Dr Pepper Snapple Group, Inc. (Form: 10-Q, Received: 05/06/2010 13:00:34)

Type of

Notice Required

Service

Description of Specific Services

to Terminate

Network Services

As part of existing separation activities, the IT team has instituted a Trust between the Cadbury and DPS Active Directory domains. This allows specified access across and between the two distinct domains.

Monthly charges will not begin until network separation is complete.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2010


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-33829


Delaware (State or other jurisdiction of incorporation or organization)		98-0517725 (I.R.S. employer identification number)

5301 Legacy Drive, Plano, Texas (Address of principal executive offices)		75024 (Zip code)

(972) 673-7000
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

Yes o No þ

As of May 3, 2010, there were 245,690,524 shares of the registrant’s common stock, par value $0.01 per share, outstanding.

DR PEPPER SNAPPLE GROUP, INC.

FORM 10-Q

INDEX


			Page
Part I. Financial Information
Item 1. Financial Statements (Unaudited)			1
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2010 and 2009			1
Condensed Consolidated Balance Sheets as of March 31, 2010 and December 31, 2009			2
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2010 and 2009			3
Notes to Condensed Consolidated Financial Statements			4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			27
Item 3. Quantitative and Qualitative Disclosures About Market Risk			38
Item 4. Controls and Procedures			39

Part II. Other Information
Item 1. Legal Proceedings			40
Item 1A. Risk Factors			40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			40
Item 6. Exhibits			41
EX-10.1
EX-10.2
EX-10.3
EX-12.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

DR PEPPER SNAPPLE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended March 31, 2010 and 2009

(Unaudited, in millions, except per share data)

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).


	For the
	Three Months Ended
	March 31,
	2010			2009
Net sales	$	1,248		$	1,260
Cost of sales		496			531

Gross profit		752			729
Selling, general and administrative expenses		531			499
Depreciation and amortization		31			27
Other operating expense (income), net		3			(62	)

Income from operations		187			265
Interest expense		34			55
Interest income		(1	)		(1	)
Other income, net		(3	)		(3	)

Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries		157			214
Provision for income taxes		68			82

Income before equity in earnings of unconsolidated subsidiaries		89			132
Equity in earnings of unconsolidated subsidiaries, net of tax		—			—

Net income	$	89		$	132


Earnings per common share:
Basic	$	0.35		$	0.52
Diluted	$	0.35		$	0.52

Weighted average common shares outstanding:
Basic		253.3			254.2
Diluted		255.1			254.3

Cash dividends declared per common share:	$	0.15		$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

DR PEPPER SNAPPLE GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

As of March 31, 2010 and December 31, 2009

(Unaudited, in millions except share and per share data)


	March 31,			December 31,
	2010			2009
Assets
Current assets:
Cash and cash equivalents	$	571		$	280
Accounts receivable:
Trade, net		529			540
Other		32			32
Inventories		270			262
Deferred tax assets		59			53
Prepaid expenses and other current assets		169			112

Total current assets		1,630			1,279
Property, plant and equipment, net		1,106			1,109
Investments in unconsolidated subsidiaries		10			9
Goodwill		2,984			2,983
Other intangible assets, net		2,702			2,702
Other non-current assets		543			543
Non-current deferred tax assets		142			151

Total assets	$	9,117		$	8,776

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	798		$	850
Deferred revenue		36			—
Income taxes payable		16			4

Total current liabilities		850			854
Long-term obligations		2,566			2,960
Non-current deferred tax liabilities		1,042			1,038
Non-current deferred revenue		861			—
Other non-current liabilities		736			737

Total liabilities		6,055			5,589

Commitments and contingencies

Stockholders’ equity:
Preferred stock, $.01 par value, 15,000,000 shares authorized, no shares issued		—			—
Common stock, $.01 par value, 800,000,000 shares authorized, 248,545,188 and 254,109,047 shares issued and outstanding for 2010 and 2009, respectively		3			3
Additional paid-in capital		2,962			3,156
Retained earnings		138			87
Accumulated other comprehensive loss		(41	)		(59	)

Total stockholders’ equity		3,062			3,187

Total liabilities and stockholders’ equity	$	9,117		$	8,776

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

DR PEPPER SNAPPLE GROUP, INC .

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31, 2010 and 2009
(Unaudited, in millions)


	For the
	Three Months Ended
	March 31,
	2010			2009
Operating activities:
Net income	$	89		$	132
Adjustments to reconcile net income to net cash provided by operations:
Depreciation expense		44			39
Amortization expense		10			10
Amortization of deferred financing costs		1			5
Employee stock-based compensation expense		6			3
Deferred income taxes		9			17
Loss (gain) on disposal of intangible assets and property		3			(62	)
Other, net		3			1
Changes in assets and liabilities:
Trade and other accounts receivable		10			(9	)
Inventories		(7	)		(24	)
Other current assets		(47	)		14
Other non-current assets		(4	)		(8	)
Accounts payable and accrued expenses		(42	)		50
Income taxes payable		16			13
Deferred revenue		36			—
Non-current deferred revenue		861			—
Other non-current liabilities		(1	)		(3	)

Net cash provided by operating activities		987			178
Investing activities:
Purchases of property, plant and equipment		(55	)		(78	)
Purchases of intangible assets		—			(5	)
Proceeds from disposals of intangible assets		—			68

Net cash used in investing activities		(55	)		(15	)
Financing activities:
Repayment of senior unsecured credit facility		(405	)		(155	)
Repurchase of shares of common stock		(202	)		—
Dividends paid		(38	)		—
Other, net		—			(1	)

Net cash used in financing activities		(645	)		(156	)
Cash and cash equivalents — net change from:
Operating, investing and financing activities		287			7
Currency translation		4			(2	)
Cash and cash equivalents at beginning of period		280			214

Cash and cash equivalents at end of period	$	571		$	219

Supplemental cash flow disclosures of non-cash investing and financing activities:
Capital expenditures included in accounts payable and accrued expenses	$	25		$	15
Supplemental cash flow disclosures:
Interest paid	$	5		$	11
Income taxes paid		13			20

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. General

References in this Quarterly Report on Form 10-Q to “we”, “our”, “us”, “DPS” or “the Company” refer to Dr Pepper Snapple Group, Inc. and all entities included in our unaudited condensed consolidated financial statements. Cadbury plc and Cadbury Schweppes plc are hereafter collectively referred to as “Cadbury” unless otherwise indicated. Kraft Foods Inc. acquired Cadbury on February 2, 2010. Kraft Foods, Inc. and/or its subsidiaries are hereafter collectively referred to as “Kraft”.

This Quarterly Report on Form 10-Q refers to some of DPS’ owned or licensed trademarks, trade names and service marks, which are referred to as the Company’s brands. All of the product names included in this Quarterly Report on Form 10-Q are either DPS’ registered trademarks or those of the Company’s licensors.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments, consisting principally of normal recurring adjustments, considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from these estimates. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

The Company has evaluated subsequent events through the date of issuance of the Unaudited Condensed Consolidated Financial Statements.

Use of Estimates

The process of preparing DPS’ unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and judgments are based on historical experience, future expectations and other factors and assumptions the Company believes to be reasonable under the circumstances. The most significant estimates and judgments are reviewed on an ongoing basis and revised when necessary. Actual amounts may differ from these estimates and judgments. The Company has identified the following policies as critical accounting policies:

•

revenue recognition;

•

customer marketing programs and incentives;

•

goodwill and other indefinite lived intangibles;

•

definite lived intangible assets;

•

stock-based compensation;

•

pension and postretirement benefits;

•

risk management programs; and

•

income taxes.

These accounting estimates and related policies are discussed in greater detail in DPS’ Annual Report on Form 10-K for the year ended December 31, 2009.

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Recently Issued Accounting Updates

In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2010-06, Improving Disclosures about Fair Value Measurements (“ASU No. 2010-06”). The new standard addresses, among other things, guidance regarding activity in Level 3 fair value measurements. Portions of ASU No. 2010-06 that relate to the Level 3 activity disclosures are effective for the annual reporting period beginning after December 15, 2010. The Company will provide the required disclosures beginning with the Company’s Annual Report on Form 10-K for the year ending December 31, 2011. Based on the initial evaluation, the Company does not anticipate a material impact to the Company’s financial position, results of operations or cash flows as a result of this change.

Recently Adopted Provisions of U.S. GAAP

In accordance with U.S. GAAP, the following provisions, which had no material impact on the Company’s financial position, results of operations or cash flows, were effective as of January 1, 2010.

•

The application of certain key provisions of U.S. GAAP related to consolidation of variable interest entities, including guidance for determining whether an entity is a variable interest entity, ongoing assessments of control over such entities, and additional disclosures about an enterprise’s involvement in a variable interest entity.

•

The addition of certain fair value measurement disclosure requirements specific to the different classes of assets and liabilities, valuation techniques and inputs used, as well as transfers between level 1 and level 2. See Note 9 for further information.

2. Inventories

Inventories as of March 31, 2010, and December 31, 2009, consisted of the following (in millions):


	March 31,			December 31,
	2010			2009
Raw materials	$	97		$	105
Work in process		5			4
Finished goods		209			193

Inventories at FIFO cost		311			302
Reduction to LIFO cost		(41	)		(40	)

Inventories	$	270		$	262

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

3. Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill for the three months ended March 31, 2010, and the year ended December 31, 2009, by reporting unit are as follows (in millions):


				WD		DSD			Latin
	Beverage			Reporting		Reporting			America
	Concentrates			Unit ⁽¹⁾		Unit ⁽¹⁾			Beverages		Total
Balance as of December 31, 2008
Goodwill	$	1,733		$	1,220	$	180		$	30	$	3,163
Accumulated impairment losses		—			—		(180	)		—		(180	)

		1,733			1,220		—			30		2,983

Foreign currency impact		(1	)		—		—			1		—

Balance as of December 31, 2009
Goodwill		1,732			1,220		180			31		3,163
Accumulated impairment losses		—			—		(180	)		—		(180	)

		1,732			1,220		—			31		2,983

Foreign currency impact		(1	)		—		—			2		1

Balance as of March 31, 2010
Goodwill		1,731			1,220		180			33		3,164
Accumulated impairment losses		—			—		(180	)		—		(180	)

	$	1,731		$	1,220	$	—		$	33	$	2,984


(1)		The Packaged Beverages segment is comprised of two reporting units, the Direct Store Delivery (“DSD”) system and the Warehouse Direct (“WD”) system.

The net carrying amounts of intangible assets other than goodwill as of March 31, 2010, and December 31, 2009, are as follows (in millions):


	March 31, 2010							December 31, 2009
	Gross		Accumulated			Net		Gross		Accumulated			Net
	Amount		Amortization			Amount		Amount		Amortization			Amount
Intangible assets with indefinite lives:
Brands ⁽¹⁾	$	2,656	$	—		$	2,656	$	2,652	$	—		$	2,652
Distributor rights		8		—			8		8		—			8
Intangible assets with finite lives:
Brands		29		(23	)		6		29		(22	)		7
Customer relationships		76		(48	)		28		76		(45	)		31
Bottler agreements		21		(17	)		4		21		(17	)		4
Distributor rights		2		(2	)		—		2		(2	)		—

Total	$	2,792	$	(90	)	$	2,702	$	2,788	$	(86	)	$	2,702


(1)		Intangible brands with indefinite lives increased between December 31, 2009, and March 31, 2010, due to changes in foreign currency.

As of March 31, 2010, the weighted average useful lives of intangible assets with finite lives were 10 years, 8 years and 9 years for brands, customer relationships and bottler agreements, respectively. Amortization expense for intangible assets was $4 million for each of the three months ended March 31, 2010 and 2009.

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Amortization expense of these intangible assets over the remainder of 2010 and the next four years is expected to be the following (in millions):


	Aggregate
	Amortization
Year	Expense
Remaining nine months for the year ending December 31, 2010	$	13
2011		8
2012		4
2013		4
2014		4

The Company conducts impairment tests on goodwill and all indefinite lived intangible assets annually, as of December 31, or more frequently if circumstances indicate that the carrying amount of an asset may not be recoverable. The Company uses present value and other valuation techniques to make this assessment. If the carrying amount of goodwill exceeds its implied fair value or the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. DPS did not identify any circumstances that indicated that the carrying amount of any goodwill or any indefinite lived intangible asset may not be recoverable during the three months ended March 31, 2010.

4. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following as of March 31, 2010, and December 31, 2009 (in millions):


	March 31,		December 31,
	2010		2009
Trade accounts payable	$	289	$	252
Customer rebates and incentives		157		209
Accrued compensation		67		126
Insurance reserves		73		68
Interest accrual and interest rate swap liability		51		24
Other current liabilities		161		171

Accounts payable and accrued expenses	$	798	$	850

5. Long-term obligations

The following table summarizes the Company’s long-term obligations as of March 31, 2010, and December 31, 2009 (in millions):


	March 31,		December 31,
	2010		2009
Senior unsecured notes ⁽¹⁾	$	2,553	$	2,542
Revolving credit facility		—		405
Less – current portion		—		—

Subtotal		2,553		2,947
Long-term capital lease obligations		13		13

Long-term obligations	$	2,566	$	2,960


(1)		The carrying amount includes an adjustment of $4 million and $8 million related to the change in the fair value of interest rate swaps designated as fair value hedges on the 1.70% senior notes due in 2011 (the “2011 Notes”) and 2.35% senior notes due in 2012 (the “2012 Notes”) as of March 31, 2010 and December 31, 2009, respectively. Refer to Note 6 for further information regarding derivatives.

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

2010 Borrowings and Repayments

On November 20, 2009, the Company’s Board of Directors (the “Board”) authorized the Company to issue up to $1,500 million of debt securities through the Securities and Exchange Commission shelf registration process. At March 31, 2010, $650 million remained authorized to be issued following the issuance described below.

During the first quarter of 2010, the Company repaid $405 million borrowed from the revolving credit facility (the “Revolver”).

The following is a description of the Company’s senior unsecured credit facility and the senior unsecured notes. The summaries of the senior unsecured credit facility and the senior unsecured notes are qualified in their entirety by the specific terms and provisions of the senior unsecured credit facility agreement (the “Facility Agreement”) and the indenture governing the senior unsecured notes, respectively, copies of which have previously been filed, as referenced in the exhibits to the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

Senior Unsecured Credit Facility

The Company’s senior unsecured credit facility originally provided senior unsecured financing of up to $2,700 million, which consisted of:

•

the senior unsecured Term Loan A facility (the “Term Loan A”) in an aggregate principal amount of $2,200 million with a term of five years, which was fully repaid in December 2009 prior to its maturity, and under which no further borrowings may be made; and

•

the Revolver in an aggregate principal amount of $500 million with a maturity in 2013. The balance of principal borrowings under the Revolver was $0 and $405 million as of March 31, 2010 and December 31, 2009, respectively. Up to $75 million of the Revolver is available for the issuance of letters of credit, of which $42 million and $41 million were utilized as of March 31, 2010, and December 31, 2009, respectively. Balances available for additional borrowings and letters of credit were $458 million and $33 million, respectively, as of March 31, 2010.

Borrowings under the senior unsecured credit facility bear interest at a floating rate per annum based upon the London interbank offered rate for dollars (“LIBOR”) or the alternate base rate (“ABR”), in each case plus an applicable margin which varies based upon the Company’s debt ratings, from 1.00% to 2.50%, in the case of LIBOR loans and 0.00% to 1.50% in the case of ABR loans. The ABR means the greater of (a) JPMorgan Chase Bank’s prime rate and (b) the federal funds effective rate plus one half of 1%. Interest is payable on the last day of the interest period, but not less than quarterly, in the case of any LIBOR loan and on the last day of March, June, September and December of each year in the case of any ABR loan. The average interest rate for the three months ended March 31, 2010 and 2009, was 2.25% and 5.10%, respectively. Interest expense was $2 million and $26 million for the three months ended March 31, 2010 and 2009, respectively. Amortization of deferred financing costs of $1 million and $4 million for the three months ended March 31, 2010 and 2009, respectively, was included in interest expense.

The Company utilized interest rate swaps to effectively convert variable interest rates to fixed rates. Refer to Note 6 for further information regarding derivatives.

An unused commitment fee is payable quarterly to the lenders on the unused portion of the commitments in respect of the Revolver equal to 0.15% to 0.50% per annum, depending upon the Company’s debt ratings. Interest expense included $1 million of amortization of deferred financing costs associated with the Revolver for each of the three months ended March 31, 2010 and 2009.

Principal amounts outstanding under the Revolver are due and payable in full at maturity.

All obligations under the senior unsecured credit facility are guaranteed by substantially all of the Company’s existing and future direct and indirect domestic subsidiaries.

The Facility Agreement contains customary negative covenants that, among other things, restrict the Company’s ability to incur debt at subsidiaries that are not guarantors; incur liens; merge or sell, transfer, lease or otherwise dispose of all or substantially all assets; make investments, loans, advances, guarantees and acquisitions; enter into transactions with affiliates; and enter into agreements restricting its ability to incur liens or the ability of subsidiaries to make distributions. These covenants are subject to certain exceptions described in the senior Facility Agreement. In addition, the Facility Agreement requires the Company to comply with a maximum total leverage ratio covenant and a minimum interest coverage ratio covenant. The Facility Agreement also contains certain usual and customary representations and warranties, affirmative covenants and events of default. As of March 31, 2010 and December 31, 2009, the Company was in compliance with all financial covenant requirements.

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Senior Unsecured Notes

The 2011 and 2012 Notes

In December 2009, the Company completed the issuance of $850 million aggregate principal amount of senior unsecured notes consisting of the 2011 and 2012 Notes. The weighted average interest rate of the 2011 and 2012 Notes was 2.0% for the three months ended March 31, 2010. The net proceeds from the sale of the debentures were used for repayment of existing indebtedness under the Term Loan A. Interest on the 2011 and 2012 Notes is payable semi-annually on June 21 and December 21. Interest expense was $2 million for the three months ended March 31, 2010.

The Company utilizes interest rate swaps designated as fair value hedges, to convert fixed interest rates to variable rates. Refer to Note 6 for further information regarding derivatives.

The indenture governing the 2011 and 2012 Notes, among other things, limits the Company’s ability to incur indebtedness secured by principal properties, to enter into certain sale and leaseback transactions and to enter into certain mergers or transfers of substantially all of DPS’ assets. The 2011 and 2012 Notes are guaranteed by substantially all of the Company’s existing and future direct and indirect domestic subsidiaries. As of March 31, 2010 and December 31, 2009, the Company was in compliance with all covenant requirements.

The 2013, 2018 and 2038 Notes

During 2008, the Company completed the issuance of $1,700 million aggregate principal amount of senior unsecured notes consisting of $250 million aggregate principal amount of 6.12% senior notes due May 1, 2013 (the “2013 Notes”), $1,200 million aggregate principal amount of 6.82% senior notes due May 1, 2018 (the “2018 Notes”), and $250 million aggregate principal amount of 7.45% senior notes due May 1, 2038 (the “2038 Notes”). The weighted average interest rate of the 2013, 2018 and 2038 Notes was 6.8% for both three month periods ended March 31, 2010 and 2009. Interest on the senior unsecured notes is payable semi-annually on May 1 and November 1. Interest expense was $29 million for each of the three months ended March 31, 2010 and 2009.

The indenture governing the senior unsecured notes, among other things, limits the Company’s ability to incur indebtedness secured by principal properties, to enter into certain sale and lease back transactions and to enter into certain mergers or transfers of substantially all of DPS’ assets. The senior unsecured notes are guaranteed by substantially all of the Company’s existing and future direct and indirect domestic subsidiaries. As of March 31, 2010 and December 31, 2009, the Company was in compliance with all covenant requirements.

Capital Lease Obligations

Long-term capital lease obligations totaled $13 million as of March 31, 2010, and December 31, 2009. Current obligations related to the Company’s capital leases were $3 million as of March 31, 2010, and December 31, 2009, and were included as a component of accounts payable and accrued expenses.

6. Derivatives

DPS is exposed to market risks arising from adverse changes in:

•

interest rates;

•

foreign exchange rates; and

•

commodity prices, affecting the cost of raw materials and fuels.

The Company manages these risks through a variety of strategies, including the use of interest rate swaps, foreign exchange forward contracts, commodity futures contracts and supplier pricing agreements. DPS does not hold or issue derivative financial instruments for trading or speculative purposes.

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The Company formally designates and accounts for certain interest rate swaps and foreign exchange forward contracts that meet established accounting criteria under U.S. GAAP as either fair value or cash flow hedges. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative instruments is recorded, net of applicable taxes, in Accumulated Other Comprehensive Loss (“AOCL”), a component of Stockholders’ Equity in the Unaudited Condensed Consolidated Balance Sheets. When net income is affected by the variability of the underlying transaction, the applicable offsetting amount of the gain or loss from the derivative instruments deferred in AOCL is reclassified to net income and is reported as a component of the Unaudited Condensed Consolidated Statements of Operations. For derivative instruments that are designated and qualify as fair value hedges, the effective change in the fair value of these instruments, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk, are recognized immediately in current-period earnings. For derivatives that are not designated or are de-designated as hedging instruments, the gain or loss on the instruments is recognized in earnings in the period of change.

Certain interest rate swap agreements qualify for the “shortcut” method of accounting for hedges under U.S. GAAP. Under the “shortcut” method, the hedges are assumed to be perfectly effective and no ineffectiveness is recorded in earnings. For all other designated hedges, DPS assesses hedge effectiveness and measures hedge ineffectiveness at least quarterly throughout the designated period. Changes in the fair value of the derivative instruments that do not effectively offset changes in the fair value of the underlying hedged item or the variability in the cash flows of the forecasted transaction throughout the designated hedge period are recorded in earnings each period.

If fair value or cash flow hedges were to cease to qualify for hedge accounting or were terminated, it would continue to be carried on the balance sheet at fair value until settled, but hedge accounting would be discontinued prospectively. If the underlying hedged transaction ceases to exist, any associated amounts reported in AOCL are reclassified to earnings at that time.

Interest Rates

Cash Flow Hedges

During 2009, DPS utilized interest rate swaps to manage its exposure to volatility in floating interest rates on borrowings under its Term Loan A. The intent of entering into these interest rate swaps was to provide predictability in the Company’s overall cost structure by effectively converting variable interest rates to fixed rates. During the three months ended March 31, 2009, the Company effectively utilized interest rate swaps with a total notional amount of $1,700 million, entered into during 2008. In February 2009, the Company entered into an interest rate swap effective December 31, 2009, with a duration of twelve months and a $750 million notional amount that amortizes at the rate of $100 million every quarter and designated it as a cash flow hedge. Upon repayment of the Term Loan A in December 2009, the Company de-designated the cash flow hedge. See the Economic Hedge section within this note for further information.

During the three months ended March 31, 2009, the Company fully settled an interest rate swap with a notional amount of $500 million.

There were no interest rate swaps in place for the three months ended March 31, 2010, that qualified for hedge accounting as cash flow hedges under U.S. GAAP.

Fair Value Hedges

The Company is also exposed to the risk of changes in the fair value of certain fixed-rate debt attributable to changes in interest rates and manages these risks through the use of receive-fixed, pay-variable interest rate swaps.

There were no interest rate swaps in place for the three months ended March 31, 2009, that qualified for hedge accounting as fair value hedges under U.S. GAAP.

In December 2009, the Company entered into interest rate swaps having an aggregate notional amount of $850 million and durations ranging from two to three years in order to convert fixed-rate, long-term debt to floating rate debt. These swaps were entered into at the inception of the 2011 and 2012 Notes, were originally accounted for as fair value hedges under U.S. GAAP and qualified for the “shortcut method” of accounting for hedges. Effective March 10, 2010, $225 million notional of the interest rate swap linked to the 2012 Notes was restructured to reflect a change in the variable interest rate to be paid by the Company. This change triggered the de-designation of the $225 million notional fair value hedge and the corresponding fair value hedging relationship was discontinued. With the fair value hedge discontinued, the Company ceased adjusting the carrying value of the 2012 Notes corresponding to the $225 million restructured notional

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

amounts. The $1 million adjustment of the carrying value of the 2012 Notes that resulted from de-designation will continue to be carried on the balance sheet and amortized completely over the remaining term of the 2012 Notes. As a result, the Company had fair value hedges having an aggregate notional amount of $625 million as of March 31, 2010.

As of March 31, 2010, the carrying value of the 2011 and 2012 Notes increased by $4 million, which includes the $1 million adjustment, net of amortization, that resulted from the de-designation discussed above, to reflect the change in fair value of the Company’s interest rate swap agreements. Refer to Note 5 for further information.

Economic Hedge

In addition to derivatives instruments that qualify for and are designated as hedging instruments under U.S. GAAP, the Company utilizes interest rate swap instruments that are not designated as cash flow or fair value hedges to manage interest rate risk.

As discussed above under Cash Flow Hedges, the interest rate swap entered into by the Company and designated as a cash flow hedge under U.S GAAP in February 2009, was subsequently de-designated with the full repayment of the Term Loan A in December 2009. The Company also terminated $345 million of the original notional amount of the interest rate swap in December 2009, leaving the remaining $405 million in notional amount of the interest rate swap that had not been terminated as an economic hedge during the first quarter of 2010. This remaining $405 million in notional amount of the interest rate swap was used to economically hedge the volatility in the floating interest rate associated with borrowings under the Revolver during the quarter. The Company terminated this interest rate swap instrument once the outstanding balance under the Revolver was fully repaid. The gain or loss on the instrument was recognized in earnings during the period the instrument was outstanding.

As discussed above under Fair Value Hedges, effective March 10, 2010, $225 million notional of the interest rate swap linked to the 2012 Notes was restructured to reflect a change in the variable interest rate to be paid by the Company. This resulted in the de-designation of the $225 million notional fair value hedge and the discontinuance of the corresponding fair value hedging relationship. The $225 million notional restructured interest rate swap was subsequently accounted for as an economic hedge and the gain or loss on the instrument is recognized in earnings.

Foreign Exchange

The Company’s Canadian business purchases its inventory through transactions denominated and settled in U.S. Dollars, a currency different from the functional currency of the Canadian business. These inventory purchases are subject to exposure from movements in exchange rates. During the three months ended March 31, 2010 and 2009, the Company utilized foreign exchange forward contracts designated as cash flow hedges to manage the operational exposures resulting from changes in these foreign currency exchange rates. The intent of these foreign exchange contracts is to provide predictability in the Company’s overall cost structure. These foreign exchange contracts, carried at fair value, have maturities between one and 21 months. As of March 31, 2010, the Company had outstanding foreign exchange forward contracts with notional amounts of $73 million.

Commodities

DPS centrally manages the exposure to volatility in the prices of certain commodities used in its production and distribution processes through futures contracts and supplier pricing agreements. The intent of these contracts and agreements is to provide predictability in the Company’s overall cost structure. During the three months ended March 31, 2010 and 2009, the Company entered into futures contracts that economically hedge certain of its risks. In these cases, a natural hedging relationship exists whereby changes in the fair value of the instruments act as an economic offset to changes in the fair value of the underlying items. Changes in the fair value of these instruments are recorded in net income throughout the term of the derivative instrument and are reported in the same line item of the unaudited Condensed Consolidated Statements of Operations as the hedged transaction. Gains and losses are recognized as a component of unallocated corporate costs until the Company’s operating segments are affected by the settlement of the underlying transaction, at which time the gain or loss is reflected as a component of the respective segment’s operating profit (“SOP”).

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The following table summarizes the location of the fair value of the Company’s derivative instruments within the unaudited Condensed Consolidated Balance Sheets as of March 31, 2010, and December 31, 2009 (in millions):


		March 31,		December 31,
	Balance Sheet Location	2010		2009
Assets:
Derivative instruments designated as hedging instruments under U.S. GAAP:
Interest rate swap contracts	Prepaid expenses and other current assets	$	6	$	6
Foreign exchange forward contracts	Other non-current assets		—		—
Derivative instruments not designated as hedging instruments under U.S. GAAP:
Commodity futures	Prepaid expenses and other current assets		4		1
Interest rate swap contracts	Prepaid expenses and other current assets		3		—
Commodity futures	Other non-current assets		7		9

Total assets		$	20	$	16


Liabilities:
Derivative instruments designated as hedging instruments under U.S. GAAP:
Foreign exchange forward contracts	Accounts payable and accrued expenses	$	2	$	2
Interest rate swap contracts	Other non-current liabilities		3		14
Foreign exchange forward contracts	Other non-current liabilities		—		—
Derivative instruments not designated as hedging instruments under U.S. GAAP:
Interest rate swap contract	Accounts payable and accrued expenses		—		3
Commodity futures	Accounts payable and accrued expenses		2		—
Interest rate swap contract	Other non-current liabilities		2		—
Commodity futures	Other non-current liabilities		1		—

Total liabilities		$	10	$	19

The following table presents the impact of derivative instruments designated as cash flow hedging instruments under U.S. GAAP to the unaudited Condensed Consolidated Statement of Operations and Other Comprehensive Income (“OCI”) for the three months ended March 31, 2010 and 2009 (in millions):


	Amount of Gain			Amount of Gain (Loss)			Location of Gain (Loss)
	(Loss) Recognized in			Reclassified from AOCL into			Reclassified from AOCL into
	OCI			Net Income			Net Income
For the three months ended March 31, 2010:
Foreign exchange forward contract	$	(2	)	$	(2	)	Cost of sales

Total	$	(2	)	$	(2	)


For the three months ended March 31, 2009:
Interest rate swap contracts	$	(6	)	$	(11	)	Interest expense
Foreign exchange forward contract		—			—		Cost of sales

Total	$	(6	)	$	(11	)

There was no hedge ineffectiveness recognized in net income for the three months ended March 31, 2010 and 2009. During the next 12 months, the Company expects to reclassify net losses of $2 million from AOCL into net income.

The interest rate swap agreements designated as fair value hedges qualify for the “shortcut” method and no ineffectiveness is recorded in earnings for the three months ended March 31, 2010.

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The following table presents the impact of derivative instruments not designated as hedging instruments under U.S. GAAP to the unaudited Condensed Consolidated Statement of Operations for the three months ended March 31, 2010 and 2009 (in millions):


	Amount of Gain (Loss)			Location of Gain (Loss)
	Recognized in Income			Recognized in Income
For the three months ended March 31, 2010:
Interest rate swap contracts	$	—		Interest expense
Commodity futures		(2	)	Cost of sales
Commodity futures		1		Selling, general and administrative expenses

Total ⁽¹⁾	$	(1	)


For the three months ended March 31, 2009:
Commodity futures	$	(3	)	Cost of sales
Commodity futures		(3	)	Selling, general and administrative expenses

Total ⁽²⁾	$	(6	)


(1)		The total loss recognized under commodity futures contracts for the three months ended March 31, 2010, represents an unrealized $1 million loss which represents the change in fair value of outstanding commodity futures contracts during the period.

(2)		The total gain recognized under commodity futures contracts for the three months ended March 31, 2009, includes a realized $7 million loss which represents commodity contracts that settled during the three months ended March 31, 2009, and an unrealized $1 million gain which represents the change in fair value of outstanding commodity futures contracts during the period.

Refer to Note 9 for more information on the valuation of derivative instruments. The Company has exposure to credit losses from derivative instruments in an asset position in the event of nonperformance by the counterparties to the agreements. Historically, DPS has not experienced credit losses as a result of counterparty nonperformance. The Company selects and periodically reviews counterparties based on credit ratings, limits its exposure to a single counterparty under defined guidelines, and monitors the market position of the programs at least on a quarterly basis.

7. Other Non-Current Assets and Other Non-Current Liabilities

The table below details the components of other non-current assets and other non-current liabilities as of March 31, 2010, and December 31, 2009 (in millions):


	March 31,		December 31,
	2010		2009
Other non-current assets:
Long-term receivables from Kraft ⁽¹⁾	$	405	$	402
Deferred financing costs, net		21		23
Customer incentive programs		82		84
Other		35		34

Other non-current assets	$	543	$	543

Other non-current liabilities:
Long-term payables due to Kraft ⁽¹⁾	$	120	$	115
Liabilities for unrecognized tax benefits and other tax related items		543		534
Long-term pension and postretirement liability		46		49
Other		27		39

Other non-current liabilities	$	736	$	737


(1)		Amounts represent receivables from or payables to Kraft under the Tax Indemnity Agreement entered into in connection with the Company’s separation.

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

8. Income Taxes

The effective tax rates for the three months ended March 31, 2010 and 2009 were 43.3% and 38.3%, respectively. The increase in the effective tax rate for the three months ended March 31, 2010, was primarily driven by a previous change in the provincial income tax rate for Ontario, Canada, which caused a writedown of a deferred tax asset, partially offset by foreign tax planning benefits. The impact of the change in tax rate increased the provision for income taxes and effective tax rate by $13 million and 8.3%, respectively for the three months ended March 31, 2010.

The Company’s Canadian deferred tax assets as of March 31, 2010, of which approximately 66% are allocated to Ontario, Canada, included a separation related balance of $138 million that was offset by a liability due to Kraft of $124 million driven by the Tax Indemnity Agreement. Anticipated legislation in Canada could result in a future partial writedown of these tax assets which would be offset to some extent by a partial write down of the liability due to Kraft.

Under the Tax Indemnity Agreement, Kraft will indemnify DPS for net unrecognized tax benefits and other tax related items of $405 million. This balance increased by $3 million during the three months ended March 31, 2010, and was offset by indemnity income recorded as a component of other income in the unaudited Condensed Consolidated Statement of Operations. In addition, pursuant to the terms of the Tax Indemnity Agreement, if DPS breaches certain covenants or other obligations or DPS is involved in certain change-in-control transactions, Kraft may not be required to indemnify the Company.

9. Fair Value

Under U.S. GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP provides a framework for measuring fair value and establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. The three-level hierarchy for disclosure of fair value measurements is as follows:

Level 1 — Quoted market prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

Level 3 — Valuations with one or more unobservable significant inputs that reflect the reporting entity’s own assumptions.

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of March 31, 2010 (in millions):


	Fair Value Measurements at Reporting Date Using
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	Level 1		Level 2		Level 3
Cash and cash equivalents	$	571	$	—	$	—
Commodity futures		—		11		—
Interest rate swaps		—		9		—

Total assets	$	571	$	20	$	—


Commodity futures	$	—	$	3	$	—
Interest rate swaps		—		5		—
Foreign exchange forward contracts		—		2		—

Total liabilities	$	—	$	10	$	—

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2009 (in millions):


	Fair Value Measurements at Reporting Date Using
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	Level 1		Level 2		Level 3
Cash and cash equivalents	$	280	$	—	$	—
Commodity futures		—		10		—
Interest rate swaps		—		6		—

Total assets	$	280	$	16	$	—


Interest rate swaps	$	—	$	17	$	—
Foreign exchange forward contracts		—		2		—

Total liabilities	$	—	$	19	$	—

The fair values of commodity futures contracts, interest rate swap contracts and foreign currency forward contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. The fair value of commodity futures contracts are valued using the market approach based on observable market transactions at the reporting date. Interest rate swap contracts are valued using models based on readily observable market parameters for all substantial terms of our contracts. The fair value of foreign currency forward contracts are valued using quoted forward foreign exchange prices at the reporting date. Therefore, the Company has categorized these contracts as Level 2.

As of March 31, 2010, and December 31, 2009, we did not have any assets or liabilities without observable market values that would require a high level of judgment to determine fair value (level 3).

There were no transfers of financial instruments between the three levels of fair value hierarchy during the three months ended March 31, 2010.

The estimated fair values of other financial liabilities not measured at fair value on a recurring basis at March 31, 2010, and December 31, 2009, are as follows (in millions):


	March 31, 2010				December 31, 2009
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long term debt – 2011 Notes	$	401	$	400	$	396	$	400
Long term debt – 2012 Notes		452		450		446		451
Long term debt – 2013 Notes		250		277		250		273
Long term debt – 2018 Notes		1,200		1,359		1,200		1,349
Long term debt – 2038 Notes		250		294		250		291
Long term debt – Revolving credit facility		—		—		405		405

Capital leases have been excluded from the calculation of fair value for both 2010 and 2009.

The fair value amounts for cash and cash equivalents, accounts receivable, net and accounts payable and accrued expenses approximate carrying amounts due to the short maturities of these instruments. The fair value amounts of long term debt as of March 31, 2010, and December 31, 2009, were estimated based on quoted market prices for traded securities. The difference between the fair value and the carrying value represents the theoretical net premium or discount that would be paid or received to retire all debt at such date.

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

10. Employee Benefit Plans

The following table sets forth the components of pension benefit costs for the three months ended March 31, 2010 and 2009 (in millions):


	For the Three Months
	Ended March 31,
	2010			2009
Service cost	$	—		$	—
Interest cost		4			4
Expected return on assets		(4	)		(3	)
Recognition of actuarial loss		1			1

Net periodic benefit costs	$	1		$	2

Total net periodic benefit costs for the U.S. postretirement benefit plans were not significant for either of the three month periods ended March 31, 2010 or 2009. The estimated prior service cost, transitional obligation and estimated net loss that will be amortized from AOCL into periodic benefit cost for postretirement plans in 2010 are not significant.

The Company contributed $3 million to its pension plans during the three months ended March 31, 2010, and expects to contribute an additional $9 million to these plans during the remainder of 2010.

The Company also contributes to various multi-employer pension plans based on obligations arising from certain of its collective bargaining agreements. The Company recognizes expense in connection with these plans as contributions are funded. Contributions paid into multi-employer defined benefit pension plans for employees under collective bargaining agreements were approximately $1 million for each of the three month periods ended March 31, 2010 and 2009.

11. Stock-Based Compensation

The Company’s Omnibus Stock Incentive Plans of 2008 and 2009 (collectively, the “DPS Stock Plans”) provide for various long-term incentive awards, including stock options and restricted stock units (“RSUs”).

The components of stock-based compensation expense for the three months ended March 31, 2010 and 2009 are presented below (in millions). Stock-based compensation expense is recorded in selling, general and administrative expenses in the unaudited Condensed Consolidated Statement of Operations.


	For the Three Months
	Ended March 31,
	2010			2009
Total stock-based compensation expense	$	6		$	3
Income tax benefit recognized in the income statement		(2	)		(1	)

Net stock-based compensation expense	$	4		$	2

The table below summarizes stock option activity for the three months ended March 31, 2010.


				Weighted		Weighted Average		Aggregate
				Average		Remaining Contractual		Intrinsic Value
	Stock Options			Exercise Price		Term (Years)		(in millions)
Outstanding at December 31, 2009		2,178,211		$	18.97		8.79	$	20
Granted		670,368			31.50
Exercised		(65,868	)		17.08
Forfeited or expired		—			—

Outstanding at March 31, 2010		2,782,711			22.04		8.85		37

Exercisable at March 31, 2010		660,247		$	19.16		8.53	$	11

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

As of March 31, 2010, there was $10 million of unrecognized compensation cost related to the nonvested stock options granted under the DPS Stock Plans that is expected to be recognized over a weighted average period of 2.15 years.

The table below summarizes RSU activity for the three months ended March 31, 2010.


				Weighted		Weighted Average		Aggregate
				Average Grant		Remaining Contractual		Intrinsic Value
	RSUs			Date Fair Value		Term (Years)		(in millions)
Outstanding at December 31, 2009		2,688,551		$	17.43		1.91	$	76
Granted		873,476			31.50
Dividend equivalent units ⁽¹⁾		13,969			28.87
Vested		(15,392	)		20.14
Forfeited or expired		(13,513	)		16.55

Outstanding at March 31, 2010		3,547,091		$	20.90		2.30	$	125


⁽¹⁾		Under the terms of the Company’s RSU agreements, unvested RSU awards, as well as dividend equivalents, are forfeitable. These forfeitable dividend equivalent units on nonvested stock awards are accrued in the form of additional restricted stock units.

As of March 31, 2010, there was $53 million of unrecognized compensation cost related to the nonvested RSUs granted under the DPS Stock Plans that is expected to be recognized over a weighted average period of 2.30 years.

12. Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the assumed conversion of all dilutive securities. The following table sets forth the computation of basic EPS utilizing the net income for the respective period and the Company’s basic shares outstanding and presents the computation of diluted EPS (in millions, except per share data):


	For the Three Months
	Ended March 31,
	2010		2009
Basic EPS:
Net income	$	89	$	132
Weighted average common shares outstanding		253.3		254.2
Earnings per common share — basic	$	0.35	$	0.52

Diluted EPS:
Net income	$	89	$	132
Weighted average common shares outstanding		253.3		254.2
Effect of dilutive securities:
Stock options, RSUs, and dividend equivalent units		1.8		0.1

Weighted average common shares outstanding and common stock equivalents		255.1		254.3


Earnings per common share — diluted	$	0.35	$	0.52

Stock options, RSUs and dividend equivalent units totaling 0.5 million shares were excluded from the diluted weighted average shares outstanding for the three months ended March 31, 2010 as they were not dilutive. Weighted average options and RSUs totaling 2.4 million shares were excluded from the diluted weighted average shares outstanding for the three months ended March 31, 2009 as they were not dilutive. Under the terms of our RSU agreements, unvested RSU awards contain forfeitable rights to dividends and dividend equivalent units. Because the dividend equivalent units are forfeitable, they are defined as non-participating securities.

On February 24, 2010, the Board approved an increase in the total aggregate share repurchase authorization up to $1 billion. Subsequent to this approval, the Company repurchased and retired 5.8 million shares of common stock valued at approximately $202 million in the three months ended March 31, 2010. These amounts were recorded as a reduction of equity, primarily additional paid-in capital.

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

13. Commitments and Contingencies

Legal Matters

The Company is occasionally subject to litigation or other legal proceedings as set forth below. The Company does not believe that the outcome of these, or any other, pending legal matters, individually or collectively, will have a material adverse effect on the business or financial condition of the Company, although such matters may have a material adverse effect on the Company’s results of operations or cash flows in a particular period.

Snapple Litigation – Labeling Claims

Snapple Beverage Corp. has been sued in various jurisdictions generally alleging that Snapple’s labeling of certain of its drinks is misleading and/or deceptive. These cases have been filed as class actions and, generally, seek unspecified damages on behalf of the class, including enjoining Snapple from various labeling practices, disgorging profits, reimbursing of monies paid for product and treble damages. The cases and their status are as follows:

•

In 2007, Snapple Beverage Corp. was sued by Stacy Holk in New Jersey Superior Court, Monmouth County. Subsequent to filing, the Holk case was removed to the United States District Court, District of New Jersey. Snapple filed a motion to dismiss the Holk case on a variety of grounds. In June 2008, the district court granted Snapple’s motion to dismiss. The plaintiff appealed and in August 2009, the appellate court reversed the judgment and remanded to the district court for further proceedings.

•

In 2007, the attorneys in the Holk case also filed a new action in the United States District Court, Southern District of New York on behalf of plaintiffs, Evan Weiner and Timothy McCausland. This case was stayed during the pendency of the Holk motion to dismiss and appeal. This stay is now lifted, the Company filed its answer and the case is proceeding.

•

In April 2009, Snapple Beverage Corp. was sued by Frances Von Koenig in the United States District Court, Eastern District of California. A motion to dismiss has been filed in the Von Koenig case.

•

In August 2009, Guy Cadwell filed suit against Dr Pepper Snapple Group, Inc. in the United States District Court, Southern District of California. This case has been transferred to the United States District Court, Eastern District of California and has been consolidated by that court with the Von Koenig case.

The Company believes it has meritorious defenses to the claims asserted in each of these cases and will defend itself vigorously. However, there is no assurance that the outcome of these cases will be favorable to the Company.

Nicolas Steele v. Seven Up/RC Bottling Company Inc.
Robert Jones v. Seven Up/RC Bottling Company of Southern California, Inc.
California Wage Audit

In 2007, one of the Company’s subsidiaries, Seven Up/RC Bottling Company Inc., was sued by Robert Jones in the Superior Court in the State of California (Orange County), alleging that its subsidiary failed to provide meal and rest periods and itemized wage statements in accordance with applicable California wage and hour law. The case was filed as a class action. The class, which has not yet been certified, consists of employees who have held delivery driver positions in California in the past three years. The potential class size could be substantially higher due to the number of individuals who have held these positions over the three year period. On behalf of the class, the plaintiffs claim lost wages, waiting time penalties and other penalties for each violation of the statute. The Company believes it has meritorious defenses to the claims asserted and will defend itself vigorously. However, there is no assurance that the outcome of this matter will be in its favor. A case filed by Nicolas Steele, et al. in the same court based on similar facts and causes of action, but involving merchandisers, has been settled for an amount that is not material to the Company.

The Company has been requested to conduct an audit of its meal and rest periods for all non-exempt employees in California at the direction of the California Department of Labor. At this time, the Company has declined to conduct such an audit until there is judicial clarification of the intent of the statute. The Company cannot predict the outcome of such an audit.

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Environmental, Health and Safety Matters

The Company operates many manufacturing, bottling and distribution facilities. In these and other aspects of the Company’s business, it is subject to a variety of federal, state and local environment, health and safety laws and regulations. The Company maintains environmental, health and safety policies and a quality, environmental, health and safety program designed to ensure compliance with applicable laws and regulations. However, the nature of the Company’s business exposes it to the risk of claims with respect to environmental, health and safety matters, and there can be no assurance that material costs or liabilities will not be incurred in connection with such claims.

The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), also known as the Superfund law, as well as similar state laws, generally impose joint and several liability for cleanup and enforcement costs on current and former owners and operators of a site without regard to fault of the legality of the original conduct. In October 2008, DPS was notified by the Environmental Protection Agency that it is a potentially responsible party for study and cleanup costs at a Superfund site in New Jersey. Investigation and remediation costs are yet to be determined, but the Company has reasonably estimated that DPS’ allocation of costs related to the study for this site will not exceed $250,000.

14. Comprehensive Income

The following table provides a summary of the total comprehensive income, including our proportionate share of equity method investees’ other comprehensive income, for the three months ended March 31, 2010 and 2009 (in millions):


	For the
	Three Months Ended
	March 31,
	2010		2009
Consolidated net income	$	89	$	132
Other comprehensive income:
Net foreign currency translation gain (loss)		17		(9	)
Net change in pension liability		1		—
Cash flow hedge gain		—		3

Total comprehensive income	$	107	$	126

15. Segments

As of March 31, 2010, the Company’s operating structure consisted of the following three operating segments:

•

The Beverage Concentrates segment reflects sales of the Company’s branded concentrates and syrup to third party bottlers primarily in the United States and Canada. Most of the brands in this segment are carbonated soft drink (“CSD”) brands.

•

The Packaged Beverages segment reflects sales in the United States and Canada from the manufacture and distribution of finished beverages and other products, including sales of the Company’s own brands and third party brands, through both DSD and WD.

