so, PepsiAmericas, Inc. has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. |
| F-7 |
| PEPSIAMERICAS, INC. SALARIED 401(k) PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) |
| 1. | Description of Plan (continued) |
| Participant accounts: |
| Each participant's account is credited with the participant's contribution, Employer contributions, and an allocation of Plan earnings. Allocations of earnings are based on participant account balances. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account. |
| Participant loans: |
| In accordance with Plan provisions, loans are made to participants in amounts not to exceed the lesser of one half of the participant's vested account balance or $50,000. The loans bear interest at the trustee's current prime rate in effect on Monday of the week the loan is requested and are payable through participant payroll withholdings under a reasonable repayment schedule of not more than five years. The loans are secured by the balance in the participant’s account. |
| Vesting: |
| Participants are immediately vested in their voluntary contributions, actual earnings thereon, and in all Employer contributions. |
| Payment of benefits: |
| On termination of service, a participant may elect to receive the value of his or her account in either a lump sum payment, in annual installments over a period of time up to a maximum of fifteen years, in the form of an immediate or deferred annuity, or disbursement amounts at their discretion. |
| Expenses: |
| External administrative expenses for the preparation and maintenance of the Plan’s financial records and participant statements, and service fees on insurance contracts are paid from Plan assets. Trustee, legal and all other external expenses are also paid from Plan assets to the extent that those expenses of the Plan are not paid by the Plan Sponsor. |
| F-8 |
| PEPSIAMERICAS, INC. SALARIED 401(k) PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) |
| 1. | Description of Plan (continued) |
| Investment options: |
| Participants in the Plan have the right to direct that their contributions be invested in one or more funds designated by the Plan’s Administrative Committee as available for investment purposes. As of December 31, 2002 and 2001, the following investment funds were offered: |
| • | Conservative Portfolio |
| • | Moderate Portfolio |
| • | Growth Portfolio |
| • | Aggressive Growth Portfolio |
| • | Fixed Income Fund |
| • | Large Company Fund |
| • | Small Company Fund |
| • | International Fund |
| • | PepsiAmericas, Inc. Stock Fund |
| Employer matching contributions may be directed into the same funds, using the same percentages, as Participant contributions. Earnings on investments in each of the investment funds are reinvested in the respective funds. |
| 2. | Interest in PepsiAmericas, Inc. Defined Contribution Master Trust |
| Certain assets of the Plan are in the PepsiAmericas, Inc. Defined Contribution Master Trust (the “Trust”), formerly known as the Whitman Corporation Defined Contribution Master Trust, which was established for the investment of assets of the Plan and another PepsiAmericas, Inc. sponsored retirement plan. Each plan has an undivided interest in the Trust. The assets of the Trust are held by the Northern Trust Company (the “Trustee”). The Plan's interest in the net assets of the Trust is based on the individual plan participants' investment balances. Investment income is allocated on a daily basis through a valuation performed by the Trustee. Administrative expenses relating to the Trust are allocated to the individual funds based upon average monthly balances invested by each plan. At December 31, 2002 and 2001, the Plan’s interest in the net assets of the Trust was approximately 73%. |
| F-9 |
| PEPSIAMERICAS, INC. SALARIED 401(k) PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) |
| 2. | Interest in PepsiAmericas, Inc. Defined Contribution Master Trust (continued) |
| The Trust held the following classifications of investments as of December 31, 2002 and 2001: |
| 2002 | 2001 | |||||||
| Investments at market value: | ||||||||
| Common stock: PepsiAmericas, Inc. | $ | 16,767,140 | $ | 16,675,285 | ||||
| Collective investment trusts | 144,500,397 | 166,180,321 | ||||||
| Participant loans | 6,723,371 | 6,333,226 | ||||||
| Investments at contract value: | ||||||||
| Investment contracts | 85,186,896 | 71,621,387 | ||||||
| Total Trust investments | $ | 253,177,804 | $ | 260,810,219 | ||||
| As of December 31, 2002 and 2001, the net assets of the Trust include the above investments and other miscellaneous net assets totaling $3,665 and $10,455, respectively. |
| Investment loss for the Trust is as follows for the years ended December 31, 2002 and 2001: |
| 2002 | 2001 | |||||||
| Net depreciation in fair value of investments: | ||||||||