•

The Latin America Beverages segment reflects sales in the Mexico and Caribbean markets from the manufacture and distribution of both concentrates and finished beverages.

Segment results are based on management reports. Net sales and SOP are the significant financial measures used to assess the operating performance of the Company’s operating segments.

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Information about the Company’s operations by operating segment for the three months ended March 31, 2010 and 2009 is as follows (in millions):


	For the
	Three Months Ended
	March 31,
	2010		2009
Segment Results – Net Sales
Beverage Concentrates	$	240	$	243
Packaged Beverages		929		944
Latin America Beverages		79		73

Net sales	$	1,248	$	1,260


	For the
	Three Months Ended
	March 31,
	2010			2009
Segment Results – SOP
Beverage Concentrates	$	146		$	150
Packaged Beverages		114			107
Latin America Beverages		7			9

Total SOP		267			266
Unallocated corporate costs		77			63
Other operating expense (income), net		3			(62	)

Income from operations		187			265
Interest expense, net		33			54
Other income, net		(3	)		(3	)

Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries	$	157		$	214

16. Agreement with PepsiCo, Inc.

On February 26, 2010, the Company completed the licensing of certain brands to PepsiCo, Inc. (“PepsiCo”) following PepsiCo’s acquisitions of The Pepsi Bottling Group, Inc. (“PBG”) and PepsiAmericas, Inc. (“PAS”).

Under the new licensing agreements, PepsiCo began distributing Dr Pepper, Crush and Schweppes in the U.S. territories where these brands were previously being distributed by PBG and PAS. The same applies to Dr Pepper, Crush, Schweppes, Vernors and Sussex in Canada; and Squirt and Canada Dry in Mexico.

Under the new agreements, DPS received a one-time nonrefundable cash payment of $900 million. The new agreements have an initial period of twenty years with automatic twenty year renewal periods, and require PepsiCo to meet certain performance conditions. The payment was recorded as deferred revenue, which will be recognized as net sales ratably over the estimated 25-year life of the customer relationship.

Additionally, in U.S. territories where it has a distribution footprint, DPS has begun selling certain owned and licensed brands, including Sunkist soda, Squirt, Vernors and Hawaiian Punch, that were previously distributed by PBG and PAS.

17. Guarantor and Non-Guarantor Financial Information

The Company’s 2011, 2012, 2013, 2018 and 2038 Notes (collectively, the “Notes”) are fully and unconditionally guaranteed by substantially all of the Company’s existing and future direct and indirect domestic subsidiaries (except two immaterial subsidiaries associated with the Company’s charitable foundations) (the “Guarantors”), as defined in the indenture governing the Notes. The Guarantors are wholly-owned either directly or indirectly by the Company and jointly and severally guarantee the Company’s obligations under the Notes. None of the Company’s subsidiaries organized outside of the United States guarantee the Notes (collectively, the “Non-Guarantors”).

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The following schedules present the financial information for the three months ended March 31, 2010 and 2009, and as of March 31, 2010 and December 31, 2009, for Dr Pepper Snapple Group, Inc. (the “Parent”), Guarantors and Non-Guarantors. The consolidating schedules are provided in accordance with the reporting requirements for guarantor subsidiaries.


	Condensed Consolidating Statements of Operations
	For the Three Months Ended March 31, 2010
	Parent			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Net sales	$	—		$	1,139		$	109		$	—		$	1,248
Cost of sales		—			447			49			—			496

Gross profit		—			692			60			—			752
Selling, general and administrative expenses		—			486			45			—			531
Depreciation and amortization		—			30			1			—			31
Other operating expense (income), net		—			3			—			—			3

Income from operations		—			173			14			—			187
Interest expense		34			20			—			(20	)		34
Interest income		(19	)		(1	)		(1	)		20			(1	)
Other income, net		(3	)		(4	)		4			—			(3	)

Income before provision for income taxes and equity in earnings of subsidiaries		(12	)		158			11			—			157
Provision for income taxes		(6	)		63			11			—			68

Income before equity in earnings of subsidiaries		(6	)		95			—			—			89
Equity in earnings of consolidated subsidiaries		95			—			—			(95	)		—
Equity in earnings of unconsolidated subsidiaries, net of tax		—			—			—			—			—

Net income	$	89		$	95		$	—		$	(95	)	$	89

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


	Condensed Consolidating Statements of Operations
	For the Three Months Ended March 31, 2009
	Parent			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Net sales	$	—		$	1,165		$	95		$	—		$	1,260
Cost of sales		—			489			42			—			531

Gross profit		—			676			53			—			729
Selling, general and administrative expenses		—			464			35			—			499
Depreciation and amortization		—			25			2			—			27
Other operating income		—			(57	)		(5	)		—			(62	)

Income from operations		—			244			21			—			265
Interest expense		55			39			—			(39	)		55
Interest income		(39	)		—			(1	)		39			(1	)
Other income, net		(3	)		—			—			—			(3	)

Income before provision for income taxes and equity in earnings of subsidiaries		(13	)		205			22			—			214
Provision for income taxes		(7	)		83			6			—			82

Income before equity in earnings of subsidiaries		(6	)		122			16			—			132
Equity in earnings of consolidated subsidiaries		138			16			—			(154	)		—
Equity in earnings of unconsolidated subsidiaries, net of tax		—			—			—			—			—

Net income	$	132		$	138		$	16		$	(154	)	$	132

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


	Condensed Consolidating Balance Sheets
	As of March 31, 2010
	Parent		Guarantors		Non-Guarantors		Eliminations			Total
	(in millions)
Current assets:
Cash and cash equivalents	$	—	$	486	$	85	$	—		$	571
Accounts receivable:
Trade, net		—		476		53		—			529
Other		—		23		9		—			32
Related party receivable		10		—		37		(47	)		—
Inventories		—		243		27		—			270
Deferred tax assets		—		54		5		—			59
Prepaid expenses and other current assets		88		50		31		—			169

Total current assets		98		1,332		247		(47	)		1,630
Property, plant and equipment, net		—		1,040		66		—			1,106
Investments in consolidated subsidiaries		3,212		494		—		(3,706	)		—
Investments in unconsolidated subsidiaries		—		—		10		—			10
Goodwill		—		2,961		23		—			2,984
Other intangible assets, net		—		2,620		82		—			2,702
Long-term receivable, related parties		2,788		689		54		(3,531	)		—
Other non-current assets		426		108		9		—			543
Non-current deferred tax assets		—		—		142		—			142

Total assets	$	6,524	$	9,244	$	633	$	(7,284	)	$	9,117


Current liabilities:
Accounts payable and accrued expenses	$	95	$	640	$	63	$	—		$	798
Related party payable		—		47		—		(47	)		—
Deferred revenue		—		34		2		—			36
Income taxes payable		—		16		—		—			16

Total current liabilities		95		737		65		(47	)		850
Long-term obligations to third parties		2,553		13		—		—			2,566
Long-term obligations to related parties		689		2,841		1		(3,531	)		—
Non-current deferred tax liabilities		—		1,024		18		—			1,042
Non-current deferred revenue		—		820		41		—			861
Other non-current liabilities		125		597		14		—			736

Total liabilities		3,462		6,032		139		(3,578	)		6,055

Total equity		3,062		3,212		494		(3,706	)		3,062

Total liabilities and stockholders’ equity	$	6,524	$	9,244	$	633	$	(7,284	)	$	9,117

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


	Condensed Consolidating Balance Sheet
	As of December 31, 2009
	Parent		Guarantors		Non-Guarantors		Eliminations			Total
	(in millions)
Current assets:
Cash and cash equivalents	$	—	$	191	$	89	$	—		$	280
Accounts receivable:
Trade, net		—		485		55		—			540
Other		—		24		8		—			32
Related party receivable		13		4		—		(17	)		—
Inventories		—		234		28		—			262
Deferred tax assets		—		49		4		—			53
Prepaid and other current assets		79		10		23		—			112

Total current assets		92		997		207		(17	)		1,279
Property, plant and equipment, net		—		1,044		65		—			1,109

Investments in consolidated subsidiaries		3,085		471		—		(3,556	)		—
Investments in unconsolidated subsidiaries		—		—		9		—			9
Goodwill		—		2,961		22		—			2,983
Other intangible assets, net		—		2,624		78		—			2,702
Long-term receivable, related parties		3,172		434		38		(3,644	)		—
Other non-current assets		425		110		8		—			543
Non-current deferred tax assets		—		—		151		—			151

Total assets	$	6,774	$	8,641	$	578	$	(7,217	)	$	8,776


Current liabilities:
Accounts payable and accrued expenses	$	78	$	710	$	62	$	—		$	850
Related party payable		—		13		4		(17	)		—
Income taxes payable		—		—		4		—			4

Total current liabilities		78		723		70		(17	)		854
Long-term obligations to third parties		2,946		14		—		—			2,960
Long-term obligations to related parties		434		3,209		1		(3,644	)		—
Non-current deferred tax liabilities		—		1,015		23		—			1,038
Non-current deferred revenue		—		—		—		—			—
Other non-current liabilities		129		595		13		—			737

Total liabilities		3,587		5,556		107		(3,661	)		5,589

Total stockholders’ equity		3,187		3,085		471		(3,556	)		3,187

Total liabilities and stockholders’ equity	$	6,774	$	8,641	$	578	$	(7,217	)	$	8,776

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


	Condensed Consolidating Statements of Cash Flows
	For the Three Months Ended March 31, 2010
	Parent			Guarantor			Non-Guarantor			Eliminations			Total
	(in millions)
Operating activities:
Net cash provided by operating activities	$	(15	)	$	992		$	10		$	—		$	987
Investing activities:
Purchases of property, plant and equipment		—			(51	)		(4	)		—			(55	)
Issuance of related party notes receivable		—			(255	)		(15	)		270			—
Proceeds from repayment of related party notes receivable		405			—			—			(405	)		—

Net cash used in investing activities		405			(306	)		(19	)		(135	)		(55	)
Financing activities:
Proceeds from related party long-term debt		255			15			—			(270	)		—
Repayment of related party long-term debt		—			(405	)		—			405			—
Repayment of senior unsecured credit facility		(405	)		—			—			—			(405	)
Repurchase of shares of common stock		(202	)		—			—			—			(202	)
Dividends paid		(38	)		—			—			—			(38	)
Other, net		—			—			—			—			—

Net cash used in financing activities		(390	)		(390	)		—			135			(645	)
Cash and cash equivalents — net change from:
Operating, investing and financing activities		—			296			(9	)		—			287
Currency translation		—			(1	)		5			—			4
Cash and cash equivalents at beginning of period		—			191			89			—			280

Cash and cash equivalents at end of period	$	—		$	486		$	85		$	—		$	571

DR PEPPER SNAPPLE GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


	Condensed Consolidating Statements of Cash Flows
	For the Three Months Ended March 31, 2009
	Parent			Guarantors			Non-Guarantors			Eliminations			Total
	(in millions)
Operating activities:
Net cash (used in) provided by operating activities	$	(30	)	$	203		$	5		$	—		$	178
Investing activities:
Purchases of property, plant and equipment		—			(78	)		—			—			(78	)
Purchases of intangible assets		—			(5	)		—			—			(5	)
Proceeds from disposals intangible assets		—			68			—			—			68
Issuance of notes receivable		—			(185	)		—			185			—

Net cash (used in) provided by investing activities		—			(200	)		—			185			(15	)
Financing activities:
Proceeds from issuance of long-term debt related to guarantor/ non-guarantor		185			—			—			(185	)		—
Repayment of senior unsecured credit facility		(155	)		—			—			—			(155	)
Other, net		—			(1	)		—			—			(1	)

Net cash provided by (used in) financing activities		30			(1	)		—			(185	)		(156	)
Cash and cash equivalents — net change from:
Operating, investing and financing activities		—			2			5			—			7
Currency translation		—			2			(4	)		—			(2	)
Cash and cash equivalents at beginning of period		—			145			69			—			214

Cash and cash equivalents at end of period	$	—		$	149		$	70		$	—		$	219

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion in conjunction with our audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2009.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and availability of raw materials. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “may,” “will,” “expect,” “anticipate,” “believe,” “estimate,” “plan,” “intend” or the negative of these terms or similar expressions in this Quarterly Report on Form 10-Q. We have based these forward-looking statements on our current views with respect to future events and financial performance. Our actual financial performance could differ materially from those projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and our financial performance may be better or worse than anticipated. Given these uncertainties, you should not put undue reliance on any forward-looking statements. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2009. Forward-looking statements represent our estimates and assumptions only as of the date that they were made. We do not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, after the date of this Quarterly Report on Form 10-Q, except to the extent required by applicable securities laws.

This Quarterly Report on Form 10-Q contains some of our owned or licensed trademarks, trade names and service marks, which we refer to as our brands. All of the product names included in this Quarterly Report on Form 10-Q are either our registered trademarks or those of our licensors.

Cadbury plc and Cadbury Schweppes plc are hereafter collectively referred to as “Cadbury” unless otherwise indicated. Kraft Foods Inc. acquired Cadbury on February 2, 2010. Kraft Foods, Inc. and/or its subsidiaries are hereafter collectively referred to as “Kraft”.

Overview

We are a leading integrated brand owner, manufacturer and distributor of non-alcoholic beverages in the United States, Canada and Mexico, with a diverse portfolio of flavored carbonated soft drinks (“CSDs”) and non-carbonated beverages (“NCBs”), including ready-to-drink teas, juices, juice drinks and mixers. Our brand portfolio includes popular CSD brands such as Dr Pepper, 7UP, Sunkist soda, A&W, Canada Dry, Crush, Squirt, Peñafiel, Schweppes and Venom Energy, and NCB brands such as Snapple, Mott’s, Hawaiian Punch, Clamato, Rose’s and Mr & Mrs T mixers. Our largest brand, Dr Pepper, is a leading flavored CSD in the United States according to The Nielsen Company. We have some of the most recognized beverage brands in North America, with significant consumer awareness levels and long histories that evoke strong emotional connections with consumers.

We operate as an integrated brand owner, manufacturer and distributor through our three segments. We believe our integrated business model strengthens our route-to-market, provides opportunities for net sales and profit growth through the alignment of the economic interests of our brand ownership and our manufacturing and distribution businesses through both our Direct Store Delivery (“DSD”) system and our Warehouse Direct (“WD”) delivery system, which enables us to be more flexible and responsive to the changing needs of our large retail customers and allows us to more fully leverage our scale and reduce costs by creating greater geographic manufacturing and distribution coverage.

The beverage market is subject to some seasonal variations. Our beverage sales are generally higher during the warmer months and also can be influenced by the timing of holidays and religious festivals as well as weather fluctuations.

Beverage Concentrates

Our Beverage Concentrates segment is principally a brand ownership and ingredient manufacturing and distribution business. In this segment we manufacture and sell beverage concentrates and syrups in the United States and Canada. Most of the brands in this segment are CSD brands. Key brands include Dr Pepper, 7UP, Sunkist soda, A&W, Canada Dry, Crush, Schweppes, Squirt, RC Cola, Sundrop, Diet Rite, Welch’s, Vernors and Country Time and the concentrate form of Hawaiian Punch.

Almost all of our beverage concentrates are manufactured at our plant in St. Louis, Missouri.

The beverage concentrates are shipped to third party bottlers, as well as to our own manufacturing systems, who combine them with carbonation, water, sweeteners and other ingredients, package them in PET containers, glass bottles and aluminum cans, and sell them as a finished beverage to retailers. Beverage concentrates are also manufactured into syrup, which is shipped to fountain customers, such as fast food restaurants, who mix the syrup with water and carbonation to create a finished beverage at the point of sale to consumers. Dr Pepper represents most of our fountain channel volume. Concentrate prices historically have been reviewed and adjusted at least on an annual basis.

Our Beverage Concentrates’ brands are sold by our bottlers, including our own Packaged Beverages segment, through all major retail channels including supermarkets, fountains, mass merchandisers, club stores, vending machines, convenience stores, gas stations, small groceries, drug chains and dollar stores.

Packaged Beverages

Our Packaged Beverages segment is principally a brand ownership, manufacturing and distribution business. In this segment, we primarily manufacture and distribute packaged beverages and other products, including our brands, third party owned brands and certain private label beverages, in the United States and Canada. Key NCB brands in this segment include Snapple, Mott’s, Hawaiian Punch, Clamato, Yoo-Hoo, Country Time, Nantucket Nectars, ReaLemon, Mr and Mrs T, Rose’s and Margaritaville. Key CSD brands in this segment include Dr Pepper, 7UP, Sunkist soda, A&W, Canada Dry, Squirt, RC Cola, Welch’s, Vernors, IBC, Mistic and Venom Energy. Additionally, we distribute third party brands such as FIJI mineral water and AriZona tea and a portion of our sales come from bottling beverages and other products for private label owners or others for a fee. Although the majority of our Packaged Beverages’ net sales relate to our brands, we also provide a route-to-market for third party brand owners seeking effective distribution for their new and emerging brands. These brands give us exposure in certain markets to fast growing segments of the beverage industry with minimal capital investment.

Our Packaged Beverages’ products are manufactured in multiple facilities across the United States and are sold or distributed to retailers and their warehouses by our own distribution network or by third party distributors. The raw materials used to manufacture our products include aluminum cans and ends, glass bottles, PET bottles and caps, paper products, sweeteners, juices, water, beverage concentrates and other ingredients.

We sell our Packaged Beverages’ products both through our DSD system, supported by a fleet of more than 5,000 trucks and approximately 12,000 employees, including sales representatives, merchandisers, drivers and warehouse workers, as well as through our WD system, both of which include the sales to all major retail channels, including supermarkets, mass merchandisers, club stores, convenience stores, gas stations, small groceries, drug chains and dollar stores.

Latin America Beverages

Our Latin America Beverages segment is a brand ownership, manufacturing and distribution business. This segment participates mainly in the carbonated mineral water, flavored CSD, bottled water and vegetable juice categories, with particular strength in carbonated mineral water and grapefruit flavored CSDs. Key brands include Peñafiel, Squirt, Clamato and Aguafiel.

In Mexico, we manufacture and distribute our products through our bottling operations and third party bottlers and distributors. In the Caribbean, we distribute our products through third party distributors. In Mexico, we also participate in a joint venture to manufacture Aguafiel brand water with Acqua Minerale San Benedetto. We provide expertise in the Mexican beverage market and Acqua Minerale San Benedetto provides expertise in water production and new packaging technologies.

We sell our finished beverages through all major Mexican retail channels, including the “mom and pop” stores, supermarkets, hypermarkets, and on premise channels.

Volume

In evaluating our performance, we consider different volume measures depending on whether we sell beverage concentrates or finished beverages.

Beverage Concentrates Sales Volume

In our Beverage Concentrates segment, we measure our sales volume in two ways: (1) “concentrate case sales” and (2) “bottler case sales.” The unit of measurement for both concentrate case sales and bottler case sales equals 288 fluid ounces of finished beverage, or 24 twelve ounce servings.

Concentrate case sales represent units of measurement for concentrates sold by us to our bottlers and distributors. A concentrate case is the amount of concentrate needed to make one case of 288 fluid ounces of finished beverage. It does not include any other component of the finished beverage other than concentrate. Our net sales in our concentrate businesses are based on concentrate cases sold.

Although net sales in our concentrate businesses are based on concentrate case sales, we believe that bottler case sales are also a significant measure of our performance because they measure sales of packaged beverages into retail channels.

Packaged Beverages Sales Volume

In our Packaged Beverages segment, we measure volume as case sales to customers. A case sale represents a unit of measurement equal to 288 fluid ounces of packaged beverage sold by us. Case sales include both our owned brands and certain brands licensed to and/or distributed by us.

Volume in Bottler Case Sales

In addition to sales volume, we measure volume in bottler case sales (“volume (BCS)”) as sales of packaged beverages, in equivalent 288 fluid ounce cases, sold by us and our bottling partners to retailers and independent distributors. Our contract manufacturing sales are not included or reported as part of volume (BCS).

Bottler case sales, concentrate case sales and packaged beverage sales volume are not equal during any given period due to changes in bottler concentrate inventory levels, which can be affected by seasonality, bottler inventory and manufacturing practices, and the timing of price increases and new product introductions.

Company Highlights and Recent Developments

•

Net sales totaled $1,248 million for the three months ended March 31, 2010, a decrease of $12 million, or 1%, from the three months ended March 31, 2009.

•

Net income for the three months ended March 31, 2010, was $89 million, compared to $132 million for the year ago period, a decrease of $43 million, or 33%.

•

Diluted earnings per share were $0.35 per share for the three months ended March 31, 2010, compared with $0.52 for the year ago period.

•

On February 26, 2010, we completed the licensing of certain brands and received a one-time nonrefundable cash payment of $900 million from PepsiCo, Inc. (“PepsiCo”).

•

During the first quarter of 2010, we repaid $405 million of our senior unsecured credit facility, which was the facility’s principal balance outstanding as of December 31, 2009.

•

During the first quarter of 2010, we paid our first dividend of $0.15 per share, and our Board of Directors (the “Board”) declared DPS’ second dividend of $0.15 per share, payable on April 9, 2010.

•

During the first quarter of 2010, we repurchased shares of our common stock valued at approximately $202 million.

•

During the first quarter of 2010, Moody’s Rating Service (“Moody’s”) raised our debt rating from Baa3 with a stable outlook to Baa2 with a positive outlook and Standard & Poor’s (“S&P”) raised our debt rating from BBB- with a positive outlook to BBB with a stable outlook.

Results of Operations

We eliminate from our financial results all intercompany transactions between entities included in the combination and the intercompany transactions with our equity method investees.

References in the financial tables to percentage changes that are not meaningful are denoted by “NM.”

Consolidated Operations

The following table sets forth our unaudited consolidated results of operation for the three months ended March 31, 2010 and 2009 (dollars in millions).


	For the Three Months Ended March 31,
	2010						2009						Percentage
	Dollars			Percent			Dollars			Percent			Change
Net sales	$	1,248			100.0	%	$	1,260			100.0	%		(1	)%
Cost of sales		496			39.7			531			42.1			(7	)

Gross profit		752			60.3			729			57.9			3
Selling, general and administrative expenses		531			42.6			499			39.6			6
Depreciation and amortization		31			2.5			27			2.1			15
Other operating expense (income), net		3			0.2			(62	)		(4.9	)		(105	)

Income from operations		187			15.0			265			21.1			(29	)
Interest expense		34			2.7			55			4.4			(38	)
Interest income		(1	)		(0.1	)		(1	)		(0.1	)	NM
Other income, net		(3	)		(0.2	)		(3	)		(0.2	)	NM

Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries		157			12.6			214			17.0			(27	)
Provision for income taxes		68			5.5			82			6.5			(17	)

Income before equity in earnings of unconsolidated subsidiaries		89			7.1			132			10.5			(33	)
Equity in earnings of unconsolidated subsidiaries, net of tax		—			—			—			—		NM

Net income	$	89			7.1	%	$	132			10.5	%		(33	)%


Earnings per common share:
Basic	$	0.35		NM			$	0.52		NM				(33	)%
Diluted	$	0.35		NM			$	0.52		NM				(33	)%

Volume. Volume (BCS) increased 3% for the three months ended March 31, 2010, compared with the three months ended March 31, 2009. In the U.S. and Canada, volume increased 2% and in Mexico and the Caribbean, volume increased 8% compared with the year ago period. CSD volume increased 2% and NCB volume increased 6%. In CSDs, Crush increased 22% compared with the year ago period due to expanded distribution. Dr Pepper volume increased by 3% compared with the year ago period. Our “Core 4” brands (7UP, Sunkist soda, A&W and Canada Dry) were down 2% compared to the year ago period as double-digit declines in Sunkist soda and low single-digit declines in A&W and 7UP were partially offset by a double-digit increase in Canada Dry. Peñafiel volume decreased 10% due to decreased sales to third party distributors. Squirt volume increased 8%. In NCBs, 17% growth in Snapple was due to the successful restage of the brand and the growth of value offerings. A 14% increase in Mott’s was the result of new distribution and strong brand support. Additionally, a 7% increase in Hawaiian Punch was partially offset by declines in third party NCB brands, such as AriZona and FIJI.

Although volume (BCS) increased 3% for the three months ended March 31, 2010, compared with the three months ended March 31, 2009, sales volume decreased 3% for the same period. The sales volume decreased as a result of lower concentrate sales as third-party bottlers purchased higher levels of concentrate during the fourth quarter of 2009, a decline in contract manufacturing (contract manufacturing is not included in volume (BCS)) and unfavorable comparisons related to the successful Crush launch and related pipeline fill in the first quarter of 2009.

Net Sales. Net sales decreased $12 million, or 1%, for the three months ended March 31, 2010, compared with the three months ended March 31, 2009. The decrease was primarily attributable to an overall sales volume decrease, including a decline in contract manufacturing within our Packaged Beverages segment, and an unfavorable product mix. These decreases were partially offset by the favorable impact of foreign currency and the revenue recognized for the PepsiCo license.

Gross Profit. Gross profit increased $23 million for the three months ended March 31, 2010, compared with the three months ended March 31, 2009. Gross margin of 60% for the three months ended March 31, 2010, was higher than the 58% gross margin for the three months ended March 31, 2009, primarily due to lower costs for packaging materials, sweeteners, and other commodity costs and a continued shift in CSDs from twelve ounce can volume towards two liter PET.

Income from Operations. Income from operations decreased $78 million to $187 million for the three months ended March 31, 2010, compared with the year ago period. The decrease was primarily attributable to the absence of one-time gains of $62 million primarily related to the termination of distribution agreements during the three months ended March 31, 2009. Selling, general and administrative expenses increased by $32 million primarily due to $8 million of one-time transaction costs associated with the PepsiCo agreement. Other drivers of the increase during the three months ended March 31, 2010, were higher productivity office investments, the unfavorable impact of foreign currency and the startup of our manufacturing facility in Victorville, California.

Interest Expense, Interest Income and Other Income. Interest expense decreased $22 million compared with the year ago period, reflecting the repayment of our senior unsecured Term Loan A facility during December 2009. Other income of $3 million for the three months ended March 31, 2010, related to indemnity income associated with the Tax Indemnity Agreement with Kraft.

Provision for Income Taxes. The effective tax rates for the three months ended March 31, 2010 and 2009 were 43.3% and 38.3%, respectively. The increase in the effective tax rate for the three months ended March 31, 2010, was primarily driven by a previous change in the provincial income tax rate for Ontario, Canada. The impact of the change in tax rate increased the provision for income taxes and effective tax rate by $13 million and 8.3%, respectively. Refer to Note 8 of the Notes to our Unaudited Condensed Consolidated Financial Statements for further information.

Results of Operations by Segment

We report our business in three segments: Beverage Concentrates, Packaged Beverages and Latin America Beverages. The key financial measures management uses to assess the performance of our segments are net sales and segment operating profit (“SOP”). The following tables set forth net sales and SOP for our segments for the three months ended March 31, 2010 and 2009, as well as the adjustments necessary to reconcile our total segment results to our consolidated results presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) (in millions).


	For the
	Three Months Ended
	March 31,
	2010			2009
Segment Results — Net sales
Beverage Concentrates	$	240		$	243
Packaged Beverages		929			944
Latin America Beverages		79			73

Net sales	$	1,248		$	1,260


Segment Results — SOP
Beverage Concentrates	$	146		$	150
Packaged Beverages		114			107
Latin America Beverages		7			9

Total SOP		267			266
Unallocated corporate costs		77			63
Other operating expense (income), net		3			(62	)

Income from operations		187			265
Interest expense, net		33			54
Other income, net		(3	)		(3	)

Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries	$	157		$	214

Beverage Concentrates

The following table details our Beverage Concentrates segment’s net sales and SOP for the three months ended March 31, 2010 and 2009 (in millions):


	For the
	Three Months Ended
	March 31,				Amount
	2010		2009		Change
Net sales	$	240	$	243	$	(3	)
SOP		146		150		(4	)

Net sales decreased $3 million, or approximately 1%, for the three months ended March 31, 2010, compared with the three months ended March 31, 2009. The decrease was primarily due to a 4% decrease in concentrate case sales volume partially offset by concentrate price increases and $3 million in revenue recognized under the PepsiCo license. Concentrate price increases, which were effective in January 2010, added an incremental $9 million to net sales during the three months ended March 31, 2010. The decrease in volume was primarily driven by the unfavorable comparisons related to the successful Crush launch and related pipeline fill during the first quarter of 2009. Also contributing to the volume decrease during the first quarter of 2010 were higher concentrate sales during the fourth quarter of 2009, ahead of the anticipated price increases as compared to the year ago period.

SOP decreased $4 million, or approximately 3% for the three months ended March 31, 2010, as compared with the year ago period, primarily driven by the decrease in net sales.

Volume (BCS) increased approximately 3% for the three months ended March 31, 2010, as compared with the year ago period. The increase was primarily driven by the launch of Cherry Crush in the first quarter of 2010. Dr Pepper also saw increases led by the launch of the Cherry line extensions late in the first quarter of 2009. The Core 4 brands in total remained relatively flat.

Packaged Beverages

The following table details our Packaged Beverages segment’s net sales and SOP for the three months ended March 31, 2010 and 2009 (in millions):


	For the
	Three Months Ended
	March 31,				Amount
	2010		2009		Change
Net sales	$	929	$	944	$	(15	)
SOP		114		107		7

Sales volume decreased 4% for the three months ended March 31, 2010, compared with the three months ended March 31, 2009. The decrease was the result of a decline in contract manufacturing in 2009 partially offset by volume growth in our NCB category. The decline in contract manufacturing negatively impacted total volume by approximately 4%. Total CSD volume decreased 7%. Volume for our Core 4 brands decreased 4%, due to a mid single-digit decline in 7UP and a double-digit decline in Sunkist soda, partially offset by a double-digit increase in Canada Dry due to targeted marketing programs. Total NCB volume increased 11% as a result of a 19% increase in Snapple due to the successful restage of the brand and growth of value offerings, a 14% increase in Mott’s and an 11% increase in Hawaiian Punch.

Net sales decreased $15 million for the three months ended March 31, 2010, compared with the three months ended March 31, 2009. The decline in contract manufacturing reduced net sales for the three months ended March 31, 2010, by $20 million. Net sales were favorably impacted by volume increases, primarily in NCBs, and the favorable impact of foreign currency, offset in part by the decrease in CSD volume and net pricing decreases, primarily in CSDs.

SOP increased $7 million for the three months ended March 31, 2010, compared with the three months ended March 31, 2009, primarily due to lower costs for packaging materials, sweeteners and other commodity costs, partially offset by higher benefit costs, costs associated with the startup of our manufacturing facility in Victorville, California, and higher productivity office investments.

Latin America Beverages

The following table details our Latin America Beverages segment’s net sales and SOP for the three months ended March 31, 2010 and 2009 (in millions):


	For the
	Three Months Ended
	March 31,				Amount
	2010		2009		Change
Net sales	$	79	$	73	$	6
SOP		7		9		(2	)

Sales volume increased 8% for the three months ended March 31, 2010, as compared with the three months ended March 31, 2009. The increase in volume was driven by a 16% increase in Squirt volume due to higher sales to third party bottlers, a 75% increase in Crush volume with the introduction of new flavors in a 2.3 liter value offering, as well as additional distribution routes added throughout 2009. These volume increases were partially offset by a 10% decrease in Peñafiel due to decreased sales to third party distributors.

Net sales increased $6 million for the three months ended March 31, 2010, compared with the year ago period primarily due to the $6 million favorable impact of changes in foreign currency and increases in sales volume, partially offset by an unfavorable impact related to product mix.

SOP decreased $2 million for the three months ended March 31, 2010, compared with the three months ended March 31, 2009, primarily due to an unfavorable sales mix and increased spending to support the distribution route expansion and information technology infrastructure upgrades. This was partially offset by increased sales volume and the favorable impact of changes in foreign currency.

Critical Accounting Estimates

The process of preparing our unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenue, and expenses. Critical accounting estimates are both fundamental to the portrayal of a company’s financial condition and results and require difficult, subjective or complex estimates and assessments. These estimates and judgments are based on historical experience, future expectations and other factors and assumptions we believe to be reasonable under the circumstances. The most significant estimates and judgments are reviewed on an ongoing basis and revised when necessary. Actual amounts may differ from these estimates and judgments. We have identified the following policies as critical accounting policies:

•

revenue recognition;

•

customer marketing programs and incentives;

•

goodwill and other indefinite lived intangible assets;

•

definite lived intangible assets;

•

stock-based compensation;

•

pension and postretirement benefits;

•

risk management programs; and

•

income taxes.

These critical accounting policies are discussed in greater detail in our Annual Report on Form 10-K for the year ended December 31, 2009.

Liquidity and Capital Resources

Trends and Uncertainties Affecting Liquidity

We believe that the following transactions, trends and uncertainties may impact liquidity:

•

changes in economic factors could impact consumers’ purchasing power; and

•

we will continue to make capital expenditures to upgrade our existing plants and distribution fleet of trucks, replace and expand our cold drink equipment and make investments in IT systems in order to improve operating efficiencies and lower costs.

2010 Borrowings and Repayments

On November 20, 2009, the Board authorized us to issue up to $1,500 million of debt securities through the Securities and Exchange Commission shelf registration process. At March 31, 2010, $650 million remained authorized to be issued following the issuance described below.

During the first quarter of 2010, we repaid $405 million borrowed from the revolving credit facility (the “Revolver”).

The following is a description of our senior unsecured credit facility and the senior unsecured notes. The summaries of the senior unsecured credit facility and the senior unsecured notes are qualified in their entirety by the specific terms and provisions of the senior unsecured credit facility agreement (the “Facility Agreement”) and the indenture governing the senior unsecured notes, respectively, copies of which have previously been filed, as referenced in the exhibits to our Annual Report on Form 10-K for the year ended December 31, 2009.

Senior Unsecured Credit Facility

Our senior unsecured credit facility originally provided senior unsecured financing of up to $2,700 million, which consisted of:

•

Borrowings under the senior unsecured credit facility bear interest at a floating rate per annum based upon the London interbank offered rate for dollars (“LIBOR”) or the alternate base rate (“ABR”), in each case plus an applicable margin which varies based upon our debt ratings, from 1.00% to 2.50%, in the case of LIBOR loans and 0.00% to 1.50% in the case of ABR loans. The ABR means the greater of (a) JPMorgan Chase Bank’s prime rate and (b) the federal funds effective rate plus one half of 1%. Interest is payable on the last day of the interest period, but not less than quarterly, in the case of any LIBOR loan and on the last day of March, June, September and December of each year in the case of any ABR loan. The average interest rate for the three months ended March 31, 2010 and 2009, was 2.25% and 5.10%, respectively. Interest expense was $2 million and $26 million for the three months ended March 31, 2010 and 2009, respectively. Amortization of deferred financing costs of $1 million and $4 million for the three months ended March 31, 2010 and 2009, respectively, was included in interest expense.

We utilized interest rate swaps to effectively convert variable interest rates to fixed rates. Refer to Note 6 of the Notes to our Unaudited Condensed Consolidated Financial Statements for further information regarding derivatives.

An unused commitment fee is payable quarterly to the lenders on the unused portion of the commitments in respect of the Revolver equal to 0.15% to 0.50% per annum, depending upon our debt ratings. Interest expense included $1 million of amortization of deferred financing costs associated with the Revolver for each of the three months ended March 31, 2010 and 2009.

Principal amounts outstanding under the Revolver are due and payable in full at maturity.

All obligations under the senior unsecured credit facility are guaranteed by substantially all of our existing and future direct and indirect domestic subsidiaries.

The Facility Agreement contains customary negative covenants that, among other things, restrict our ability to incur debt at subsidiaries that are not guarantors; incur liens; merge or sell, transfer, lease or otherwise dispose of all or substantially all assets; make investments, loans, advances, guarantees and acquisitions; enter into transactions with affiliates; and enter into agreements restricting its ability to incur liens or the ability of subsidiaries to make distributions. These covenants are subject to certain exceptions described in the Facility Agreement. In addition, the Facility Agreement requires us to comply with a maximum total leverage ratio covenant and a minimum interest coverage ratio covenant. The Facility Agreement also contains certain usual and customary representations and warranties, affirmative covenants and events of default. As of March 31, 2010 and December 31, 2009, we were in compliance with all financial covenant requirements.

Senior Unsecured Notes

The 2011 and 2012 Notes

In December 2009, we completed the issuance of $850 million aggregate principal amount of senior unsecured notes consisting of the 2011 and 2012 Notes. The weighted average interest rate of the 2011 and 2012 Notes was 2.0% for the three months ended March 31, 2010. The net proceeds from the sale of the debentures were used for repayment of existing indebtedness under the Term Loan A. Interest on the 2011 and 2012 Notes is payable semi-annually on June 21 and December 21. Interest expense was $2 million for the three months ended March 31, 2010.

We utilize interest rate swaps designated as fair value hedges, to convert fixed interest rates to variable rates. Refer to Note 6 of the Notes to our Unaudited Condensed Consolidated Financial Statements for further information regarding derivatives.

The indenture governing the 2011 and 2012 Notes, among other things, limits our ability to incur indebtedness secured by principal properties, to enter into certain sale and leaseback transactions and to enter into certain mergers or transfers of substantially all of DPS’ assets. The 2011 and 2012 Notes are guaranteed by substantially all of our existing and future direct and indirect domestic subsidiaries. As of March 31, 2010 and December 31, 2009, we were in compliance with all covenant requirements.

The 2013, 2018 and 2038 Notes

During 2008, we completed the issuance of $1,700 million aggregate principal amount of senior unsecured notes consisting of $250 million aggregate principal amount of 6.12% senior notes due May 1, 2013 (the “2013 Notes”), $1,200 million aggregate principal amount of 6.82% senior notes due May 1, 2018 (the “2018 Notes”), and $250 million aggregate principal amount of 7.45% senior notes due May 1, 2038 (the “2038 Notes”). The weighted average interest rate of the 2013, 2018 and 2038 Notes was 6.8% for both three month periods ended March 31, 2010 and 2009. Interest on the senior unsecured notes is payable semi-annually on May 1 and November 1 and is subject to adjustment. Interest expense was $29 million each for the three months ended March 31, 2010 and 2009, respectively.

The indenture governing the senior unsecured notes, among other things, limits our ability to incur indebtedness secured by principal properties, to enter into certain sale and lease back transactions and to enter into certain mergers or transfers of substantially all of DPS’ assets. The senior unsecured notes are guaranteed by substantially all of our existing and future direct and indirect domestic subsidiaries. As of March 31, 2010 and December 31, 2009, we were in compliance with all covenant requirements.

Debt Ratings

During the first quarter of 2010, Moody’s raised our debt rating from Baa3 with a stable outlook to Baa2 with a positive outlook and S&P raised our debt rating from BBB- with a positive outlook to BBB with a stable outlook. These debt ratings impact the interest we pay on our financing arrangement. A downgrade of one or both of our debt ratings below investment grade could increase our interest expense and decrease the cash available to fund anticipated obligations.

Cash Management

We fund our liquidity needs from cash flow from operations, cash and hand or amounts available under our Revolver.

Capital Expenditures

Cash paid for capital expenditures was $55 million for the three months ended March 31, 2010. Additions primarily related to the development of our new manufacturing and distribution center in Victorville, California, expansion and replacement of existing cold drink equipment, and IT investments for systems upgrades. We continue to expect to incur discretionary annual capital expenditures in an amount equal to approximately 5% of our net sales which we expect to fund through cash provided by operating activities.

Acquisitions

We may make future acquisitions. For example, we may make acquisitions of regional bottling companies, distributors, and distribution rights to further extend our geographic coverage. Any acquisitions may require future capital expenditures and restructuring expenses.

Liquidity

Based on our current and anticipated level of operations, we believe that our proceeds from operating cash flows will be sufficient to meet our anticipated obligations for the next twelve months. Excess cash provided by operating activities may be used to fund capital expenditures, pay dividends and repurchase shares of our common stock. To the extent that our operating cash flows are not sufficient to meet our liquidity needs, we may utilize cash on hand or amounts available under our Revolver.

The following table summarizes our cash activity for the three months ended March 31, 2010 and 2009 (in millions):


	For the
	Three Months Ended
	March 31,
	2010			2009
Net cash provided by operating activities	$	987		$	178
Net cash used in investing activities		(55	)		(15	)
Net cash used in financing activities		(645	)		(156	)

Net Cash Provided by Operating Activities

Net cash provided by operating activities increased $809 million for the three months ended March 31, 2010, compared with the year ago period. Deferred revenue and non-current deferred revenue increased due to the receipt of a one-time nonrefundable cash payment of $900 million from PepsiCo. Working capital unfavorability was primarily driven by a decrease in accounts payable and accrued expenses due to the timing of the payment of employee bonuses in the first quarter of 2010 as compared to second quarter of 2009, and increases in other current assets.

Net Cash Used in Investing Activities

The increase of $40 million in cash used in investing activities for the three months ended March 31, 2010, compared with the year ago period, was primarily attributable to the absence of one-time cash receipts of $68 million principally from the termination of distribution agreements, partially offset by a decrease in capital expenditures.

Net Cash Used in Financing Activities

The increase of $489 million in cash used in financing activities for the three months ended March 31, 2010, compared with the year ago period, was driven by the repayment of our senior unsecured credit facility and the start of our stock repurchase program.

Cash and Cash Equivalents

Cash and cash equivalents were $571 million as of March 31, 2010, an increase of $291 million from $280 million as of December 31, 2009. Cash and cash equivalent balances increased as a result of the $900 million cash payment from PepsiCo, partially offset by the repurchases of our common stock and repayment of the outstanding principal balance of the Revolver as of December 31, 2009.

Our cash balances are used to fund working capital requirements, scheduled debt and interest payments, capital expenditures, income tax obligations, dividend payments and repurchases of our common stock. Cash available in our foreign operations may not be immediately available for these purposes. Foreign cash balances constitute approximately 15% of our total cash position as of March 31, 2010.

Dividends

On November 20, 2009, our Board declared our first dividend of $0.15 per share on outstanding common stock, which was paid on January 8, 2010 to stockholders of record at the close of business on December 21, 2009.

On February 3, 2010, our Board declared a quarterly dividend of $0.15 per share on outstanding common stock, which was paid on April 9, 2010 to the stockholders of record at the close of business on March 22, 2010.

Common Stock Repurchases

On February 24, 2010, the Board approved an increase in the total aggregate share repurchase authorization up to $1 billion. Subsequent to the Board’s authorization, we repurchased 5.8 million shares of our common stock valued at approximately $202 million in the three months ended March 31, 2010. Refer to Part II, Item 2 of this Quarterly Report on Form 10-Q for additional information regarding these repurchases.

Contractual Commitments and Obligations

We enter into various contractual obligations that impact, or could impact, our liquidity. The following table summarizes our contractual obligations and contingencies as of March 31, 2010 (in millions). Based on our current and anticipated level of operations, we believe that our proceeds from operating cash flows will be sufficient to meet our anticipated obligations. To the extent that our operating cash flows are not sufficient to meet our liquidity needs, we may utilize cash on hand and amounts available under our Revolver. Refer to Notes 5 and 10 of the Notes to our Unaudited Condensed Consolidated Financial Statements for additional information regarding the items described in this table.


			Payments Due in Year
	Total		2010		2011		2012		2013		2014		After 2014
Revolver	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest payments ⁽¹⁾		1,325		125		135		131		109		101		724
Operating leases		387		55		66		55		49		39		123
Purchase obligations ⁽²⁾		789		347		174		110		94		39		25

Total	$	2,501	$	527	$	375	$	296	$	252	$	179	$	872


(1)		Amounts represent our estimated interest payments based on (a) specified interest rates for fixed rate debt, (b) capital lease amortization schedules and (c) debt amortization schedules.

(2)		Amounts represent payments under agreements to purchase goods or services that are legally binding and that specify all significant terms, including capital obligations and long-term contractual obligations.

Through March 31, 2010, there have been no other material changes to the amounts disclosed in our Annual Report on Form 10-K for the year ended December 31, 2009.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our results of operations, financial condition, liquidity, capital expenditures or capital resources.

Effect of Recent Accounting Pronouncements

Refer to Note 1 of the Notes to our Unaudited Condensed Consolidated Financial Statements for a discussion of recent accounting standards and pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risks arising from changes in market rates and prices, including movements in foreign currency exchange rates, interest rates, and commodity prices. We do not enter into derivatives or other financial instruments for trading purposes.

Foreign Exchange Risk

The majority of our net sales, expenses, and capital purchases are transacted in United States dollars. However, we have some exposure with respect to foreign exchange rate fluctuations. Our primary exposure to foreign exchange rates is the Canadian dollar and Mexican peso against the U.S. dollar. Exchange rate gains or losses related to foreign currency transactions are recognized as transaction gains or losses in our income statement as incurred. As of March 31, 2010, the impact to net income of a 10% change (up or down) in exchange rates is estimated to be an increase or decrease of approximately $11 million on an annual basis.

We use derivative instruments such as foreign exchange forward contracts to manage our exposure to changes in foreign exchange rates. For the period ending March 31, 2010, we had contracts outstanding with a notional value of $73 million maturing at various dates through December 15, 2011.

Interest Rate Risk

We centrally manage our debt portfolio and monitor our mix of fixed-rate and variable rate debt.

We are subject to floating interest rate risk with respect to any borrowings, including those we may borrow in the future, under the senior unsecured credit facility. As of March 31, 2010, there were no borrowings outstanding under the senior unsecured credit facility.

Interest Rate Swaps

We enter into interest rate swaps to convert fixed-rate, long-term debt to floating-rate debt. These swaps are accounted for as either a fair value hedge or an economic hedge under U.S. GAAP. The fair value hedges qualify for the short-cut method of recognition; therefore, no portion of these swaps is treated as ineffective.

In December 2009, we entered into interest rate swaps having an aggregate notional amount of $850 million and durations ranging from two to three years in order to convert fixed-rate, long-term debt to floating rate debt. These swaps were entered into at the inception of the 2011 and 2012 Notes and were originally accounted for as fair value hedges under U.S. GAAP. Effective March 10, 2010, $225 million notional of the interest rate swap linked to the 2012 Notes was restructured to reflect a change in the variable interest rate to be paid by us. This change triggered the de-designation of the $225 million notional fair value hedge and the corresponding fair value hedging relationship was discontinued. The $225 million notional restructured interest rate swap was subsequently accounted for as an economic hedge and the gain or loss on the instrument is recognized in earnings.

As a result of these interest rate swaps, we pay an average floating rate, which fluctuates semi-annually, based on LIBOR. The average floating rate to be paid by us as of March 31, 2010 was less than 1%. The average fixed rate to be received by us as of March 31, 2010 was 2.0%

Commodity Risks

We are subject to market risks with respect to commodities because our ability to recover increased costs through higher pricing may be limited by the competitive environment in which we operate. Our principal commodities risks relate to our purchases of aluminum, corn (for high fructose corn syrup), natural gas (for use in processing and packaging), PET and fuel.

We utilize commodities forward contracts and supplier pricing agreements to hedge the risk of adverse movements in commodity prices for limited time periods for certain commodities. The fair market value of these contracts as of March 31, 2010, was a net asset of $8 million.

As of March 31, 2010, the impact to net income of a 10% change (up or down) in market prices of these commodities is estimated to be an increase or decrease of approximately $16 million on an annual basis.

Item 4. Controls and Procedures.

Based on evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) our management, including our Chief Executive Officer and Chief Financial Officer, has concluded that, as of March 31, 2010, our disclosure controls and procedures are effective to (i) provide reasonable assurance that information required to be disclosed in the Exchange Act filings is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms, and (ii) ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

No change in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) occurred during the quarter that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

Information regarding legal proceedings is incorporated by reference from Note 13 of the Notes to our Unaudited Condensed Consolidated Financial Statements.

Item 1A. Risk Factors.

There have been no material changes that we are aware of from the risk factors set forth in Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2009.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

We repurchased 5.8 million shares of our common stock valued at approximately $202 million in the first quarter of 2010. Our share repurchase program activity for each of the three months and the quarter ended March 31, 2010 was as follows (in thousands, except per share data):


							Maximum Dollar
							Value of Shares
					Total Number of		that May Yet be
					Shares Purchased		Purchased Under
					as Part of Publicly		Publicly
	Number of Shares		Average Price		Announced Plans		Announced Plans
Period	Purchased ⁽¹⁾		Paid per Share		or Programs ⁽²⁾		or Programs ⁽²⁾
January 1, 2010 – January 31, 2010		—	$	—		—	$	200,000
February 1, 2010 – February 28, 2010		—		—		—		1,000,000
March 1, 2010 – March 31, 2010		5,835		34.69		5,835		797,606

For the quarter ended March 31, 2010		5,835	$	34.69		5,835	$	797,606


(1)		Represents number of shares purchased in open-market transactions pursuant to our publicly announced repurchase program.

(2)		Represents cumulative number of shares purchased and dollar value remaining under previously announced share repurchase authorizations by the Board of Directors (“the Board”). As previously announced, on November 20, 2009, the Board authorized the repurchase of up to $200 million of the Company’s outstanding common stock during 2010, 2011 and 2012. On February 24, 2010, the Board approved the repurchase of up to an additional $800 million of the Company’s outstanding common stock, bringing the total aggregate share repurchase authorization up to $1 billion. On March 11, 2010, pursuant to authority granted by the Board, the Company’s Audit Committee authorized the Company to attempt to effect up to $1 billion in share repurchases during 2010 if prevailing market conditions permit. The repurchase authorization noted above is also subject to certain repurchase parameters, including a maximum price per share. As a result, there can be no assurance that the Company will be able to execute its share repurchase program up to the authorized levels during 2010.

Item 6. Exhibits.

2.1		Separation and Distribution Agreement between Cadbury Schweppes plc and Dr Pepper Snapple Group, Inc. and, solely for certain provisions set forth therein, Cadbury plc, dated as of May 1, 2008 (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K (filed on May 5, 2008) and incorporated herein by reference).

3.1		Amended and Restated Certificate of Incorporation of Dr Pepper Snapple Group, Inc. (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (filed on May 12, 2008) and incorporated herein by reference).

3.2		Amended and Restated By-Laws of Dr Pepper Snapple Group, Inc. (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K (filed on July 16, 2009) and incorporated herein by reference).

4.1		Indenture, dated April 30, 2008, between Dr Pepper Snapple Group, Inc. and Wells Fargo Bank, N.A. (filed an Exhibit 4.1 to the Company’s Current Report on Form 8-K (filed on May 1, 2008) and incorporated herein by reference).

4.2		Form of 6.12% Senior Notes due 2013 (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K (filed on May 1, 2008) and incorporated herein by reference).

4.3		Form of 6.82% Senior Notes due 2013 (filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K (filed on May 1, 2008) and incorporated herein by reference).

4.4		Form of 7.45% Senior Notes due 2013 (filed as Exhibit 4.4 to the Company’s Current Report on Form 8-K (filed on May 1, 2008) and incorporated herein by reference).

4.5		Registration Rights Agreement, dated April 30, 2008, between Dr Pepper Snapple Group, Inc., J.P. Morgan Securities Inc., Banc of America Securities LLC, Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated, UBS Securities LLC, BNP Paribas Securities Corp., Mitsubishi UFJ Securities International plc, Scotia Capital (USA) Inc., SunTrust Robinson Humphrey, Inc., Wachovia Capital Markets, LLC and TD Securities (USA) LLC (filed as Exhibit 4.5 to the Company’s Current Report on Form 8-K (filed on May 1, 2008) and incorporated herein by reference).

4.6		Supplemental Indenture, dated May 7, 2008, among Dr Pepper Snapple Group, Inc., the subsidiary guarantors named therein and Wells Fargo Bank, N.A., as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (filed on May 12, 2008) and incorporated herein by reference).

4.7		Second Supplemental Indenture dated March 17, 2009, to be effective as of December 31, 2008, among Splash Transport, Inc., as a subsidiary guarantor, Dr Pepper Snapple Group, Inc., and Wells Fargo Bank, N.A., as trustee (filed as Exhibit 4.8 to the Company’s Annual Report on Form 10-K (filed on March 26, 2009) and incorporated herein by reference).

4.8		Registration Rights Agreement Joinder, dated May 7, 2008, by the subsidiary guarantors named therein (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K (filed on May 12, 2008) and incorporated herein by reference).

4.9		Third Supplemental Indenture, dated October 19, 2009, among 234DP Aviation, LLC, as a subsidiary guarantor; Dr Pepper Snapple Group, Inc., and Wells Fargo Bank, N.A., as trustee (filed as Exhibit 4.9 to the Company’s Quarterly Report on Form 10-Q (filed November 5, 2009) and incorporated herein by reference).

4.10		Indenture, dated as of December 15, 2009, between Dr Pepper Snapple Group, Inc. and Wells Fargo Bank, N.A., as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (filed on December 23, 2009) and incorporated herein by reference).

4.11		First Supplemental Indenture, dated as of December 21, 2009, among Dr Pepper Snapple Group, Inc., the guarantors party thereto and Wells Fargo Bank, N.A., as trustee (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K (filed on December 23, 2009) and incorporated herein by reference).

4.12		1.70% Senior Notes due 2011 (in global form) (filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K (filed on December 23, 2009) and incorporated herein by reference).

4.13		2.35% Senior Notes due 2012 (in global form) (filed as Exhibit 4.4 to the Company’s Current Report on Form 8-K (filed on December 23, 2009) and incorporated herein by reference).

10.1*		Transition Services Agreement between Cadbury Schweppes plc and Dr Pepper Snapple Group, Inc., dated as of May 1, 2008.

10.2*		Tax Sharing and Indemnification Agreement between Cadbury Schweppes plc and Dr Pepper Snapple Group, Inc. and, solely for the certain provision set forth therein, Cadbury plc, dated as of May 1, 2008.

10.3*		Employee Matters Agreement between Cadbury Schweppes plc and Dr Pepper Snapple Group, Inc. and, solely for certain provisions set forth therein, Cadbury plc, dated as of May 1, 2008.

12.1*		Computation of Ratio of Earnings to Fixed Charges.

31.1*		Certification of Chief Executive Officer of Dr Pepper Snapple Group, Inc. pursuant to Rule 13a-14(a) or 15d-14(a) promulgated under the Exchange Act .

31.2*		Certification of Chief Financial Officer of Dr Pepper Snapple Group, Inc. pursuant to Rule 13a-14(a) or 15d-14(a) promulgated under the Exchange Act.

32.1**		Certification of Chief Executive Officer of Dr Pepper Snapple Group, Inc. pursuant to Rule 13a-14(b) or 15d-14(b) promulgated under the Exchange Act, and Section 1350 of Chapter 63 of Title 18 of the United States Code.

32.2**		Certification of Chief Financial Officer of Dr Pepper Snapple Group, Inc. pursuant to Rule 13a-14(b) or 15d-14(b) promulgated under the Exchange Act, and Section 1350 of Chapter 63 of Title 18 of the United States Code.

101*		The following financial information from Dr Pepper Snapple Group, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations for the three months ended March 31, 2010 and 2009, (ii) Condensed Consolidated Balance Sheets as of March 31, 2010 and December 31, 2009, (iii) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2010 and 2009, and (iv) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text.


*		Filed herewith.

**		Furnished herewith.

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Dr Pepper Snapple Group, Inc.

		By:		/s/ John O. Stewart

		Name:		John O. Stewart
		Title:		Executive Vice President and Chief Financial Officer

Date: May 6, 2010

Exhibit 10.1

EXECUTION VERSION

TRANSITION SERVICES AGREEMENT

This Transition Services Agreement (“ Agreement ”) is dated as of May 1, 2008, between Cadbury Schweppes plc, a United Kingdom public limited company (“ Cadbury ”), and Dr Pepper Snapple Group, Inc., a Delaware corporation (“ DPS ”).

RECITALS

WHEREAS, the board of directors of Cadbury has determined that it is in the best interests of Cadbury and its shareholders to separate Cadbury into two separate, publicly traded companies, which shall operate the Cadbury plc Business and the Beverages Business, respectively (the “ Separation ”); and

WHEREAS, Cadbury plc, a United Kingdom public limited company, and DPS have entered into a Separation and Distribution Agreement (the “ Separation Agreement ”), dated as of May 1, 2008, which sets forth, among other things, the assets, liabilities, rights and obligations of each of the parties thereto following the Separation; and

WHEREAS, in connection with the Separation, Cadbury will continue to provide, or cause to be provided, to DPS, and DPS will continue to provide, or cause to be provided, to Cadbury, certain services for a limited period of time after the Separation pursuant to this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the signatories covenant and agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 . Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Separation Agreement. The following terms used herein shall have the following meanings:

“ Affiliate ” shall have the meaning set forth in the Separation Agreement and for purposes of this Agreement, shall refer to Cadbury’s Affiliates or DPS’ Affiliates, as the case may be, post-Separation.

“ Cadbury Providing Party ” shall have the meaning set forth in Section 5.2.

“ Cadbury Receiving Party ” shall have the meaning set forth in Section 5.6.

“ Cadbury Services ” shall have the meaning set forth in Section 2.1.

“ Confidential Information ” shall have the meaning set forth in Section 2.5(a).

“ Consents ” shall have the meaning set forth in Section 2.3.

“ Disclosing Party ” shall have the meaning set forth in Section 2.5(a).

“ DPS Providing Party” shall have the meaning set forth in Section 5.5.

“ DPS Receiving Party ” shall have the meaning set forth in Section 5.3.

“ DPS Services ” shall have the meaning set forth in Section 2.2.

“ Force Majeure Event ” shall have the meaning set forth in Section 9.1.

“ Incoming Service Fee ” shall have the meaning set forth in Section 4.1.

“ Indemnified Party ” shall have the meaning set forth in Section 7.3.

“ Indemnifying Party ” shall have the meaning set forth in Section 7.3.

“ Outgoing Service Fee ” shall have the meaning set forth in Section 4.1.

“ Providing Party ” shall have the meaning set forth in Section 3.2.

“ Receiving Party ” shall have the meaning set forth in Section 3.2.

“ Recipient ” shall have the meaning set forth in Section 2.5(a).

“ Representatives ” shall have the meaning set forth in Section 2.5(a).

“ SAS ” shall have the meaning set forth in Section 5.3.

“ Senior Managers ” shall mean the individuals appointed by the Chief Legal Officers of each party hereto.

“ Services ” shall have the meaning set forth in Section 2.2.

“ Transition Representative ” shall mean Thomas Whitten, in the case of Cadbury, and Angie Wallander, in the case of DPS, or their respective replacements or designees.

“ VAT ” shall have the meaning set forth in Section 4.1(c).

ARTICLE II

DESCRIPTION OF SERVICES; STANDARD OF PERFORMANCE

Section 2.1 On the terms and subject to the conditions contained herein, Cadbury shall provide, or cause to be provided, to DPS and its Affiliates the services identified in Schedule A hereto, as such Schedule A may be from time to time supplemented or modified in accordance with the provisions of this Agreement (the “ Cadbury Services ”).

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Section 2.2 On the terms and subject to the conditions contained herein, DPS shall provide, or cause to be provided, to Cadbury and its Affiliates the services identified in Schedule B hereto, as such Schedule B may be from time to time supplemented or modified in accordance with the provisions of this Agreement (the “ DPS Services ”, and together with Cadbury Services, the “ Services ”).

Section 2.3 . Each party shall, and shall cause its respective Affiliates to, provide the Services in a commercially reasonable manner and with reasonable skill and care. Notwithstanding the foregoing, the standard of care for provision of the Services shall in all material respects be no less than the level of care, skill and quality as are currently being provided to and by such party and its Affiliates and have been provided in the preceding twelve months, provided that, in the case where the Services are not currently being provided, each party shall provide the Services in a commercially reasonable manner and with reasonable skill and care. The relevant measurement of performance of the Services shall be the measurement metrics, if any, currently used by DPS and its Affiliates or by Cadbury and its Affiliates, as the case may be. Cadbury and DPS shall, and shall cause each of its Affiliates that is a Providing Party to, use commercially reasonable efforts to cooperate with each other in all matters relating to the provision of the Services. With respect to actions taken by the Receiving Party in connection with the Services received, the Receiving Party shall use the Services in a commercially reasonable manner in compliance with all applicable Laws. The Providing Party hereby grants the Receiving Party a license under all of its Intellectual Property used in the performance of Services solely to the extent required for the Receiving Party to receive the Services hereunder.

Section 2.4 . Cadbury and DPS shall each use its (and shall cause its applicable Affiliates to use their) reasonable best efforts to obtain all required consents, licenses or approvals necessary to perform the Services (the “ Consents ”) (that have not already been procured prior to the Distribution Date) as soon as reasonably practicable following the date hereof; provided that, each party shall notify the other in writing of any terms to which a proposed Consent is to be subject and shall use its reasonable best efforts to agree with the relevant third party any reasonable amendments to a proposed Consent requested by Cadbury or DPS, as the case may be. If the parties are unable to obtain any required Consents, the parties shall negotiate in good faith reasonable modifications of the Services so that such Consents are not required.

Section 2.5 . (a) Each party recognizes that in the performance of its obligations under this Agreement, or as a result of the parties’ ongoing relationship pursuant to this Agreement, non-public, confidential and/or proprietary information (“ Confidential Information ”) belonging or relating to the other party or its Affiliates (each, a “ Disclosing Party ”), including Confidential Information regarding the Services may be disclosed or become known to the other party or its Affiliates or its officers, directors, controlling persons, employees, lenders, agents, representatives, accountants and counsel (collectively, “ Representatives ”) (each, a “ Recipient ”). Each party acknowledges that all Confidential Information disclosed in connection with the provision of Services remains the property of the Disclosing Party. Unless otherwise expressed in writing to the other party, information, including any information expressed orally, that is exchanged between the parties or their respective Affiliates in connection with the performance of their respective obligations under this Agreement shall be

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presumed to be Confidential Information. Each party shall, and shall cause its Affiliates and Representatives to, keep the Disclosing Party’s Confidential Information confidential and take such precautions with respect to the Disclosing Party’s Confidential Information as it normally takes with its own non-public, confidential and/or proprietary information, which shall be no less than a reasonable standard of care under the circumstances. This obligation shall not apply to:

(i) information that, at the time of disclosure, is in the public domain or generally known in the industry, other than as a result of a breach by the other party or its Affiliates or Representatives of any of the provisions of this Agreement or of any other duty of confidentiality owed to the other party or its Recipients;

(ii) information that, after disclosure to the Recipient hereunder, is published or otherwise becomes part of the public domain or generally known in the industry through no fault of the party (or such party’s Recipients) to whom the information was disclosed;

(iii) information that a party can demonstrate through its records was in its lawful possession or the lawful possession of a Recipient at the time such party received such information (except for Confidential Information regarding DPS or its Affiliates in Cadbury’s possession or Confidential Information regarding Cadbury or its Affiliates in the possession of Representatives that are transferred to DPS or its Affiliates, each of which shall continue to be confidential); and

(iv) information that may be received by a Recipient in good faith from a source other than the Disclosing Party, which source either has no duty of confidentiality to such other party or, if such source does have a duty of confidentiality, the Recipient of such Confidential Information was unaware of or had no reasonable basis for knowing thereof (provided that, if a Recipient later becomes aware or reasonably should know of such duty, this exception shall no longer apply).

(b) Each party shall inform any and all of its Recipients that receive Confidential Information of a Disclosing Party of the confidential and proprietary nature of such Confidential Information and shall inform such Recipients that such Confidential Information is to be kept strictly proprietary and confidential pursuant to the terms of this Agreement. Each party shall explain to each such Recipient his or her responsibilities and obligations under this Section 2.5, and shall establish commercially reasonable procedures to ensure that the Confidential Information is properly protected and monitored for purposes of adhering to the terms of this Section 2.5. Except to the extent otherwise specifically provided in this Section 2.5, the Confidential Information will be kept confidential by each party and its Recipients. Each party agrees to be responsible for any breach of this Section 2.5 by any of its Recipients.

(c) Each party and its Recipients shall maintain, however, the right to disclose the Confidential Information of a Disclosing Party if required to do so by Law, subpoena or other legal process, provided that, in the case of any such potential disclosure pursuant to this Section 2.5(c), the Recipient shall provide the Disclosing Party with prompt notice of such requirement and shall use its reasonable best efforts to keep and assist the Disclosing Party in keeping it confidential by all appropriate means, and shall, to the extent reasonably practical, afford the

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Disclosing Party the opportunity to contest the disclosure obligation and cooperate with any Recipients in seeking any such protective order or other appropriate legal remedy, in each case, at the Disclosing Party’s request and expense. If a Recipient finds it necessary to disclose any Confidential Information, such Person will disclose only that portion of the Confidential Information that it is advised in writing by counsel is legally required to be disclosed and will use its reasonable best efforts, at the Disclosing Party’s request and expense, to ensure that all Confidential Information so disclosed will be accorded confidential treatment.

(d) Upon termination of this Agreement for any reason, no Recipient shall disclose nor make any further use of a Disclosing Party’s Confidential Information and upon written request shall immediately return or destroy all such Confidential Information as shall be in written or other tangible form (including all copies thereof), provided , however , that each party shall be entitled to retain one record copy in its legal department, to be held in strict confidence, subject to the above exceptions; and provided , further , that if such Confidential Information is destroyed, upon written request, shall certify the same to the Disclosing Party.

(e) The parties acknowledge that in the event of any breach or threatened breach of this Agreement pertaining to Confidential Information, the non-breaching party will not have an adequate remedy at law and may suffer irreparable injury as a result of any such breach. Therefore, in the event of any such breach or threatened breach, the non-breaching party shall, in addition to any other remedies available at law or in equity, be entitled to specific performance, without posting bond or other security.

Section 2.6 . The Transition Representatives shall meet regularly in person, telephonically, or as they otherwise agree at least monthly for the first year following the date hereof, to discuss any issues arising under this Agreement and the need for any modifications or additions hereto.

Section 2.7 . Subject to Section 2.8, except with respect to any services of the type described on Schedule D , if either party can demonstrate that, by virtue of the transactions contemplated by the Separation Agreement, either party requires a service not currently provided for under this Agreement that was provided by or to a member of the Cadbury and its Affiliates by or to DPS and its Affiliates, as the case may be, in the twenty-four (24) month period prior to the Distribution Date, the parties shall cooperate and endeavor in good faith to modify and supplement the schedules to this Agreement (including any other attachments thereto, if any) to accurately identify those services, and to specify the manner and term in which such services shall be performed and, as appropriate, to enter into ancillary transition services agreements addressing the provision of certain critical services or the provision of the Services in certain jurisdictions (including price calculated pursuant to Section 4), in order to refine and further effect the understandings set forth in this Agreement. Unless otherwise so agreed, in no event shall any such modification or supplement to the schedules (other than the election by a party to identify a Service which it does not elect to receive and for which service fees shall not be payable) or the execution of any ancillary agreements result in any change in the fees for the Services.

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Section 2.8 . Where a service that was provided by a third party to Cadbury or its Affiliates (including DPS and its Affiliates) prior to the Distribution Date is not otherwise provided for in this Agreement and is reasonably required by DPS or Cadbury to continue DPS’ or Cadbury’s remaining businesses, as applicable, in substantially the same manner as that carried on in the twenty-four month period prior to the Distribution Date, Cadbury or DPS, as applicable, will provide such assistance as is reasonable under the circumstances so as to enable the other party to put in place similar arrangements with such third party.

Section 2.9 . Except as otherwise specified in this Agreement, all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be paid by the party incurring such costs and expenses.

Section 2.10 . Subject to Section 2.3 of this Agreement, the Cadbury Providing Party and DPS Providing Party (each, as defined below), as applicable, shall be responsible for selecting and supervising in good faith the personnel who will perform any particular Cadbury Service or DPS Service, respectively, and performing all administrative services with respect to such personnel, including establishing compensation structure and work load balancing.

Section 2.11 . Cadbury and DPS shall, or shall cause their respective Affiliates to, make available on a timely basis to the Providing Party all information reasonably requested by such Providing Party to enable it to provide the Services and provide reasonable access to the Providing Party of such party’s premises to the extent necessary for the purpose of providing the Services.

ARTICLE III

PERIOD OF SERVICES: TERM

Section 3.1 . The parties agree that, except as otherwise designated in this Agreement, all services covered by this Agreement shall terminate on the date indicated on Schedule A or Schedule B , as applicable, unless earlier terminated by the Receiving Party upon such prior written notice as set forth on Schedule A or Schedule B , as applicable, or pursuant to Section 3.2(c) of this Agreement or extended by the mutual written agreement of the Providing Party and Receiving Party. This Agreement shall terminate when the terms for all Services have terminated; provided, however, that Sections 2.5, 2.9 and Articles 5, 7, 8 and 9 shall survive any such termination; provided further that Sections 5.4 and 5.7 shall continue for one year only.

Section 3.2 . (a) Each party shall, or shall cause its Affiliate that is providing the Services hereunder (a “ Providing Party ”) to, cooperate in a commercially reasonable manner with the party receiving the Services hereunder (a “ Receiving Party ”) to facilitate the transfer of responsibility for the Services to the Receiving Party or its designee. Each party shall use its commercially reasonable efforts to: (i) assume performance of the Services within shorter time periods than those specified on Schedule A or Schedule B , as applicable, and (ii) make or obtain any approvals, permits and licenses and implement such systems as may be necessary for

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such party to provide the Services independently as soon as reasonably practicable following the Distribution Date.

(b) As soon as reasonably practicable following the termination of this Agreement or the discontinuation of any Services, the Providing Party shall deliver to the Receiving Party, at the Receiving Party’s expense, copies of any books, records, data and reports reasonably requested by the Receiving Party in connection with such Services. Subject to the requirements of any applicable Laws, each Receiving Party agrees to keep any information it receives pursuant to this Section 3.2(b) that relates to a Disclosing Party confidential in accordance with Section 2.5.

(c) Notwithstanding anything to the contrary in this Agreement, a party may terminate any Service or all Services immediately upon notice to the other party in the event of a material breach of this Agreement by the breaching party that is not cured within thirty (30) days following written notice from the non-breaching party.

ARTICLE IV

COMPENSATION; PAYMENT TERMS

Section 4.1 . (a) DPS shall pay to Cadbury a fee for each Service that is provided to DPS and its Affiliates hereunder (collectively, the “ Incoming Service Fee ”) and Cadbury shall pay to DPS a fee for each Service that is provided to Cadbury and its Affiliates hereunder (collectively, the “ Outgoing Service Fee ”). The costs for each Service (the “ Costs ”) shall be the actual direct cost incurred by the Providing Party in performing such Service, calculated as set forth on Schedule C , which shall include a reasonable allocation for overhead salary, wages, benefits, taxes and other expenses attributable thereto (but shall exclude, for the avoidance of doubt, any overhead expenses for branding, marketing and other similar expenses) and without any markup for profit, calculated in a manner consistent with past custom and practice of the Providing Party with respect to such Service (or Cadbury Schweppes SBS, Inc. in the case of the Services which were not historically provided by the Providing Party); provided , however , that such Costs shall be adjusted to reflect any termination or expiration of any Transition Service pursuant to Article 3 of this Agreement.

(b) The Incoming Service Fee and the Outgoing Service Fee shall include all out-of-pocket charges and costs of performing the Services hereunder, including, without limitation, license fees, royalties or provider services fees.

(c) The fees payable by a Receiving Party to a Providing Party shall, in each case, be taken to be exclusive of any value added Taxes, sales Taxes, or similar Taxes (“ VAT ”) properly chargeable in respect of the transactions hereunder, and an amount equal to such Taxes so chargeable shall, subject to receipt of a valid VAT receipt or invoice in accordance with Section 4.1(f) below, be paid by the Receiving Party to the Providing Party in addition to the fees otherwise payable under this Agreement.

(d) In the event that applicable Law requires that any amount in respect of Taxes be withheld from any payment by a Receiving Party to a Providing Party under this Agreement,

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the Receiving Party shall withhold the required amounts and pay such withheld amounts over to the applicable Governmental Authority in accordance with the requirements of the applicable Law, and any amount so withheld and paid over shall be treated as having been paid to the Providing Party, and the Receiving Party shall not be required to pay any additional amount as a result of or in respect of such withholding.

(e) In each case where an amount in respect of VAT is payable by the Receiving Party in respect of a service provided by the Providing Party, DPS or Cadbury (as the case may be) shall ensure that the Providing Party shall furnish in a timely manner a valid VAT receipt or invoice to the Receiving Party in the form and manner required by Law to allow the Receiving Party or, as the case may be, any of its affiliates to recover such Tax to the extent allowable by Law.

(f) Except in the event the Receiving Party disputes a charge, the Receiving Party shall pay, or cause payment to be made to, the Providing Party, within 30 days of receipt of a reasonably detailed written invoice from the Providing Party, for the Cost of each Service rendered hereunder, which invoice shall be delivered by the Providing Party to Cadbury or DPS, as applicable, by the 30th day of each month for the Services provided during the preceding month. Payments shall be made by wire transfer to an account designated in writing from time to time by Cadbury or DPS, as applicable.

ARTICLE V

ACCESS TO RECORDS

Section 5.1 . During the term of this Agreement, each party shall, for the lesser of a period of seven years after the Distribution Date or a period specified by such party’s record retention policies, retain the books and records of each party and their respective Affiliates relating to the Services provided hereunder in accordance with the record retention policies of such party; provided , however , that each party shall notify the other party at least 60 days in advance of destroying any such books and records in order to provide the other party the opportunity to access such books and records and if the other party fails to request that such books and records be delivered to them at the requesting party’s expense, within 60 days after receipt of such notice, each party may destroy such books and records.

Section 5.2 . Subject to Section 2.5 above, Cadbury shall provide, or cause to be provided, to DPS and its Representatives reasonable access to the books, records (including, but not limited to, records and documentation referred to in Section 5.1), premises, systems and personnel of each Providing Party of Cadbury (a “ Cadbury Providing Party ”) to permit DPS to audit Cadbury’s or a Cadbury Providing Party’s compliance with this Agreement, provided that this right of access is exercised with reasonable prior notice and DPS uses its reasonable efforts to cause as little disruption as is reasonably possible to the performance of the Services and Cadbury Providing Party’s other businesses, provided further that DPS may only undertake two such audits per calendar year.

Section 5.3 . In addition to the rights set out in Section 5.2, Cadbury shall comply and shall cause each Cadbury Providing Party to comply with any reasonable request of

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DPS, including any review in accordance with the Statement of Auditing Standards No. 70 (Type 11) (the “ SAS ”), of any third party service provider of Cadbury for information relating to the Services that may be required by DPS or any Receiving Party of DPS (a “ DPS Receiving Party ”) to enable them to comply with the Sarbanes-Oxley Act of 2002 (and any resultant, similar or replacement legislation, rules or guidance).

Section 5.4 . If, based upon any audit performed in accordance with Sections 5.2 or 5.3, there has been either an overcharge or undercharge for the costs of the Services, then Cadbury Providing Party or DPS, as the case may be, will promptly reimburse or pay to the other Party such difference. All the costs of any audit conducted under Sections 5.2 or 5.3 shall be borne by DPS.

Section 5.5 . Subject to Section 2.5 above, DPS shall provide, or cause to be provided, to Cadbury and its Representatives reasonable access to the books, records (including, but not limited to, records and documentation referred to in Section 5.1), premises, systems and personnel of the Providing Party of DPS (the “ DPS Providing Party ”) to permit Cadbury to audit DPS’ or a DPS Providing Party’s compliance with this Agreement, provided that this right of access is exercised with reasonable prior notice and Cadbury uses its reasonable efforts to cause as little disruption as is reasonably possible to the performance of the Services and DPS Providing Party’s other businesses, provided further that Cadbury may only undertake two such audits per calendar year.

Section 5.6 . In addition to the rights set out in Section 5.5, DPS shall comply and shall cause each relevant DPS Providing Party to comply with any reasonable request of Cadbury, including any review in accordance with the SAS, of any third party service provider of DPS for information relating to the Services that may be required by Cadbury or any Receiving Party of Cadbury (a “ Cadbury Receiving Party ”) to enable them to comply with the Sarbanes-Oxley Act of 2002 (and any resultant, similar or replacement legislation, rules or guidance).

Section 5.7 . If, based upon any audit performed in accordance with Sections 5.5 or 5.6, there has been either an overcharge or undercharge for the costs of the Services, then DPS Providing Party or Cadbury, as the case may be, will promptly reimburse or pay to the other Party such difference. All the costs of any audit conducted under Sections 5.5 and 5.6 shall be borne by Cadbury.

ARTICLE VI

ASSIGNMENT

Section 6.1 . Except as otherwise provided in this Article 6, neither party shall assign its rights or obligations under this Agreement, or any part hereof, without the prior written consent of the other party (which consent shall not be unreasonably withheld). Either party may, at its election, assign its rights and corresponding obligations under this Agreement in whole or in one or more parts to any one or more of its Affiliates so long as such assigning party agrees to remain fully obligated for the performance of the terms and provisions of this Agreement as they relate to the Services being assigned.

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Section 6.2 . Notwithstanding anything to the contrary in this Agreement, a party shall be entitled to assign its rights and/or obligations under this Agreement in whole or in part to an unrelated party in one or more locations in connection with the sale, transfer or other disposal by it or any of its Affiliates of its business or operations that receives and/or provides the Services under this Agreement in such location and this Agreement shall thereafter be read and construed as if it were a separate and independent contract between the unrelated party and the party hereto as regarding the services and facilities to be received and/or provided under this Agreement in such locations. Notwithstanding the foregoing, in the event a party assigns its rights and/or obligations hereunder upon a sale or transfer to an unrelated party as set forth above, (a) such transferor shall be entitled to continue to receive the Services (other than the Services that are the subject of such assignment) from the other party in accordance with the terms of this Agreement following any such assignment, and the other party shall have no right to terminate this Agreement as a result of such assignment, and (b) no such assignment shall relieve the transferor of any obligations hereunder in the event that such transferee fails to perform in any manner or breaches this Agreement.

Section 6.3 . Any attempted or purported assignment in violation of this Section 6 shall be null and void ab initio. In the event of a permitted assignment hereunder, this Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and permitted assigns.

ARTICLE VII

LIMITATION ON LIABILITY; THIRD PARTY CLAIMS

Section 7.1 . Except with respect to damages included in an award against an Indemnified Party (as defined herein) resulting from a Third Party Claim for which such party is indemnified hereunder, in no event shall either party or its respective Representatives and Affiliates have any liability whether in contract or tort (including negligence and strict liability) or otherwise, at law or equity, for loss of profit, diminution in value, loss of goodwill, claims of customers, or consequential, incidental or punitive damages or other special damages as a result of, provision of or failure to provide the services under the terms of this Agreement. Subject to such other remedies permitted by Section 2.5 above and except as specifically provided in the previous sentence or in the event of bad faith or willful misconduct of such party, the maximum liability of each party and its Representatives and Affiliates to, and the sole remedy of, the other party or its Affiliates or Representatives for any act or failure to act in connection herewith (including but not limited to, the performance or breach of this Agreement) shall be the greater of (i) a refund of price paid for the particular Service, (ii) such other party’s incremental cost of performing the Service itself or (iii) such other party’s incremental cost of obtaining the Service from a third party.

Section 7.2 . EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT (INCLUDING SECTION 2.3), AND WITHOUT LIMITING ANY REPRESENTATIONS OR WARRANTIES IN THE SEPARATION AGREEMENT, THE PARTIES MAKE NO EXPRESS REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES, AND NO REPRESENTATION OR WARRANTY SHALL BE IMPLIED UNDER THIS AGREEMENT OR AT LAW, INCLUDING, WITHOUT LIMITATION,

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RELIABILITY, ACCURACY, SUITABILITY, COMPLETENESS, WARRANTY OF MERCHANTABILITY OR WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, AS TO THE SERVICES TO BE PERFORMED HEREUNDER.

Section 7.3 . Subject to the limitations set forth in Section 7.1, each party (the “ Indemnifying Party ”) agrees that it shall protect, indemnify and hold the other party and its Affiliates and their Representatives (each, the “ Indemnified Party ”) harmless from and against all Indemnifiable Losses and shall defend such party at the Indemnifying Party’s expense (to the extent of any Third Party Claims) in any Action for injuries to or death of any Person or Persons or loss of or damage to the property of any Person or Persons whomsoever (including without limitation the agents and employees of the Indemnified Party) or infringement of any Person’s or Persons’ Intellectual Property arising out of the actions of the Indemnifying Party, or its Representatives, in connection with or as a result of this Agreement or the performance of the Indemnifying Party’s Services, the unauthorized use by the Indemnifying Party of the Services or other obligations hereunder.

Section 7.4 . The Indemnified Party shall give the Indemnifying Party prompt notice of any indemnifiable Action asserted against it.

Section 7.5 . Except with respect to any Third Party Claims, the receipt by a Receiving Party or its Affiliates of the Services shall be an unqualified acceptance of, and a waiver by, the Receiving Party and its Affiliates of their rights to make any claim (other than based on gross negligence or fraud) with respect to such Services unless the Receiving Party gives written notice of the claim to the Providing Party within the later of (i) sixty (60) days after receipt of the Service by the Receiving Party or its Affiliates or (ii) thirty (30) days after the date on which the Receiving Party became, or should have become, aware of the facts, events, occurrences or circumstances underlying such claim; provided , that, in no event shall the Receiving Party be entitled to give notice of a claim more than one (1) year after receipt of the Service by the Receiving Party or its Affiliates.

ARTICLE VIII

DISPUTE RESOLUTION

Section 8.1 . Prior to the initiation of formal dispute resolution procedures, the parties shall first attempt to resolve any dispute arising out of or in connection with this Agreement or the transactions contemplated hereby informally, as follows:

(a) The parties shall first attempt in good faith to resolve all disputes on a local level and shall attempt to initiate such efforts within two Business Days after receipt of notice of any such dispute. If the parties are unable to resolve a dispute in an amount of time that either party deems reasonable under the circumstances, such party may refer the dispute for resolution to the Senior Managers pursuant to the provisions of Section 8.1(b).

(b) Within five Business Days of a notice under Section 8.1(a) referring a dispute for resolution by Senior Managers, the Transition Representatives (or other employees of the parties) shall each prepare and provide to the Senior Managers of each party summaries of the

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relevant information and background of the dispute, along with any appropriate supporting documentation. The designated Senior Managers will confer as often as they deem reasonably necessary in order to gather and exchange information, discuss the dispute and negotiate in good faith, in an effort to resolve the dispute without the need for any formal proceedings.

(c) Formal proceedings for the resolution of a dispute pursuant to Section 8.2 may not be initiated until at least ten Business Days after the receipt by a party of a notice under Section 8.1(a) referring a dispute to Senior Managers.

Section 8.2 . All disputes arising out of or in connection with this Agreement and the transactions contemplated hereby which cannot be resolved through the procedures described herein or therein shall be finally resolved solely and exclusively by means of arbitration to be conducted in English in the City of New York. The arbitration shall be conducted by a sole arbitrator appointed by agreement of the parties, or failing such agreement, under the Commercial Rules of the American Arbitration Association and the arbitration will proceed under such Rules. The decision of the arbitrator shall be final, conclusive and binding upon the parties, and a judgment upon the award may be obtained and entered in any federal or state court of competent jurisdiction. The parties agree that any arbitration shall be kept confidential and any element of such arbitration (including but not limited to any pleadings, briefs or other documents submitted or exchanged, any testimony or other oral submissions, and any awards) shall not be disclosed beyond the arbitral tribunal, the parties, their counsel and any Person necessary to conduct the arbitration, except as may be required in recognition and enforcement proceedings, if any, or in order to satisfy disclosure obligations imposed by any applicable Law. The parties agree to cooperate in providing each other with all discovery, including but not limited to the exchange of documents and depositions of parties and non-parties, reasonably related to the issues in the arbitration. If the parties are unable to agree on any matter relating to such discovery, any such difference shall be determined by the arbitrator. The parties also agree to submit to the non-exclusive personal jurisdiction of the federal and state courts sitting in New York, New York, for the limited purpose of enforcing this arbitration agreement (including, where appropriate, issuing injunctive relief) or any award resulting from arbitration pursuant to this Section 8.2. The parties agree that the arbitration proceeding described in this Section 8.2 is the sole and exclusive manner in which the parties may resolve disputes arising out of or in connection with this Agreement; provided , however , that the parties expressly agree that nothing herein shall prevent the parties from applying to a court having jurisdiction over any of the parties hereto for provisional, injunctive or interim relief to preserve the status quo or otherwise to prevent irreparable harm to a party pending the outcome of arbitration. The prevailing party in any arbitration shall be entitled to attorneys’ fees and costs and the non-prevailing party shall be responsible for all expenses of the arbitration.

Section 8.3 . If there is a dispute between the parties, each party shall continue to perform all of their obligations under this Agreement (including the obligations in dispute).

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ARTICLE IX

MISCELLANEOUS

Section 9.1 Force Majeure . (a) The obligations of Cadbury or DPS and their respective Affiliates, as the Providing Party, shall be suspended during the period, but only to the extent that Cadbury or DPS and their respective Affiliates, as the case may be, is prevented or hindered from complying therewith by any of the following causes beyond its reasonable control: (i) acts of God, (ii) weather, fire or explosion, (iii) war, invasion, riot, domestic insurrection, acts of terrorism or other civil unrest, (iv) national or regional emergency, (v) shortage of adequate power or transportation facilities, or (vi) any other event which is beyond the reasonable control of the Providing Party (each, a “ Force Majeure Event ”). In such event, the Providing Party shall give notice of suspension as soon as reasonably practicable to the other stating the date and extent of such suspension and the cause thereof, and such Providing Party shall resume the performance of such obligations as soon as reasonably practicable after the removal of the cause.

(b) During the duration of a Force Majeure Event, the affected party shall use commercially reasonable efforts to avoid, mitigate, remedy or remove such Force Majeure Event (including the expenditure of reasonable sums), and shall use commercially reasonable efforts to resume its performance under this Agreement with the least practicable delay.

Section 9.2 Independent Contractor . The parties and each of their respective Affiliates shall each be an independent contractor in the performance of its obligations hereunder and not as the agent of the Receiving Party in performing Services, and no employee of a Providing Party performing Services shall be considered an employee of the Receiving Party. No third party, including any employee of any party or any of such party’s Affiliates, shall have or acquire any rights by reason of this Agreement.

Section 9.3 Public Announcement . None of the parties hereto shall make, or cause to be made, any press release or public announcement in respect of this Agreement or the services contemplated hereby or otherwise communicate with any news media without the prior written consent of the other party (unless otherwise required by Law or applicable stock exchange regulation), and the parties hereto shall cooperate as to the timing and contents of any such press release, public announcement or communication.

Section 9.4 Notices . All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by an internationally recognized overnight courier service, by facsimile or registered or certified mail (postage prepaid, return receipt requested) to the respective parties hereto at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9.4):

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if to Cadbury:

Cadbury Schweppes plc

25 Berkeley Square
London W1J 6HB
Facsimile: 44-20-7830-5015
Attention: Henry Udow, Esq.
Chief Legal Officer

with a copy to:

Cadbury Adams USA
389 Interpace Parkway
Parsippany, NJ 07054
Facsimile: (973) 909-3976
Attention: Thomas Whitten

if to DPS:

5301 Legacy Drive, 3 ^rd Floor
Plano, TX 75024
Facsimile: (972) 673-8130
Attention: James L. Baldwin, Jr.
General Counsel

with a copy to:

Dr Pepper Snapple Group, Inc.
5301 Legacy Drive
Plano, TX 75024
Facsimile: (972) 673-8130
Attention: Angie Wallander

Section 9.5 Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the choice of law or conflicts of law principles that would cause the application of the laws of any other jurisdiction.

Section 9.6 Counterparts . This Agreement may be executed and delivered (including by facsimile transmission or portable document format (“.pdf”)) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.

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Section 9.7 Headings . The headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

Section 9.8 Modifications . This Agreement contains the entire understanding and agreement between the parties hereto as to the services being performed hereunder. It may not be amended or modified except by a written instrument executed by the parties hereto.

Section 9.9 Cumulative Effect . The rights and obligations of the parties under this Agreement shall be cumulative to and not exclusive of the rights and obligations of the parties contained in the Separation Agreement.

Section 9.10 Interpretation . All references in this Agreement to “ Cadbury ” or “ DPS ” or a “ party ” shall be deemed to include such party’s Affiliates unless the context requires otherwise. All references in this Agreement to “services to be supplied” or similar language shall be defined to include “facilities to be provided” unless the context requires otherwise. To the extent that this Agreement purports to impose any obligation on the Affiliates of a party, such party shall cause its Affiliates to fulfill such obligation.

Section 9.11 Insurance . As regards employees, agents or representatives of a Providing Party who shall be performing the Services on or at properties of a Receiving Party, the Receiving Party will be designated as an additional insured under the Providing Party’s liability insurance.

Section 9.12 Amendment . This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of, Cadbury and DPS or (b) by a waiver in accordance with Section 9.13.

Section 9.13 Waiver . Either party to this Agreement may (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered by the other party pursuant hereto or (c) waive compliance with any of the agreements of the other party or conditions to such party’s obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of either party hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights.

Section 9.14 Severability . If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect for so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to either party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties

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as closely as possible in an acceptable manner in order that the transactions contemplated by this Agreement are consummated as originally contemplated to the greatest extent possible.

Section 9.15 No Additional Rights . Except as expressly provided in this Agreement, the parties agree that this Agreement shall not grant to either party any additional rights to the other party’s proprietary information, technology or know-how.

[ Remainder of the page intentionally left blank ]

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IN WITNESS WHEREOF, Cadbury and DPS have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.


CADBURY SCHWEPPES PLC
By:	/s/ Henry Udow
	Name:	Henry Udow
	Title:	Chief Legal Officer and Group Secretary

DR PEPPER SNAPPLE GROUP, INC.
By:	/s/ James L. Baldwin
	Name:	James L. Baldwin
	Title:	Executive Vice President and Secretary

SCHEDULE A

Services to Be Provided by Cadbury to DPS

This schedule sets forth the Services to be provided by a Cadbury Providing Party to a DPS Receiving Party.

Corporate Group Finance


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
Process	Cadbury plc (“ Cadbury ”) will make the relevant personnel (currently Dominic Blakemore and Pauline Caywood) reasonably available to consult with the new DPS finance team.	3 months	30 days

Corporate Group HR Benefits


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
System Access	Cadbury will provide access to [ILLEGIBLE] until implementation of new website for DPS Comp and Benefits. DPS Comp and Benefits is targeted to implement a new benefits administration provider (Hewitt) in June 2008. As such, they will need to maintain the Cadbury branding on the existing provider website [ILLEGIBLE] until they complete the conversion process in June 2008.	2 months	30 days

ESPP Administration	Cadbury will provide access to DPS employees to view their ESPP awards on the UBS site until such time as they have been exercised or lapse under the ESPP rules.	Up to 12 months	30 days

Settlement of ESPP awards	Cadbury will settle all ESPP options exercised by DPS employees as a result of the demerger. These awards will be settled in Cadbury plc ADRs.	Up to 12 months	30 days

Discretionary Share Option Administration	Cadbury will provide access to DPS employees to view their discretionary share option awards on the UBS site until such time as they have been exercised or lapse under the discretionary share option plan rules. DPS to pay the £20 per head annual administration fee to UBS in respect of these records.	Up to 12 months	30 days

Settlement of Discretionary Share Options for DPS colleagues	Cadbury will settle all discretionary share options exercised by DPS employees within 12 months of the Distribution Date. These options will be settled in Cadbury plc Ordinary Shares (either new issue or from the Cadbury employee benefit trust).	Up to 12 months	30 days

PSP/HIPRA/ ISAP Administration	Cadbury will provide access to DPS employees to view their PSP/HIPRA/ISAP awards on the UBS site until such time as these records are exported to the new DPS share plan administrators. DPS to pay the costs of exporting these records to a new administration provider. This service will not extend past 31 December 2008. As part of this service these awards will be converted and shown as equivalent numbers of shares of DPS Common Stock on the UBS system. DPS to pay UBS fees for carrying out this conversion and updating their records.	Not later than 12/31/08	30 days

Settlement of conditional ISAP awards vesting before 31 December 2008	Cadbury will settle any ISAP conditional awards held by DPS employees that vest prior to 31 December 2008 using DPS Common Stock held in the Cadbury Employee Benefits Trust. DPS will provide tax calculations and operate tax reporting and withholding on the vesting of these awards. DPS will communicate with the recipients of these awards upon vesting.	Up to 8 months	30 days

BSRP and LTIP Administration	Cadbury will provide spreadsheets to DPS detailing subsisting BSRP and LTIP awards held by DPS employees at the Distribution Date. These awards will be administered by DPS from the Distribution Date.	Upon Demerger	30 days

Provision of records detailing the share conversion calculations	Cadbury will provide to DPS excel spreadsheets detailing the conversion calculations in respect of the DPS employees LTIP, BSRP, PSP, HIPRA and ISAP awards converting from CS Ordinary Shares to shares of DPS Common Stock.	Upon Demerger	30 days


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
Provision of nominee shareholding services	All DPS employees who hold shares in the UBS roll-over account will be included as “active records” on the UBS system and as such Cadbury will incur an annual administration fee. These records may remain on UBS but must be transferred to alternative nominee holdings by 31 December 2008.	Up to 8 months	30 days

Corporate Group Intellectual Property (Americas)


			Notice
Type of			Required to
Service	Description of Specific Services	Term	Terminate
Intellectual Property Services / Documentation	Cadbury will use reasonable endeavors, following receipt of a request from DPS, to make appropriate Cadbury plc Group IP personnel available to clarify intellectual property issues arising out of work done prior to the Distribution Date (for example assistance to try to identify information that relate to files transferred), provided that such assistance shall be provided within 60 days of the Distribution Date and not exceed a total of 25 hours.	2 months	None

Corporate Group Legal Americas


			Notice
Type of			Required to
Service	Description of Specific Services	Term	Terminate
Processes and Consulting Services/ Documentation	1. Cadbury will make the relevant Cadbury plc Group Secretariat personnel (currently John Mills, John Hudspith and Victoria Hames) available to clarify, advise and provide knowledge transfer in the following areas:	3 months	None

	• Stock Transfer Agent services
	• Stock disbursement processes including the Odd Lot Facility
	• Shareholder communications
	• Corporate reorganization known as the “scheme of arrangement”

	2. Cadbury will provide a copy of the executed Project Bounce transaction documents and access to the “Project Bounce” website.