| Common stock | $ | ( 193,865 | ) | $ | ( 3,875,582 | ) | ||
| Collective investment trusts | ( 26,538,978 | ) | ( 17,245,918 | ) | ||||
| ( 26,732,843 | ) | ( 21,121,500 | ) | |||||
| Interest, dividends and other | 4,509,078 | 4,113,450 | ||||||
| Total investment loss | $ | ( 22,223,765 | ) | $ | ( 17,008,050 | ) | ||
| F-10 |
| PEPSIAMERICAS, INC. SALARIED 401(k) PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) |
| 3. | Summary of significant accounting policies |
| Basis of presentation: |
| The accompanying financial statements are prepared on the accrual basis of accounting. |
| Investment valuation and income recognition: |
| Except for the investment contracts, the Trust's investments are stated at fair value. The fair values of marketable securities are based on quotations obtained from national securities exchanges. Where marketable securities are not listed on an exchange, quotations are obtained from brokerage firms. |
| Fully benefit-responsive investment contracts are valued at contract value, which represents the principal balance of the investment contracts, plus accrued interest at the stated contract rate, less payments received and contract charges by the insurance company. The aggregate average yield of the investment contracts for the years ended December 31, 2002 and 2001 was 4.7% and 5.7%, respectively. The aggregate interest rate for the investment contracts as of December 31, 2002 and 2001 was 5.1% and 5.9%, respectively. The fair value of the investment contracts in the Trust as of December 31, 2002 and 2001 was approximately $90,800,000 and $76,900,000, respectively. |
| The Trust records investment transactions on a trade date basis. Dividends are recorded on the ex-dividend date. |
| Benefits paid to participants: |
| Benefits paid to participants are recorded when paid. |
| Use of estimates: |
| The financial statements have been prepared in accordance with generally accepted accounting principles and necessarily include amounts based on estimates and assumptions by management. Actual results could differ from those estimates. |
| F-11 |
| PEPSIAMERICAS, INC. SALARIED 401(k) PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) |
| 4. | Tax status |
| The Internal Revenue Service has determined and informed the Company by a letter dated October 30, 2002 that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan Administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. The Plan Administrator believes that the Plan was qualified and the related trust was tax-exempt as of the financial statement dates. |
| 5. | Transfers from other plans |
| Effective July 3, 2001, the assets attributable to the accounts of the participants under the Delta Beverage Group, Inc. Retirement Savings Plan were transferred to the Trust. The asset transfer amounted to approximately $15.3 million. |
| Effective October 2, 2001, the assets attributable to the accounts of the participants under the PepsiAmericas, Inc. Retirement Savings Plan were transferred to the Trust. The asset transfer amounted to approximately $10.4 million. |
| 6. | Subsequent events |
| Effective January 1, 2003, the Plan was amended and the name of the Plan changed to the PepsiAmericas, Inc. Salaried 401(k) Plan. The former name of the Plan was the PepsiAmericas, Inc. Salaried Retirement Savings Plan. |
| Effective January 1, 2003, Fidelity Investments was appointed as the successor trustee to Northern Trust Company. On January 3, 2003, The Northern Trust Company transferred the assets of the PepsiAmericas, Inc. Defined Contribution Master Trust to Fidelity Investments. The asset transfer amounted to $252,889,860. |
| F-12 |
| PEPSIAMERICAS, INC. SALARIED 401(k) PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) |
| 7. | Reconciliation of financial statements to Schedule H of Form 5500 |
| The following is a reconciliation of net assets available for benefits per the financial statements at December 31, 2002 and 2001 to Schedule H of Form 5500: |
| 2002 | 2001 | |||||||
| Net assets available for benefits per the financial statements | $ | 185,150,227 | $ | 189,987,261 | ||||
| Amounts allocated to withdrawing participants | ( 76,480 | ) | ( 259,424 | ) | ||||
| Net assets available for benefits per Schedule
H of Form 5500 |
$ | 185,073,747 | $ | 189,727,837 | ||||
| The following is a reconciliation of benefits paid to participants per the financial statements for the year ended December 31, 2002 to Schedule H of Form 5500: |
| Benefits paid to participants per the
financial statements |
$ | 12,261,118 | ||||||
| Add: Amounts allocated to
withdrawing participants at December 31, 2002 |
76,480 | |||||||
| Less: Amounts allocated to
withdrawing participants at December 31, 2001 |
( 259,424 | ) | ||||||
| Benefits paid to participant per
Schedule H of Form 5500 |
$ | 12,078,174 | ||||||
| F-13 |