Corporate Audit


			Notice
Type of			Required to
Service	Description of Specific Services	Term	Terminate
System Access	Cadbury Audit will provide access to and data extraction of DPS files from the Group (Central) Audit database in Lotus Notes as well as the shared drive.	2 months	None

Tax


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
Processes	Cadbury will make provision for services regarding taxes, including legal organizations, outstanding audits and forecasting assistance. The monthly rate has been finalized based on the percentage of time to be spent by Joe Leuzzi, Kimberly Sweeney and Lisa Longo performing these services.	20 months	30 days

	The parties further acknowledge and agree that the monthly rate for these services was based on the assumption that Cadbury would provide 210 hours of these services per month. If the average amount of these services actually provided by Cadbury for the first three months (or any three-month period thereafter) exceeds 230 hours per month, the parties shall negotiate in good faith to determine the appropriate increase in the monthly rate for these services. If the time spent on these services averages less than 190 hours in any 3 month period, any of the three individuals listed above is no longer employed by Cadbury or it becomes commercially unreasonable for any of such individuals to perform the services contemplated by this service, the parties shall renegotiate in good faith for an appropriate change to the level of services required by this service or to the costing of this service. If the services provided by Cadbury reaches an average of 210 hours per month, for any three-month period, Cadbury shall notify DPS and DPS shall have the option, but shall not be obligated, to either defer such services or discontinue such services that are provided by Cadbury.

Processes	Cadbury will assume responsibility for preparing the 2007 federal and state and certain other tax returns of the DPS Group (or any member of the DPS Group) as per the provisions of Section 3 the Tax Sharing and Indemnification Agreement (the “TS1A”).	N/A	N/A

Treasury


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
Process	Cadbury will make the relevant personnel (currently Sarah Boyce and Ann Svoboda) reasonably available to consult with the DPS Treasury team.	6 months	30 days

North American HR


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
Data Access	Cadbury will provide access with full functionality as prior to the Distribution Date to I-grasp, the global talent database system.	8 months	NA

Services to Be Provided by Cadbury to DPS (Dominican Republic and Puerto Rico)

NoLA Office and Administrative Services


			Notice
Type of			Required to
Service	Description of Specific Services	Term	Terminate
Puerto Rico office lease	Cadbury Adams Puerto Rico will continue to lease office space to Mott’s Inc. for an additional month after the Distribution Date. This extension shall be governed by the terms of the 2006 Lease Agreement between Mott’s Inc. and Cadbury.	1 month	None

Dominican Republic One employee in Cadbury Adams’ payroll	Plinio Hernandez will remain in Cadbury Adams Dominicana S.A.’s payroll for an additional month after the Distribution Date.	1 month	None

Services to Be Provided by Cadbury to DPS (Canadian Services)

10.

Canadian Services


			Notice
Type of			Required to
Service	Description of Specific Services	Term	Terminate
	1. These services are required until the licence described below can be transferred. All services to be provided in accordance with the site licence (the “Site Licence”) issued to Cadbury Beverages Canada, Inc. (“CBCI”) by the Canadian Department of Health’s Natural Health Products Directorate (the “Natural Health Products Directorate”) for the Product Licence Applications (as defined in Section 2 below) to permit the manufacturing, packaging, labelling and importing activities for the products at those facilities authorized by the Vendor’s current applicable site licences. CBCI will use all reasonable efforts to maintain any required insurance with respect to the Site Licence and maintain, renew and otherwise keep in place all necessary consents, licenses and approvals required to provide the Site Licence for the term of this Agreement. CBCI will not submit to Health Canada any regulatory reports, correspondence, documentation, records or other information in relation to the Site Licence without providing Canada Dry Mott’s Inc. (“CDMI”) an opportunity to review and comment on same, which it shall do in a timely manner. CBCI will take all reasonable actions required to respond to any inquiries related to the Site Licence or to the products covered by the Site Licence.	Until services are completed	30 days

	2. These services are required until a licence can be transferred. All services to be provided in accordance with the product licence applications in respect of the Accelerade advanced sports drink, Coolah Energy Drink and apple sauce products (the “Product Licence Applications”) submitted to the Natural Health Products Directorate. CBCI will use all reasonable efforts to maintain any required insurance with respect to the Product Licence Applications and maintain, renew and otherwise keep in place the submission numbers issued by the Natural Health Products Directorate in connection with the Product Licence Applications. CBCI will take all reasonable actions required to respond to any inquiries related to the Product Licence Applications.	Until services are completed	30 days

	3. In the event that the existing banking accounts and account numbers related to existing payroll operations cannot be immediately renamed or reassigned to CDMI, CBCI will fund these accounts in a timely manner for the amount of each net payroll as such funds are transmitted to CBCI by CDMI on a bi-weekly basis for purposes of paying CDMI employees and all related employee and employer taxes.	5 months	30 days

	4. CBCI will use all commercially reasonable efforts to assist, support and facilitate CDMI in securing all necessary employer, tax or other identification numbers as required by CDMI to conduct business in Canada and in all provinces of Canada.	2 months	30 days

Services to Be Provided by Cadbury IT to DPS IT

11.

IT Management Advisory Services


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
Advisory Services	As Lalit Gulati retains institutional knowledge of the pre-separation Cadbury organization and operating environment as well as significant knowledge of the external providers with which DPS will be interacting, DPS may request the resource — ad hoc — to provide assistance in the following areas:	8 months	30 days
	• Guidance on forward looking strategy
	• Commercial knowledge of vendor agreements
	• Organizational knowledge of vendor partners
	• Perspective on past decisions
	• Domain Experience and Expertise

	Cadbury will make Lalit Galati available to deliver intellectual and advisory services to DPS according to the terms of this Agreement.

Out of Scope Services:

	a)		No travel is to be undertaken by Lalit Galati in support of this Service.

	b)		Lalit Galati will not be asked to be a signatory or accountable party in any contractual agreements entered into by DPS.

	c)		Lalit Galati will provide only Institutional and Domain knowledge. No activity in terms of HR decisions, input, or communications is in scope.

	d)		Lalit Galati will not spend greater than:

	(1)		2 hours per week in support of this activity; or

	(2)		26 total hours.

12. IT (Management Advisory Services)


			Notice
Type of			Required to
Service	Description of Specific Services	Term	Terminate
Advisory Services	The IT organization of DPS will be entitled to request and utilize the knowledge capital / system expertise of support resources of Cadbury. This request is only to be made in the event of critical (Severity 1 or Severity 2) incidents requiring immediate resolution to allow the impacted business to operate.	8 months	30 days

	Cadbury is not obligated to provide any resource assistance to DPS. However, if formally requested, the appropriate Cadbury Function Head may allow their resources to assist in resolving the issue at hand. In such cases, this Service is meant to ensure that proper cost recovery is provided. Should the request be granted, the resources time will be billed at $80/hour.

13. IT (Active Directory Trust)

14. IT (Hyperion Access)


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
System Access	User Access — PLC Instance	3 months	30 days

	~ 60 DPS Hyperion users will require access to the Cadbury HFM system through August 14, 2008.

	Users shall be authorized to:
	• access the system with pre-separation security levels
	• enter and review DPS financial data
	• save and print reports
	• execute any other activities that they could carry out before legal separation.

	Cadbury IT will ensure all existing security profiles are retained and ensure continued access before and following final network separation. Any tradeoffs in cost / functionality of the final access solution will be agreed with the business users.

	DPS resources only require write access through the entry of the May 7th input, which should be complete by the end of June. If Cadbury chooses, they may convert access to READ ONLY following that entry.

System Support	Hyperion Support and Consolidation	8 months	30 days

	Cadbury Finance will provide operational support and assistance in the transfer of knowledge to DPS. Cadbury will make the relevant personnel (currently Carl Waller) reasonably available to consult with the new DPS Hyperion team. This is to include advisory services as well as system interaction. Subsequent to May 30, 2008, support and advisory services provided by Cadbury will be billed at £100 per hour.

System Support	In the event that DPS Hyperion Instance is unable to support the 4+8 forecasting activities Cadbury will make their system available for this purpose. The appropriate set up and administration will be the responsibility of the Cadbury Finance team.	2 months	30 days

	In the event that this occurs, the applicable people will enter into a confidentiality agreement on customary terms

15. IT (Ongoing Separation Activities)


			Notice
Type of			Required to
Service	Description of Specific Services	Term	Terminate
Technical Services	As of the Distribution Date, there will be a number of activities still under way to fully split the DPS and Cadbury systems. All costs for these activities are borne in the Separation budget and any DPS costs are part of the final settlement of outstanding intercompany balances that will be settled prior to the Distribution Date. Therefore, no costs will be billed by either party for this Service.	3 months (Or final technical separation)	None

	This Service is intended to ensure that the following activities are understood by both DPS and CS to be ongoing and to commit that both IT organizations are committed to completion per the planned timeline.

	Ongoing activities include:
	• Separation of the Spend Management System (SMS) for DPS
	• Completion of implementation of MSSI Copy — IXOS functionality
	• Completion of AD Migration activities for Finance Users & Applications
	• Standup of the DMZ, Separation of the Data Center, Breaking of the
	• Network (addressed fully in a separate Service)
	• Deletion of data in separated systems (GDS, Trouble Ticketing Systems)
	• Streamserve Form Testing
	• Lotus Notes DBs — SARD, RAM

16. IT (Network Ops Support)


			Notice
Type of			Required to
Service	Description of Specific Services	Term	Terminate
Support Services	DPS IT will be entitled to request and utilize the knowledge capital/system expertise of support resources of CS IT. This request is only to be made in the event of critical Severity 1 and Severity 2 incidents requiring immediate resolution to allow the impacted business to operate.	1 month	N/A

	The Service would keep the combined DPS and Cadbury network operations team as it is until May 31st. This will give the DPS Operations team time to get its resources trained and on-boarded.

	DPS and Cadbury will continue the current mode of Network Operations support including 7 X 24 on-call rotations for Data and Voice issues. Once the Ticket queues have been separated, if both teams do not have access to the other queues, the Tickets will updated via email exchange between the groups

SCHEDULE B

Services to Be Provided by DPS to Cadbury

This schedule sets forth the Services to be provided by a DPS Providing Party to a Cadbury Receiving Party.

1. Customer Solutions — Facilities Service & Support/Fleet

2. Customer Solutions — HR Services


Benefits & Compensation Services	DPS will provide a reasonable level of support and consultation for: • leave of absence processing support, including being reasonably available to provide consultation; • ESPP and share plan administration; and • vendor management issues.	1 month	30 days

Benefits & Compensation Services	DPS will provide a reasonable level of open enrollment processing support, which shall include being reasonably available to provide consultation.	1 month	30 days

Benefits & Compensation Services	DPS will provide a reasonable level of AIP processing support, which shall include being reasonably available to provide consultation.	1 month	30 days

Benefits & Compensation Services	DPS will provide a reasonable level of Merit processing support, which shall include being reasonably available to provide consultation.	1 month	30 days

Benefits & Compensation Services	DPS will make its benefits/compensation manager (currently Brian Beasley) reasonably available to provide consultation relating to benefits and compensation administration.	1 month	30 days

Payroll and Workman’s Comp Services	DPS will provide payroll and compensation/benefits for workers compensation claims. Note: 3 years is for consultation and cooperation on tax and insurance claims. It is not an intense level of longer term services	3 years	6 months

Medical Claim Payments	Any actual medical claim payments for Cadbury will be paid by DPS and subsequently invoiced directly to Cadbury in accordance with the monthly billing schedule of this Agreement.	8 months	30 days

3. HR Benefits


Type of			Notice Required to
Service	Description of Specific Services	Term	Terminate
Benefits Processes	DPS Benefits (United States) will provide a reasonable level of support to: • provide leave of absence processing (STD/LTD/FMLA);	8 months	30 days
(United States)	• provide new retiree administration for medical, pension and 401(k);
	• provide benefits support reasonably necessary to assist with Cadbury’s benefits group’s organizational design, selection and training/transition;
	• manage Health & Welfare providers, including negotiating vendor contracts and fees (medical, dental, etc); monitoring SLAs; and resolving vendor and participant issues;
	• assist in the initial creation of and maintain plan compliance documents/governance under federal, state and local laws, including plan audits, actuarial evaluations, and 5500s (tax returns); and provide SOX oversight and conduct governance meetings as required;
	• manage Retirement Plan administrators & call centers, including negotiate contracts, fees; monitor SLAs; and resolve vendor and participant issues; and
	• assist in the initial creation of and monitor benefit plan budgets; execute benefit plan vendor payments per contract and federal law; and provide summary billings to client.

Benefits Consulting & Services (United States)	DPS Benefits (United States) will conduct enrollments (including providing for payment and deferral elections) for nonqualified plans; administer plans per plan documents and federal laws; and resolve related issues.	8 months	30 days

Benefits Consulting & Services (United States)	DPS Benefits (United States) will provide a reasonable level of consulting to Cadbury relating to benefits matters for labor relations.	8 months	30 days

Benefits Processes (Canada)	DPS Benefits (Canada) will provide a reasonable level of services to: • conduct annual health & welfare benefits enrollment for active and inactive employees, including:	8 months	30 days
	• review plans/rates and obtain client approval; prepare employee communication;
	• support employee meetings as required;
	• vendor set-up, testing and coordination with payroll;
	• manage Health & Welfare providers, including to negotiate vendor contracts and premiums/fees (medical, dental, etc); monitor SLAs; resolve issues; conduct quarterly reviews as required; and implement union contract changes as required;
	• manage Health & Welfare benefit administrator/call center vendor, including to negotiate contracts and rates; monitor SLAs; and resolve related issues. This will also include leave of absence administration processing;
	• review and update plan governance as required post-separation and maintain plan compliance documents under provincial and local laws. This will include plan audits, actuarial evaluations, and required federal filings with the Financial Services Commission of Ontario;
	• manage Retirement Plan administrators & call centers (negotiate contracts, rates; monitor SLAs; resolve vendor and participant issues);
	• assist in the initial creation of and monitor benefit plan


Type of			Notice Required to
Service	Description of Specific Services	Term	Terminate
	budgets; execute benefit plan vendor payments per contract and federal law; and provide summary billings to client;
	• conduct enrollments (including providing for payment and deferral elections) for nonqualified plans; administer plans per plan documents and federal laws; and
	• support union/labor relations activities as required.

Benefits Processes (Mexico)	DPS Benefits (Mexico) will review and update plan governance as required and maintain plan compliance documents under local laws, including plan financial reporting, audits and actuarial valuations.	8 months	30 days

Benefits Processes (Puerto Rico)	DPS Benefits (Puerto Rico) will conduct annual health & welfare benefits enrollment for active and inactive employees, including: • review plans/rates and obtain client approval;	8 months	30 days
	• prepare employee communication;
	• support employee meetings as required; and
	• vendor set-up; testing and coordination with payroll.

Benefits Consulting and Services (Puerto Rico)	DPS Benefits (Puerto Rico) will: • manage Health & Welfare providers, including negotiating vendor contracts and premiums/fees (medical, dental, etc); monitoring SLAs; resolving issues; and conducting quarterly reviews as required;	8 months	30 days
	• review and update plan governance as required post- separation;
	• manage Retirement Plan administrators & call centers, including negotiating contracts and rates; monitoring SLAs; and resolving related issues;
	• assist in the initial creation of and monitor benefit plan budgets;
	• execute benefit plan vendor payments per contract and federal law; and provide summary billings to client.

4. Compensation CoE


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
Compensation Processes	DPS will provide administrative services relating to stock option exercising and ESPP elections, subject to the placement of the relevant personnel post-separation.	8 months	30 days

Compensation Processes	Stock Programs: DPS will continue to deliver the files relating to stock awards to UBS upon the exercise of stock awards by employees.	12 monuhs	30 days

5. Finance


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
Process	DPS will make the relevant personnel (currently Steve Alexander, Diane Hicks and Robert Franklin) reasonably available to consult with the new finance team.	3 months	30 days

6. Risk Management


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
Processes	DPS will provide reasonable support and information regarding open claims, including reasonable access to DPS personnel with specific knowledge of the incident, witnesses, legal counsel, human resource, consumer relations, compensation & benefits and payroll.	6 months (1 person — 3 days/month)	3 months

7. Tax


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
Tax Returns	DPS will assume responsibility for preparing the 2008 federal, state and certain other tax returns of the DPS Group (or any member of the DPS Group) as per the provisions of Section 3 of the TSIA.	N/A	N/A

Services to Be Provided by DPS to Cadbury (Canadian Services)

8. Canadian Services


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
	All employees and/or other service providers, administrative services, sublicenses of trademarks, trade names and domain names, information and notification required by CBCI in order for CBCI to: (a) provide the CBCI Services, and (b) manage, administer and operate the Liquor Assets (as defined in the Asset Purchase Agreement between CBCI and CDMI dated as of April 25, 2008).	Until services are completed	30 days

9. IT

Item 9 is specific to the IT Service Offerings, in support of the general Business to Business Service.

1) Summary of Services

The DPS Group will provide access to the DPS network for approximately 20 Intellectual Property and Tax personnel of the Cadbury plc Group in the Rye Brook office. These colleagues will continue to use the DPS phone and voicemail systems, Internet, local file server(s), Multi-Function Print sharing, local application access, access to Cadbury VPN (via Internet), and e-mail. These colleagues will be clustered in a central location in the Rye Brook facility. This solution considers the employees as DPS users in all the services provided (file sharing, print sharing, voicemail, e-mail, Internet access, antivirus protection, PC configuration. Active Directory username and access control to the applications).

For Cadbury-hosted applications, access to the applications will be supported via the Cadbury SSL VPN web portal. Local printers will be provided by Cadbury for printing from these applications; access to local file and print servers, DPS hosted applications and Multi-Function Printers will not be available to Cadbury personnel while connected to the Cadbury SSL VPN.

Costs assume 30 September end date. Any incremental months/portions of months will add an additional $8,079 for each month.

2) In Scope Services:

Access to Cadbury hosted applications


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
System Access	DPS will provide access to the Internet via DPS’ Internet breakout points. Internet access is the only requirement for Cadbury to gain access to Cadbury hosted applications	5 months	30 days
	• Cadbury colleagues requiring printing services from Cadbury-hosted applications will print to Cadbury-provided local printers while connected to Cadbury’s VPN
	• Access to local shared resources (file/print servers, Multi-Function Printers, DPS-hosted applications) while Cadbury’s colleagues are connected to Cadbury’s VPN is not supported
	• Printing from DPS-hosted or local applications will continue to go through DPS print servers to shared printer resources

	IP Team (Dan Chung — 13 colleagues) Application Requirements
	• Dennemeyer IAM
	• NAC SAP

	Tax Team (Lisa Longo — 6 colleagues) Application Requirements
	• Hyperion HFM
	• SAP — NAC SP5
	• SAP — CTAI 3.0f

Access to DPS-hosted applications


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
System Access	DPS will continue to provide access through DPS network and access control systems to DPS-hosted applications. • SAP — MSSI MPD • SAP — Probe SP2 • Applications installed on Rye Brook-based file servers	8 months	30 days

Shared File and Print Server/MFP access


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
System Access	DPS will provide access through DPS network and access control systems to DPS shared file and print servers. • Access control will be via DPS Active Directory account	8 months	30 days
	• Access to Cadbury data will be restricted to Cadbury accounts via Group Membership restrictions in DPS Active Directory system
	• Home directories for Cadbury employees will continue to be located on the local file server
	• Cadbury may periodically request an audit of Group Members of any Cadbury-specific Active Directory Group
	• Cadbury employees will have the ability to scan documents and store the scanned images on the DPS shared file server
	• Upon termination of this Service, Cadbury will provide blank backup tapes and USB drives to which all Cadbury data will be copied
	• Upon termination of this Service, DPS will permanently remove all Cadbury-specific data from local file servers

Phone/voicemail system


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
Phone Service	• DPS will supply one fixed-line phone per Cadbury employee • DPS will supply one standard voice mailbox per Cadbury employee • Cadbury employees will be listed in DPS’ phone directory • Not available with this service: o Access to Cadbury’s phone services directory o Short (7-digit) dial to Cadbury employees in other facilities	8 months	30 days

Personal Computer/Workstation


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
PC / Workstation	• DPS will supply one standard desktop or laptop per Cadbury employee • Upon termination of this Service, Cadbury will provide blank backup tapes and USB drives to which all Cadbury data will be copied	8 months	30 days

Break — Fix Support (Severity 1 and 2)

Preventative Maintenance

User Administration


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
User Administration	DPS will add and remove users from the system, upon receipt of formal request from Cadbury. DPS will attempt to action the request within existing SLAs. DPS will add users to appropriate security groups per Cadbury’s request	8 months	30 days

Knowledge Transfer

Out of Scope Services:

	a)		Printing from DPS-hosted or local applications to locally-attached printers

	b)		Application break and fix, upgrades and enhancements

	c)		Operating System Upgrades

	d)		Any break-fix or preventative maintenance support requested following application or operating system upgrades

	e)		Break-fix support for Severity 3 or 4 issues

	f)		Data replication between DPS and Cadbury resources

	g)		Application development and license management

4) Resources to be Utilized:

The following resources have been identified as those who will be providing the above services to Cadbury. In the event they leave the DPS organization, a revision of the terms of the agreement will be required.

	a)		WAN, LAN and Voice Specialists

	b)		Intel and Unix Specialist

Rationale: Base Support will be provided according with the standard SLA’s agreed with the current Service Desk contract in DPS

10. IT (Telephony — Mobile Services Contracts)

DPS will drive an effort to logically separate (label) DPS and Cadbury device accounts. Cadbury will assist in this effort by:

	a)		Providing a list of Cadbury employees with relevant department, cost center, email, reporting manager and parent cost center information.

	b)		Reviewing each contract/service following a data separation to validate the data.

The end date for these Services (September 30, 2008) reflects the maximum duration that the agreed upon Service may be required from DPS. Should Cadbury successfully accelerate the TCO program and implement similar Services with a new provider prior to such date, Cadbury shall be entitled to terminate this Service without penalty or further compensation from the effective service date with the new provider. Any significant change to carrier accounts, contracts or inventories listed below will result in a revised split to be agreed upon by both parties in writing, and subject to appropriate change management, prior to payment.


			Notice
			Required
Type of			to
Service	Description of Specific Services	Term	Terminate
Telephony (T-Mobile)	DPS will maintain and charge Cadbury for services under the T-Mobile Mobility Services [ILLEGIBLE]) contract. The charges will be for the portion of the monthly invoice used by Cadbury businesses and its employees.	5 months	30 days

	Currently, the agreed split is 50% DPS & 50% CS. DPS will charge Cadbury for 50% of the total monthly amount until a more exact split is determined.

Telephony (AT&T Mobile)	DPS will maintain and charge Cadbury for services under the AT&T Mobility (formerly Cingular) Services [ILLEGIBLE] contract. The charges will be for the portion of the monthly invoice used by Cadbury businesses and its employees.	5 months	30 days

	Currently, the agreed split is 75% DPS & 25% Cadbury. DPS will charge Cadbury for 25% of the total monthly amount until a more exact split is determined.

Telephony (Sprint Long Distance)	DPS will maintain and charge Cadbury for services under the Sprint Long Distance and Calling Card Services [ILLEGIBLE] contract. The charges will be for the portion of the monthly invoice used by Cadbury businesses and its employees. Charges presented to Cadbury will include a copy of the original invoice if the agreed split is utilized, otherwise, line item information will be provided detailing each charge. Standard Net 30 Terms apply for invoice processing.	5 months	30 days

	Currently, the agreed split is 75% DPS & 25% Cadbury, until such time that the DPS and Cadbury accounts and devices are identified and agreed to then the actual charges for those accounts will be invoiced accordingly and the split no longer applies.

Telephony (Sprint Nextel Mobile)	Beverages will maintain and charge Cadbury for services under the Sprint/Nextel Mobility Services [ILLEGIBLE] contract. The charges will be for the portion of the monthly invoice used by Cadbury businesses and its employees. Charges presented to Cadbury will include a copy of the original invoice if the agreed split is utilized, otherwise, line item information will be provided detailing each charge. Standard Net 30 Terms apply for invoice processing.	5 months	30 days

	Currently, the agreed split is 60% DPS & 40% Cadbury, until such time that the DPS and Cadbury accounts and devices are identified and agreed to then the actual charges for those accounts will be invoiced accordingly and the split no longer applies.

Telephony	DPS will maintain and charge Cadbury for services under the Symphony Service	5 months	30 days


			Notice
			Required
Type of			to
Service	Description of Specific Services	Term	Terminate
(Symphony Ongoing)	Telecommunications Expense Management and Cellular Service Desk Services [ILLEGIBLE] contract. The charges will be for the portion of the monthly invoice used by Cadbury businesses and its employees. Charges presented to Cadbury will include a copy of the original invoice if the agreed split is utilized, otherwise, line item information will be provided detailing each charge. Standard Net 30 Terms apply for invoice processing.

	Currently, the agreed split is 60% DPS & 40% Cadbury, until such time that the DPS and Cadbury accounts and devices are identified and agreed to then the actual charges for those accounts will be invoiced accordingly and the split no longer applies.

Telephony (Verizon Long Distance)	DPS will maintain and charge Cadbury for local telephone and DID services under the Verizon [ILLEGIBLE] contract. The charges will be for the portion of the monthly invoice used by Cadbury businesses and its employees. Charges presented to Cadbury will include a copy of the original invoice if the agreed split is utilized, otherwise, line item information will be provided detailing each charge. Standard Net 30 Terms apply for invoice processing.	5 months	30 days

	Currently, the agreed split is 30% DPS & 70% Cadbury, until such time that the DPS and Cadbury accounts and devices are identified and agreed to then the actual charges for those accounts will be invoiced accordingly and the split no longer applies.

Telephony (Post Symphony Service Desk & Billing)	Upon expiration of the Symphony Services Agreement [ILLEGIBLE] DPS and Cadbury will exchange internal services for those previously provided by Symphony to include Telecommunications Invoice Management and Cellular Service Desk Support. Both parties agree to an exchange of services in lieu of monies. Cadbury is to provide monthly invoicing support services to DPS and in exchange DPS will provide Cellular Service Desk support to Cadbury. Any significant change to the services or Service Levels previously provided under the Symphony Agreement will be agreed upon by both parties in writing, and subject to appropriate change management, prior to execution.

11.

IT (Network Services)


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
Network Services	The DMZ provides the ability for key partners (commercial or financial) to exchange data with our systems in a protected environment without requiring our company to provide full access to our environment, which could lead to security issues.	3 months	30 days

	As part of separation, Cadbury will be building a new DMZ environment with Hewlett Packard. This new DMZ environment will not be available for use until June 2008. As a result, continued access / support for Cadbury applications in the DPS DMZ are required.

	In order to facilitate this access, the network tie between Cadbury and DPS must be maintained. These ‘double running’ network costs are borne by Cadbury and not included in this Service. Additionally, the Hewlett Packard data center environment separation, which is dependent on network separation, will be delayed.

12.

IT (Advisory Services)


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
Advisory Services	The IT organization of Cadbury will be entitled to request and utilize the knowledge capital / system expertise of support resources of DPS. This request is only to be made in the event of critical Severity 1 or Severity 2 incidents requiring immediate resolution to allow the impacted business to operate.	8 months	30 days

	DPS is not obligated to provide any resource assistance. However, if formally requested, the appropriate Function Head may allow their resource to assist in resolving the issue at hand. In such cases, this Service is meant to ensure that proper cost recovery is provided. Should the request be granted, the resources time will be billed at $80/hour.

13.

IT (Network Ops Support)


Type of			Notice Required
Service	Description of Specific Services	Term	to Terminate
Support Services	CS IT will be entitled to request and utilize the knowledge capital/system expertise of support resources of DPS IT. This request is only to be made in the event of critical Severity 1 and Severity 2 incidents requiring immediate resolution to allow the impacted business to operate.	1 month	N/A

	The Service would keep the combined DPS and Cadbury network operations team as it is until May 31st. This will give the Cadbury Operations team time to get its resources trained and on-boarded.

	DPS and Cadbury will continue the current mode of Network Operations support including 7 X 24 on-call rotations for Data and Voice issues. Once the Ticket queues have been separated, if both teams do not have access to the other queues, the Tickets will updated via email exchange between the groups.

14 . IT (Rogers Facility)


			Notice
Type of			Required to
Service	Description of Specific Services	Term	Terminate
Network Services	The current planned date for IT readiness in the new Cadbury office at the Rogers AR sales facility is 15 June. Due to delays in the separation of the DPS / Cadbury network, Rogers Cadbury users will continue to have access to the Cadbury network through at least 30 June. So long as all new network connectivity is complete by 30 June, the following IT services will continue to be provided to Cadbury users at no charge.	2 months	30 days
	• Desk
	• Phone
	• Network connectivity (until network separation)
	• File server / Network Printer access (until network separation)

	The following services will not be available:
	• DPS-issued PCs. (Users will keep their Cadbury PCs).

	If funding or project delays push the readiness date past 30 June and network separation occurs, the fallback will be to have the Cadbury users set up in the DPS environment.

	• Users will lose any file server access for their Cadbury accounts, so any saved data would need to be removed prior to the split.
	• Users will have access to the local services (network, printer) via their DPS credentials, but would be required to access the confectionery system via VPN.
	• Further, their Cadbury email will only be accessible via the WebMail functionality while on the DPS network or via VPN to use the Outlook client.
	• While on VPN, they would not have the ability to print locally, though documents could be saved and printed to the network once completed.

	Incremental costs due to a post 30 June move will be agreed to/funded by the site owner

15.

IT (CCB Governance)


			Notice
Type of			Required to
Service	Description of Specific Services	Term	Terminate
Change Management	As the network will continued to be shared between Cadbury and DPS until — at best — early July, it is crucial that both organizations communicate, understand, and agree on any changes that will impact the shared network, its connectivity, or performance.	3 months (Until network separation — target July 11, 2008)	N/A

	To this end, both parties agree that no network changes shall be implemented without the full approval of from both the DPS and Cadbury Change Control Boards (CCBs).

	When changes are requested, the requestor is responsible for engaging both their own CCB as well as that of the other party. Only after approval has been given by BOTH CCBs can the change be implemented.

	In the event of any disagreement between the boards, the issue will be escalated to the appropriate VPs of Infrastructure and — if required — to the SVPs of IT for both DPS and Cadbury. These parties are accountable for making the final decisions.

	In the event of an immediate change required to restore service, the support teams will attempt to follow the Fast Track change request process for both organizations.

16.

IT (Hyperion Access)

In Scope Services:


			Notice
Type of			Required to
Service	Description of Specific Services	Term	Terminate
System Access	~ 5 Cadbury Hyperion users will require access to the DPS Hyperion through December 31, 2008.	8 months	30 days
	Users shall be authorized to:
	• access the system to assist with consolidation activities
	• review DPSG financial data
	• save and print reports

	DPS IT will ensure all security profiles are generated and implemented.


17.		IT (Ongoing Separation Activities)

In Scope Services:


			Notice
Type of			Required to
Service	Description of Specific Services	Term	Terminate
Technical Services	As of the Distribution Date, there will be a number of activities still under way to fully split the DPS and Cadbury systems. All costs for these activities are borne in the Separation budget and any DPS costs are part of the final settlement of outstanding intercompany balances that will be settled prior to the Distribution Date. Therefore, no costs will be billed to either party for this Service.	3 months (Or final technical separation)	None

	However, there are a number of technical considerations, and this Service is intended to ensure that the following activities are understood by both DPS and CS to be ongoing and to commit that both IT organizations are committed to completion per the planned timeline.


			Notice
Type of			Required to
Service	Description of Specific Services	Term	Terminate
	Ongoing activities include:
	• Separation of the Spend Management System (SMS) for DPS
	• Completion of implementation of MSSI Copy — IXOS functionality
	• Completion of AD Migration activities for Finance Users & Applications
	• Standup of the DMZ, Separation of the Data Center, Breaking of the Network (addressed fully in a separate Service)
	• Deletion of data in separated systems (GDS, Trouble Ticketing Systems)

	• Streamserve Form Testing
	• Lotus Notes DBs — SARD, RAM

SCHEDULE C

Services Provided by Cadbury to DPS


Type of Service	Full Term Cost
1. Corporate Group Finance	$	36,000
2. Corporate Group HR Benefits	$	55,000
3. Corporate Group Intellectual Property (Americas)	$	2,250
4. Corporate Group Legal Americas	$	9,000
5. Corporate Audit	$	0
6. Tax	$	304,000
7. Treasury	$	126,000
8. North American HR	$	0
9. NoLA Office and Administrative Services	$	3,500
10. Canadian Services	$	0
11. IT Management Advisory Services	$	0
12. IT (Management Advisory Services)	$	0
13. IT (Active Directory Trust)	$	14,000
14. IT (Hyperion Access)	$	0
15. IT (Ongoing Separation Activities)	$	0
16. IT (Network Ops Support)	$	0
Total to be Charged to DPS	$	556,150

Services Provided by DPS to Cadbury


Type of Service	Full Term Cost
1. Customer Solutions — Facilities Services & Support/Fleet	$	138,890
2. Customer Solutions — HR Services	$	28,333
Payroll & Workman’s Comp Services	$	11,400
Medical Claim Payments	$	0
3. HR Benefits	$	208,928
4. Compensation CoE	$	39,407
5. Finance	$	33,750
6. Risk Management	$	25,200
7. Tax	$	0
8. Canadian Services	$	0
9. IT	$	50,870
10. IT (Telephony — Mobile Services Contracts)
Telephony (T-Mobile)	$	141,250
Telephony (AT&T Mobile)	$	218,750
Telephony (Sprint Long Distance)	$	150,000
Telephony (Sprint/Nextel Mobile)	$	28,000
Telephony (Symphony Ongoing)	$	36,000
Telelphony (Verizon Long Distance)	$	42,000
Telephony (Post Symphony Service Desk & I Billing)	$	0
11. IT (Network Services)	$	99,000
12. IT (Advisory Services)	$	0
13 . IT (Network Ops Support)	$	0
14. IT (Rogers Facility)	$	0
15. IT (CCB Governance)	$	0
16. IT (Hyperion Access)	$	0
17. IT (Ongoing Separation Activities)	$	0
Total to be Charged to Cadbury	$	1,251,778

SCHEDULE D

Out-of-Scope Services

1.		Legal advisory services

2.		Insurance services

3.		Execution of treasury services

4.		Any services designated as Out-of-Scope Services on Schedule A or B

5.		Any other services that the parties reasonably agree is not appropriate for one party or its Affiliates to provide to the other party or its Affiliates because the parties are not Affiliates of one another

Exhibit 10.2

EXECUTION VERSION

TAX SHARING AND INDEMNIFICATION AGREEMENT

This Tax Sharing and Indemnification Agreement (this “Agreement”), dated as of May 1, 2008, among Cadbury Schweppes plc (“CS”), a United Kingdom public limited company, on behalf of itself and the members of the Cadbury Group, as defined below (other than Cadbury plc (“Cadbury”), a United Kingdom public limited company), and Dr Pepper Snapple Group, Inc. (“DPS”), a Delaware corporation, on behalf of itself and the members of the DPS Group, as defined below, and, solely for purposes of Section 20, Cadbury.

WITNESSETH:

WHEREAS, CS and DPS have entered into a Separation and Distribution Agreement, dated as of May 1, 2008 (the “Separation Agreement”), relating to the demerger by Cadbury of Cadbury Schweppes Americas, Inc., a Delaware corporation, that along with its subsidiaries and various affiliated companies operates the Cadbury beverages business in North America (“CSAI”), and certain related transactions (collectively, the “Demerger”);

WHEREAS, pursuant to the Demerger, (i) CS, will become a wholly-owned subsidiary of Cadbury, (ii) the stock of CSAI will be transferred by Cadbury or CS to DPS, and (iii) DPS will issue its common stock to Cadbury shareholders (collectively, the “Principal Separation Transactions”);

WHEREAS, prior to, and in contemplation of, the Demerger, (i) the Cadbury Group will sell, distribute or otherwise transfer certain assets relating to (or comprising part of) the beverages business, including the Beverage Entities, as defined below, to the DPS Group, and (ii) the DPS Group will sell, distribute or otherwise transfer certain assets relating to (or comprising part of) the confectionery business, including the Confectionery Entities, as defined below, to the Cadbury Group;

WHEREAS, for U.S. federal income tax purposes, the substance of the Principal Separation Transactions is intended to be characterized as follows: (a) Cadbury is formed and all of the outstanding ordinary shares of CS are exchanged by the CS shareholders for all of the Cadbury ordinary shares after which CS elects, pursuant to Treasury regulation section 301.7701-3, to be a treated as a disregarded entity in a transaction qualifying as a reorganization under 368(a)(1)(F) of the United States Internal Revenue Code of 1986, as amended (the “Code”); (b) Cadbury distributes the shares of CSAI to Cadbury shareholders in a transaction qualifying under Code section 355; and (c) the CSAI shareholders exchange all of their CSAI shares for DPS shares, immediately after which CSAI is converted to a limited liability company and a disregarded entity, in a transaction qualifying as a reorganization under Code section 368(a)(1)(F);

WHEREAS, CS has received from the United States Internal Revenue Service (“IRS”) a private letter ruling providing that, subject to the representations and information submitted by CS, the Principal Separation Transactions will be treated for U.S. federal income tax purposes in the manner set forth above in the foregoing whereas clause (the “Ruling”), which Ruling was received pursuant to a private letter ruling request submitted by CS (together with all

attachments, exhibits and supplements to the private letter ruling request, in each case, that were submitted by CS to the IRS, the “Ruling Request”);

WHEREAS, in connection with the Demerger, CS and DPS desire to set forth their agreement on the rights and obligations of CS, DPS and the members of the Cadbury Group and the DPS Group, respectively, with respect to certain Tax matters as set forth below;

NOW, THEREFORE, in consideration of the foregoing and the terms, conditions, covenants and provisions of this Agreement, the parties mutually covenant and agree as follows:

1. Definitions .

(a) As used in this Agreement:

“ Active Business ” shall mean an active trade or business relied upon in the Ruling Request and the Ruling for Code section 355 treatment in connection with the Demerger.

“ Affiliate ” shall have the meaning set forth in the Separation Agreement.

“ ATOB DPS Entity ” shall mean Dr Pepper/Seven Up, Inc., a Delaware corporation and the member of the DPS Group conducting an Active Business.

“ Beverage Assets ” shall mean those assets, as set forth on Schedule A, relating to (or comprising part of) the beverages business that are sold, distributed or otherwise transferred by the Cadbury Group to the DPS Group prior to, and in contemplation of, the Demerger, including any equity interests in the Beverage Entities.

“ Beverage Entities ” shall mean those entities, as set forth on Schedule B, relating to (or comprising part of) the beverages business the equity of which is sold, distributed or otherwise transferred (in whole or in part) by the Cadbury Group to the DPS Group and that become wholly-owned by the DPS Group prior to, and in contemplation of, the Demerger.

“ C Election ” shall mean a joint election by CS (or one or more of its Subsidiaries) and DPS (or one or more of its subsidiaries) to have the provisions of subsection 85(1) of the Income Tax Act (Canada) (and any equivalent or corresponding provision under applicable Canadian provincial or territorial Tax law) apply with respect to the transfer of assets of Cadbury Beverages Canada Inc., a Canadian corporation (”CBCI”), to Canada Dry Mott’s Inc., a Canadian corporation (“CDMI”).

“ Cadbury Group ” shall mean Cadbury and any Person that is a Subsidiary of Cadbury immediately after the Demerger Date (for the avoidance of doubt, including the Confectionery Entities but excluding the Beverage Entities), and each Person that becomes a Subsidiary of Cadbury after the Demerger Date.

“ Cadbury Group Taxes ” shall mean any Taxes of the Cadbury Group (including Taxes for which any member of the Cadbury Group is primarily liable under applicable Tax law but excluding Taxes for which any such member is secondarily liable under such law) for any Pre-

Demerger Period, Straddle Period or Post-Demerger Period. For the avoidance of doubt, Cadbury Group Taxes shall (a) include any Taxes (i) shown as due on Tax Returns of the Cadbury Group for Pre-Demerger Periods and Straddle Periods (including Taxes imposed in respect of the sale, distribution or other transfer of the Beverage Assets by the Cadbury Group to the DPS Group but excluding Taxes of the Beverage Entities), (ii) imposed in respect of the Beverage Assets while owned by the Cadbury Group prior to the sale, distribution or other transfer of the Beverage Assets to the DPS Group, and (iii) of the Confectionery Entities for all taxable periods; and (b) exclude Taxes (i) of the Beverage Entities for all taxable periods, (ii) of a member of the DPS Group for which a member of the Cadbury Group is responsible for (A) under Treasury Regulation 1.1502-6 (or similar provision of U.S. state or local or non-U.S. Tax law) solely as a result of such Cadbury Group member being or having been included in a Tax Return with any member of the DPS Group or otherwise joining in a fiscal unity or other combined group or (B) as a consequence of the failure of any member of the DPS Group to discharge a liability for Tax for which a member of the DPS Group is primarily liable under applicable Tax law or (C) because such member of the Cadbury Group acted as a representative of a group of companies to the extent that the Cadbury Group Tax liability would have been a liability of a member of the DPS Group if such member of the Cadbury Group did not act as a representative, and (iii) Taxes described in Section 6(b)(iv).

“ CFC Legislation ” means (i) that legislation contained in Chapter IV of Part XVII of the Income and Corporation Taxes Act 1988 of the United Kingdom (or any comparable successor or additional legislation), together with all related statutory instruments, orders, judgments (including of the European Court of Justice or the Courts of England and Wales), enactments, laws, directives and Taxing Authority practice relating to the same, and (ii) any provision of any taxation statute in the Netherlands of similar effect to the United Kingdom Legislation referred to in clause (i) above, together with all Taxing Authority practice relating to the same.

“ CFC Questions ” means any information required by the Cadbury Group in order to comply with any obligations under any CFC Legislation.

“ Confectionery Assets ” shall mean those assets, as set forth on Schedule C, relating to (or comprising part of) the confectionery business that are sold, distributed or otherwise transferred by the DPS Group to the Cadbury Group prior to, and in contemplation of, the Demerger, including any equity interests in the Confectionery Entities.

“ Confectionery Entities ” shall mean those entities, as set forth on Schedule D, relating to (or comprising part of) the confectionery business the equity of which is sold, distributed or otherwise transferred (in whole or in part) by the DPS Group to the Cadbury Group and that become wholly-owned by the Cadbury Group prior to, and in contemplation of, the Demerger.

“ Confectionery Transactions ” shall mean (i) the sales, distributions or other transfers, as set forth on Schedule E, which include sales, distributions or other transfers of the Confectionery Assets or of the Confectionery Entities by a member of the DPS Group to the Cadbury Group prior to, and in contemplation of, the Demerger, (ii) the Cross-Border Financing Transactions, and (iii) the transfer of assets of CBCI to CDMI.

“ Cross-Border Financing Transactions ” shall mean the transactions entered into prior to the Demerger Date, involving an amount loaned or other financing (including a preferred equity investment), directly or indirectly, by a borrower (or issuer of the debt or preferred equity investment) which is a member of the CSAB Group or a Subsidiary of the CSAB Group and the lending party (or the holder of the debt or preferred equity investment) is a Subsidiary of Cadbury other than a member of the CSAB Group or a Subsidiary of the CSAB Group. For the avoidance of doubt, Cross-Border Financing Transactions shall not include any amount loaned or other financing (including a preferred equity investment), directly or indirectly, between the members of the CSAB Group or a U.S. Subsidiary thereof.

“ CSAB Group ” shall mean the affiliated group, within the meaning of Code section 1504(a), the common parent of which was either CSAI or Cadbury Schweppes Holdings (US) (“CSH”) and the common parent of which upon the Demerger will be DPS, treating for such purposes, the stock of CSAI, CSH and DPS as widely held by the public.

“ Damages ” shall mean any damage, liability, loss, cost, charge, assessments, settlements, judgments or expense (including, without limitation, reasonable expenses of investigation and attorneys’ and accountants’ fees and expenses).

“ Demerger Date ” shall mean May 7, 2008, the date on which the Demerger is effected and the stock of DPS is issued by DPS to Cadbury shareholders.

“ DPS Group ” shall mean DPS and any Person that is a Subsidiary of DPS immediately after the Demerger Date (for the avoidance of doubt, including the Beverage Entities and any CSAB Group members but excluding the Confectionery Entities), and each Person that becomes a Subsidiary of DPS after the Demerger Date.

“ DPS Group Taxes ” shall mean any Taxes of the DPS Group (including Taxes for which any member of the DPS Group is primarily liable under applicable Tax law but excluding Taxes for which any such member is secondarily liable under such law) for any Pre-Demerger Period, Straddle Period or Post-Demerger Period. For the avoidance of doubt, DPS Group Taxes shall (a) include any Taxes (i) shown as due on the DPS Transition Returns and Tax Returns of the DPS Group described in Section 3(b)(i) (excluding Income Taxes imposed in respect of the Confectionery Transactions in excess of $22,194,000 and excluding Taxes of the Confectionery Entities), (ii) imposed in respect of the Confectionery Assets while owned by the DPS Group prior to the sale, distribution or other transfer of the Confectionery Assets to the Cadbury Group, and (iii) of the Beverage Entities for all taxable periods; and (b) exclude (i) Income Taxes imposed in respect of the Confectionery Transactions in excess of $22,194,000, (ii) Taxes of the Confectionery Entities for all taxable periods, and (iii) Taxes of a member of the Cadbury Group for which a member of the DPS Group is responsible for (A) under Treasury Regulation 1.1502-6 (or similar provision of U.S. state, local or Non-U.S. Tax law) solely as a result of such DPS Group member being or having been included in a Tax Return with any member of the Cadbury Group or otherwise joining in a fiscal unity or other combined group or (B) as a consequence of the failure of any member of the Cadbury Group to discharge a liability for Tax for which a member of the Cadbury Group is primarily liable under applicable Tax law or (C) because such member of the DPS Group acted as a representative of a group of companies to the extent that

the DPS Group Tax liability would have been a liability of a member of the Cadbury Group if such member of the DPS Group did not act as a representative.

“ DPS Transaction Costs ” shall have the meaning set forth in the Separation Agreement but excluding rating agency costs set forth on Schedule 1.01(o) of the Separation Agreement.

“ Final Determination ” shall mean any final determination of a liability in respect of Taxes that, under applicable Tax law, is no longer subject to further appeal, review or modification through proceedings or otherwise (including the expiration of the statute of limitations or a period for the filing of claims for refunds, amended Tax Returns or appeals from adverse determinations).

“ Income Taxes ” shall mean Taxes based upon, measured by, or calculated with respect to (i) net income or net profits (including any capital gains, minimum taxes and any Taxes on items of Tax preference, but not including sales, use, real or personal property transfer, value added or other similar Taxes), (ii) multiple bases (including corporate franchise, doing business or occupation Taxes imposed by a jurisdiction in lieu of Taxes on net income or net profits) if one or more of the bases upon which such Tax may be imposed on, measured by, or calculated with respect to, is net income or net profits and (iii) withholding Taxes imposed under Code section 1442, 1445 or 1446 (or comparable provisions of non-U.S. Tax law) on any payments or distributions (except for wages or other remuneration for services).

“ Income Tax Return ” shall mean Tax Returns that relate to Income Taxes.

“ Incremental DPS Group Taxes ” shall mean (i) the amount of Income Taxes in respect of the Confectionery Transactions that are imposed on the DPS Group, determined in accordance with the Tax Return preparation provisions set forth in Section 3 and computed as if the relevant taxable year of the DPS Group closed on the Demerger Date, in excess of $22,194,000, plus (ii) the amount of Income Taxes in respect of the Confectionery Transactions in excess of the sum of (A) the amount computed pursuant to clause (i), and (B) $22,194,000, to the extent that, in accordance with Section 3(d)(ii), there is a confirmed material change in applicable Tax law after the Demerger Date but prior to the due date for timely filing of the applicable Tax Return of the DPS Group (including valid extensions obtained), and, as a result, the Income Tax reporting position for such Confectionery Transaction that was based on the opinions (or substantially equivalent written advice) described in Section 3(d)(ii) is no longer applicable or otherwise not followed or adopted, plus (iii) without duplication in respect of clauses (i) and (ii), the amount of Income Taxes, as determined pursuant to a Final Determination, in respect of the Confectionery Transactions imposed on the DPS Group (or any member thereof) in excess of the sum of (A) the amount of Income Taxes for such Confectionery Transactions that were computed pursuant to clauses (i) and (ii), and (B) $22,194,000.

“ Person ” shall mean any natural person, corporation, limited liability company, trust, estate, joint venture, association, company, partnership, governmental authority or other entity.

“ Post-Demerger Period ” shall mean any taxable period beginning after the Demerger Date.

“ Pre-Demerger Period ” shall mean any taxable period ending on or before the Demerger Date.

“ Specified Entity ” shall mean each of the entities as set forth on Schedule F.

“ Straddle Period ” shall mean any taxable period that begins on or before and ends after the Demerger Date. For avoidance of doubt, the term Straddle Period shall include the Tax year of the affiliated group within the meaning of Code section 1504(a) that includes CSAI and the ATOB DPS Entity as members that begins in January 2008 and ends in December 2008 or otherwise after the Demerger Date.

“ Subsidiary ” shall have the meaning set forth in the Separation Agreement.

“ Tax ” or “ Taxes ” shall mean any and all federal, state, local, foreign duties or other taxes imposed by a Taxing Authority in the United States, United Kingdom, Canada, the Netherlands or Mexico or any other jurisdiction, including any net income, gross income, gross receipts, alternative or add-on minimum, sales, use, business and occupation, value-added, trade, goods and services, ad valorem, franchise, profits, license, business royalty, withholding, payroll, employment, capital, excise, transfer, recording, severance, stamp, occupation, premium, property, asset, real estate acquisition, environmental or other tax or duty, together with any interest, penalty, addition to tax or other additional amount imposed by a Taxing Authority.

“ Taxing Authority ” shall mean any governmental authority (domestic or foreign), including, without limitation, any state, municipality, political subdivision or governmental agency, responsible for the imposition of any Tax.

“ Tax Benefit Attribute ” shall mean any net operating loss (including carrybacks and carryforwards), credit, refund, deduction, depreciation, amortization, allowance or other item that can be used to reduce or offset a Tax liability.

“ Tax Proceeding ” shall mean any Tax audit, examination, dispute or proceeding (whether administrative, judicial or contractual).

“ Tax Return ” shall mean any Tax return, statement, report, form, election, claim or surrender (including estimated Tax returns and reports, extension requests and forms, and information returns and reports) required to be filed with any Taxing Authority.

“ Transition Services Agreement ” shall mean the agreement entered into by Cadbury and DPS, dated as of May 1, 2008, in respect of certain services (including Tax, accounting and legal services) to be provided by the Cadbury Group to the DPS Group for an interim period beginning after the Demerger Date.

“ Underpayment Rate ” shall mean the underpayment rate as set forth in Code section 6621.

(b) Any term used in this Agreement which is not defined in this Agreement shall, to the extent the context requires, have the meaning assigned to it in the Code or the applicable

Treasury regulations thereunder (as interpreted in administrative pronouncements and judicial decisions), in comparable provisions of applicable Tax law or in the Ruling or Separation Agreement. In this Agreement, except to the extent otherwise provided or that the context otherwise requires: (i) when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated; (ii) the table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement; (iii) whenever the words “include,” “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”; (iv) the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement; and (v) the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms.

2. Sole Tax Sharing Agreement . Any and all existing Tax sharing agreements or arrangements, written or unwritten, between any member of the Cadbury Group and any member of the DPS Group shall be or shall have been terminated upon the consummation of the Demerger. Upon the consummation of the Demerger, neither the members of the DPS Group nor the members of the Cadbury Group shall have any further rights or liabilities with respect to such Tax agreements or arrangements, and this Agreement shall be the sole Tax sharing agreement and arrangement between the members of the DPS Group and the members of the Cadbury Group. CS and DPS shall act in good faith in the performance of this Agreement.

3. Tax Return Filing .

(a) (i) For Pre-Demerger Periods, to the extent the Income Tax Returns have not been filed on or before the Demerger Date, and, to the extent provided in this Section 3(a)(i), for Straddle Periods, CS shall prepare or cause to be prepared and shall deliver to DPS for timely filing and DPS shall timely file (or review if a member of the Cadbury Group is permitted under applicable Tax law to file the relevant Income Tax Return) the following Income Tax Returns for the DPS Group and its members: (A) U.S. federal, state and local Income Tax Returns (separate and consolidated, combined, unitary or other group Income Tax Returns) other than for Straddle Periods, and (B) all other non-U.S. Income Tax Returns for the DPS Group (including the Netherlands) except for Income Tax Returns of any subsidiary organized in Mexico of Bebidas Americas Investments B.V., a Dutch entity (“BAI BV”) and Canadian federal and provincial Income Tax Returns for CDMI (collectively, those Income Tax Returns prepared by CS are referred to as “DPS Transition Returns”). For the avoidance of doubt, the preparation of any consolidated, combined, unitary or other group Tax Return of the Cadbury Group that includes or reflects a Beverage Entity as a member shall be governed by Section 3(c). Any and all out-of-pocket expenses incurred in preparing a DPS Transition Return for a Pre-Demerger Period shall be for the account of CS. Any and all out-of-pocket expenses incurred by CS in preparing a DPS Transition Return for a Straddle Period shall be for the account of DPS and DPS shall reimburse CS within 45 days of DPS’ receipt of a written invoice from CS setting forth the amount of such expenses.

(ii) CS shall provide DPS with a copy of any completed DPS Transition Return at least 30 days prior to the due date (including any extensions) for the filing of such DPS Transition Return, in the case of a Pre-Demerger Period, and at least 45 days prior to the due date (including any extensions) for the filing of such DPS Transition Return, in the case of a Straddle Period. DPS shall have the right to review, comment on and propose amending any items set forth on such DPS Transition Return except to the extent relating to a Confectionery Entity or Confectionery Transaction or other transaction or item that is the subject of a previously issued opinion (or substantially equivalent written advice) described in Section 3(d); provided that DPS will notify CS in writing of any proposed changes to such DPS Transition Return at least 20 days prior to the due date of such DPS Transition Return. In the event that, subject to Section 3(d), DPS disputes the treatment by CS on a DPS Transition Return of a Confectionery Entity or Confectionery Transaction that is not the subject of a previously issued opinion (or substantially equivalent written advice) described in Section 3(d) or CS disputes any other proposed change by DPS to any such DPS Transition Return, CS or DPS, as the case may be, will provide the disputing party with an opinion (or substantially equivalent written advice) of a law firm or accounting firm of internationally recognized standing and expert in the Tax matters at issue, reasonably acceptable to the disputing party, supporting the treatment by CS or the proposed change by DPS, as the case may be, on no less than a “more likely than not” basis. The fees and expenses of such law firm or accounting firm, as well as the fees and expenses of the accounting firm for revising the applicable DPS Transition Return(s) to reflect such proposed change, shall be borne by the disputing party. For the avoidance of doubt, no changes to a DPS Transition Return may be made or proposed by DPS with respect to any Confectionery Entity or any Confectionery Transaction so long as DPS has been provided with an opinion (or substantially equivalent written advice) of a law firm or accounting firm pursuant to this Section 3(a) or Section 3(d).

(iii) DPS shall prepare or cause the relevant members of the DPS Group to prepare, in a manner consistent with the past practices of the relevant members of the DPS Group, Tax work paper preparation packages necessary to enable CS to prepare the DPS Transition Returns described in this Section 3(a) and such packages shall be delivered to CS (i) at least 90 days prior to the due date of DPS Transition Returns for Pre-Demerger Periods, (ii) no later than 10 days prior to the due date for estimated and other periodic Income Tax Returns filed during or within 30 days after the Straddle Periods, and (iii) within 90 days of the end of the relevant taxable year of the relevant members of the DPS Group with respect to other DPS Transition Returns for Straddle Periods.

(iv) DPS shall pay, or cause to be paid, and shall be responsible for, any and all Taxes shown as due or otherwise reported on, any DPS Transition Return; provided that CS shall pay, or cause to be paid, and shall be responsible for (A) Incremental DPS Group Taxes, and (B) Taxes imposed on a Confectionery Entity, in each case, shown as due or otherwise reported on any DPS Transition Return; provided further that such Confectionery Entity is not a pass-through or other fiscally transparent entity for Tax purposes.

(b) (i) DPS shall, at its expense, prepare or cause to be prepared and file or cause to be filed all Tax Returns of the DPS Group (or any member thereof) for Pre-Demerger and Straddle Periods that are not filed as of the Demerger Date and that are not described in Section 3(a), including, for the avoidance of doubt, any (A) U.S. federal, state and local Income Tax

Returns (separate and consolidated, combined, unitary or other group Income Tax Returns) for Straddle Periods, (B) Canadian federal and provincial Income Tax Returns for CDMI, and (C) Income Tax Returns of any subsidiary of BAI BV; provided that in the case of Income Tax Returns described in clause (A) of this Section 3(b)(i), DPS shall engage and employ the same accounting firm to prepare such Tax Returns that CS uses for the preparation of the DPS Transition Returns. With respect to a Confectionery Entity or a Confectionery Transaction or other transaction or item that is the subject of a previously issued opinion (or substantially equivalent written advice) described in Section 3(d), or to the extent that the treatment of a Confectionery Entity or a Confectionery Transaction or other transaction or item was determined pursuant to the dispute resolution procedures involving obtaining an opinion (or substantially equivalent written advice) of a law firm or accounting firm of internationally recognized standing and expert in the Tax matters at issue set forth in Section 3(a), the DPS Group shall prepare the Tax Returns described in this Section 3(b) consistently with the conclusions set forth in such opinions (or substantially equivalent written advice).

(ii) DPS shall provide CS with a copy of any completed Tax Return described in this Section 3(b) for CS’ review, comment and approval at least 30 days prior to the due date (including any extensions) for the filing of such Tax Return, in the case of a Pre-Demerger Period, and at least 45 days prior to the due date (including any extensions) for the filing of such Tax Return, in the case of a Straddle Period. DPS shall reflect on such Tax Return any comments provided by CS (including in respect of the treatment of any Confectionery Entity or Confectionery Transaction) within 10 days following CS’ receipt of the Tax Return; provided that, except to the extent relating to a Confectionery Entity or Confectionery Transaction or other transaction or item that is the subject of a previously issued opinion (or substantially equivalent written advice) described in Section 3(a) or Section 3(d), if DPS disputes any comments provided by CS, the dispute resolution procedures involving obtaining an opinion (or substantially equivalent written advice) set forth in Section 3(a) shall apply; provided, further, that, for the avoidance of doubt, DPS shall not make any changes to a Tax Return described in this Section 3(b) with respect to any Confectionery Entity or Confectionery Transaction or other transaction or item so long as DPS has been provided with an opinion (or substantially equivalent written advice) of a law firm or accounting firm pursuant to Section 3(a) or Section 3(d) unless there has been a material change in applicable Tax law as described in Section 3(d).

(iii) DPS shall pay, or cause to be paid, and shall be responsible for, any and all Taxes due or required to be paid with respect to, or required to be reported on, any Tax Returns described in this Section 3(b); provided that CS shall pay, or cause to be paid, and shall be responsible for (A) Incremental DPS Group Taxes, and (B) Taxes imposed on a Confectionery Entity, in each case, shown as due or otherwise reported on any Tax Returns described in this Section 3(b); provided further that such Confectionery Entity is not a pass-through or other fiscally transparent entity for Tax purposes.

(iv) The parties acknowledge and agree that to the extent that the aggregate Income Taxes of the DPS Group in respect of the Confectionery Transactions shown as due on the DPS Transition Returns and the Tax Returns described in this Section 3(b), as prepared in accordance with this Section 3 (including Section 3(d)(ii)) and originally filed, is less than $22 million, DPS shall pay to CS an amount equal to such difference within 5 days of the

latest due date for timely filing of the Tax Returns of the DPS Group described in this Section 3(b)(iv) (including valid extensions obtained).

(c) CS shall prepare or cause to be prepared and file or cause to be filed any Tax Returns for the Cadbury Group that are filed after the Demerger Date, including Tax Returns for the Confectionery Entities other than Tax Returns that include the Confectionery Entities and that are prepared pursuant to Section 3(a) or 3(b). CS shall pay, or cause to be paid, and shall be responsible for, any Taxes shown as due or otherwise reported on, any Tax Returns described in this Section 3(c); provided that DPS shall pay, or cause to be paid, and shall be responsible for, Taxes imposed on a Beverage Entity shown as due or otherwise reported on any Tax Returns described in this Section 3(c); provided further that such Beverage Entity is not a pass-through or other fiscally transparent entity for Tax purposes.

(d) (i) Tax Returns referred to in this Section 3 shall be prepared in a manner consistent with past Tax accounting practices used with respect to prior Tax Returns (taking into account any changes in applicable Tax law), in each case, as reasonably determined by the party preparing the Tax Return. All Tax Returns and Taxes referred to in this Section 3 shall be timely filed with and timely paid to the applicable Taxing Authority, and

(ii) Notwithstanding anything to the contrary set forth in this agreement, the parties acknowledge and agree that, with respect to Confectionery Transactions and other transactions and items supported by the issuance to CS and/or one of its Subsidiaries by a law firm or accounting firm prior to the Demerger Date, of a no less than “more likely than not” opinion (or substantially equivalent written advice) supporting the Tax treatment thereof, the DPS Group will follow, adopt and fully support Income Tax reporting positions that are consistent with the conclusions in those opinions (or substantially equivalent written advice), in each case absent a material change in applicable Tax law after the Demerger Date, which change invalidates one or more of such conclusions and which change is confirmed in writing by independent, nationally recognized Tax counsel selected by CS and reasonably acceptable to DPS. Without limiting the foregoing, each member of the DPS Group will file (and support the filing by the Cadbury Group of) Tax Returns consistently with such positions and opinions (or substantially equivalent written advice), which Tax Returns do not include either (x) a Form 8275 (or the substantial equivalent form for state, local or foreign purposes) with respect to any such Confectionery Transaction or other transaction or item or (y) a Form 8886 (or the substantial equivalent form for state, local or foreign purposes) with respect to any such transaction or item. The DPS Group will promptly notify CS in writing of any legislation or other item that may represent such a material change in applicable Tax law. For the avoidance of doubt, the DPS Group acknowledges and agrees that, absent such a material change in applicable Tax law that is confirmed pursuant to this Section 3(d)(ii), with respect to any Confectionery Transaction or other transaction or item supported by the issuance to CS of a no less than “more likely than not” opinion (or substantially equivalent written advice), the DPS Group shall not procure the services of any law firm or accounting firm to issue an opinion (or substantially equivalent written advice) in respect of such Confectionery Transaction or other transaction or item that is inconsistent with the conclusions set forth in such opinion (or substantially equivalent written advice) or otherwise challenge the treatment of such Confectionery Transaction or other transaction or item.

(e) The filing of any Tax Return not otherwise expressly dealt with in this Section 3 shall be filed by the Person who is responsible for filing such Tax Return under applicable Tax law and the payment of any Taxes shown as due or otherwise required to be reported on such Tax Returns shall be the responsibility of the Person who is primarily liable for such Taxes under applicable Tax law. In the case of a consolidated, combined, unitary or other group Tax Return, the member or other entity whose activity or operations generate the Taxes for which payment is due (computed on a stand alone basis) shall be treated as the Person who is primarily liable for such Taxes under applicable Tax Law for purposes of this Agreement.

4. Carrybacks; Amended Tax Returns; Refunds; Transaction Costs; CDMI.

(a) Notwithstanding anything to the contrary contained in this Agreement, (i) to the extent permitted under applicable Tax law, each member of the DPS Group shall take all actions required to waive any carryback period with respect to any Tax Benefit Attribute that arises or otherwise becomes available after the Demerger, and (ii) no member of the DPS Group shall amend any Income Tax Return for a Pre-Demerger Period or a Straddle Period (including, for the avoidance of doubt, for purposes of carrying back any Tax Benefit Attribute from a Post-Demerger Period to a Pre-Demerger Period or Straddle Period) without the prior written consent of CS (which consent shall not be unreasonably withheld). In the event that (A) CS consents to amending an Income Tax Return of the DPS Group, (B) a member of the DPS Group is not permitted under applicable Tax law to waive a carryback period in respect of a Tax Benefit Attribute and is required to carry back the Tax Benefit Attribute to a Pre-Demerger Period or Straddle Period, or (C) in the case of a Straddle Period, a Tax Benefit Attribute generated during the portion of the Straddle Period beginning after the Demerger Date reduces Taxes that were imposed during the portion of the Straddle Period ending on the Demerger Date (for this purpose, treating the two portions of the Straddle Period as separate taxable years), CS shall be entitled to any refund, credit or similar benefit (including by way of being allowable as an offset and any interest with respect thereto) that results from the actions referred to in clauses (A), (B) or (C) to the extent that any incremental Taxes or other costs are incurred by any member of the Cadbury Group and the excess, if any, shall be the property of the DPS Group; provided, however, that DPS will indemnify the Cadbury Group to the extent that the incremental Taxes or other costs incurred by the Cadbury Group pursuant to the CFC Legislation or otherwise exceeds the amount of the refund, credit or similar benefit.

(b) Except as provided in Section 4(a), any refund of DPS Group Taxes (including by way of being allowable as an offset and any interest with respect thereto) shall be the property of the DPS Group and, if received by a member of the Cadbury Group, such refund shall promptly be paid over to DPS. Any refund of Cadbury Group Taxes and Incremental DPS Group Taxes (including by way of being allowable as an offset and any interest with respect thereto) shall be the property of the Cadbury Group and, if received by a member of the DPS Group, such refund shall promptly be paid over to CS. In the event of a subsequent disallowance by a Tax Authority of any refund that has been paid over to CS or DPS pursuant to this Section 4(b), CS or DPS, as the case may be, shall return such payment together with any applicable interest.

than 45 days following the Demerger Date, CS shall consult with DPS in respect of the Tax treatment by any member of the DPS Group of DPS Transaction Costs to be reflected on the IRS Form 1120 for CSAI and its U.S. Subsidiaries for the taxable year ending on December 31, 2007, and no later than 90 days prior to the timely filing of the IRS Form 1120 for the DPS Group for the taxable year that includes the Demerger Date and each taxable year thereafter, DPS shall consult with CS in respect of the Tax treatment by any member of the DPS Group of DPS Transaction Costs to be reflected in such IRS Form 1120 and subsequent IRS Form 1120s of the DPS Group. In the event that DPS disputes the proposed Tax treatment by CS of DPS Transaction Costs, CS, at the joint expense of DPS and CS, will provide DPS with an opinion (or substantially equivalent written advice) of a law firm or accounting firm of internationally recognized standing and expert in the Tax matters at issue, reasonably acceptable to DPS, supporting the Tax treatment of such DPS Transaction Costs on no less than a should basis. In respect of the taxable year ending on December 31, 2007, and each taxable year thereafter, DPS shall, in accordance with Section 4(c)(ii), make a payment to CS in an amount, if any, equal to 50% of the actual reduction in Taxes of, in the case of the taxable year ending on December 31, 2007, CSAI and its U.S. Subsidiaries and, in the case of the taxable year that includes the Demerger Date and each taxable year thereafter, the DPS Group (or any member thereof), in each case, determined on a with and without basis, for such taxable year resulting from the use of any Tax Benefit Attributes related to one or more DPS Transaction Costs.

(ii) Within 10 days of the timely filing of the IRS Form 1120 for CSAI and its U.S. Subsidiaries for the taxable year that ends on December 31, 2007, and within 10 days of the timely filing of the IRS Form 1120 for the DPS Group (or corresponding successor Tax Return) for the taxable year that includes the Demerger Date and each taxable year thereafter, DPS shall (A) provide CS with an executed officer’s certificate setting forth in reasonable detail the amount of any actual reduction in Taxes described in Section 4(c)(i) for such taxable year, and (B) pay to CS the amount of such reduction in Taxes; provided that the DPS Group shall provide CS, in accordance with Section 8, access to any documents or other information that CS reasonably determines is necessary to confirm the statements set forth in the officer’s certificate and the amount of such payment. Any amount paid by DPS to CS pursuant to this Section 4(c)(ii) shall be adjusted to reflect any Final Determination with respect to the Tax treatment of DPS Transaction Costs and payments between CS and DPS to reflect any such adjustment shall be made as necessary within 10 days of such determination.

(d) (i) If, on or prior to June 30, 2009, CS (or one or more of its Subsidiaries) notifies DPS (or one or more of its Subsidiaries) that a C Election will be made in respect of eligible capital property, DPS agrees to pay CS an amount equal to C$7,000,000 per year (each, an “Initial Tax Benefit Amount”) in respect of the calendar year that includes the Demerger Date and each of the next 9 succeeding calendar years, and an amount equal to C$20,250,000 (the “Final Tax Benefit Amount”) in respect of the 10th succeeding calendar year (such 10th succeeding calendar year, the “Final Year”) following the calendar year that includes the Demerger Date (such calendar years, in the aggregate, the “Applicable Period”) in accordance with the provisions of this Section 4(d). DPS and CS acknowledge and agree that the Initial Tax Benefit Amounts and the Final Tax Benefit Amount are based on a C Election that results in a cumulative eligible capital amount of C$420,000,000; provided that, to the extent that the actual amount of the resulting cumulative eligible capital amount is greater than or less than

C$420,000,000, the Initial Tax Benefit Amounts and the Final Tax Benefit Amount shall be proportionately adjusted (e.g., if the actual amount of the cumulative eligible capital amount is C$210,000,000, the Initial Tax Benefit Amounts and the Final Tax Benefit Amount would each be reduced by 50%); provided further that, to the extent that, pursuant to a Final Determination, the amount of the cumulative eligible capital amount is determined to be greater than or less than C$420,000,000, the Initial Tax Benefit Amounts and the Final Tax Benefit Amount shall be proportionately adjusted in a similar manner. Subject to this Section 4(d), an amount equal to each Initial Tax Benefit Amount, in the case of a calendar year in the Applicable Period (other than the Final Year), and, in the case of the Final Year, the Final Tax Benefit Amount, shall be paid by DPS to CS (or a Subsidiary of CS pursuant to Section 4(e)) within 30 days of the due date for the timely filing of the Canadian federal Income Tax Return for CDMI (or its successors) or, if no longer CDMI, that of the principal Subsidiary of DPS organized or doing business in Canada, for the taxable year that ends on the close of or in such calendar year (the “Canadian Tax Return”) but in no event shall the payment by DPS to CS of each Initial Tax Benefit Amount and, in the case of the Final Year, the Final Tax Benefit Amount, be made later than September 1st of the each succeeding calendar year beginning in 2009.

(ii) Notwithstanding Section 4(d)(i), the full amount of the Initial Tax Benefit Amount in respect of a calendar year in the Applicable Period (other than the Final Year) and, in the case of the Final Year, the Final Tax Benefit Amount shall be paid by DPS only if the gross revenues (computed without taking into account discounts) of CDMI (or its successors) and any other Subsidiaries of DPS organized or doing business in Canada (including their branches) for such calendar year or Final Year, as applicable, determined in accordance with Canadian generally accepted accounting principles (the “Actual Gross Revenues Amount”) equals or exceeds C$200,000,000 (the “Threshold Gross Revenues Amount”); provided that the Actual Gross Revenues Amount for the Final Year shall be increased by an amount equal to the Excess Actual Gross Revenues Amount (as defined below); provided, further, that if CDMI (or its successors) or one or more such Subsidiaries of DPS (including their branches) sells or otherwise transfers a substantial portion of its assets to any Person (other than another Subsidiary of the DPS Group), CS and DPS shall negotiate in good faith to proportionately adjust the Threshold Gross Receipts Amount for the calendar year in which the sale or transfer occurs and subsequent calendar years to reflect such sale or transfer. The “Excess Actual Gross Revenues Amount” shall be an aggregate amount equal to the total amount, if any, by which the Actual Gross Revenues Amount for each calendar year during the Applicable Period (other than the Final Year) exceeds C$200,000,000, less any Actual Gross Revenues Amount in excess of C$200,000,000 for a calendar year that was used in calendar years prior to the Final Year to increase the amount payable to CS pursuant to Section 4(d)(iii) in respect of any carryforwards of Initial Tax Benefit Amounts.

(iii) In respect of each of the 11 calendar years included in the Applicable Period, DPS shall, within 10 days of the timely filing of the Canadian Tax Return for the taxable year that ends on the close of or in each such calendar year but in no event later than August 1st of the next succeeding calendar year, provide CS with an executed officer’s certificate (A) stating the Actual Gross Revenues Amount and (B) setting forth in reasonable detail the determination that the Actual Gross Revenues Amount is either greater than or less than the Threshold Gross Receipts Amount; provided that, DPS shall provide CS, in accordance with

Section 8, access to any documents or other information that CS reasonably determines is necessary to confirm the statements set forth in the officer’s certificate. If the Actual Gross Revenues Amount is less than the Threshold Gross Revenues Amount for a calendar year in the Applicable Period other than the Final Year, (A) the amount of the Initial Tax Benefit Amount payable by DPS for such calendar year shall be proportionately reduced (e.g., if the Actual Gross Revenues Amount for a calendar year is C$100,000,000, the amount of the Initial Tax Benefit Amount currently required to be paid by DPS to CS in respect of such calendar year would be reduced by 50%), and (B) the portion of the Initial Tax Benefit Amount not required to currently be paid shall be carried forwarded and added to the Initial Tax Benefit Amount or the Final Tax Benefit Amount, as applicable, that is due in respect of the next succeeding calendar year in the Applicable Period and shall be payable in accordance with this Section 4(d)(iii). Any remaining amount of an Initial Tax Benefit Amount not paid pursuant to the limitation described in the preceding sentence shall be carried forward and shall be paid in respect of the first succeeding calendar year in the Applicable Period in which the Actual Gross Revenues Amount is more than C$200,000,000 but, except with respect to the Final Year, only to the extent of the excess Initial Tax Benefit Amount for such calendar year determined on a proportionate basis to the Actual Gross Revenues Amount (e.g., if the Actual Gross Revenues Amount is C$400,000,000 for a calendar year and the Initial Tax Benefit Amount (not including carryforwards) is C$7,000,000, then up to C$7,000,000 of carried forward Initial Tax Benefit Amounts shall be due and payable along with the amount of the Initial Tax Benefit Amount for such calendar year). With respect to the Final Year, (A) if the Actual Gross Revenues Amount plus any Excess Actual Gross Revenues Amount exceed the Threshold Gross Revenues Amount, the Final Tax Benefit Amount and any carried forward Initial Tax Benefit Amounts shall be paid in full by DPS to CS, and (B) if the Actual Gross Revenues Amount plus any Excess Actual Gross Revenues Amount is less than the Threshold Gross Revenues Amount the amount of the aggregate of the Final Tax Benefit Amount and any carried forward Initial Tax Benefit Amounts that is required to be paid in full by DPS to CS shall be reduced on a proportionate basis and the amount of the reduction shall be ratably allocated over the next 5 succeeding calendar years and shall be computed on a present value basis using a discount rate equal to the rate on 5-year U.S. Treasury securities (in effect at the time of the computation) plus 4% and the aggregate amount so computed shall be paid by DPS to CS on the payment date for the Final Year (as set forth in Section 4(d)(i)) (e.g., if, in the Final Year, the Actual Gross Revenues Amount plus any Excess Actual Gross Revenues Amount is C$100,000,000 and the total amount of the Final Tax Benefit Amount and the carried forward Initial Tax Benefit Amounts are C$40,000,000, then C$20,000,000 is required to be paid in full and the remaining C$20,000,000 would be ratably allocated over the next five years and subject to the net present value computation described above and such computed amount, together with the C$20,000,000, would be paid by DPS and CS in respect of the Final Year).

(iv) Notwithstanding Sections 4(d)(i), (ii) and (iii), to the extent that (A) a substantial portion of the assets of CDMI (or its successors) or one or more other Subsidiaries of DPS organized or doing business in Canada (including their branches) is sold or otherwise transferred to any Person (other than another Subsidiary of the DPS Group) during the Applicable Period and the proceeds of such sale or transfer (or a portion thereof) are applied to reduce the cumulative eligible capital account that is created by the C Election described in this Section 4(d), an amount equal to the reduction in such capital account multiplied by the

applicable Canadian tax rate in effect for the calendar year in which the sale or transfer occurs shall be paid by DPS to CS within 30 days of the closing of the sale or transfer and the parties shall negotiate in good faith to determine the appropriate reductions in the Initial Tax Benefit Amount for such calendar year and subsequent calendar years and the Final Tax Benefit Amount, or (B) the stock, or substantially all of the assets, of CDMI (or its successors) or one or more other Subsidiaries of DPS organized or doing business in Canada (including their branches) is sold or otherwise transferred to any Person (other than another Subsidiary of the DPS Group) during the Applicable Period, the remaining Initial Tax Benefit Amounts and the Final Tax Benefit Amount shall be computed on a present value basis using a discount rate equal to the rate on 5-year U.S. Treasury securities (in effect at the time of the computation) plus 4% and the aggregate computed amount shall be paid by DPS to CS within 30 days of the closing of the sale or transfer.

(v) CS and DPS acknowledge and agree that on or before each of the 5th and 7th anniversaries of the Demerger Date, CS and DPS shall negotiate in good faith to determine a payment by DPS to CS that terminates any remaining Initial Tax Benefit Amounts and the Final Tax Benefit Amount that would be payable by DPS pursuant to and subject to the limitations of this Section 4(d); provided that, for the avoidance of doubt, if an agreement is not reached by CS and DPS, the provisions of this Section 4(d) shall continue to apply in accordance with their terms.

(vi) DPS acknowledges and agrees that the DPS Group (and any member thereof as required by applicable Tax law) shall make a timely election pursuant to Code section 338(g) in respect of the acquisition of stock of CDMI from the Cadbury Group and shall timely file all corresponding IRS Forms required to be filed with the IRS in connection with the Code section 338(g) election and, except pursuant to a Final Determination, the DPS Group shall not take any action inconsistent with the Code section 338(g) election and the step-up in Tax basis of the assets of CDMI in respect of any Tax Return, audit or other proceeding or otherwise. For the avoidance of doubt, the treatment and reporting of the Code section 338(g) election in respect of CDMI on the IRS Form 1120 for the DPS Group for the taxable year that includes the Demerger Date shall be governed by this Section 4(d)(vi) and Section 3(b)(ii).

(vii) In the event that, pursuant to a Final Determination, it is determined that CDMI was not entitled, pursuant to the Code section 338(g) election described in Section 4(d)(vi) or otherwise, to step-up the Tax basis of its assets to their respective values at the time of their acquisition by CDMI for U.S. federal income tax purposes in connection with the transfer of such assets from CBCI to CDMI and/or the various transactions pursuant to which the stock of CDMI was sold to the DPS Group prior to, and in connection with the Demerger, CS shall (i) repay to DPS the actual amounts of any Initial Tax Benefit Amounts or Final Tax Benefit Amount previously paid to CS pursuant to Section 4(d) and, for the avoidance of doubt, no further Initial Tax Benefit Amounts or Final Tax Benefit Amount shall be required to be paid by DPS to CS pursuant to this Section 4(d), and (ii) indemnify and hold the DPS Group harmless against any interest and penalties charged by the IRS pursuant to the Final Determination that are attributable to incremental U.S. federal income taxes, if any, that the DPS Group is required to pay in respect of previous distributions from CDMI as a result of recomputing the earnings and profits of CDMI for U.S. federal income tax purposes to reflect the disallowance of the step-up

adjustment of the Tax basis of the assets of CDMI; provided that, for the avoidance of doubt, CS, pursuant to and in accordance with the provisions of Section 9(b), shall have full control over any Tax Proceeding relating to or involving the Tax basis step-up or adjustment thereto in respect of the assets of CDMI for U.S. federal income tax purposes.

(e) If requested by CS, DPS agrees to make any payment due under Section 4(c) or 4(d) to a Subsidiary of CS. In the event that a payment from DPS to CS (or one or more of its Subsidiaries) pursuant to Section 4(c) or 4(d) is subject to Tax deductions or withholdings under applicable Tax law or any Taxes are imposed on CS (or one or more of its Subsidiaries) in respect of such payment, DPS shall not be required to increase the payment or otherwise provide a gross-up to CS (or one or more of its Subsidiaries); provided that DPS agrees to cooperate with CS and to use commercially reasonable efforts (to the extent such efforts will not result in materially adverse consequences to the DPS Group (or any member thereof)) to mitigate or avoid any applicable Tax deductions or withholdings or other Taxes imposed.

5. Representations and Covenants of DPS .

(a) DPS, on behalf of the DPS Group, represents that as of the date hereof, and covenants that on the Demerger Date, there is no plan or intention by the DPS Group to:

(i) liquidate DPS or merge or consolidate DPS or the ATOB DPS Entity with any other Person or sell, issue or otherwise dispose of, directly or indirectly, the ATOB DPS Entity or any equity interest, or an instrument convertible into an equity interest, in the ATOB DPS Entity;

(ii) take any action inconsistent with the written statements and representations furnished to the IRS in connection with the Ruling Request or set forth by the IRS in the Ruling;

(iii) repurchase stock of DPS in a manner contrary to the requirements of IRS Revenue Procedure 96-30, as modified by IRS Revenue Procedure 2003-48, or in a manner contrary to the representations set forth by the IRS in the Ruling;

(iv) issue any class of nonvoting stock of DPS; and

(v) fail to preserve and maintain the separate legal existence, entity classification for Tax purposes and ownership structure of the Specified Entities (other than a Specified Entity that is listed as the predecessor of another Specified Entity on Schedule F), in each case, as in effect on the Demerger Date.

(b) DPS covenants to CS that, without either (i) the prior written consent of CS, (ii) a supplemental private letter ruling issued by the IRS with respect to the Ruling Request, based upon a request for supplemental private letter ruling filed with the prior written consent of CS, or (iii) an unqualified written opinion of nationally recognized Tax counsel selected by DPS and acceptable to CS in its sole discretion exercised in good faith (in the case of (iii), such opinion shall be satisfactory to CS in its sole discretion exercised in good faith):

(i) throughout the twelve-month period following the Demerger Date, neither DPS nor the ATOB DPS Entity will liquidate, merge or consolidate with any other Person, DPS will continue to wholly-own the ATOB DPS Entity and no member of the DPS Group will sell, issue or otherwise dispose of, directly or indirectly, any equity interest, or an instrument convertible into an equity interest, in the ATOB DPS Entity;

(ii) following the Demerger, the DPS Group will, for a minimum of twelve months, continue the conduct of Active Business;

(iii) throughout the twelve-month period following the Demerger Date, DPS will not issue any class of nonvoting stock of DPS;

(iv) DPS will not, nor will it permit any member of the DPS Group to, take any action inconsistent with the written statements and representations furnished to the IRS in connection with the Ruling Request or set forth by the IRS in the Ruling;

(v) throughout the two-year period following the Demerger Date, DPS will not repurchase stock of DPS in a manner contrary to the requirements of IRS Revenue Procedure 96-30, as modified by IRS Revenue Procedure 2003-48, or in a manner contrary to the representations set forth in the Ruling;

(vi) on or after the Demerger Date, except as otherwise provided by this Agreement and except for the transactions listed on Schedule G, DPS will not, nor will it permit any member of the DPS Group to (A) make or change any accounting method or amend any Tax Return, or (B) take any Tax position on an Income Tax Return that is outside the ordinary course of business or inconsistent with past practice, in each case, that results in an increased Tax liability or a reduction of Tax Benefit Attributes of the Cadbury Group or any member thereof in respect of any Pre-Demerger Period or Straddle Period including pursuant to the CFC Legislation; and

(vii) DPS will preserve and maintain the separate legal existence, entity classification for Tax purposes and ownership structure of the Specified Entities (other than a Specified Entity that is listed as the predecessor of another Specified Entity on Schedule F), in each case, as in effect on the Demerger Date, until after the calendar year that includes the second anniversary of the Demerger Date.

(c) DPS agrees that, regardless of whether CS consents to, or DPS receives a private letter ruling from the IRS or an opinion of Tax counsel with respect to, any action referred to in Section 5(b), CS is to have no liability for any Taxes or Damages (including pursuant to any indemnification obligations under this Agreement) resulting from any such action and DPS agrees to indemnify and hold harmless the Cadbury Group against any such Taxes or Damages including Damages of the Cadbury Group relating to Taxes of shareholders of Cadbury and/or DPS incurred as a result of such actions. DPS shall also bear all reasonable out-of-pocket costs incurred by CS in connection with obtaining any private letter ruling from the IRS or an opinion of Tax counsel or in connection with CS’ determination of whether or not to grant any written consent required under Section 5(b).

6. Indemnities .

(a) Subject to the provisions of this Section 6, CS and each member of the Cadbury Group will jointly and severally indemnify DPS and the members of the DPS Group against, and hold them harmless from and shall pay any:

(i) Cadbury Group Taxes;

(ii) Incremental DPS Group Taxes (except for any Incremental DPS Group Taxes that are attributable to actions taken by a member of the DPS Group after the Demerger Date other than actions that CS has expressly consented to in writing or actions taken pursuant to a Final Determination or required by this Agreement);

(iii) Taxes of a member of the Cadbury Group for which a member of the DPS Group is responsible for (A) under Treasury Regulation 1.1502-6 (or similar provision of U.S. state or local or non-U.S. Tax law) solely as a result of such member of the DPS Group being or having been included in a Tax Return with any member of the Cadbury Group or otherwise joining in a fiscal unity or other combined group, or (B) as a consequence of the failure of any member of the Cadbury Group to discharge a liability for Tax for which a member of the Cadbury Group is primarily liable under applicable Tax law or (C) because a member of the DPS Group acted as a representative of a group of companies to the extent that the DPS Group Tax liability would have been a liability of a member of the Cadbury Group if the relevant member of the DPS Group did not act as representative;

(iv) Damages resulting from or that are otherwise attributable to a breach by CS or any member of the Cadbury Group of any covenant made by CS in this Agreement; and

(v) Out-of-pocket legal, accounting or similar expenses resulting from the imposition, assessment or assertion of any Taxes or Damages indemnified against and described in (i), (ii), (iii) or (iv), including those incurred in the contest in good faith in appropriate proceedings relating to the imposition, assessment or assertion of any such Taxes or Damages.

(b) Subject to the provisions of this Section 6, DPS and each member of the DPS Group will jointly and severally indemnify CS and the members of the Cadbury Group against, and hold them harmless from and shall pay any:

(i) DPS Group Taxes (other than Incremental DPS Group Taxes);

(ii) Taxes of a member of the DPS Group for which a member of the Cadbury Group is responsible for (A) under Treasury Regulation 1.1502-6 (or similar provision of U.S. state or local or non-U.S. Tax law) solely as a result of such member of the Cadbury Group being or having been included in a Tax Return with any member of the DPS Group or otherwise joining in a fiscal unity or other combined group, or (B) as a consequence of the failure of any member of the DPS Group to discharge a liability for Tax for which a member of the DPS Group is primarily liable under applicable Tax law or (C) because a member of the Cadbury Group acted as a representative of a group of companies to the extent that the Cadbury

Group Tax liability would have been a liability of a member of the DPS Group if the relevant member of the Cadbury Group did not act as a representative;

(iii) Damages resulting from or that are otherwise attributable to a breach by DPS or any member of the DPS Group of any representation set forth in Section 5 or any covenant made by DPS in this Agreement (including Section 5), including Damages of the Cadbury Group relating to Taxes of shareholders of Cadbury and/or DPS incurred as a result of such breach;

(iv) Taxes of or otherwise imposed on CBCI in respect of transactions or operations in the ordinary course of business for taxable periods (or portions thereof) ending on or prior to December 31, 2007; and

(c) (i) For purposes of this Section 6, (A) to the extent that a Confectionery Entity was included in a Tax Return of the DPS Group or a Beverage Entity was included in a Tax Return of the Cadbury Group, as the case may be, the Taxes of the Confectionery Entity or the Beverage Entity shall be computed on a stand-alone basis taking into account as an offset any Taxes (including estimated) paid on account of such Confectionery Entity or Beverage Entity prior to the Demerger Date, and (B) in the case of a Confectionery Entity or Beverage Entity that is a pass-through or other fiscally transparent entity for Tax purposes, the pass-through or other fiscally transparent status of such entity shall be respected so that the Taxes, including Taxes resulting from a Tax adjustment or other change in respect of such entity shall, pursuant to applicable Tax law, be treated as imposed on the members (or other equityholders) of the Confectionery Entity or Beverage Entity and nothing in this Agreement shall be read to require indemnification of such entity on account of such Taxes (including an adjustment to such Taxes) on the grounds that such Taxes (or adjustment) are Taxes of such entity (as opposed to its members).

(ii) As a supplement to, but without duplication of the rights and obligations provided in Section 6(a), if, pursuant to a Final Determination in respect of a Pre-Demerger Period of Cadbury Adams USA LLC, there is an adjustment in respect of Cadbury Adams USA LLC that results in (A) an increase to DPS Group Taxes, computed on a with and without basis in respect of such adjustment, CS shall pay to DPS an amount equal to such increase in DPS Group Taxes, or (B) a decrease to DPS Group Taxes, computed on a with and without basis in respect of such adjustment, DPS shall pay to CS an amount equal to such decrease in DPS Group Taxes. Any payment required to be made pursuant to this Section 6(c)(ii) shall be made within 10 days of the Final Determination in respect of the adjustment.

(iii) Notwithstanding Sections 6(a) and 6(b), except as provided in Section 6(c)(ii), neither the DPS Group nor the Cadbury Group shall be required to indemnify the other party against a loss or reduction of a Tax Benefit Attribute arising as a result of an amended Tax Return, audit, agreed determination or other adjustment, claim or decision in respect of a Pre-

Demerger Period or a Straddle Period. For the avoidance of doubt, the parties acknowledge and agree that the Cadbury Group is not representing or warranting to the amount of any Tax basis in respect of the DPS Group or its members or assets.

(d) Notwithstanding anything to the contrary contained in this Agreement, the DPS Group or the Cadbury Group, as the case may be, shall not be liable for any Taxes or Damages pursuant to this Section 6 if the Damages and Taxes for which indemnification is being claimed pursuant to this Section 6 do not exceed the amount of $350,000 for (i) a single claim, or (ii) related claims involving one or more jurisdictions and arising out of the same or similar facts.

(e) The DPS Group and the Cadbury Group shall discharge their respective obligations under Section 6, by paying the relevant amount no later than 5 days after (i) the due date of the applicable estimated or final Tax Return of the Cadbury Group or the DPS Group for a Pre-Demerger Period or Straddle Period, as the case may be, that reports an amount of Tax that is indemnified against under this Agreement, (ii) an agreement between CS and DPS that a payment is due or (iii) a Final Determination in respect of the relevant Tax matter or a final decision in respect of another amount indemnified against; provided that, in the case of a written Tax assessment or other similar written claim from a Taxing Authority that is required to be paid prior to contesting such Tax assessment or claim, payment under this Section 6(e) shall be due no later than 5 days prior to the due date for payment of such Tax assessment. Any indemnification payment for Taxes pursuant to this Agreement shall be made in the currency of the jurisdiction that imposes the Taxes indemnified against. Any indemnification payment made pursuant to this Section 6 will be treated as a contribution to DPS or CSAI, or as a distribution from DPS or CSAI to CS or Cadbury or other type of payment as is consistent with applicable Tax law, occurring immediately prior to and in connection with the Demerger, and shall be paid free and clear of any Tax deduction or withholding. The parties agree to use commercially reasonable efforts (to the extent such efforts will not result in materially adverse consequences to a party) to mitigate or avoid such Tax deductions or withholdings.

(f) (i) Any indemnification payment made pursuant to this Section 6 or Article VII of the Separation Agreement shall, subject to this Section 6(f), be (A) decreased by the amount of any net Tax benefit (including, to the extent provided in Section 6(f)(ii), an increase to Tax basis) realized by the indemnified party (including the consolidated, combined, unitary or other Tax group of which the indemnified party is a member) arising in connection with the accrual, incurrence or payment of the amount indemnified against, and (B) increased by the amount of any net Tax cost incurred (including a gross-up for any amounts required to be deducted or withheld from the indemnity payment under applicable Tax law) by the indemnified party (including the consolidated, combined, unitary or other Tax group of which the indemnified party is a member) arising in connection with the accrual or receipt of any indemnification payment pursuant to this Section 6 or such Article VII.

(ii) In computing the amount of any net Tax benefit or net Tax cost, the indemnified party shall be deemed to recognize all other items of income, gain, loss, deduction or credit before recognizing any item arising in connection with the accrual, incurrence or payment of any indemnifiable amount or arising in connection with the accrual or receipt of any indemnification payment pursuant to this Section 6 or Article VII of the Separation Agreement.

For these purposes, an indemnified party shall be deemed to have “realized” a net Tax benefit or “incurred” a net Tax cost to the extent that, and at such time as, the amount of Taxes payable by such indemnified party is reduced below or increased above, as the case may be, the amount of Taxes that such indemnified party would be required to pay but for incurrence or payment of the indemnifiable amount or the receipt of the indemnity payment; provided that the parties acknowledge and agree that in the event that the net Tax benefit includes an increase in Tax basis (A) in respect of an asset for which amortization, depreciation or similar deductions are allowable, the parties shall compute such net Tax benefit on a present value basis using a discount rate equal to the rate on 5-year U.S. Treasury securities (in effect at the time the parties are computing the applicable net Tax benefit) plus 4%; provided, however, that if the present value of the net Tax benefit exceeds $20 million then until the net present value of the unrealized net Tax benefit does not exceed $20 million, the indemnified party shall make periodic reimbursements to the indemnifying party in respect of such net Tax benefit to the extent that such net Tax benefit is “realized” by the indemnified party (as determined pursuant to the general principles of this Section 6(f)(ii)), or (B) in respect of an equity interest or other asset for which amortization, depreciation or similar deductions are not allowable, the amount of the indemnification payment shall be subject to adjustment on account of such increase in Tax basis only if a net Tax benefit in respect of such increase to Tax basis is realized prior to or within the 5-year period following the later of the end of the calendar year in which the indemnity payment is made or in which there is a Final Determination with respect to the matter indemnified against in accordance with Section 6(f)(iii). The parties shall make any adjusting payment between each other as is required pursuant this Section 6(f) within 10 days of the date an indemnified party is deemed to have realized a net Tax benefit or incurred a net Tax cost. The amount of any increase or reduction hereunder shall be adjusted to reflect any Final Determination with respect to the indemnified party’s liability for Taxes. Payments between the indemnified party and the indemnifying party to reflect any such adjustment shall be made as necessary within 10 days of such determination. For the avoidance of doubt, in computing the amount of Incremental DPS Group Taxes indemnified against, any Tax Benefit Attribute that becomes available to the DPS Group (or any member thereof) as a result of the additional Income Taxes imposed in respect of a Confectionery Transaction shall be taken into account when realized (as determined pursuant to the principles of this Section 6(f)) and shall reduce the amount of Incremental DPS Group Taxes indemnified against under Section 6(a).

(iii) The parties acknowledge and agree that in the event that, pursuant to this Section 6(f), there is a net Tax benefit that includes an increase in Tax basis in respect of an equity interest or other asset for which amortization, depreciation or similar deductions are not allowable, DPS shall, on an annual basis during the applicable 5-year period set forth in Section 6(f)(ii), provide CS with an executed officer’s certificate, satisfactory to CS in its reasonable discretion, specifying in reasonable detail whether or not the DPS Group realized a net Tax benefit in respect of such increase in Tax basis; provided that if the asset disposition occurs, or the Tax basis benefit is otherwise realized in respect of a taxable period, prior to such 5-year period, DPS shall provide CS with such an executed officer’s certificate within 10 days of the event (including a Final Determination) in respect of which the Tax basis was increased and the net Tax benefit was realized; provided further that the DPS Group shall provide CS, in accordance with Section 8, access to any documents or other information that CS reasonably determines is necessary to confirm the statements set forth in any officer’s certificate provided

pursuant to this Section 6(f)(iii). In the event that the DPS Group realizes a net Tax benefit in respect of such an increase in Tax basis in respect of a taxable period prior to or during the first year of the applicable 5-year period, DPS shall pay to CS an amount equal to 50% of such net Tax benefit and, if such a net Tax benefit is realized during any succeeding year of such 5-year period, the amount that DPS is required to pay CS shall decrease by 5% each year so that the payment would be 30% of the next Tax benefit if realized during the fifth year of the 5-year period. For the avoidance of doubt, the parties acknowledge and agree that in the event that a payment from DPS to CS pursuant to Section 6(f)(ii) or this Section 6(f)(iii) is subject to Tax deductions or withholdings under applicable Tax law or any Taxes are imposed on CS in respect of such payment, DPS shall not be required to increase the payment or otherwise provide a gross-up to CS; provided that DPS agrees to cooperate with CS and to use commercially reasonable efforts (to the extent such efforts will not result in materially adverse consequences to the DPS Group (or any member thereof)) to mitigate or avoid any applicable Tax deductions or withholdings or other Taxes imposed.

(iv) Without duplication, if, as a result of an amended Tax Return, claim for refund, audit, agreed determination or other adjustment, claim or decision, the amounts indemnified against by the Cadbury Group pursuant to Section 6(a) or DPS Group pursuant to Section 6(b), as the case may be, is increased and there is a Tax benefit (including an adjustment to the Tax basis of an asset) that is realized by the other party, such other party shall promptly pay to CS or DPS, as the case may be, the amount of the Tax benefit less any incremental Tax or other cost of such other party, computed in accordance with the provisions of this Section 6(f).

(g) Each member of the DPS Group shall act in a commercially reasonable manner in respect of their Tax matters and shall not proactively disclose to any person any material information regarding the Income Tax reporting positions or Income Tax Returns of any member of the DPS Group in respect of a Pre-Demerger or Straddle Period except (i) to any of its legal, accounting and tax personnel, outside legal and tax advisors, and auditors, but only to the extent necessary for tax and financial reporting purposes, provided that such persons are instructed to keep such information confidential, or to such other persons as is otherwise required to comply with applicable law; or (ii) in response to a request by a Taxing Authority (in connection with an audit or other proceeding), to the extent that the DPS Group determines, in its good faith discretion, which shall be presumed, that such information should be disclosed. If any member of the DPS Group makes any such disclosure to any person (including a Taxing Authority) in circumstances other than permitted above, the Cadbury Group shall not be required to indemnify the DPS Group for any associated Taxes that the Cadbury Group otherwise would be required to indemnify the DPS Group against pursuant to this Section 6.

(h) For purposes of this Agreement (taking into account the responsibility for Taxes under this Agreement), in computing amounts indemnified against and for purposes of preparing DPS Transition Returns and other Tax Returns, if an allocation of Taxes is required for a member of the Cadbury Group or the DPS Group (or a Subsidiary thereof) for a Straddle Period or other taxable period then the amount of such Tax that is allocable to the portion of such taxable period ending on the Demerger Date or other date for which the allocation is relevant shall be: (i) in the case of income Taxes, sales Taxes, employment Taxes and other Taxes that are readily apportionable based on an actual or deemed closing of the books, the portion of any

such Tax equal to the amount that would be payable if the taxable year (including, for the avoidance of doubt, the taxable year of any entity that is a partnership for U.S. federal income tax purposes) ended on the Demerger Date or other relevant date, and (ii) in the case of property and other Taxes that are imposed on a periodic basis, the portion of any such Tax equal to the amount of such Tax for the entire taxable period multiplied by a fraction, the numerator of which is the number of days in the portion of the taxable period ending on the Demerger Date or other relevant date, and the denominator of which is the number of days in the entire taxable period. Any Tax Benefit Attribute for a Straddle Period or other taxable period for which an allocation is required for a member of the Cadbury Group or the DPS Group (or a Subsidiary thereof) shall be allocated in the same manner as provided in this Section 6(h) as the Tax to which the Tax Benefit Attribute relates.

(i) The indemnification obligations contained in this Section 6 or otherwise in this Agreement shall remain in effect until 30 days after the expiration of all applicable statutes of limitation (giving effect to any extension, waiver or mitigation thereof) and, with respect to any claim hereunder initiated prior to the end of such period, until such claim has been satisfied or otherwise resolved.

7. Guarantees. CS shall guarantee or otherwise perform the obligations of each member of the Cadbury Group under this Agreement. DPS shall guarantee or otherwise perform the obligations of each member of the DPS Group under this Agreement.

8. Cooperation.

(a) CS and DPS shall each, at their own expense, cooperate with each other (and shall cause each member of the Cadbury Group and the DPS Group, respectively, to cooperate) and make available to each other, their officers, agents and personnel and such Tax and accounting data and other information as may be reasonably required in connection with (i) the preparation or filing of any Tax Return, election, consent, certification, declaration or authorization of representative, or any claim for refund, including executing such items where required, (ii) any determinations of liability for Taxes, or (iii) any audit or other proceeding in respect of Taxes including cooperating in connection with the exercise of contest rights under Section 9. Without limiting the foregoing, the members of the DPS Group and the Cadbury Group, as the case may be, shall not be entitled to assert privilege or any similar argument against the members of the other group with respect to legal and other professional services or documents (both internal and external), in each case, in respect of Tax matters of the Cadbury Group and the DPS Group for Pre-Demerger Periods or Straddle Periods. At the request of CS and in connection with a Confectionery Transaction, DPS shall make (or cause to be made or permit CS to make) one or more Tax elections, as directed by CS (for the avoidance of doubt, nothing in this sentence shall limit the obligations of the Cadbury Group to indemnify the DPS Group for Confectionery Transactions pursuant to Section 6 of this Agreement). The Cadbury Group and the DPS Group shall retain all Tax Returns, work papers and all Tax and accounting records or other documents in their possession relating to material Tax and accounting matters of the DPS Group for any Pre-Demerger Period or Straddle Period until the later of (i) seven years after the Demerger Date or (ii) one year after the expiration of all applicable statutes of limitations (including extensions thereof). After such time, before the Cadbury Group or the

DPS Group shall dispose of any such documents in their possession, the other party shall be given an opportunity, after 90 days prior written notice, to remove and retain all or any part of such documents as such other party may select (at such other party’s expense). The parties agree to use their best efforts to maintain privilege or other protection in respect of third parties regarding any documents or other information relating to Tax matters provided by the Cadbury Group or the DPS Group, as the case may be, to the other group.

(b) (i) (A) Without limiting Section 8(a), the DPS Group shall provide the Cadbury Group and its officers, agents and personnel with access to and the right to copy such documents, and shall provide such other information, as are reasonably necessary to allow the Cadbury Group to determine and report their Taxes for any Pre-Demerger Period or Straddle Period and to prepare any applicable Tax Return or other required filings of the Cadbury Group. The DPS Group acknowledges and agrees that the rights afforded to the Cadbury Group under this Section 8(b)(i) are, among other things, intended to enable the Cadbury Group to prepare, at its expense, profit and loss statements, balance sheets and other financial statements or accounting information with respect to each member of the DPS Group on a stand-alone or legal entity basis as of or prior to the Demerger Date and, in the case of a jurisdiction in which the Taxable year of a DPS Group member does not end on the Demerger Date, as of the end of the Taxable year in which the Demerger Date occurs.

(B) DPS shall deliver or cause to be delivered to CS, or otherwise make available to CS, information in respect of the accounting systems of the DPS Group for Pre-Demerger Periods and Straddle Periods to enable CS to create the DPS Statements (as defined below) no later than 45 days after the Demerger Date. Based on the information in respect of the accounting systems of the DPS Group for Pre-Demerger Periods and Straddle Periods (the “DPS Information”) that CS is entitled to download or otherwise acquire pursuant to this Section 8, CS will create profits and loss statements and balance sheets for each legal entity of the DPS Group for the period beginning on January 1, 2008 and ending on the Demerger Date in accordance with the accounting policies of the DPS Group as of, and prior to, the Demerger Date (the “DPS Statements”) and shall deliver the DPS Information and DPS Statements to DPS within 90 days of the Demerger Date (or such other time as CS shall determine and notify DPS in writing); provided that DPS, at its expense, shall provide any reasonable cooperation requested by CS in preparing the DPS Statements, including the provision of any other information that CS determines is reasonably necessary to prepare the DPS Statements in accordance with such accounting policies of the DPS Group. Within 45 days of the receipt of the DPS Information and DPS Statements by DPS, DPS shall confirm in writing to CS that (A) the DPS Information downloaded or otherwise acquired by DPS was properly extracted from the DPS accounting systems, is accurate and complete in all material respects and is properly identified on an entity-by-entity basis, and (B) the accounting policies used by CS in preparing the DPS Statements are consistent in all material respects with the accounting policies of the DPS Group as of, and prior to, the Demerger Date; provided that if DPS is unable to provide such written confirmation, (X) DPS shall provide CS, within 45 days of the receipt of the DPS Information and DPS Statements by DPS, with a written statement setting forth in detail the reasons that such confirmation could not be made, (Y) DPS shall, at its expense, cooperate with CS to correct the DPS Information or DPS Statements, including any improper extraction of the DPS Information or any inconsistencies in the accounting policies used by CS to prepare the

DPS Statements, and (Z) within 20 days of the receipt of revised DPS Information and DPS Statements, DPS shall provide the written confirmation contemplated by this Section 8(b)(iii) to CS; provided, further, that the principles of the preceding proviso shall continue to apply until CS receives such written confirmation.

(ii) Without limiting Sections 8(a) and 8(b)(i), the DPS Group shall provide the Cadbury Group and its officers, agents and personnel all such cooperation, access and assistance, as may reasonably be necessary for the Cadbury Group to comply with any CFC Legislation, including causing the DPS Group to, as soon as reasonably practicable, (i) respond to any CFC Questions asked by CS and its officers, agents and personnel, and (ii) provide CS with copies of any accounts or financial statements or other information in respect of the members of the DPS Group that may be reasonably required or reasonably necessary to enable the Cadbury Group to comply with any CFC Legislation in relation to the DPS Group in respect of any Pre-Demerger Period or Straddle Period (including permitting the Cadbury Group to download any information in respect of accounting systems of the DPS Group for Pre-Demerger Periods and Straddle Periods).

(iii) With respect to Controladora de Marcas Internacionales, S.A. de C.V. and Adams Mecca B.V., DPS shall deliver to CS, in the case of a Pre-Demerger Period within 45 days following the Demerger Date and in the case of a Straddle Period within 45 days following the end of such Straddle Period, copies or originals of all Tax and accounting data and other information or documents relating to Tax matters of the applicable company for the applicable taxable period. With respect to the prior ownership of preferred shares of Cadbury Aguas Minerales, S.A. de C.V. (“CAMSA”) by Cadbury Adams Canada, Inc., DPS agrees to provide CS, within 45 days of a request by CS, with any Tax and accounting data and other information or documents relating to Tax matters of CAMSA that may be reasonably required or reasonably necessary to enable the Cadbury Group to satisfy its Tax compliance obligations or in respect of a Tax Proceeding, including, for the avoidance of doubt, any information that is required to be reported (or used to calculate items that are required to be reported) or otherwise disclosed to a Taxing Authority or other governmental entity.

(iv) DPS agrees to provide CS, within 45 days of a request by CS, with any Tax and accounting data and other information or documents relating to Tax matters of CBCI that may be reasonably required or reasonably necessary to enable the Cadbury Group to satisfy its Tax compliance obligations or in respect of a Tax Proceeding, including, for the avoidance of doubt, any information that is required to be reported (or used to calculate items that are required to be reported) or otherwise disclosed to a Taxing Authority or other governmental entity. CS agrees to provide DPS, within 45 days of a request by DPS, with any Tax and accounting data and other information or documents relating to Tax matters of CDMI that may be reasonably required or reasonably necessary to enable the DPS Group to satisfy its Tax compliance obligations or in respect of a Tax Proceeding, including, for the avoidance of doubt, any information that is required to be reported (or used to calculate items that are required to be reported) or otherwise disclosed to a Taxing Authority or other governmental entity.

9. Audits and Contest .

(a) CS or DPS shall notify the other in writing upon the receipt of any notice of a Tax Proceeding that could reasonably result in a right to indemnification of a party under this Agreement together with a description in reasonable detail of the Tax Proceeding and the underlying claim within 30 days of the receipt of such notice or such earlier time that would allow the indemnifying party to timely respond to such notice; provided, that a party’s right to indemnification under this Agreement shall not be limited in any way by a failure to so notify, except to the extent that the indemnifying party is materially prejudiced by such failure.

(b) Notwithstanding anything in this Agreement to the contrary, except as otherwise provided in this Section 9(b), CS shall have full control over any Tax Proceeding in respect of Cadbury Group Taxes and Taxes indemnified against by CS pursuant to this Agreement including any Tax Proceeding involving the DPS Group or any of its members relating to a Confectionery Transaction or a Specified Entity. CS shall have absolute discretion with respect to any decisions to be made (including choice of counsel, venue or judicial forum), or the nature of any action to be taken, with respect to such Tax Proceeding and the contest thereof (including whether to litigate, compromise or otherwise settle the dispute or contest and the amount of any settlement) and DPS shall cooperate with CS in accordance with the provisions of Section 8 and this Section 9; provided that DPS may, at its own expense, participate in any such Tax Proceeding and CS shall consult with and take reasonable direction from DPS in respect of any decisions to be made or actions to be taken in respect of Tax matters of the DPS Group other than with respect to Cadbury Group Taxes, Confectionery Transactions, one or more Specified Entities or other matters relating to Taxes indemnified against by CS pursuant to this Agreement.

(c) With respect to Tax Proceedings not described in Section 9(b) but that could result in a right to indemnification for Taxes or Damages by the DPS Group or the Cadbury Group, as the case may be, under this Agreement, the indemnified party shall control the Tax Proceeding and contest the claim indemnified against in good faith as directed by the indemnifying party; provided further that to the extent relating to the claim indemnified against, (i) the indemnified party shall keep the indemnifying party informed of the status and progress of the Tax Proceeding and shall consult with the indemnified party regarding decisions relating to the Tax Proceeding, and (ii) the indemnified party shall not settle or compromise any such Tax Proceeding without the prior written consent of the indemnified party (such consent not to be unreasonably withheld or delayed).

(d) With respect to any Tax Proceeding involving issues relating solely to a Tax Return or Taxes of one or more members of the DPS Group for which the DPS Group has no right to indemnification under this Agreement or Taxes indemnified against by DPS under Section 6(b)(iv), DPS shall have control over such Tax Proceeding and shall have discretion with respect to any decisions to be made, or the nature of any action to be taken, with respect to such Tax Proceeding; provided that to the extent that the outcome of the Tax Proceeding can affect the Taxes of the Cadbury Group under the CFC Legislation or otherwise, (i) CS shall have the right, at its own expense, to participate and DPS shall keep CS informed of the status and progress of the Tax Proceeding and shall consult with CS regarding decisions relating to the Tax Proceeding,

and (ii) DPS shall not settle or compromise any such Tax Proceeding without the prior written consent of CS (such consent not to be unreasonably withheld or delayed).

(e) The DPS Group acknowledges and agrees that with respect to any Tax Proceeding including or involving the DPS Group that CS controls pursuant to this Section 9, (i) the DPS Group shall cooperate fully with CS, (ii) the DPS Group shall act in good faith and use its best efforts to support the defense of the Tax Proceeding, and (iii) in no event shall the DPS Group interfere with CS’ control of the Tax Proceeding or otherwise fail to support, or take any action that is inconsistent with, the Tax reporting positions for the relevant transaction or item unless otherwise directed by CS in writing.

10. Notices . All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by an internationally recognized overnight courier service, by facsimile or registered or certified mail (postage prepaid, return receipt requested) to the respective parties hereto at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 10):

	(a)		If to CS or Cadbury:

			Cadbury plc 25 Berkeley Square London W1J 6HB Facsimile: 44-20-7830-5015 Attention: Henry Udow, Esq. – Chief Legal Officer Lisa M. Longo – Senior Vice President of Tax

			with a copy to:

			Shearman & Sterling LLP 599 Lexington Avenue New York, NY 10022-6069 Facsimile: (212) 848-7179 Attention: Laurence M. Bambino, Esq. Creighton O’M. Condon, Esq.

			and

			Slaughter and May One Bunhill Row London EC1Y 8YY Facsimile: 44-20-7090-5000 Attention: Tim Boxell

	(b)		If to DPS:

			Dr Pepper Snapple Group, Inc.

			5301 Legacy Drive 3 ^rd Floor Plano, TX 75024 Facsimile: Attention: James L. Baldwin, Jr. – General Counsel Taun Dimatteo – Senior Vice President of Tax

			with a copy to:

			Sullivan & Cromwell LLP 125 Broad Street New York, New York 10004-2498 Facsimile: (212) 558-3588 Attention: Ronald E. Creamer, Jr., Esq.

11. Costs and Expenses . Except as expressly set forth in this Agreement or the Transition Services Agreement, each of the Cadbury Group and the DPS Group shall bear its own costs and expenses (including reasonable attorneys’ fees, accountant fees and other related professional fees and disbursements) incurred in preparing and filing any Tax Return, in complying with the provisions of this Agreement and in connection with any Tax Proceeding.

12. Interest . Any payment required to be made pursuant to this Agreement that is not paid when due shall bear interest at the Underpayment Rate.

13. Effectiveness; Termination; Survival and Change of Control .

(a) This Agreement shall become effective upon the consummation of the Demerger. All rights and obligations arising hereunder shall survive until they are fully effectuated or performed in accordance with the terms thereof. The rights and obligations of the Cadbury Group and the DPS Group under this Agreement shall survive the sale or other transfer by any member of the Cadbury Group or the DPS Group, as the case may be, of any assets or businesses or the assignment by such member of any liabilities.

(b) Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence of (i) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities Exchange Commission thereunder as in effect on the date hereof), of capital stock (whether denominated as common stock or preferred stock) of DPS representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding capital stock of DPS, (ii) the occupation of a majority of the seats (other than vacant seats) on the board of directors of DPS by Persons who were neither (A) nominated by the board of directors of DPS nor (B) appointed by directors so nominated, or (iii) DPS consolidating with, or merging with or into, any Person (other than another member of the DPS Group), or any Person (other than a member of the DPS Group) consolidating with, or merging with or into, DPS, in any such event pursuant to a transaction in which any of the outstanding voting capital stock (whether denominated as common stock or preferred stock) of DPS or such other Person is converted into or exchanged for cash, securities or other property, other than any such transaction where the

shares of the voting capital stock (whether denominated as common stock or preferred stock) of DPS outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the voting capital stock (whether denominated as common stock or preferred stock) of the surviving Person immediately after giving effect to such transaction, the indemnification obligations of the Cadbury Group to indemnify against Incremental DPS Group Taxes, and the right of the DPS Group to be so indemnified, shall terminate without any action of the parties hereto and none of the members of the Cadbury Group shall have any further liabilities or obligations, and none of the members of the DPS Group shall have any further rights, with respect to Incremental DPS Group Taxes. Unless otherwise prohibited by this Agreement, any member of the DPS Group shall be permitted to undertake wholly internal reorganizations, consolidations, or mergers involving DPS and any Person that is a Subsidiary of DPS after the Demerger Date.

14. Entire Agreement; Amendments and Waivers .

(a) This Agreement contains the entire understanding of the parties hereto with respect to the subject matter contained herein.

(b) This Agreement may not be amended or modified except (i) by an instrument in writing signed by, or on behalf of, the parties hereto or (ii) by a waiver in accordance with Section 14(c).

(c) Either party to this Agreement may (i) extend the time for the performance of any of the obligations or other acts of the other party and (ii) waive compliance with any of the agreements of the other party or conditions to such party’s obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of either party hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights

15. Governing law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

16. Dispute Resolution . (a) The procedures for discussion, negotiation and arbitration set forth in this Section 16 shall apply to all disputes, controversies or claims that may arise out of or relate to, or arise under or in connection with, this Agreement between or among any member of the Cadbury Group, on the one hand, and any member of the DPS Group, on the other hand (collectively, “ Agreement Disputes ”).

(b) CS and DPS will use their respective commercially reasonable efforts to resolve expeditiously any Agreement Dispute on a mutually acceptable negotiated basis. In furtherance of the foregoing, any member of the DPS Group or the Cadbury Group involved in an Agreement Dispute may deliver a notice (an “ Escalation Notice ”) demanding an in-person meeting involving the senior tax director of each CS and DPS. A copy of any such Escalation Notice shall be given to the chief legal officer of each of CS and of DPS (which copy shall state that it is an Escalation Notice pursuant to this Section 16(b)). Any agenda, location or

procedures for such discussions or negotiations between CS and DPS may be established by CS and DPS from time to time; provided, however, that the representatives of CS and DPS shall use their reasonable efforts to meet within 30 days of the Escalation Notice.

(c) If the senior tax director of each CS and DPS are not able to resolve the Agreement Dispute within 30 days after the date of the Escalation Notice (or such shorter time as is necessary to avoid immediate irreparable injury), then the Agreement Dispute shall be submitted to the chief financial officer of each of CS and DPS.

(d) If CS and DPS are not able to resolve the Agreement Dispute through the processes set forth in subsections (b) and (c) of this Section 16 within 60 days after the date of the Escalation Notice, such Agreement Dispute shall be determined, at the request of either CS or DPS by arbitration, which shall be conducted (i) by three arbitrators, consisting of one arbitrator appointed by CS, one arbitrator appointed by DPS and a third arbitrator appointed by the two arbitrators appointed by CS and DPS or, if the arbitrators appointed by CS and DPS cannot agree on a third arbitrator, the third arbitrator shall be appointed by the chief financial officer of each CS and DPS, and (ii) in accordance with the Commercial Rules of the American Arbitration Association (except with respect to the selection of arbitrators) in effect at the time of filing of the demand for arbitration.

(e) The decision of the arbitrators shall be final and binding upon the parties hereto, and the expense of the arbitration (including the award of attorneys’ fees to the prevailing party) shall be paid as the arbitrators determine. The decision of the arbitrators shall be executory, and judgment thereon may be entered by any court of competent jurisdiction. The seat of the arbitration shall be New York, New York.

(f) The existence of, and any discussions, negotiations, arbitrations or other proceedings relating to, any Agreement Dispute shall be considered by each party hereto as confidential information until such time as a judgment thereon is entered in a court of competent jurisdiction.

(g) Notwithstanding anything contained in this Agreement to the contrary, no member of the DPS Group and no member of the Cadbury Group shall have the right to institute judicial proceedings against the other party or any Person acting by, through or under such other party, in order to enforce the instituting party’s rights hereunder, except that any such member shall be permitted to seek an injunction in aid of arbitration with respect to an Agreement Dispute to preserve the status quo during the pendency of any arbitration proceeding pursuant to paragraph (d) of this Section 16. All judicial proceedings arising out of or relating to this Agreement shall be heard and determined exclusively in any New York state or federal court sitting in the Borough of Manhattan in The City of New York.

(h) Unless otherwise agreed in writing, the parties will continue to provide service and honor all other commitments under this Agreement during the course of dispute resolution pursuant to the provisions of this Section 16 with respect to all matters not subject to such Agreement Dispute.

17. Counterparts . This Agreement may be executed and delivered (including by facsimile transmission or portable document format (“ .pdf ”)) in counterparts, and by the different Parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.

18. Assignments; Third Party Beneficiaries . This Agreement may not be assigned by a party hereto without the consent of the other party hereto; provided that a merger shall not be deemed to be an assignment under this Agreement; and provided further, that any party may assign this Agreement or any of its rights and obligations hereunder to one or more Affiliates of such party without the consent of the other party provided that no such assignment shall relieve the assignor of any of its obligations hereunder. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto (including the members of the Cadbury Group and the DPS Group as the case may be) and their respective successors and permitted assigns, and nothing herein, express or implied (including the provisions of Section 6 relating to indemnified parties), is intended to or shall confer upon any other Person (including any shareholders of Cadbury and/or DPS) any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. If, during the period beginning on the Demerger Date and ending upon the expiration of the survival period set forth in Section 13, any Person becomes an Affiliate of CS or DPS, such Affiliate shall be bound by the terms of this Agreement and CS or DPS, as the case may be, shall provide evidence to the other party of such Affiliate’s agreement to be bound by the terms of this Agreement upon the request of such other party.

19. Severability . If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect for so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to either party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated by this Agreement are consummated as originally contemplated to the greatest extent possible.

20. CS Obligations . DPS and Cadbury agree that Cadbury shall not, and shall cause CS not to, take any actions that would materially and adversely impact the ability of CS to fulfill its obligations under this Agreement; provided that Cadbury may at any time following the Demerger Date require CS to assign to Cadbury all of CS’ rights and obligations under this Agreement in substitution for compliance by Cadbury and CS with the aforementioned obligation in this Section 20, and upon such assignment, Cadbury shall assume all of CS’ obligations under this Agreement.

21. Authorization, etc . Each of the parties hereto hereby represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such party, that this Agreement constitutes a legal, valid and binding obligation of each such party, and that the execution, delivery and performance of this Agreement by such party does not contravene or

conflict with any provision or law or of its charter or bylaws or any agreement, instrument or order binding on such party.

* * *

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement on the day and year first written above.

CADBURY SCHWEPPES PLC on its own behalf and on behalf of the members of the Cadbury Group (other than Cadbury)

By: /s/ Henry Udow

Name: Henry Udow

Title: Chief Legal Officer and Group Secretary

DR PEPPER SNAPPLE GROUP, INC. on its own behalf and on behalf of the members of the DPS Group

By: /s/ John O. Stewart

Name: John O. Stewart

Title: Executive Vice President and Chief Financial Officer

CADBURY PLC, solely for purposes of Section 20

By: /s/ Henry Udow

Name: Henry Udow

Title: Chief Legal Officer and Group Secretary

EXECUTION VERSION

Schedule A — Beverage Assets

1.		Dr Pepper, Crush, Canada Dry & Sport Cola trademarks in Europe held by Cadbury Ireland Ltd. Sold to Dr Pepper Seven Up, Inc. on November 2, 2007.

2.		11.2% preferred interest in Cadbury Aguas Minerales, S.A. de C. V. held by Cadbury Mexico Investments B.V. Sold to Bebidas Americas Investments B.V. on November 28, 2007.

3.		Shares of Cadbury Servicios S.A. de C.V. held by Cadbury Schweppes Overseas Ltd. and Soset Companies A, B, D, and G. Shares of Cadbury Servicios S.A. de C.V. held by Cadbury Schweppes Overseas Ltd. and Soset Companies A, B and G sold to Bebidas Americas Investments B.V. on November 28, 2007. Shares of Cadbury Servicios S.A. de C.V. held by Soset Company D sold to Cadbury Aguas Minerales, S.A. de C. V. on November 28, 2007.

4.		99.95% interest in Cadbury Bebidas, S.A. de C. V. held by Controladora de Marcas Internaciolales, S.A. de. C.V. Sold to Bebidas Americas Investments B.V. on November 28, 2007.

5.		3% common shares in Cadbury Aguas Minerales, S.A. de C. V. held by Cadbury Schweppes Overseas Ltd. and Soset A, B, G, and D Companies. Sold to Bebidas Americas Investments B.V. on November 28, 2007.

6.		996 Class I, Series B shares of Cadbury Aguas Minerales, S.A. de C. V. held by Aguas Minerales Holdings, Inc. Sold to Bebidas Americas Investments B.V. on November 28, 2007.

7.		Shares held by Soset Companies A, B, D, and G in the subsidiaries of Cadbury Aguas Minerales, S.A. de C. V., including (i) Cadbury Servicios Comerciales, S.A. de C.V., (ii) Compañía Exportadora de Aguas Minerals S.A de C.V., (iii) Comercializadora de Bebidas, S.A. de C.V., (iv) Embotelladora Balseca, S.A. de C.V., (v) Manantiales Penafiel, S.A. de C.V., (vi) Distribuidora Anahuac, S.A. de C.V. fixed Series A shares and variable Series B shares, (vii) Embotelladora Orange Crush, S.A. and (viii) Distribuidora de Aguas Minerales, S.A. de C.V. Shares held by Soset Companies A, B and G sold to Cadbury Aguas Minerales, S.A. de C. V. on December 18, 2007. Shares held by Soset Company D sold to Cadbury Bebidas, S.A. de C. V. on December 18, 2007.

8.		All the shares in Canada Dry Mott’s Inc. held by Cadbury Schweppes Investments B.V. sold to Aguas Minerales International Investments B.V. on April 28, 2008.

9.		Mexican Beverages Intangible Property held by Controladora de Marcas Internaciolales, S.A. Sold to Bebidas Americas Investments B.V. on April 29, 2008.

10.		All the membership interests in Beverage Investments LLC held by Cadbury Adams USA II LLC transferred to Mott’s General Partnership in redemption of partnership interests held by Mott’s General Partnership on April 29, 2008.

11.		All the stock in Bebidas Americas Investments B.V. held by Cadbury Schweppes Investments B.V. Sold to Cadbury Schweppes Americas Inc. on May 1, 2008.

12.		Stock of Berkeley Square US Inc. held by CS Americas Holdings B.V. contributed to CS Americas Inc. on May 2, 2008.

Schedule B — Beverage Entities

1.		Cadbury Servicios, S.A. de C.V.

2.		Cadbury Bebidas, S.A. de C. V.

3.		Cadbury Aguas Minerales, S.A. de C. V.

4.		Mexican affiliates, including (i) Cadbury Servicios Comerciales, S.A. de C.V., (ii) Compañía Exportadora de Aguas Minerals S.A de C.V., (iii) Comercializadora de Bebidas, S.A. de C.V., (iv) Embotelladora Balseca, S.A. de C.V., (v) Manantiales Penafiel, S.A. de C.V., (vi) Distribuidora Anahuac, S.A. de C.V. fixed Series A shares and variable Series B shares, (vii) Embotelladora Orange Crush, S.A., and (viii) Distribuidora de Aguas Minerales, S.A. de C.V.

5.		Bebidas Americas Investments B.V.

6.		Canada Dry Mott’s Inc.

7.		Aguas Minerales International Investments B.V.

8.		Nuthatch Trading US Inc.

9.		Berkeley Square US Inc.

10.		Beverage Investments LLC.

Schedule C — Confectionery Assets

1.		Nominal shareholding in Cadbury International & Leasing S. de R.L. de C.V. and Cadbury Adams Mexico held by Cadbury Aguas Minerales, S.A. de C. V.

2.		High Ridge Finance Ltd. Stock held by International Investments Management LLC.

3.		Membership interests in Cadbury Schweppes US Finance LLC held by Cadbury Schweppes Finance Inc.

4.		Membership interests in Green & Blacks USA LLC held by Cadbury Beverages Delaware Inc.

5.		Rights in the Rose’s Brands in North America held by Mott’s LLP. See Section 3 of Schedule E.

6.		Gini and Crush brands held by Dr Pepper/Seven Up, Inc.

7.		Squirt and A&W trademarks in Australia held by A&W Concentrate Company.

8.		Hershey license, including Peter Paul and York brands held by Cadbury Beverages Delaware, Inc.

9.		Dr Pepper know-how for the Australian market held by Dr Pepper/Seven Up, Inc.

10.		Cadbury Adams USA II LLC interests held by Mott’s General Partnership.

Schedule D — Confectionery Entities

1.		Cadbury International & Leasing S. de R.L. de C.V. and Cadbury Adams Mexico.

2.		High Ridge Finance Ltd.

3.		Cadbury Schweppes US Finance LLC.

4.		Green & Blacks USA LLC.

5.		Cadbury Adams USA II LLC.

6.		Cadbury Adams USA LLC.

Schedule E — Confectionery Transactions

1.		Sale of membership interests in Cadbury Schweppes US Finance LLC on July 10, 2007, by Cadbury Schweppes Finance Inc. to CS Confectionery Inc.

2.		Sale of the rights to Rose’s brands in North America by Mott’s LLP to Cadbury Ireland Ltd on November 2, 2007.

3.		Sale of Gini and Crush brands by Dr Pepper/Seven Up, Inc. and sale of Squirt and A&W trademarks in Australia by A&W Concentrate Company on November 2, 2007, to Cadbury Enterprises PTE Limited.

4.		Acquisition by Controladora de Marcas Internaciolales, S.A. de. C.V. from Cadbury Aguas Minerales, S.A. de C. V. one share of its Cadbury International & Leasing S. de R.L. de C.V. stock and Cadbury Adams Mexico stock on November 28, 2007.

5.		Redemption of Aguas Minerales Holdings, Inc. custodial ownership interest and cancellation of all the shares held for the benefit of Cadbury Schweppes Overseas Ltd. in Cadbury Aguas Minerales, S.A. de C.V. on December 5, 2007.

6.		Sale of all membership interests in Green & Blacks USA LLC to Cadbury Adams USA LLC on January 1, 2008.

7.		Sale of Hershey license (including Peter Paul and York brands) by Cadbury Beverages Delaware Inc. to Cadbury Ireland Ltd. on April 29, 2008.

8.		Sale of Dr Pepper know-how for the Australian market to Cadbury Enterprises PTE Limited by Dr Pepper/Seven Up, Inc. on April 29, 2008.

9.		Election by Cadbury Adams USA LLC to be treated as a corporation for U.S. federal income tax purposes and corresponding issuance of non-voting stock and preferred stock on or about May 1, 2008.

10.		Transfer by Mott’s General Partnership of its interest in Cadbury Adams USA II LLC to CS Confectionery Inc. on May 1, 2008.

11.		Transactions other than in the ordinary course of business after April 2007 and on or before the Demerger Date between or among two or more of the Specified Entities.

Schedule F — Specified Entities

1.		Americas Beverages Management GP

2.		International Beverage Investments GP

3.		Mott’s General Partnership

4.		High Ridge Investments US Inc. (the successor of High Ridge Investments Ltd.)

5.		International Investments Management LLC

6.		Nuthatch Trading US Inc. (the successor of Nuthatch Trading Ltd.)

7.		Berkeley Square US Inc. (the successor of Berkeley Square Investments Ltd.)

8.		Snapple Beverage Corporation

9.		Nantucket Allserve Inc.

10.		High Ridge Investments Ltd. (the predecessor of High Ridge Investments US Inc.)

11.		Nuthatch Trading Ltd. (the predecessor of Nuthatch Trading US Inc.)

12.		Berkeley Square Investments Ltd. (the predecessor of Berkeley Square US Inc.)

13.		Beverage Investments LLC

Schedule G — Exceptions to Section 5(b)(vi)

1. Upstream merger of Seven-Up/RC Bottling Company with and into Dr Pepper Bottling Company of Texas on May 31, 2008 or as soon as possible after the Demerger Date.

2. Upstream merger of Dr Pepper Bottling of Spokane Inc. with and into Dr Pepper Bottling Company of Texas on May 31, 2008 or as soon as possible after the Demerger Date.

3. Upstream merger of Seven Up Bottling Company of San Francisco with and into Dr Pepper Bottling Company of Texas on May 31, 2008 or as soon as possible after the Demerger Date.

4. Merger of Beverages Management, Inc. with and into The American Bottling Company on May 31, 2008 or as soon as possible after the Demerger Date.

5. Merger of Dr Pepper Bottling Company of Texas with and into The American Bottling Company on May 31, 2008 or as soon as possible after the Demerger Date.

6. Downstream merger of Cadbury Schweppes Bottling Group, Inc. with and into The American Bottling Company on May 31, 2008 or as soon as possible after the Demerger Date.

7. Upstream merger of Southeast-Atlantic Beverage Corporation with and into The American Bottling Company on December 31, 2008 or as soon as possible after the Demerger Date.

Exhibit 10.3

EXECUTION VERSION

EMPLOYEE MATTERS AGREEMENT

among

CADBURY PLC

CADBURY SCHWEPPES, PLC

and

DR PEPPER SNAPPLE GROUP, INC.

Dated as of May 1, 2008

TABLE OF CONTENTS


	PAGE
ARTICLE 1

SCOPE AND DEFINITIONS

Section 1.01 Scope		1
Section 1.02 Definitions		2
Section 1.03 Interpretation		5

ARTICLE 2

ASSIGNMENT OF EMPLOYEES

Section 2.01 Active Employees		6
Section 2.02 Former Employees		6
Section 2.03 Employment Law Obligations		7
Section 2.04 Employee Records		7

ARTICLE 3

EQUITY COMPENSATION PLANS

Section 3.02 Share Option Plans		9
Section 3.03 Long Term Incentive Plan		10
Section 3.04 Bonus Share Retention Plan		10
Section 3.05 International Share Award Plan		11
Section 3.06 Employee Share Option Plans		11
Section 3.07 Responsibility for Tax Withholding, Reporting, and Social Insurance Contributions		12
Section 3.08 No Change of Control		12
Section 3.09 Compliance with Section 409A		12

ARTICLE 4

GENERAL PRINCIPLES FOR ALLOCATION OF LIABILITIES

Section 4.01 General Principle		12
Section 4.02 Establishment of DPSG Plans		14
Section 4.03 Transfer of Assets and Liabilities		14
Section 4.04 Service Credit		14
Section 4.05 Plan Administration		15


	PAGE
ARTICLE 5

U.S. PENSION PLAN SPIN-OFF

Section 5.01 General Principle		16
Section 5.02 Determination and Transfer of Initial Transfer Amount		16
Section 5.03 Determination of the Final Pension Transfer Amount		17
Section 5.04 True-Up Adjustment		18
Section 5.05 Form and Selection of Assets to be Transferred		18

ARTICLE 6

U.S. 401(K) PLAN

Section 6.01 General Principle		18
Section 6.02 Transfer of Accounts		19
Section 6.03 Funding of 2008 Matching Contribution		19

ARTICLE 7

U.S. WELFARE BENEFIT PLANS

Section 7.01 General Principle.		20
Section 7.02 Establishment of DPSG Plans		20
Section 7.03 Insurance Contracts		21
Section 7.04 Third Party Vendors		21

ARTICLE 8

FRINGE BENEFIT AND OTHER U.S. PLANS AND PROGRAMS

ARTICLE 9

WORKERS COMPENSATION AND UNEMPLOYMENT COMPENSATION

ARTICLE 10

COMPENSATION MATTERS AND GENERAL BENEFIT AND EMPLOYEE MATTERS

Section 10.01 Restrictive Covenants in Employment and Other Agreements		22
Section 10.02 Severance		22
Section 10.03 Accrued Vacation Days Off		23
Section 10.04 Leaves of Absence		23
Section 10.05 Cadbury Obligations		23
Section 10.06 Collective Bargaining Agreements		23


	PAGE
ARTICLE 11

CANADIAN EMPLOYEE MATTERS

ARTICLE 12

GENERAL PROVISIONS

Section 12.01 Preservation of Rights to Amend		24
Section 12.02 Confidentiality		24
Section 12.03 Administrative Complaints/Litigation		24
Section 12.04 Reimbursement and Indemnification		24
Section 12.05 Costs of Compliance with Agreement		25

ARTICLE 13

MISCELLANEOUS

Section 13.01 Notices		25
Section 13.02 Amendments; No Waivers		26
Section 13.03 Successors and Assigns		26
Section 13.04 Governing Law		26
Section 13.05 Counterparts; Effectiveness; Third-Party Beneficiaries		26
Section 13.06 Entire Agreement		27
Section 13.07 Jurisdiction		27
Section 13.08 Waiver of Jury Trial		27
Section 13.09 Severability		27
Section 13.10 Survival		27
Section 13.11 Captions		28
Section 13.12 Specific Performance		28
Section 13.13 Mutual Drafting		28
Section 13.14 Operating Committee		28
Section 13.15 Effect if Distribution Does Not Occur		29
Section 13.16 Corporate Authorization		29

iii

EMPLOYEE MATTERS AGREEMENT

THIS EMPLOYEE MATTERS AGREEMENT dated as of May 1, 2008 among Cadbury Schweppes, plc, a United Kingdom public limited company incorporated in England and Wales with the registered number 0052457 and whose registered office is at 25 Berkley Square, London W1J 6HB (“ Cadbury ”), Dr Pepper Snapple Group, Inc., a Delaware corporation (“ DPSG ”) and, solely for the purposes of Section 10.05, Cadbury plc, a United Kingdom public limited company incorporated in England and Wales with the registered number 0052457 and whose registered office is at 25 Berkley Square, London W1J 6HB (“ Cadbury plc ”). Each of Cadbury and DPSG is sometimes referred to herein as a “ Party ” and together, as the “ Parties ”.

RECITALS

WHEREAS, Cadbury, Cadbury plc and DPSG have entered into a Separation and Distribution Agreement as of the date hereof (the “ Separation Agreement ”) pursuant to which (i) Cadbury will become a wholly-owned subsidiary of Cadbury plc; (ii) Cadbury and/or one or more members of the Cadbury plc Group will, collectively, retain or acquire beneficial ownership of all of the Cadbury plc Assets and Assume all of the Cadbury plc Liabilities and DPSG and/or one or more members of the DPSG Group will, collectively, retain or acquire beneficial ownership of all of the Beverages Assets and Assume all of the Beverages Liabilities (as such terms are defined in the Separation Agreement); and (iii) DPSG will distribute to the holders of Cadbury plc Ordinary Shares on a pro rata basis, without any consideration being paid by such holders, all of the outstanding shares of Common Stock, par value $0.01 per share, of DPSG..

WHEREAS, in connection with the Distribution, Cadbury, Cadbury plc and DPSG desire to enter into this Employee Matters Agreement as a complement to the Separation Agreement.

NOW THEREFORE, in consideration of the mutual covenants contained herein and in the Separation Agreement, Cadbury, Cadbury plc and DPSG hereto agree as follows:

ARTICLE 1

SCOPE AND DEFINITIONS

Section 1.01 Scope . Notwithstanding anything to the contrary contained herein (i) this Agreement shall not apply with respect to any Employee whose primary employer within the Cadbury Group or DPSG Group is or was an entity domiciled in Mexico and (ii) the terms of this Agreement shall apply only to the extent relevant with respect to the appropriate treatment of any Employee whose primary employer within the Cadbury Group or DPSG Group is or was an entity domiciled in a country other than Canada or the U.S. (including Puerto Rico). For the avoidance of doubt, any relevant portions of this Agreement shall apply with respect to the Employees listed on Schedule 1.01(i) hereof (who are Employees who are or have been located

outside the U.S., but are or have been covered under U.S. compensation and benefit plans and arrangements).

Section 1.02 Definitions . Unless otherwise defined herein, each capitalized term shall have the meaning specified for such term in the Separation Agreement. As used in this Agreement:

“ Agreement ” means this Employee Matters Agreement together with those parts of the Separation Agreement referenced herein, all Schedules hereto and all amendments, modifications and changes hereto and thereto.

“ BSRP ” means the Cadbury Schweppes Bonus Share Retention Plan 2004.

“ Business Day ” means any day, other than a Saturday, a Sunday or a day on which banks in New York, New York are authorized or obligated by law to close.

“ Cadbury 401(k) Plan ” means the Cadbury Adams Holdings LLC Employees’ Savings Incentive Plan.

“ Cadbury Business Employee ” means any individual who is, immediately prior to the Distribution, employed by Cadbury or any of its Subsidiaries or Affiliates and is not a DPSG Business Employee.

“ Cadbury Committee ” shall mean the Remuneration Committee of the Board of Directors of Cadbury or another duly authorized committee of the Board.

“ Cadbury Employee Share Schemes ” means the BSRP, the LTIP, the ISAP, the Share Option Plans and the Employees Share Option Plans.

“ Cadbury Initial Price ” shall mean the market value (within the meaning of section 272(3) of the UK Taxation of Chargeable Gains Act 1992) of Cadbury plc Ordinary Shares on the first day of dealings in Cadbury plc Ordinary Shares on the London Stock Exchange following the Scheme becoming effective or such other value of a Cadbury plc Ordinary Share on or about that date as the Cadbury Committee may agree with HMRC for the purposes of determining the number of Cadbury plc Ordinary Shares over which replacement options may be granted as referred to in clause (i) of the definition of Exchange Ratio.

“ Cadbury Final Price ” shall mean the market value (within the meaning of section 272(3) of the UK Taxation of Chargeable Gains Act 1992) of Cadbury Ordinary Shares on the last day of dealings in Cadbury Ordinary Shares immediately prior to the Scheme becoming effective or such other value of a Cadbury Ordinary Share on or about that date as the Cadbury Committee may agree with HMRC for the purposes of determining the number of Cadbury Ordinary Shares over which a replacement option may be granted as referred to in clause (i) of the definition of Exchange Ratio.

“ Cadbury Non-ERISA U.S. Benefit Arrangement ” means any Non-ERISA U.S. Benefit Arrangement sponsored or maintained by Cadbury.

“ Cadbury Ordinary Shares ” means the ordinary shares of 12.5 pence each in the capital of Cadbury.

“ Cadbury Pension Plan ” means the Cadbury Adams Holdings LLC Personal Pension Account Plan, the Cadbury Adams Holdings LLC Supplemental Executive Retirement Plan and the Cadbury Adams Holdings LLC Pension Equalization Plan.

“ Cadbury Pension and Welfare Benefit Plan ” means any Pension Plan or Welfare Plan sponsored or maintained by Cadbury or a Cadbury Subsidiary.

“ Cadbury plc Ordinary Shares ” means the ordinary shares of Cadbury plc.

“ Cadbury Retiree Medical Plan ” means that portion of the Cadbury Health and Welfare Benefits Plan that provides post-employment medical benefits beyond those required to be provided pursuant to COBRA. This includes the Cadbury Schweppes $25,000 Retiree Health Plan and the Cadbury Schweppes Retiree Health Plan.

“ Cadbury Subsidiary ” means any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are expected to be directly or indirectly owned by Cadbury immediately after the Distribution.

“ Circular ” means the circular and explanatory statement dated March 19, 2008 to the holders of Cadbury Ordinary Shares.

“ COBRA ” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as codified at Part 6 of Subtitle B of Title I of ERISA and at IRS Code Section 4980B, as amended.

“ Code ” means the U.S. Internal Revenue Code of 1986, as amended.

“ Distribution ” shall have the meaning set forth in Section 1.01 of the Separation Agreement.

“ Distribution Date ” shall have the meaning set forth in Section 1.01 of the Separation Agreement.

“ DPSG Business Employee ” means any individual who is, immediately prior to the Distribution, employed by DPSG or any of their respective Subsidiaries. A DPSG Business Employee may not be a Cadbury Business Employee.

“ DPSG Legacy Equity Plans ” shall mean one or more plans adopted by DPSG and approved by Cadbury, as sole shareholder of DPSG, under the authority of which the DPSG equity awards described in Article 3 shall be issued.

“ DPSG Non-ERISA U.S. Benefit Arrangement ” means any Non-ERISA U.S. Benefit Arrangement sponsored or maintained by DPSG.

“ DPSG Pension and Welfare Benefit Plan ” means any Pension Plan or Welfare Plan sponsored or maintained by DPSG or a DPSG Subsidiary.

“ DPSG Subsidiary ” means any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are expected to be directly or indirectly owned by DPSG immediately after the Distribution.

“ Employee ” means any Cadbury Business Employee or Former Cadbury Employee or DPSG Business Employee or Former DPSG Employee.

“ Employees Share Option Plans ” means the Cadbury Schweppes plc US Employees Share Option Plan 2005 and the Cadbury Schweppes plc Americas Employees Share Option Plan 2005.

“ ERISA ” means the U.S. Employee Retirement Income Security Act of 1974, as amended.

“ Exchange Ratio ” means:

	(i)		where an option granted under a Cadbury Employee Share Scheme, or a part thereof, which is approved by HMRC, is exchanged for an option over Cadbury plc Ordinary Shares, the ratio agreed by HMRC for determining the number of Cadbury plc Ordinary Shares over which the replacement option is granted; and

	(ii)		where an option or award granted under any other Cadbury Employee Share Scheme, or a part thereof, is exchanged or converted into an option or award over Cadbury plc Ordinary Shares or DPSG Common Stock, such ratio as is determined by the Cadbury Committee which is, in its opinion, consistent with the ratio referred to in clause (i) or the basis for determining the ratio in clause (i).

“ FMLA ” means the U.S. Family Medical Leave Act, as amended.

“ Former DPSG Employees ” has the meaning set forth in Section 2.02(c).

“ Former Cadbury Employees ” has the meaning set forth in Section 2.02(b).

“ HMRC ” means HM Revenue & Customs.

“ IRS ” means the U.S. Internal Revenue Service.

“ ISAP ” means the Cadbury Schweppes International Share Award Plan.

“ LTIP ” means the Cadbury Schweppes Long Term Incentive Plans 1997 and 2004.

“ Non-ERISA U.S. Benefit Arrangement ” means any contract, agreement, policy, practice, program, plan, trust or arrangement, other than a Pension Plan or Welfare Plan, providing for benefits, perquisites or compensation of any nature to any Employee, or to any family member, dependent or beneficiary of any such Employee, including, without limitation, disability, severance, health, dental, life, accidental death and dismemberment, travel and accident, tuition reimbursement, vacation, sick, personal or bereavement days, holidays, retirement, deferred compensation, profit sharing, bonus, stock-based compensation or other forms of incentive compensation.

“ Pension Plan ” means any pension plan as defined in Section 3(2) of ERISA, without regard to Section 4(b)(4) or 4(b)(5) of ERISA.

“ Scheme ” means the proposed scheme of arrangement under Section 425 of the United Kingdom Companies Act 1985 between Cadbury and its shareholders as set forth in the Circular.

“ Share Option Plans ” means the Cadbury Schweppes Share Option Plan 2004 and the Cadbury Schweppes (New Issue) Share Option Plan 2004.

“ Welfare Plan ” means any employee welfare plan as defined in Section 3(1) of ERISA, without regard to Section 4(b)(4) of ERISA.

“ WARN ” means the U.S. Workers Adjustment Retraining and Notification Act, as amended and any applicable state or local law equivalent.

Section 1.03 Interpretation . In this Agreement, unless the context clearly indicates otherwise:

(a) words used in the singular include the plural and words used in the plural include the singular;

(b) references to any Person include such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement, and a reference to such Person’s “Affiliates” shall be deemed to mean such Person’s Affiliates following the Distribution;

(d) accounting terms used herein shall have the meanings historically ascribed to them by Cadbury and its Subsidiaries, including DPSG, in its and their internal accounting and financial policies and procedures in effect prior to the date of this Agreement;

(e) if there is any conflict between the provisions of the Separation Agreement and this Agreement, the provisions of this Agreement shall control with respect to the subject matter hereof; if there is any conflict between the provisions of the body of this Agreement and the Schedules hereto, the provisions of the body of this Agreement shall control unless explicitly stated otherwise in such Schedule;

(f) the titles to Articles and headings of Sections contained in this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of or to affect the meaning or interpretation of this Agreement; and

(g) unless otherwise specified in this Agreement, all references to dollar amounts herein shall be in respect of lawful currency of the United States.

ARTICLE 2

ASSIGNMENT OF EMPLOYEES

Section 2.01 Active Employees .

(a) DPSG Business Employees . Except as otherwise set forth in this Agreement, effective not later than the Distribution Date, the employment of each DPSG Business Employee who is employed by Cadbury or a Cadbury Subsidiary shall be assigned and transferred to DPSG or a DPSG Subsidiary. As of the Distribution Date, DPSG shall and shall cause each DPSG Subsidiary to continue the employment of each DPSG Business Employee who is employed by DPSG or a DPSG Subsidiary.

(b) Cadbury Business Employees . Effective not later than the Distribution Date, the employment of each Cadbury Business Employee who is employed by DPSG or a DPSG Subsidiary shall be assigned and transferred to Cadbury or a Cadbury Subsidiary. As of the Distribution Date, Cadbury shall and shall cause each Cadbury Subsidiary to continue the employment of each Cadbury Business Employee who is employed by Cadbury or a Cadbury Subsidiary.

(c) At-Will Status . Notwithstanding the above or any other provision of this Agreement, nothing in this Agreement shall create any obligation on the part of Cadbury, DPSG or any of their respective Affiliates to continue the employment of any employee for any definite period following the Distribution Date or to change the employment status of any employee from “ at will, ” to the extent such employee is an “ at will ” employee under applicable law.

(d) Severance . The Distribution and the assignment, transfer or continuation of the employment of employees in connection therewith shall not be deemed a severance of employment of any employee for purposes of any plan, policy, practice or arrangement of Cadbury, DPSG or any of their respective Subsidiaries, except as otherwise provided herein.

Section 2.02 Former Employees .

(a) General Principal . Except as otherwise provided in this Agreement, each former employee of Cadbury or any Cadbury Subsidiary or DPSG or any DPSG Subsidiary as of the Distribution Date will be considered a former employee of the business as to which his or her duties were primarily related immediately prior to his or her termination of employment with all of Cadbury, DPSG and their respective Affiliates.

(b) Former Cadbury Employees . For these purposes, former employees of Cadbury and the Cadbury Subsidiaries shall be deemed to include all employees who, as of their last day

of employment with all of Cadbury, DPSG and their respective Affiliates, had employment duties primarily related to the Cadbury Business (collectively, the “ Former Cadbury Employees ”).

(c) Former DPSG Employees . Except with respect to those individuals set forth on Schedule 2.02(c), former employees of DPSG and the DPSG Subsidiaries shall be deemed to include all employees who, as of their last day of employment with all of Cadbury, DPSG and their respective Affiliates, had employment duties primarily related to the DPSG Business (collectively, the “ Former DPSG Employees ”).

Section 2.03 Employment Law Obligations .

(a) WARN Act . Cadbury and the Cadbury Subsidiaries shall be responsible for providing any necessary WARN notice (and meeting any similar state law notice requirements) with respect to any termination of any Cadbury Business Employee. DPSG and the DPSG Subsidiaries shall be responsible for providing any necessary WARN notice (and meeting any similar state law notice requirements) with respect to any termination of any DPSG Business Employee; provided , however , that Cadbury and the Cadbury Subsidiaries shall be responsible for providing any necessary WARN notice (and any similar state law notice requirements) to any DPSG Business Employee or any governmental authority in connection with any transfer of the employment of any DPSG Business Employee from a Cadbury Group entity to a DPSG Group entity in contemplation of the Distribution.

(b) Compliance With Employment Laws . On and after the Distribution Date (i) Cadbury and the Cadbury Subsidiaries shall be responsible for adopting and maintaining any policies or practices, and for all other actions and inactions, necessary to comply with employment-related laws and requirements relating to the employment of the Cadbury Business Employees and the treatment of the Former Cadbury Employees in respect of their former employment with Cadbury and its Affiliates and (ii) DPSG and the DPSG Subsidiaries shall be responsible for adopting and maintaining any policies or practices, and for all other actions and inactions, necessary to comply with employment-related laws and requirements relating to the employment of the DPSG Business Employees and the treatment of the Former DPSG Employees in respect of their former employment with DPSG and their respective Affiliates.

Section 2.04 Employee Records .

(a) Records Relating to Cadbury Business Employees and Former Cadbury Employees . All records and data in any form relating to Cadbury Business Employees and Former Cadbury Employees shall be the property of Cadbury, except that data pertaining to such an employee and relating to any period that such employee was employed by DPSG or a DPSG Subsidiary prior to the Distribution shall be jointly owned by Cadbury and DPSG.

(b) Records Relating to DPSG Business Employees and Former DPSG Employees . All records and data in any form relating to DPSG Business Employees and Former DPSG Employees shall be the property of DPSG, except that data pertaining to such an employee and relating to any period that such employee was employed by Cadbury, DPSG or any of their respective Subsidiaries prior to the Distribution shall be jointly owned by Cadbury and DPSG.

(c) Sharing of Records . The Parties shall use their respective reasonable commercial efforts to provide each other such records and information only as necessary or appropriate to carry out their obligations under applicable law (including, without limitation, any relevant privacy protection laws or regulations in any applicable jurisdictions), this Agreement or the Separation Agreement or the Transition Services Agreement, or for the purposes of administering their respective employee benefit plans and policies. Subject to applicable law, all information and records regarding employment and personnel matters of DPSG Business Employees and Former DPSG Employees shall be accessed, retained, held, used, copied and transmitted after the Distribution Date by DPSG in accordance with all laws and policies relating to the collection, storage, retention, use, transmittal, disclosure and destruction of such records. The Parties shall reimburse each other for any reasonable costs incurred in copying or transmitting any records requested pursuant to this Section 2.04.

(d) Access to Records . To the extent consistent with this Agreement and any applicable privacy protection laws or regulations, access to such records after the Distribution Date will be provided to Cadbury and DPSG in accordance with the Separation Agreement. In addition, notwithstanding anything to the contrary, Cadbury shall retain reasonable access to those records necessary for Cadbury’s continued administration of any plans or programs on behalf of Employees after the Distribution Date, provided that such access shall be limited to individuals who have a job-related need to access such records. Cadbury shall also retain copies of all restrictive covenant agreements with any DPSG Business Employee or Former DPSG Employee in which Cadbury has a valid business interest.

(e) Maintenance of Records . With respect to retaining, destroying, transferring, sharing, copying and permitting access to all such information, Cadbury and DPSG shall each comply with all applicable laws, regulations and internal policies, and each Party shall indemnify and hold harmless the other Party from and against any and all liability, claims, actions, and damages that arise from a failure (by the indemnifying party or its agents) to so comply with all applicable laws, regulations and internal policies applicable to such information.

(f) No Access to Computer Systems or Files . Except as set forth in the Separation Agreement or the Transition Services Agreement, no provision of this Agreement shall give either Party direct access to the computer systems or other files, records or databases of the other Party, unless specifically permitted by the owner of such systems, files, records or databases.

(g) Relation to Separation Agreement . The provisions of this Section 2.04 shall be in addition to, and not in derogation of, the provisions of the Separation Agreement governing Confidential Information and access to and use of employees, information and records, including Sections of the Separation Agreement.

(h) Confidentiality . Except as otherwise set forth in this Agreement, all records and data relating to Employees shall, in each case, be subject to the confidentiality provisions of the Separation Agreement.

(i) Cooperation . DPSG and Cadbury and their respective Affiliates shall use reasonable commercial efforts to cooperate to share, retain and maintain data and records that are necessary or appropriate to further the purposes of this Section 2.04 and for each other to

administer their respective benefit plans to the extent consistent with this Agreement and applicable law. Except as provided under the Transition Services Agreement, neither DPSG nor Cadbury shall charge the other any fee for such cooperation. The parties agree to cooperate as long as is reasonably necessary to further the purposes of this Section 2.04.

ARTICLE 3

EQUITY COMPENSATION PLANS

Section 3.01 General Principles .

(a) For the avoidance of doubt, the provisions of this Article 3 shall not apply unless the Distribution takes place. Cadbury and DPSG shall take any and all action as shall be necessary and appropriate to further the provisions of Article 3.

(b) Each DPSG Business Employee shall be treated for the purposes of the Cadbury Employee Share Schemes as having ceased to be an employee of Cadbury at the Distribution Date.

(c) Where an award granted under the DPSG Legacy Equity Plans replaces an award under the Cadbury Employee Share Schemes in accordance with the provisions of this Article 3, such award shall be on terms which are in all material respects identical to the terms of the award which it replaces having regard to the fact that those terms are the terms which are applicable to a good leaver under the relevant Cadbury Employee Share Scheme but subject to any necessary changes to take into account that (i) the award relates to DPSG Common Stock, (ii) the DPSG Legacy Equity Plan is administered by DPSG and (iii) the award is not subject to any performance conditions.

Section 3.02 Share Option Plans . Each unexercised option of a DPSG Business Employee on the Distribution Date shall be converted in accordance with the rules of the applicable Share Option Plan into an option over Cadbury plc Ordinary Shares. The number of Cadbury plc Ordinary Shares shall be determined based on the Exchange Ratio. The aggregate exercise price of the substitute option shall be the same as the aggregate exercise price of the option that it replaces except (i) that it shall be in US dollars and (ii) for any adjustments that the Cadbury Committee determines to be appropriate if the Exchange Ratio does not result in a whole number of Cadbury plc Ordinary Shares. Such substituted options shall, in the sole discretion of the Cadbury Committee, preserve the aggregate intrinsic value of the original options for which they are substituted and the ratio in the original option of the exercise price to the fair market value of the stock by adjusting the number of shares purchasable and the exercise price, based on the a comparison of the Cadbury Final Price and the Cadbury Initial Price. Such substitute options shall:

(i) if they represent options granted before May 2005, be fully vested and exercisable for a period of 12 months after the Distribution Date; and

(ii) if they represent options granted after April 2005, be fully vested and exercisable for a period of 12 months starting on the third anniversary of the grant date of the options that they represent.

Section 3.03 Long Term Incentive Plan .

(a) Contingent Share Awards . Subject to the Scheme becoming effective, each Contingent Share Award (as defined in the rules of the relevant LTIP) of a DPSG Business Employee shall be converted based on the Exchange Ratio into a Contingent Share Award over Cadbury plc Ordinary Shares in accordance with the rules of the relevant LTIP and those shares shall be released to the DPSG Business Employee in accordance with the rules of the relevant LTIP within sixty (60) days following the Distribution Date.

(b) Basic Awards .

(i) The performance conditions applying to Basic Awards (as defined in the rules of the relevant LTIP) of each DPSG Business Employee participating in the LTIPs shall be measured using the fair value methodology basis described in paragraph 16 of Part I of the Circular to determine the number of Cadbury Ordinary Shares that shall (subject to the following provisions) become payable under those awards at the end of the relevant performance periods.

(ii) The number of Cadbury Ordinary Shares subject to each Basic Award held by each DPSG Business Employee, as determined in accordance with Section 3.03(a), shall then be reduced on a time pro-rated basis having regard to the proportion of the relevant performance period applicable to that Basic Award completed prior to the Distribution Date and converted based on the Exchange Ratio into an award over DPSG Common Stock to be granted by DPSG under the applicable DPSG Legacy Equity Plan. The DPSG Common Stock subject to the replacement award shall be released to the DPSG Business Employee within sixty (60) days following the end of the performance period originally applicable to the relevant Basic Award.

Section 3.04 Bonus Share Retention Plan .

(a) Each Matching Award (as defined in the rules of the BSRP) consists of a service-related element and a performance-related element. The performance conditions applying to the performance-related element of the Matching Award of each DPSG Business Employee shall be measured using the fair value methodology basis described in paragraph 16 of Part I of the Circular to determine the number of Cadbury Ordinary Shares that shall (subject to the following provisions) become due under that performance-related element of those awards at the end of the relevant performance period.

(b) The number of Cadbury Ordinary Shares subject to each Matching Award held by each DPSG Business Employee, (being the aggregate of the Cadbury Ordinary Shares subject to the service-related element and the Cadbury Ordinary Shares subject to the performance-related element as determined in accordance with Section 3.04(a), shall then be reduced on a pro-rated basis having regard to the proportion of the relevant performance period applicable to that Matching Award completed prior to the Distribution Date and converted based on the Exchange Ratio into an award over DPSG Common Stock to be granted by DPSG under the applicable DPSG Legacy Equity Plan. The DPSG Common Stock shall be released to the DPSG Business

Employee within sixty (60) days following the end of the original performance period applicable to the relevant Matching Award.

(c) Each Basic Award held by a DPSG Business Employee shall be converted based on the Exchange Ratio into an award over DPSG Common Stock to be granted by DPSG under the applicable DPSG Legacy Equity Plan. The DPSG Common Stock shall be released to the DPSG Business Employee within sixty (60) days following the end of the original performance period applicable to the Matching Award that is related to that Basic Award.

Section 3.05 International Share Award Plan .

(a) Awards with Performance Conditions . This Section 3.05(a) shall apply to Conditional Awards (as each is defined in the rules of the ISAP) which are subject to performance conditions.

(i) The performance conditions applicable to the Conditional Awards shall be measured using the fair value methodology basis described in paragraph 16 of Part I of the Circular to determine the number of Cadbury Ordinary Shares that shall (subject to the following provisions) become payable under those awards at the end of the relevant performance period.

(ii) The number of Cadbury Ordinary Shares subject to each award held by a DPSG Business Employee, as determined in accordance with Section 3.05(b), shall then be reduced on a pro-rated basis having regard to the proportion of the relevant performance period applicable to that award completed prior to the Distribution Date and converted based on the Exchange Ratio into an award over DPSG Common Stock to be granted by DPSG under the applicable DPSG Legacy Equity Plan. The DPSG Common Stock shall be distributed to the DPSG Business Employee within sixty (60) days following the end of the original performance period applicable to the relevant Conditional Award.

(b) Awards without Performance Conditions . This Section 3.05(b) shall apply to Conditional Awards (as each is defined in the rules of the ISAP) which are not subject to performance conditions. Each award held by a DPSG Business Employee shall be converted based on the Exchange Ratio into an award over DPSG Common Stock to be granted by DPSG under the applicable DPSG Legacy Equity Plan. The DPSG Common Stock shall be released to the DPSG Business Employee within sixty (60) days following the date on which the Conditional Award would otherwise have vested under the ISAP but for the Distribution.

(c) Restricted Awards . All restrictions applicable to the Cadbury Ordinary Shares subject to the Restricted Awards (as defined in the rules of the ISAP) of each DPSG Business Employee shall lapse on the date on which the Scheme is sanctioned by the Court and such shares shall be subject to the terms of the Scheme.

Section 3.06 Employee Share Option Plans . Each unexercised option of a DPSG Business Employee on the Distribution Date shall be converted in accordance with the rules of the applicable Share Option Plan into an option over Cadbury plc Ordinary Shares. The number of Cadbury plc Ordinary Shares shall be determined based on the Exchange Ratio. The

aggregate exercise price of the substitute option shall be the same as the aggregate exercise price of the option that it replaces except (i) that it shall be in US dollars and (ii) for any adjustments that the Cadbury Committee determines to be appropriate if the Exchange Ratio does not result in a whole number of Cadbury plc Ordinary Shares. Such substituted options shall, in the sole discretion of the Cadbury Committee, preserve the aggregate intrinsic value of the original options for which they are substituted and the ratio in the original option of the exercise price to the fair market value of the stock by adjusting the number of shares purchasable and the exercise price, based on a comparison of the Cadbury Final Price and the Cadbury Initial Price. Such substitute options shall be exercisable in accordance with the rules of the relevant Employee Share Option Plan.

Section 3.07 Responsibility for Tax Withholding, Reporting, and Social Insurance Contributions . Cadbury and DPSG agree that, unless prohibited by applicable law, DPSG shall be responsible for all tax withholding and reporting obligations and shall pay the employer’s share of any social insurance tax obligations that arise in connection with the vesting, exercise, transfer or other settlement of the adjusted awards held by DPSG Business Employees. Cadbury and DPSG further agree that, unless prohibited by applicable law, Cadbury shall be responsible for all tax withholding and reporting obligations and shall pay the employer’s share of any social insurance tax obligations that arise in connection with the vesting, exercise, transfer or other settlement of the equity awards held by Cadbury Business Employees, Former Cadbury Business Employees and Former DPSG Business Employees. Cadbury and DPSG agree to enter into any necessary agreements regarding the subject matter of this Section 3.07 to enable them to fulfill their respective obligations hereunder, including but not limited to compliance with all applicable laws and regulations regarding the reporting, withholding or remitting of income and social insurance taxes.

Section 3.08 No Change of Control . For the avoidance of doubt, the Distribution shall not constitute a “change of ownership” or a “change in control” for purposes of Cadbury equity awards which are outstanding as of the Distribution Date.

Section 3.09 Compliance with Section 409A . Notwithstanding any provision in this Agreement, if any provision of this Article 3 contravenes any regulations or guidance promulgated under Code Section 409A or could cause the awards subject to this Article 3 to be subject to additional taxes, accelerated taxation, interest or penalties under Code Section 409A, the parties will make reasonable commercial efforts to agree how to modify this Article 3: (i) to comply with, or avoid being subject to, Code Section 409A, or to avoid the imposition of any taxes, accelerated taxation, interest or penalties under Code Section 409A, and (ii) to maintain, to the maximum extent practicable, the original intent of the applicable provision without contravening the provisions of Code Section 409A.

ARTICLE 4

GENERAL PRINCIPLES FOR ALLOCATION OF LIABILITIES

Section 4.01 General Principle .

(a) Cessation of Participation in Cadbury Pension and Welfare Benefit Plans and Non-ERISA U.S. Benefit Arrangements . Cadbury and DPSG shall take any and all action as shall be necessary or appropriate so that participation in Cadbury Pension and Welfare Benefit Plans and Cadbury Non-ERISA U.S. Benefit Arrangements by all DPSG Business Employees and Former DPSG Employees shall terminate in connection with the Distribution as and when provided under this Agreement (or if not specifically provided under this Agreement, as of the close of business on the Distribution Date) and DPSG and each DPSG Subsidiary shall cease to be a participating employer under the terms of such Cadbury Pension and Welfare Benefit Plans and Cadbury Non-ERISA U.S. Benefit Arrangements as of such time.

Except as otherwise agreed below, DPSG shall have all liabilities and their share of assets relating to employee benefits for DPSG Business Employees and Former DPSG Employees and Cadbury shall have all liabilities and their share of assets relating to employee benefits for Cadbury Business Employees and Former Cadbury Employees.

(b) Assumption of Certain Obligations by DPSG Group . Except as otherwise provided in this Agreement, effective on or before the Distribution Date, DPSG shall assume or continue the sponsorship of, and none of Cadbury or any Cadbury Subsidiary shall have any further liability for or under, the following agreements, obligations and liabilities, and DPSG shall indemnify Cadbury and the Cadbury Subsidiaries, and the officers, directors, and employees of each, and hold them harmless with respect to such agreements, obligations or liabilities:

(i) Agreements entered into between Cadbury, its Subsidiaries or Affiliates and DPSG Business Employees and Former DPSG Employees;

(ii) Agreements entered into between Cadbury, its Subsidiaries or Affiliates and independent contractors providing services primarily to the DPSG Business;

(iii) All collective bargaining agreements, collective agreements, trade union, or works council agreements entered into between Cadbury, its Subsidiaries or Affiliates and any union, works council, or other body representing only DPSG Business Employees and Former DPSG Employees;

(iv) All wages, salary, incentive compensation, commissions and bonuses payable to DPSG Business Employees and Former DPSG Employees on or after the Distribution Date, without regard to when such wages, salary, incentive compensation, commissions and bonuses are or may have been earned;

(v) All moving expenses and obligations related to relocation, repatriation, transfers, or similar items incurred by or owed to DPSG Business Employees and Former DPSG Employees;

(vi) All immigration-related, visa, work application, or similar rights, obligations and liabilities related to DPSG Business Employees; and

(vii) All liabilities and obligations whatsoever of the DPSG Business with respect to claims made by or with respect to DPSG Business Employees and Former

DPSG Employees or any other persons who at any time prior to the Distribution Date had employment duties primarily related to the DPSG Business relating to any employee benefit plan, program or policy not otherwise retained or assumed by Cadbury pursuant to this Agreement, including such liabilities relating to actions or omissions of or by DPSG or any officer, director, employee or agent thereof prior to the Distribution Date.

Section 4.02 Establishment of DPSG Plans . Except as otherwise provided in this Agreement, sponsorship of Cadbury benefit plans that cover solely DPSG Business Employees and Former DPSG Employees shall be transferred to DPSG on or before the Distribution Date. Cadbury benefit plans that cover DPSG Business Employees and Former DPSG Employees and that also cover Cadbury Business Employees and/or Former Cadbury Employees shall be split into two separate plans, one covering DPSG Business Employees and Former DPSG Employees and one covering Cadbury Business Employees and/or Former Cadbury Employees, and sponsorship of the plans covering DPSG Business Employees and Former DPSG Employees shall be transferred to DPSG on or before the Distribution Date.

Section 4.03 Transfer of Assets and Liabilities . To the extent necessary to effectuate the foregoing, on or before the Distribution Date, DPSG and Cadbury shall, in compliance with applicable law, transfer assets (if any) and liabilities of any such benefit plans to each other, including under the following plans:

CBI Holdings Inc. Health & Welfare Benefits Plan
CBI Holdings Inc. Premium Payment Plan
CBI Holdings Inc. Flexible Spending Account Plan
CBI Holdings Inc. Dependent Care Spending Account Plan
CBI Holdings Inc. Severance Pay Plan
Dr Pepper Bottling Company of Texas, ETAL Occupational Injury Benefit Plan
Cadbury Adams Holdings LLC Personal Pension Account Plan
Cadbury Adams Holdings LLC Pension Equalization Plan
Cadbury Adams Holdings LLC Supplemental Savings Plan
Cadbury Adams Holdings LLC Supplemental Executive Retirement Plan
Cadbury Adams Holdings LLC Supplemental Incentive Plan

Section 4.04 Service Credit .

(a) Service for Eligibility and Vesting . Except as otherwise provided in any other provision of this Agreement (i) for purposes of participation, eligibility and vesting under the DPSG Pension and Welfare Benefit Plans, DPSG shall, and shall cause the DPSG Subsidiaries to, give to each DPSG Business Employee and Former DPSG Employee service credit for any employment with Cadbury or any Cadbury Affiliate prior to the Distribution Date to the extent that such service is taken into account pursuant to the terms of the comparable Cadbury plan and (ii) for purposes of participation, eligibility and vesting under the Cadbury Pension and Welfare Benefit Plans, Cadbury shall, and shall cause the Cadbury Subsidiaries to, give to each Cadbury Business Employee and Former Cadbury Employee service credit for any employment with DPSG or any DPSG Affiliate prior to the Distribution Date (to the extent available to employees generally).

(b) Service for Benefit Purposes . Except as otherwise provided in any other provision of this Agreement (i) for purposes of benefit levels and accruals, post-retirement welfare benefit contribution rates and benefit commencement entitlements under the DPSG Pension and Welfare Benefit Plans, DPSG shall, and shall cause the DPSG Subsidiaries to, give to each DPSG Business Employee and Former DPSG Employee service credit for any employment with Cadbury or any Cadbury Affiliate prior to the Distribution Date to the extent that such service is taken into account pursuant to the terms of the comparable Cadbury plan and (ii) for purposes of benefit levels and accruals, post-retirement welfare benefit contribution rates and benefit commencement entitlements under the Cadbury Pension and Welfare Benefit Plans, Cadbury shall, and shall cause the Cadbury Subsidiaries to, give to each Cadbury Business Employee and Former Cadbury Employee service credit for any employment with DPSG or any DPSG Affiliate prior to the Distribution Date (to the extent available to employees generally).

(c) Evidence of Prior Service . Notwithstanding anything to the contrary, but subject to applicable law, upon reasonable request by one Party to the other Party, the first Party will provide to the other copies of any records available to the first Party to document such service, plan participation and membership and cooperate with the first Party to resolve any discrepancies or obtain any missing data for purposes of determining benefit eligibility, participation, vesting and calculation of benefits with respect to such DPSG Business Employees and Former DPSG Employees.

Section 4.05 Plan Administration .

(a) Transition Services . DPSG will administer Cadbury’s benefit programs for a transitional period under the terms of the Transition Services Agreement. The Parties agree to enter into a business associate agreement in connection with such Transition Services Agreement, which shall be set forth substantially in the form of Appendix 1 to this Agreement.

(b) Administration . DPSG shall, and shall cause the DPSG Subsidiaries to, administer its benefit plans in a manner that does not jeopardize the tax favored status of the tax favored benefit plans maintained by Cadbury and the Cadbury Subsidiaries. Cadbury shall, and shall cause the Cadbury Subsidiaries to, administer its benefit plans in a manner that does not jeopardize the tax favored status of the tax favored benefit plans maintained by DPSG and the DPSG Subsidiaries.

(c) Participant Elections and Beneficiary Designations . All participant elections and beneficiary designations made under any Cadbury benefit plan prior to the date as of which assets or liabilities relating to that plan are transferred to DPSG shall continue in effect under any plan maintained by DPSG or any DPSG Subsidiary to which liabilities are transferred pursuant to this Agreement until such time as the participant changes his or her elections or beneficiary designations in accordance with the procedures of the relevant plan, as the case may be.

ARTICLE 5

U.S. PENSION PLAN SPIN-OFF

Section 5.01 General Principle . Effective on or before the Distribution Date, DPSG shall establish and adopt a defined benefit pension benefit plan and trust (the “ DPSG Pension Plan ”) intended to be qualified under IRS Code Section 401(a) and containing provisions that will provide to each DPSG Business Employee and Former DPSG Employee (and each alternate payee or beneficiary of such person) (the “ DPSG Pension Beneficiaries ”) benefits identical to those accrued with respect to such person under the Cadbury Pension Plan as of December 31, 2007 (the “ Pension Measurement Date ”). On or before the Distribution Date, Cadbury shall (i) determine the Initial Transfer Amount (as defined below) and (ii) cause assets equal to the Initial Transfer Amount (adjusted as provided below) to be transferred to the trust under the DPSG Pension Plan in the form described below (the “ Initial Transfer ”). As of the date of such transfer of the Initial Transfer Amount (the “ Initial Transfer Date ”), DPSG shall commence making the required benefit payments under the terms of the DPSG Pension Plan and shall assume all liabilities with respect to the payment of benefits previously accrued by the DPSG Pension Beneficiaries under the Cadbury Pension Plan. A DPSG Business Employee shall not accrue benefits under the Cadbury Pension Plan after the date on which such employee becomes eligible to participate under the DPSG Pension Plan, unless such DPSG Pension Beneficiary shall become employed by Cadbury or a Cadbury Subsidiary after such date. A Cadbury Business Employee shall not accrue benefits under the DPSG Pension Plan, unless such Cadbury Business Employee shall become employed by DPSG or a DPSG Subsidiary. Following the Initial Transfer Date (i) an enrolled actuary appointed by Cadbury (the “ Cadbury Actuary ”) shall determine the Final Pension Transfer Amount (as defined below) and (ii) a True-Up Adjustment shall be made with respect to the Cadbury Pension Plan and the DPSG Pension Plan, as provided below. The Parties shall use reasonable commercial efforts to cause the determination of the Final Pension Transfer Amount and the True-Up Adjustment to be completed as reasonably promptly as practicable, subject to the time frames established under Section 5.03, but in no event later than December 31, 2008. Before or promptly after the date hereof, Cadbury and DPSG shall file requests with the IRS for qualification determination letters under IRS Code Section 401(a) with respect to the Cadbury Pension Plan and the DPSG Pension Plan and shall take any and all reasonable action, including the adoption of any amendments requested by the IRS, as shall be necessary to obtain such determination letters. The transfers hereunder shall occur prior to, but subject to the subsequent receipt of, favorable determination letters issued by the IRS with respect to the Cadbury Pension Plan and DPSG Pension Plan, copies of which shall be shared among Cadbury and DPSG promptly upon issuance.

Section 5.02 Determination and Transfer of Initial Transfer Amount . On or before the Distribution Date, with the assistance of the Cadbury Actuary, Cadbury shall establish and communicate to DPSG the amount equal to 90% of the estimated asset transfer amount calculated as of January 1, 2008 in accordance with IRS Code Section 414(l) but based on January 1, 2007 census data and November 30, 2007 trust assets as attributable to benefits accrued by DPSG Pension Beneficiaries under the Cadbury Pension Plan as of the Pension Measurement Date, adjusted for contributions, distributions, trust gains and losses, payments and other appropriate items occurring between the Pension Measurement Date and the Initial Transfer Date, all as estimated in good faith by Cadbury (the “ Initial Transfer Amount ”).

Following the determination of the Initial Transfer Amount by Cadbury, Cadbury shall cause to be transferred from the trust under the Cadbury Pension Plan to the trust under the DPSG Pension Plan assets having an aggregate Value (as defined below) equal to the Initial Transfer Amount. Such assets shall be in the form of cash, securities and other property, determined in accordance with the provisions below.

Section 5.03 Determination of the Final Pension Transfer Amount .

(a) Calculation of the Cadbury Actuary . Following the Distribution Date, the Cadbury Actuary shall determine the Final Pension Transfer Amount, which shall be equal to the amount required to be transferred from the Cadbury Pension Plan to the DPSG Pension Plan in respect of the assumption by the DPSG Pension Plan of the benefit obligations of the Cadbury Pension Plan of benefits accrued by the DPSG Pension Beneficiaries as of the Pension Measurement Date, as determined in accordance with IRS Code Section 414(l) and the regulations thereunder and the actuarial assumptions and methods set forth in Schedule 6.03 hereof, as appropriately adjusted to reflect the following amounts arising after the Pension Measurement Date and before the True-Up Adjustment: (A) any distributions and contributions made in respect of the DPSG Pension Beneficiaries, (B) administrative expenses of the Cadbury Pension Plan reasonably allocable to the DPSG Pension Beneficiaries, (C) earnings realized by the Cadbury Pension Plan allocable to the DPSG Pension Beneficiaries, (D) the net gain or loss (realized and unrealized) of the Cadbury Pension Plan allocable to the DPSG Pension Beneficiaries and (E) other appropriate items. Cadbury and DPSG shall each be responsible for the funding of their respective pension plans. It is anticipated that each pension plan will have underfunding under ERISA Section 4044. Each party shall be responsible for funding such underfunding under their respective pension plan. Promptly upon determination of the Final Pension Transfer Amount, Cadbury shall cause the Cadbury Actuary to provide to DPSG a written statement of the Final Pension Transfer Amount, a summary of the calculation of such amount (the “ Pension Statement ”) and a written statement that the sum of the Initial Transfer Amount and the Final Pension Transfer Amount satisfies the requirements of IRS Code Section 414(l).

(b) Resolution of Differences . Cadbury shall provide DPSG with all information reasonably necessary to review the calculation of the Final Pension Transfer Amount in all material respects and to verify that such calculations have been performed in a manner consistent with the terms of this Agreement. The determination of the Final Pension Transfer Amount by the Cadbury Actuary shall be final, conclusive and binding for all purposes under this Agreement, unless DPSG provides to Cadbury, within thirty (30) days after receipt of the Pension Statement, a written objection prepared by an enrolled actuary retained by DPSG setting forth in detail a reasonable basis for the conclusion that the Final Pension Transfer Amount set forth in the Pension Statement is understated by an amount in excess of 5%. Upon receipt of such objection, Cadbury and DPSG shall make a good faith attempt to resolve their dispute as to the Final Pension Transfer Amount. Should such dispute remain unresolved for more than thirty (30) days, Cadbury and DPSG shall promptly select and appoint a third enrolled actuary who is mutually satisfactory to both Parties. The third actuary shall recalculate the Final Pension Transfer Amount and if such recalculated amount exceeds the Final Pension Transfer Amount set forth in the Pension Statement by more than 5%, then such recalculated amount shall serve as the Final Pension Transfer Amount for all purposes under this Agreement. If such recalculated

amount does not exceed the Final Pension Transfer Amount set forth in the Pension Statement by more than 5%, then for all purposes under this Agreement the Final Pension Transfer Amount shall be the Final Pension Transfer Amount as set forth in the Pension Statement. The recalculation of such third party actuary shall be completed within thirty (30) days of the retention of such third party actuary and shall be conclusive as to any dispute with respect to the Final Pension Transfer Amount, except as set forth in Section 5.05 below. The cost of such third party actuary shall be divided equally between Cadbury and DPSG. Each Party shall be responsible for the cost of its own actuary.

Section 5.04 True-Up Adjustment . The following transfer shall be made promptly after the date that the Final Pension Transfer Amount is determined as set forth above: (A) if the Final Pension Transfer Amount exceeds the Initial Transfer Amount, Cadbury shall promptly cause to be transferred from the Cadbury Pension Plan trust to the DPSG Pension Plan trust assets having a Value equal to such excess and (B) if the Initial Transfer Amount exceeds the Final Pension Transfer Amount, DPSG shall promptly cause to be transferred from the DPSG Pension Plan trust to the Cadbury Pension Plan trust assets having a Value equal to such excess.

Section 5.05 Form and Selection of Assets to be Transferred . The assets to be transferred in the Initial Transfer and the True-Up Adjustment Assets will be transferred in-kind or in cash pro rata from each investment manager under the transferring plan in a manner that represents, as closely as commercially practical, a pro rata portion of each asset and position held by the manager as of the date of such transfer, except that reasonable adjustments shall be made where Cadbury determines such transfers cannot reasonably be made by the Cadbury Pension Plan due to investment manager account minimums or where other considerations prevent such pro rata transfers or render such pro rata transfers impractical. For purposes of the Agreement, the " Value ” of all pension assets shall be the value of such assets as determined in good faith by Cadbury based on all relevant information known to Cadbury at the time of such determination, including the most recent account statements or schedules of asset values provided to Cadbury by any service providers maintaining or overseeing any such assets or any investment vehicles which represent or hold the relevant plan assets. Cadbury shall select the assets to be transferred and provide a schedule of such assets to DPSG 14 days prior to the transfer of such assets. DPSG shall communicate to Cadbury any objection to the schedule of the assets to be transferred promptly, and upon receipt by Cadbury of such objection, Cadbury and DPSG shall make a good faith attempt to resolve their dispute as to the assets to be transferred within the period remaining prior to the transfer of the assets. Should such dispute remain unresolved upon the asset transfer date, the assets shall be transferred in accordance with the schedule provided by Cadbury. Any assets that are liquidated prior to transfer shall be reduced by the asset liquidation expenses actually incurred.

ARTICLE 6

U.S. 401(K) PLAN

Section 6.01 General Principle . Effective on or before the Distribution Date, DPSG shall establish and adopt a qualified employee cash or deferred arrangement under IRS Code Section 401(k) (the “ DPSG 401(k) Plan ”) intended to be qualified under IRS Code Section 401(a) and containing provisions that will provide benefits for each DPSG Business

Employee and Former DPSG Employee (and each beneficiary and alternate payee of such person) (the “ DPSG DC Plan Beneficiaries ”) identical to those in effect for the DPSG DC Plan Beneficiaries as of the date of transfer of assets and liabilities with respect to such plan (as described below). Before or as soon as reasonably practicable after the Distribution Date, the assets and liabilities relating to the DPSG DC Plan Beneficiaries under the Cadbury 401(k) Plan and shall be transferred to the DPSG 401(k) Plan. DPSG Business Employees shall not make or receive additional contributions under the Cadbury 401(k) Plan after the effective date of the DPSG 401(k) Plan, unless such DPSG Business Employee shall become employed by Cadbury or a Cadbury Subsidiary after such date. A Cadbury Business Employee shall not participate in the DPSG 401(k) Plan after the effective date of the DPSG 401(k) Plan, unless such Cadbury Business Employee shall become employed by DPSG or a DPSG Subsidiary after such date.

Section 6.02 Transfer of Accounts . Effective before or as soon as practical following the Distribution Date, but in no event later than six months following the Distribution Date, Cadbury shall cause to be transferred from trusts under the Cadbury 401(k) Plan to the trust under the DPSG 401(k) Plan the aggregate amount that is credited to the accounts of the DPSG DC Plan Beneficiaries (disregarding any participant loans from the plans) as of the date of transfer, but not less than or more than permitted by law, as determined by Cadbury. The transfer shall be an in-kind transfer, subject to the reasonable consent of the trustee of the DPSG 401(k) Plan and shall include the transfer of the aggregate assets held in the accounts relating to each DPSG DC Plan Beneficiary under the Cadbury 401(k) Plan and any participant loan notes held under such plans. Any assets that are liquidated prior to transfer shall be reduced by the asset liquidation expenses, such as commissions or early withdrawal penalties, actually incurred. Cadbury shall cause the DPSG 401(k) Plan to allocate the portion of any forfeiture account under the Cadbury 401(k) Plan that relates to forfeiture by Former DPSG Employees consistent with Cadbury’s past practice regarding allocation of forfeitures under the Cadbury 401(k) Plan. Before or promptly after the date hereof, Cadbury and DPSG shall file requests with the IRS for qualification determination letters under IRS Code Section 401(a) and 401(k) (as applicable) with respect to the Cadbury 401(k) Plan and DPSG 401(k) Plan and shall take any and all reasonable actions, including the adoption of amendments requested by the IRS, as shall be necessary to obtain such determination letters. The transfers under this Section 6.02 shall occur prior to, but subject to the subsequent receipt of favorable determination letters issued by the IRS with respect to the Cadbury 401(k) Plan and DPSG 401(k) Plan, copies of which shall be shared among Cadbury and DPSG promptly upon issuance.

Section 6.03 Funding of 2008 Matching Contribution . DPSG shall fund and allocate the full amount of any 2008 matching contribution accrued under the terms of the Cadbury 401(k) Plan to eligible DPSG DC Plan Beneficiaries under the DPSG 401(k) Plan within the time permitted by law (determined based on the terms of the Cadbury 401(k) Plan immediately prior to the transfer to the DPSG 401(k) Plan as if the transfer to the DPSG 401(k) Plan did not occur, but paid and contributed by DPSG to the DPSG 401(k) Plan).

ARTICLE 7

U.S. WELFARE BENEFIT PLANS

Section 7.01 General Principle . Except as provided below, on or about the Distribution Date, liabilities relating to DPSG Business Employees and Former DPSG Employees shall be transferred to newly established DPSG welfare benefit plans that shall contain the same benefit provisions as in effect for DPSG Business Employees and Former DPSG Employees immediately prior to such date, and DPSG Business Employees and Former DPSG Employees shall cease to participate in the Cadbury welfare benefit plans. Welfare benefit plans include health, welfare, and wellness benefits plans (including, medical, dental, prescription drug and vision benefits, life insurance, accidental death and disability insurance, business travel accident insurance, disability (STD and LTD), long term care, flexible spending accounts, severance, Employee Assistance Plan, and similar types of plans). DPSG Business Employees and Former DPSG Employees shall not participate in Cadbury welfare benefit plans following the effective date of the DPSG plans described in this Section 7.01, unless they shall become employed by Cadbury after such date. Cadbury Business Employees and Former Cadbury Employees shall not participate in any DPSG welfare benefit plans following the effective date of such plans, unless they shall become employed by DPSG after such date.

Section 7.02 Establishment of DPSG Plans .

(a) General Rule . DPSG Business Employees and Former DPSG Employees shall cease to participate in the Cadbury welfare benefit plans on or about the Distribution Date.

(b) Treatment of Claims Incurred . DPSG shall assume and shall be responsible for the liability for payment of all covered claims (including medical, dental, life insurance and long-term disability) and eligible expenses incurred by any DPSG Business Employee and beneficiaries thereof under the Cadbury Welfare Plans and Cadbury Non-ERISA U.S. Benefit Arrangements prior to the Distribution Date, and Cadbury shall not be responsible for any liability with respect to any such claims or expenses.

(c) Credit for Deductibles and Other Limits . With respect to each DPSG Business Employee and Former DPSG Employee, and each covered dependent, beneficiary, or other related party of such individual (the “ DPSG Welfare Plan Participants ”), the DPSG welfare benefit plans will give credit in the year of the Distribution Date for any amount paid under the comparable type Cadbury plan by such DPSG Welfare Plan Participant in the year of the Distribution Date toward deductibles, out-of-pocket maximum, or other, similar limitations to the extent such amounts are taken into account under the comparable type Cadbury plan. For purposes of any life-time maximum out-of-pocket limit on expenses paid by a covered participant, the DPSG welfare plans will recognize any expenses incurred by a DPSG Welfare Plan Participant prior to the Distribution to the same extent such expenses would be recognized in respect of an active plan participant under the comparable type Cadbury plan.

(d) COBRA . Effective as of the date of cessation of participation in the Cadbury welfare benefit plans by the DPSG Business Employees and Former DPSG Employees (as provided above), DPSG shall assume and satisfy all requirements under COBRA with respect to

all DPSG Business Employees and Former DPSG Employees and their qualified beneficiaries, including for individuals who are already receiving benefits as of such date under COBRA.

(e) Disabled Persons . The Parties intend that any Employee who has, prior to the Distribution Date, become eligible to receive any long-term disability benefits pursuant to any third-party insurance policy applicable under any welfare benefit plan shall continue to be eligible to receive such benefits in accordance with the terms of such plan and policy.

Section 7.03 Insurance Contracts . To the extent any Cadbury welfare benefit plan is funded through the purchase of an insurance contract or is subject to any stop loss contract, Cadbury and DPSG will cooperate and use their reasonable commercial efforts to “ clone ” such insurance contracts for DPSG and to maintain any pricing discounts or other preferential terms for both Cadbury and DPSG through the end of the term of the Transition Services Agreement. Neither party shall be liable for failure to obtain such pricing discounts or other preferential terms for DPSG. The cost of “ cloning ”, including any increases in premiums, charges or administrative fees relating to DPSG Business Employees and Former DPSG Employees shall be the obligation of DPSG. Each party shall be responsible for any additional premiums, charges or administrative fees that such party may incur pursuant to this Section 7.03.

Section 7.04 Third Party Vendors . Except as provided below, to the extent any Cadbury welfare benefit plan is administered by a third-party vendor, Cadbury and DPSG will cooperate and use their reasonable commercial efforts to “ clone ” any contract with such third-party vendor for DPSG and to maintain any pricing discounts or other preferential terms for both Cadbury and DPSG. Neither party shall be liable for failure to obtain such pricing discounts or other preferential terms for DPSG. The cost of “ cloning ”, including any increases in premiums, charges or administrative fees relating to DPSG Business Employees and Former DPSG Employees shall be the obligation of DPSG. Each party shall be responsible for any additional premiums, charges or administrative fees that such party may incur pursuant to this Section 7.04.

ARTICLE 8

FRINGE BENEFIT AND OTHER U.S. PLANS AND PROGRAMS

Except as otherwise provided under this Agreement, effective as of the Distribution Date, DPSG Business Employees and Former DPSG Employees shall not be eligible to participate in any plan, policy or arrangement of Cadbury or a Cadbury Subsidiary providing fringe benefits to employees or former employees.

ARTICLE 9

WORKERS COMPENSATION AND UNEMPLOYMENT COMPENSATION

DPSG shall have and assume the obligations for all claims and liabilities relating to workers compensation and unemployment compensation benefits for all DPSG Business Employees and Former DPSG Employees. Cadbury shall have and assume the obligations for all claims and liabilities relating to workers compensation and unemployment compensation benefits for all Cadbury Business Employees and Former Cadbury Employees. DPSG and

Cadbury shall make reasonable commercial efforts to provide that workers compensation and unemployment insurance costs are not adversely affected for either of them by reason of the Distribution.

ARTICLE 10

COMPENSATION MATTERS AND GENERAL BENEFIT AND EMPLOYEE MATTERS

Section 10.01 Restrictive Covenants in Employment and Other Agreements . To the fullest extent permitted by the agreements and applicable law, Cadbury shall assign, or cause its Affiliates to assign, to DPSG or one of its Affiliates as designated by DPSG all agreements containing restrictive covenants (including but not limited to confidentiality and non-competition provisions) between Cadbury (or a Cadbury Affiliate) and a DPSG Business Employee, with such assignment to be effective no later than the Distribution Date. To the extent that assignment of such agreements is not permitted, following the Distribution, DPSG and its Subsidiaries and Affiliates shall be considered to be successors to Cadbury and its Subsidiaries and Affiliates for purposes of, and third-party beneficiaries with respect to, all agreements containing restrictive covenants (including but not limited to confidentiality and non-competition provisions) between Cadbury (or a Cadbury Subsidiary or Affiliate) and DPSG Business Employees and between Cadbury (or a Cadbury Subsidiary or Affiliate) and Cadbury Employees whom DPSG reasonably determines have substantial knowledge of the DPSG Business, such that each of Cadbury, DPSG and their respective Subsidiaries and Affiliates shall all enjoy the rights and benefits under such agreements (including, without limitation, rights and benefits as a third-party beneficiary), with respect to such Party’s and its respective Subsidiaries’ and Affiliates’ business operations; provided , however , that (a) in no event shall Cadbury be permitted to enforce the restrictive covenant agreements against DPSG Business Employees for action taken in their capacity as employees of DPSG or its Subsidiaries, and (b) in no event shall DPSG be permitted to enforce the restrictive covenants agreements of Cadbury Business Employees for action taken in their capacity as employees of Cadbury or its Subsidiaries.

Section 10.02 Severance .

(a) Effective as of the Distribution Date, DPSG may establish one or more severance plans and policies with respect to DPSG Business Employees as DPSG deems appropriate in its discretion. Cadbury shall have no liability or obligation under any Cadbury severance plan or policy with respect to DPSG Business Employees who remain employed or whose employment terminates on or after the Distribution Date.

(b) Following the Distribution Date, DPSG shall assume and shall be responsible for administering all payments and benefits under the applicable Cadbury severance policies or any termination agreements with Former DPSG Employees whose employment has terminated prior to the Distribution Date for an eligible reason under such policies or in accordance with such agreements.

(c) It is not intended that any DPSG Business Employee will be eligible for termination or severance payments or benefits from Cadbury or its Subsidiaries or Affiliates as a

result of the transfer or change of employment from Cadbury to DPSG or their respective Subsidiaries or Affiliates. Notwithstanding the preceding sentence, in the event that any such termination or severance payments or benefits become payable on account of such transfer, change or the refusal of a DPSG Business Employee to accept employment with DPSG, DPSG shall indemnify Cadbury, and its Subsidiaries and Affiliates, for the amount of such termination or severance payments or benefits.

Section 10.03 Accrued Vacation Days Off . DPSG shall recognize and assume all liability for all vacation, holiday, sick leave, flex days, personal days and Paid-Time Off, including banked time accrued by DPSG Business Employees as of the Distribution Date and DPSG shall credit each DPSG Business Employee with such accrual.

Section 10.04 Leaves of Absence . DPSG will continue to apply the leave of absence policies maintained by Cadbury to inactive DPSG Business Employees who are on an approved leave of absence as of the Distribution Date. Leaves of absence taken by DPSG Business Employees prior to the Distribution Date shall be deemed to have been taken as employees of DPSG.

Section 10.05 Cadbury Obligations . DPSG and Cadbury plc agree that Cadbury plc shall not, and shall cause Cadbury not to, take any actions that would materially and adversely impact the ability of Cadbury to fulfill its obligations under this Agreement; provided that Cadbury plc may at any time following the Distribution Date require Cadbury to assign to Cadbury plc all of Cadbury’s rights and obligations under this Agreement in substitution for compliance by Cadbury plc and Cadbury with the aforementioned obligation in this Section 10.05, and upon such assignment, Cadbury plc shall assume all of Cadbury’s obligations under this Agreement.

Section 10.06 Collective Bargaining Agreements . Except as otherwise provided in this Agreement, effective as of the close of business on the Distribution Date, DPSG shall assume, and Cadbury shall have no further liability for, all collective bargaining agreements, collective agreements, multiemployer plans, pension and welfare plans and arrangements, trade union or works council agreements entered into with Cadbury, any union, works council, or other body representing only DPSG Business Employees.

ARTICLE 11

CANADIAN EMPLOYEE MATTERS

The treatment of employee matters with respect to an Employee whose primary employer within the Cadbury Group or the DPSG Group is or was an entity domiciled in Canada shall be set forth as Appendix 2 to this Agreement.

ARTICLE 12

GENERAL PROVISIONS

Section 12.01 Preservation of Rights to Amend . The rights of Cadbury or DPSG to amend or terminate any plan, program, or policy referred to herein shall not be limited in any way by this Agreement.

Section 12.02 Confidentiality . Each Party agrees that any information conveyed or otherwise received by or on behalf of a Party in conjunction herewith is confidential and is subject to the terms of the confidentiality provisions set forth in the Separation Agreement.

Section 12.03 Administrative Complaints/Litigation . Except as otherwise provided in this Agreement, as of and after the Distribution Date, DPSG shall assume, and be solely liable for, the handling, administration, investigation and defense of actions, including, without limitation, ERISA, occupational safety and health, employment standards, union grievances, wrongful dismissal, discrimination or human rights and unemployment compensation claims, asserted at any time against Cadbury, or DPSG or their respective Affiliates by any DPSG Business Employee or Former DPSG Employee (including any dependent or beneficiary of any such Employee) or any other person, to the extent such actions or claims arise out of or relate to employment or the provision of services (whether as an employee, contractor, consultant, or otherwise) to or with the DPSG Business. To the extent that any legal action relates to a putative or certified class of plaintiffs, which includes both Cadbury Business Employees (or Former Cadbury Employees) and DPSG Business Employees (or Former DPSG Employees) and such action involves employment or benefit plan related claims, reasonable costs and expenses incurred by the Parties in responding to such legal action shall be allocated among the Parties equitably in proportion to a reasonable assessment of the relative proportion of Cadbury Business Employees (or Former Cadbury Employees) and DPSG Business Employees (or Former DPSG Employees) included in or represented by the putative or certified plaintiff class. The procedures contained in the indemnification and related litigation cooperation provisions of the Separation Agreement shall apply with respect to each Party’s indemnification obligations under this Section 12.03.

Section 12.04 Reimbursement and Indemnification . The Parties hereto agree to reimburse each other, within 60 days of receipt from the other Party of reasonable verification, for all costs and expenses which each may incur on behalf of the other as a result of any of the Welfare Plans, Pension Plans and Non-ERISA U.S. Benefit Arrangements and, as contemplated by Section 10.02, any termination or severance payments or benefits. All liabilities retained, assumed or indemnified against by DPSG pursuant to this Agreement, and all liabilities retained, assumed or indemnified against by Cadbury pursuant to this Agreement, shall in each case be subject to the indemnification provisions of the Separation Agreement. Notwithstanding anything to the contrary, no provision of this Agreement shall require DPSG or any DPSG Subsidiary to pay or reimburse to Cadbury or any Cadbury Affiliate any benefit-related cost item that DPSG or any DPSG Subsidiary has previously paid or reimbursed to Cadbury or any Cadbury Affiliate.

Section 12.05 Costs of Compliance with Agreement . Except as otherwise provided in this Agreement or any other Distribution document, each Party shall pay its own expenses in fulfilling its obligations under this Agreement.

ARTICLE 13

MISCELLANEOUS

Section 13.01 Notices . Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing shall be duly given upon delivery, if delivered by hand, facsimile transmission, or mail, to the following addresses:

	(a)		If to Cadbury

			25 Berkeley Square London W1J 6HB Facsimile: 44-20-7830-5015 Attention: Henry Udow, Esq. Chief Legal Officer

			With a copy to:

			Shearman & Sterling LLP 599 Lexington Avenue New York, NY 10022-6069 Telecopy: 212-848-6069 Attention: Creighton O’M. Condon, Esq.

	(b)		If to Cadbury plc:

			25 Berkeley Square London W1J 6HB Facsimile: 44-20-7830-5015 Attention: Henry Udow, Esq. Chief Legal Officer

			With a copy to:

			Shearman & Sterling LLP 599 Lexington Avenue New York, NY 10022-6069 Telecopy: 212-848-6069 Attention: Creighton O’M. Condon, Esq.

	(b)		If to DPSG to:

			5301 Legacy Drive Plano, TX 75024 Facsimile: 972-673-8130 Attention: James. L. Baldwin, Jr. General Counsel

or to such other addresses or telecopy numbers as may be specified by like notice to the other Party. All such notices, requests and other communications shall be deemed given, (a) when delivered in person or by courier or a courier services, (b) if sent by facsimile transmission (receipt confirmed) on a Business Day prior to 5 p.m. in the place of receipt, on the date of transmission (or, if sent after 5 p.m., on the following Business Day) or (c) if mailed by certified mail (return receipt requested), on the date specified on the return receipt.

Section 13.02 Amendments; No Waivers . From and after the Distribution, any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by Cadbury and DPSG, or in the case of a waiver, by the Party against whom the waiver is to be effective.

(a) No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 13.03 Successors and Assigns . The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns; provided that neither Party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other Party hereto. If any Party or any of its successors or permitted assigns (i) shall consolidate with or merge into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) shall transfer all or substantially all of its properties and assets to any Person, then, and in each such case, proper provisions shall be made so that the successors and assigns of such Party shall assume all of the obligations of such Party under the Separation Agreement.

Section 13.04 Governing Law . This Agreement shall be construed in accordance with and governed by the law of the State of New York, without regard to the conflicts of laws rules thereof.

Section 13.05 Counterparts; Effectiveness; Third-Party Beneficiaries . This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. Neither this Agreement nor any provision hereof is intended to confer any rights, benefits, remedies, obligations, or liabilities hereunder upon any

Person other than the parties hereto and their respective successors and permitted assigns. No Employee or other current or former employee of Cadbury or DPSG or any Subsidiary or Affiliate of either (or his/her spouse, dependent or beneficiary), or any other person not a party to this Agreement, shall be entitled to assert any claim hereunder. Without limiting the foregoing, the provisions of this Agreement are not intended to, nor shall they confer upon any Person other than the Parties hereto any right or expectation as to the adoption, amendment, maintenance, continuation, operation or funding of any employee benefit plan, policy or arrangement.

Section 13.06 Entire Agreement . This Agreement and the other Distribution documents constitute the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the parties with respect to the subject matter hereof and thereof. Regardless of anything else contained herein, the parties do not intend for this Agreement to amend any employee benefit plans or arrangements.

Section 13.07 Jurisdiction . Any Action seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may be brought in the United States District Court for the Southern District of New York or any other New York State court sitting in New York County, and each of the Parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any Party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each Party agrees that service of process on such Party as provided in Section 13.01 shall be deemed effective service of process on such Party.

Section 13.08 Waiver of Jury Trial . The parties hereto hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement or the transactions hereby contemplated.

Section 13.09 Severability . If any one or more of the provisions contained in this Agreement should be declared invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained in this Agreement shall not in any way be affected or impaired thereby so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such a declaration, the Parties shall modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner so that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.

Section 13.10 Survival . All covenants and agreements of the Parties contained in this Agreement shall survive the Distribution Date indefinitely, unless a specific survival or other applicable period is expressly set forth herein.

Section 13.11 Captions . The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.

Section 13.12 Specific Performance . Each Party to this Agreement acknowledges and agrees that damages for a breach or threatened breach of any of the provisions of this Agreement would be inadequate and irreparable harm would occur. In recognition of this fact, each Party agrees that, if there is a breach or threatened breach, in addition to any damages, the other nonbreaching Party to this Agreement, without posting any bond, shall be entitled to seek and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction, attachment, or any other equitable remedy which may then be available to obligate the breaching Party (i) to perform its obligations under this Agreement or (ii) if the breaching Party is unable, for whatever reason, to perform those obligations, to take any other actions as are necessary, advisable or appropriate to give the other Party to this Agreement the economic effect which comes as close as possible to the performance of those obligations (including, but not limited to, transferring, or granting liens on, the assets of the breaching Party to secure the performance by the breaching Party of those obligations).

Section 13.13 Mutual Drafting . This Agreement shall be deemed to be the joint work product of Cadbury and DPSG and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable.

Section 13.14 Operating Committee .

(a) The parties shall use an operating committee (the “ Operating Committee ”) to implement the terms of this Agreement. Each of Cadbury and DPSG shall appoint two employees to the Operating Committee and designate one of such employees to be such party’s lead representative (each, a “ Lead Representative ”) for the purpose of fielding queries from representatives of the relevant Group concerning the implementation and ongoing operation of this Agreement. In addition, the Lead Representatives shall have such other functions and responsibilities as may be determined by the Operating Committee from time to time. The Operating Committee will oversee the implementation and ongoing operation of this Agreement and shall attempt in good faith to resolve disputes between the parties. Each of the parties shall have the right to (i) replace one or more of its Operating Committee members at any time with employees or officers with comparable knowledge, expertise and decision-making authority and (ii) designate an alternative Lead Representative.

(b) The Operating Committee shall act by a majority vote of its members. If the Operating Committee fails to make a decision, resolve a dispute or agree upon any necessary action, the unresolved matters shall be handled by the dispute resolution procedures contained in the Separation Agreement.

(c) During the term of this Agreement, the full Operating Committee shall meet at such times as may be required by either Lead Representative. Meetings of the Operating Committee may be in person or via teleconference and shall be convened and held in accordance with such procedures as the Operating Committee may determine from time to time.

Section 13.15 Effect if Distribution Does Not Occur . Notwithstanding anything in this Agreement to the contrary, if the Separation Agreement or Transition Services Agreement is terminated prior to the Distribution Date, this Agreement shall be of no further force and effect.

Section 13.16 Corporate Authorization . The officers of Cadbury and DPSG are hereby authorized, empowered and directed, in the name and on behalf of each of Cadbury and DPSG, respectively, to take or cause to be taken all such further action, to execute and deliver or cause to be executed and delivered all such further agreements, certificates, instruments and documents, to make or cause to be made all such filings with governmental or regulatory authorities, and to pay or cause to be paid all such fees and expenses, in each case which shall in such officers’ judgment be deemed necessary, proper or advisable to effect and carry out the intent of this Agreement, such determination to be evidenced conclusively by such officers’ execution and delivery thereof or taking of action in respect thereto.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in their names by a duly authorized officer as of the date first written above.


	CADBURY SCHWEPPES, PLC
	By:	/s/ Henry Udow
		Name: Henry Udow
		Title: Chief Legal Officer and Group Secretary

	DR PEPPER SNAPPLE GROUP, INC.
	By:	/s/ James L. Baldwin
		Name: James L. Baldwin
		Title: Executive Vice President and Secretary

	CADBURY PLC, solely for the purposes of Section 10.05
	By:	/s/ Henry Udow
		Name: Henry Udow
		Title: Chief Legal Officer and Group Secretary

Schedule 1.01(i)
Employees Employed Outside the U.S. but Covered
Under U.S. Compensation and Benefit Plans

Pedro Herrán Gacha and Mario Magro are employed in Mexico but covered under U.S. compensation and benefits plans.

Schedule 2.02(c)
Former DPSG Employees

For purposes of this Agreement, Jim Robertson, Michael Clark and Michael Mason shall be treated as Former Cadbury Employees.

Schedule 6.03
Assumptions and Methods to be
Used for the Calculation of the Final Pension Transfer Amount

Actuarial Assumptions and Methods for Personal Pension Account Plan


Interest Rate		PBGC assumptions for plans terminating in January, 2008: 5.42% for the first 20 years and 4.49% thereafter.

Mortality		ERISA Section 4044 mortality rates for 2008 valuation dates

Retirement Age		XRA’s as defined in PBGC Reg. Section 4044.55 based on amount of benefit, the year when a participant reaches his unreduced retirement age (URA), the participant’s URA, and the participant’s earliest retirement age at the determination date.

Form of Benefit		For existing retirees, actual benefit form. Active employees are assumed to be married and to receive a qualified joint and survivor. Husbands are assumed to be four years older than wives.

Expense Loading		The PBGC expense loading was included in the present values. The $200 per participant amount is assigned to the highest priority category (where PC1 is “higher” than PC2) where the participant has benefits. The 5% loading goes to the priority category with the first $200,000 of present value, and the lower percentage goes in the remaining priority categories.

Assets		January 1, 2008 asset data provided by the trustee, State Street

Census Data		Participant data as of January 1, 2008 was provided by Mercer Human Resource Consulting. Data was reviewed for reasonableness and consistency, but no audit was performed. Assumptions or estimates were made by the Towers Perrin actuaries when data was not available. We are not aware of any errors or omissions in the data that would have a significant effect on the results of our calculations.

		Participants were allocated as Beverages or Confectionary based on indicators in the census data provided by Mercer. Cadbury confirmed that participants indicated as Confectionary-Uncertain should be treated as Confectionary.

Personal Pension Account Plan Provisions


Participation Date		Salaried employees are eligible to participate in the plan on the first payroll period following completion of one year of eligibility service. Eligibility service is a 12-month period during which the employee


		complete 1,000 hours of service. All regular full-time salaried employees, employed prior to January 1, 1992, begin participating on January 1, 1992. Participants in the former Dr. Pepper/Seven-Up companies Pension Plan (DPSG Plan) as of December 31, 1995 participate as of January 1, 1996. Participants in the Adams Retirement Plan as of April 30, 2005 participate as of May 1, 2005. Employees hired on or after January 1, 2007 are not eligible to participate in the plan.

Definitions

Vesting service		Completed years of employment generally including employment with acquired companies and Cadbury affiliates.

Benefit service		Years and fractional years of employment:

		Employees who did not elect to participate in the Cadbury U.S.A. Salaried Employees’ Pension Plan begin to accrue benefit service on January 1, 1979.

		Employees of Duffy-Mott Company, Inc. who began to participate in this plan as of January 1, 1985 begin to accrue benefit service as of March 29, 1982.

		Employees covered under the National Distillers and Chemical Corporate Pension Plan begin to accrue benefit service as of July 19, 1982.

		Employees who became participants as a result of the May 30, 1986 acquisition begin to earn service under this plan on various dates, as provided by Cadbury.

		Employees of the former Seven Up Company begin to accrue benefit service on November 12, 1986.

		Employees of Canada Dry at the time of the DPSG acquisition begin to accrue benefit service on February 3, 1982.

		Employees of Welch’s begin to accrue benefit service on September 1, 1981.

		Employees who became participants as a result of the Snapple Beverage Group, Inc. acquisition begin to earn service under this plan on January 1, 2001.

		Employees who became participants as a result of the Carteret


		Packaging, Inc. acquisition begin to earn service under this plan on January 11, 2001.

		Employees who became participants as a result of the Slush Puppie acquisition begin to earn service under this plan on January 24, 2001. Employees who became participants as a result of the Yoo Hoo Division acquisition begin to earn service under this plan on October 23, 2001.

		Employees who became participants as a result of the ReaLemon/ReaLime Group acquisition begin to earn service under this plan on January 1, 2002.

		Employees who became participants as a result of the Adams acquisition begin to earn service under this plan on May 1, 2005.

Compensation Considered		Base pay, overtime pay, Annual Incentive Plan bonus, but excluding deferred compensation. Compensation is limited by 401 (a)(17).

Average Annual Compensation		The average of the five highest consecutive completed calendar years of compensation out of the last ten completed calendar years. For participants in the former DPSG Plan, final average compensation is the average of the three highest consecutive completed calendar years of compensation out of the last ten completed calendar years.

Social Security Benefits		Amount to which participant is entitled to at age 65 based on earnings during periods for which benefit service is accrued.

Benefit Under the Plan as of 12/31/91		Benefit: 56% of final average compensation less 50% of Social Security benefit as of December 31, 1991, reduced proportionately for benefit service of less than 25 years as of December 31, 1991.

		Offset Benefit: Above benefit will be offset by any benefit accrued under the Retirement Plan for Employees of Del Monte Corporation for service which is considered benefit service under this plan, by benefits earned in non-U.S. Cadbury plans, and by annuity benefits purchased from insurance companies.

		Grandfathered Benefits for former Duffy-Mott participants:
		Larger of: Accrued benefit under the Duffy-Mott Plan as of March 28, 1982 (converted to a life annuity), plus the accrued benefit determined in accordance with benefit above based on

		• Benefit service after March 28, 1982.


		• Accrued benefit under the Duffy-Mott Plan based on service to the earlier date of termination or December 31, 1989.

DPSG Benefit Under the Plan as of 12/31/95		Benefit:

		2.50% of final three year average compensation times benefit service up to 20 years plus .50% of final three year average compensation times benefit service in excess of 20 years.

		Offset Benefit:
		Benefit above will be offset by annuities purchased from the New England Life Insurance Company.

		Philip Morris Benefit:
		Benefit above will be in addition to any annuity benefit accrued under the Seven Up Company Retirement Plan (SU Plan) as of November 11, 1986.

Eligibility for Benefits

Normal Retirement		The first of the month coincident with or next following the later of attainment of age 65 and the fifth anniversary of employment. For participants in the DPSG Plan as of December 31, 1996, normal retirement date is the first of the month following the attainment of age 65.

Early Retirement		The first month coincident with or next following attainment of age 55 and completion of 10 years of vesting service.

		Participants covered by the Retirement plan for Employees of Peter Paul, Inc. as of December 31, 1978 are eligible for an early retirement pension of the first month coincident with or next following attainment of age 50 and completion of 15 years of vesting service.

		Participants covered by the Pension plan for Eligible Salaried Employees of National Distillers and Chemical Corporation who became participants of the plan on July 19, 1982 are eligible for an early retirement pension on the first of the month coincident with or next following attainment of age 55 and completion of 10 years of Vesting Service.

		Participants covered by the DPSG Plan as of December 31, 1995 are eligible for an early retirement pension on the first of the month coincident with or next following attainment of age 55 and completion of 5 years of vesting service, based on the December 31,


		1995 accrued benefit.

Vested Retirement Pension		Completion of five years of vesting service (including service with acquired or affiliated companies).

Death Benefit		Beneficiary of participant who dies.

Disability		Employees who are receiving payments under the long-term disability plan and/or Workers’ Compensation payments.

Monthly Benefits Paid Upon the Following Events

Normal Retirement		Excludes former Duffy-Mott participants as described previously.

(1)

For employees at least age 50 with at least 10 years of vesting service as of December 31, 1991, the greater of

(a)

	or (b), where:

	(a) =		Benefit under the plan as of December 31, 1991,

times

Final Average Compensation at December 31, 1993
Final Average Compensation at December 31, 1991

times

			Final Average Compensation at Retirement Final Average Compensation at December 31, 1993

			plus the PPA annuity described in (2)(b) below.

	(b)=		Benefit formula under the plan in effect as of December 31, 1991, using all benefit service and final average compensation at retirement date.

	(2)		For employees under age 50, or with less than 10 years of vesting service as of December 1991, (a) + (b) where: (a) = Benefit under the plan as of December 31, 1991

times

Final Average Compensation at December 31, 1993
Final Average Compensation at December 31, 1991

times

			Final Average Compensation at Retirement Final Average Compensation at December 31, 1993

	(b) =		The PPA annuity which is the value of the PPA account defined in (6) below divided by an annuity factor using the 1994 Group Annuity Reserving Table and the average yield on 30 year treasuries for the October before the plan year in

which payments are made.

(3)

For former A&W employees, (a) + (b), where:

	(a) =		Benefit under the A&W plan as of December 31, 1993, and

	(b) =		The PPA annuity, where allocations start in 1994 as defined in (2)(b) above.

(4)

For active participants in the DPSG plan as of December 31, 1995 who are at least age 50 with at least 10 years of vesting service as of that date, the greater of (a) or (b) where:
(a) = Dr Pepper benefit under the plan as of December 31, 1995

times

			Final Average Compensation at Retirement Final Average Compensation at December 31, 1995

			plus the PPA annuity defined in (2)(b) above.

	(b) =		Benefit formula under the DPSG Plan in effect as of December 31, 1995, using all benefit service and final three year average compensation at retirement date.

(5)

For active participants in the DPSG Plan as of December 31, 1995 who were under age 50, or with less than 10 years of vesting service as of that date (a) + (b), where:
(a) = Dr Pepper benefit under the plan as of December 31, 1995

times

			Final Average Compensation at Retirement Final Average Compensation at December 31, 1995

	(b) =		The PPA annuity defined in (2)(b) above.

(6)

The PPA account is a record keeping account, established for each participating employee, which each year is credited with an annual allocation based on the following table:


	Allocation % of Compensation
	Earnings up to the						Earnings above the
	Social Security						Social Security
	Wage Base						Wage Base
Sum of Age plus
Vesting Service as
of January 1	Before			After			Before			After
	1999			1998			1999			1998
Less than 35		2.50	%		2.75	%		5.00	%		5.50	%
35 to less than 45		3.50	%		3.75	%		7.00	%		7.50	%
45 to less than 55		4.50	%		4.50	%		9.00	%		9.00	%
55 to less than 65		6.00	%		6.00	%		11.00	%		11.00	%
65 to less than 75		8.00	%		8.00	%		13.00	%		13.00	%
75 or more		10.00	%		10.00	%		15.00	%		15.00	%


		The first such allocation is on December 31, 1992 for active employees except participants in the DPSG Plan as of December 31, 1995. The first allocation for the DPSG plan active participants as of December 31, 1995 is on December 31, 1996. On December 31 of each year, interest is credited on the balance in the account as of January 1 of that year. The first such interest credit will be made on December 31, 1993 (December 31, 1997 for DPSG plan active participants as of December 31, 1995). The interest rate equals the 12-month average of one year Treasury Bill rates, plus one percentage point, with a minimum of 5% (4% prior to 1999).

		In addition, all active participants as of January 1, 1995 will receive a special interest credit of 5.00% on their January 1, 1995 account balance.

Early Retirement		Normal retirement benefit as determined according to Normal Retirement Pension above but based upon final average compensation, Social Security benefit, benefit service and PPA annuity as of the employee’s early retirement date. If payments are to commence prior to normal retirement date, such payments, except for the PPA annuity and the portion accrued under the DPSG Plan formula, will be reduced by 2% for each of the first 3 years and 4% for each additional year that early retirement date precedes normal retirement date. The portion of any payments attributable to the DPSG Plan formula will be reduced by 6 2/3% for each of the first 5 years and 3 1/3% for each additional year the early retirement date precedes normal retirement date. In addition, the portion of any payments attributable to the Philip Morris benefit indicated above will be reduced by 6% for each of the first 5 years by which early retirement date precedes attainment of age 60. For former DPSG Plan participants with at least 30 years of vesting service, no reduction will apply to their Philip Morris benefits, if they retire from active service. There is no reduction for employees who were covered by the Duffy-Mott Plan if they have completed 40 or more


		years of service. For former A&W employees the early retirement benefit will not be less than that calculated using the accrued A&W benefit as of December 31, 1993 with the A&W plan early retirement factors.

Vested Retirement Pension		Normal retirement benefit as determined according to Normal Retirement Pension above based upon final average compensation, Social Security benefit, benefit service and PPA annuity as of the employee’s termination date. Payments may commence immediately, but is actuarially reduced prior to earliest retirement age provided he or she had accrued the required vesting service prior to termination. Former SU Plan participants who are eligible for a vested retirement pension will have their payments reduced by 6% for each of the first 10 years that their vested retirement date precedes normal retirement date.

Death Benefit		For beneficiaries of participants who die prior to satisfying the service requirement for early retirement: 50% of the employee’s vested accrued benefit reduced on an actuarially equivalent basis and converted to a 50% joint and survivor form of payment commencing as of the date of death.

		For beneficiaries of participants who die after satisfying the requirements for early retirement: 50% of the employee’s vested accrued benefit, converted to a 50% joint and survivor form of payment commencing as of the date of death.

		For beneficiaries of participants who die after normal retirement date: 50% of the employee’s vested accrued benefit as reduced for the 50% joint and survivor annuity payable for the beneficiary’s lifetime.

		In all cases, the death benefit is assumed payable as a lump sum.

Disability		PPA allocations based on pay at the time of disability continue to be made until retirement or recovery, and the employee continues to accrue vesting service.

		The disability benefit is assumed payable as a lump sum at normal retirement date.

Other Plan Provisions

Normal Form of Payment		Life annuity

Optional Forms of		Actuarially equivalent to life annuity:


Retirement Benefits

		(1) Joint and survivor: 100%, 75%, or 50%

		(2) 5 or 10 years certain and continuous

		(3) Lump Sum

APPENDIX 1

FORM OF
BUSINESS ASSOCIATE AGREEMENT

Health Insurance Portability and Accountability Act (HIPAA)

In conformity with the regulations at 45 C.F.R. §§ 160.103 and 164.501 (the “Privacy and Security Rules”) and for the consideration already existing between the parties, this Agreement is made between Business Associate and Covered Entity so that Business Associate will have the authority to, under the following conditions and provisions, create, receive and otherwise have access to certain Protected Health Information which Business Associate has created, received or otherwise have access to in conjunction with the insurance brokerage and/or benefits consulting services to be provided to Covered Entity.

Definitions . The following terms, as used in this Agreement, shall have the meaning set forth below:

	(a)		Agreement means this Business Associate Agreement.

	(b)		C.F.R . means the Code of Federal Regulations.

	(c)		Business Associate shall mean Dr Pepper Snapple Group, Inc.

	(d)		Covered Entity shall mean Cadbury Adams Holdings LLC, on behalf of both itself and its group health plans, for which Business Associate performs services.

	(e)		Designated Record Set has the meaning assigned to such term in 45 C.F.R. §164.501.

	(f)		Electronic Protected Health Information, or ePHI shall have the same meaning as the term “electronic protected health care information”, defined at 45 C.F.R. §160.103. ePHI shall be a subset of PHI for all purposes herein.

	(g)		Individual shall have the same meaning as the term “individual” in 45 C.F.R. §160.103 and shall include a person who qualifies as a personal representative in accordance with 45 C.F.R. §164.502(g).

	(h)		Privacy Rules mean the standards for privacy of individually identifiable health information in 45 C.F.R. §§ 160 and 164, Subpart A and E.

	(i)		Protected Health Information, or PHI shall have the same meaning as the term “Protected Health Information” defined at 45 C.F.R. §160.103, and limited to the information created or received by Business Associate from or on behalf of Covered Entity.

	(j)		Secretary shall mean the Secretary of the U.S. Department of Health and Human Services or its designee.

	(k)		Security Incident shall have the same meaning as such term is used in the Security Rules.

	(l)		Security Rules mean the standards for security of electronic protected health information, established at 45 C.F.R. §164, Subpart C.

Obligations and Activities of Business Associate

(a)

Business Associate agrees to not use or disclose PHI other than as permitted or required by this Agreement or as required by law.

	(b)		Business Associate agrees to use appropriate safeguards to prevent use or disclosure of PHI other than as provided for by this Agreement.

	(c)		Business Associate agrees to report to Covered Entity any use or disclosure of the PHI not provided for by this Agreement of which it becomes aware, and including the reporting of any Security Incident of which it becomes aware to Covered Entity.

	(d)		Business Associate agrees to ensure that any agent, including a subcontractor, to whom it provides PHI received from, or created or received by Business Associate on behalf of Covered Entity agrees to the same restrictions and conditions that apply through this Agreement to Business Associate with respect to such information.

	(e)		Business Associate agrees to provide access, at the request of and in the time and manner designated by Covered Entity, to PHI in a Designated Record Set, to Covered Entity so that the Covered Entity may meet the requirements under 45 C.F.R. §164.524.

	(f)		Business Associate agrees to make any reasonable amendment(s) to PHI in a Designated Record Set that the Covered Entity directs or agrees to pursuant to 45 C.F.R. §164.526 at the request of Covered Entity.

	(g)		Business Associate agrees to make internal practices, books and records, including policies and procedures about PHI, relating either directly or indirectly to the use and disclosure of PHI received from, or created or received by Business Associate on behalf of Covered Entity, available to the Secretary, in a time and manner designated by the Secretary, for purposes of the Secretary determining Covered Entity’s compliance with the Privacy and Security Rules.

	(h)		Business Associate agrees to document such disclosures of PHI and information related to such disclosures as would be required for Covered Entity to respond to a request by an Individual for an accounting of disclosures of PHI in accordance with 45 C.F.R. §164.528.

	(i)		Business Associate will implement administrative, physical and technical safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of the ePHI that it creates, receives, maintains, or transmits on behalf of Covered Entity.

Permitted Uses and Disclosures by Business Associate

	(a)		General Use and Disclosure Except as otherwise limited in the Agreements, Business Associate may use or disclose PHI to perform its obligations as an insurance broker and/or benefits consultant to Covered Entity and/or Covered Entity’s plan sponsor, provided that such use or disclosure would not violate the Privacy and Security Rules if done by Covered Entity either jointly or individually.

	(b)		Specific Use and Disclosure Provisions Except as otherwise limited in the Agreements, Business Associate may use and/or disclose PHI for the proper management and administration of Business Associate, provided that disclosures are permitted by the Privacy and Security Rules, or Business Associate obtains reasonable assurances from the person to whom the information is disclosed that the PHI will remain confidential and used or further disclosed only as required by

law or for the purpose for which it was disclosed to the person, and the person notifies Business Associate of any instances of which it is aware in which the confidentiality of the information has been breached.

	(i)		Except as otherwise limited in the Agreements, Business Associate may use PHI to provide data aggregation services to Covered Entity as permitted by 42 C.F.R. §164.504(e)(2)(i)(B).

	(ii)		Business Associate may use PHI to report violations of law to appropriate Federal and State authorities, consistent with 42 C.F.R. §164.502(j)(1).

Obligations of Covered Entity

(a)

Provisions for Covered Entity to Inform Business Associate of Privacy Practices

	(i)		Covered Entity shall provide Business Associate with the notice of privacy practices that Covered Entity produces in accordance with 45 C.F.R. §164.520, as well as any changes to such notice.

	(ii)		Covered Entity shall provide Business Associate with any changes in, or revocation of, permission by an Individual to use or disclose PHI, to the extent that such changes affect Business Associate’s uses or disclosures of PHI.

	(iii)		Covered Entity shall notify Business Associate of any amendment or restriction to the use or disclosure of PHI that Covered Entity has agreed to in accordance with 45 C.F.R. §164.522.

(b)

Permissible Requests by Covered Entity . Covered Entity shall not request Business Associate to use or disclose PHI in any manner that would not be permissible under the Privacy and Security Rules if done by Covered Entity.

Term and Termination

	(a)		Term . The provisions of this Agreement shall take effect as of the date Business Associate receives or creates PHI from or on behalf of Covered Entity, and shall terminate as of the date Business Associate no longer provides insurance brokerage and/or benefits consulting services to Covered Entity and/or Covered Entity’s plan sponsor, subject to Section 5(c) herein.

	(b)		Termination for Cause . Without limiting the termination rights of the parties pursuant to the Agreement, and subject to Section 5(c) below, upon Covered Entity’s knowledge of a material breach by Business Associate of the provisions of this Agreement, Covered Entity shall provide an opportunity for Business Associate to cure the breach (including amending or terminating sections of the Agreement) or end the violation and terminate the Agreement, if Business Associate does not cure the breach or end the violation within the time specified by Covered Entity.

	(c)		Effect of Termination . Upon termination of this Agreement for any reason, Business Associate shall return or destroy all PHI that Business Associate or its agents or subcontractors still maintain in any form, and shall retain no copies of such PHI. If Business Associate reasonably determines that return or destruction is not feasible, however, Business Associate shall continue to extend the protections of this Agreement to such PHI, and limit further use of such PHI to those purposes that make the return or destruction of such PHI infeasible, pursuant to 45 C.F.R. §164.504(e)(ii)(2)(I).

Miscellaneous

	(a)		Regulatory References . A reference in this Agreement to a section in the Privacy and Security Rules means the section as in effect or as amended, and for which compliance is required.

	(b)		Amendment . The parties acknowledge that state and federal laws relating to data security and privacy are rapidly evolving and that amendment of this Agreement may be required to provide for procedures to ensure compliance with such developments. The parties specifically agree to take such action as is necessary to implement the standards and requirements of the Privacy and Security Rules and other applicable laws relating to the security and confidentiality of individually identifiable health information. Upon the request of either party, the other party agrees to promptly enter into negotiations concerning the terms of an amendment to this Agreement in order to safeguard PHI consistent with the Privacy and Security Rules and other applicable laws relating to the security and confidentiality of such information.

	(c)		Interpretation . Any ambiguity in this Agreement shall be resolved in favor of a meaning that permits Covered Entity to comply with the Privacy and Security Rules.

	(d)		No third party beneficiary . Nothing express or implied in this Agreement is intended to confer, nor shall anything herein confer, upon any person other than the parties and the respective successors or assigns of the parties, any rights, remedies, obligations, or liabilities whatsoever.

	(e)		Governing Law . Except where governed by federal law or regulation, this Agreement shall be governed by and construed in accordance with the laws of the state of Texas.

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed and delivered by their duly authorized representatives, as of the Agreement’s Effective Date.


Cadbury Adams Holdings LLC						Dr Pepper Snapple Group, Inc.
on behalf of both itself corporately and its group health plans

By:						By:

Print Name:						Print Name:

Print Title:						Print Title:

Date:						Date:

APPENDIX 2

CANADIAN EMPLOYMENT MATTERS

ARTICLE 1
SCOPE AND DEFINITIONS

Section 1.01 Scope . This Appendix shall apply only to the extent relevant in connection with the appropriate treatment of employee matters with respect to an Employee whose primary employer within the Cadbury Group or the DPSG Group is or was an entity domiciled in Canada (“Canadian Employee”). In respect of any employee matters applicable to a Canadian Employee not specifically dealt with in this Appendix 2, the terms of the Agreement shall apply mutatis mutandis to the extent applicable.

Section 1.02 Definitions . Unless otherwise defined herein, each capitalized term shall have the meaning specified for such term as used in the Agreement.

“Cadbury Canadian Benefit Plans” means Canadian Benefit Plans sponsored or maintained by Cadbury or a Cadbury Subsidiary.

“Cadbury Canadian Plans” means Canadian Plans sponsored or maintained by Cadbury or a Cadbury Subsidiary.

“Cadbury Canadian Savings Plans” means Canadian Savings Plans sponsored or maintained by Cadbury or a Cadbury Subsidiary.

“Cadbury Designated Pension Plan” means the Cadbury Schweppes Canada Pension Plan for Designated Colleagues and the Cadbury Schweppes Canada Supplemental Pension Plan for Designated Colleagues.

“Canadian Benefit Plan” means any contract, agreement, policy, practice, program, plan, or arrangement, other than a Canadian Pension Plan or Canadian Savings Plan, providing for benefits to any Canadian Employee, or to any family member, dependent or beneficiary of any such employee, in respect of, disability (long or short), health, dental, life, accidental death and dismemberment and travel and accident insurance.

“Canadian Employee” has the meaning given in Section 1.01 of this Appendix 2.

“Canadian Pension Plans” means any contract, agreement, policy, practice, program, plan or arrangement providing pension benefits to any Canadian Employee by way of a registered pension plan (as defined in the Income Tax Act (Canada).

“Canadian Plans” means Canadian Savings Plans, Canadian Benefit Plans and Canadian Pension Plans.

“Canadian Savings Plan” means any contract, agreement, policy, practice, program, plan or arrangement providing savings plan benefits to any Canadian Employee by way of a “registered retirement savings plan” (as defined in the Income Tax Act (Canada) or a non-registered savings plan, but excluding Canadian Pension Plans.

“DPSG Canadian Plans” means Canadian Plans sponsored or maintained by DPSG or a DPSG Subsidiary.

“Service Provider Agreements” has the meaning given in Section 4.01 of this Appendix 2.

ARTICLE 2
CANADIAN BENEFIT PLANS

Section 2.01 Cessation of Participation under Canadian Benefit Plans .

(a) Cadbury and DPSG shall take any and all action as shall be necessary or appropriate so that participation in Cadbury Canadian Benefit Plans by each DPSG Business Employee and Former DPSG Employee shall terminate in connection with the Distribution on or before the Distribution Date and DPSG and each DPSG Subsidiary shall cease to be a participating employer under the terms of such Cadbury Canadian Benefit Plans as of such date.

(b) In connection with such cessation of participation in the Cadbury Canadian Benefit Plans, DPSG shall establish similar Canadian Benefit Plans for each affected DPSG Business Employee and Former DPSG Employee for coverage on and after the effective date of such cessation of participation in the Cadbury Canadian Benefit Plans.

(c) DPSG shall assume and be responsible for all liabilities and obligations relating to Canadian Benefit Plan benefits for each DPSG Business Employee and Former DPSG Employee incurred prior to the date of transfer of such liabilities and obligations, and Cadbury shall assume and be responsible for liabilities and obligations relating to Canadian Benefit Plan benefits for Cadbury Business Employees and Former Cadbury Employees.

ARTICLE 3
CANADIAN SAVINGS PLANS

Section 3.01 Cessation of Participation under Canadian Savings Plans .

(a) Cadbury and DPSG shall take any and all action as shall be necessary or appropriate so that participation in Cadbury Canadian Savings Plans by each DPSG Business Employee and Former DPSG Employee shall terminate in connection with the Distribution on or before the Distribution Date and DPSG and each DPSG Subsidiary shall cease to be a participating employer under the terms of such Canadian Savings Plans as of such date.

(b) In connection with such cessation of participation in the Cadbury Canadian Savings Plans, DPSG shall establish and adopt or shall designate a Canadian Savings Plans for each affected DPSG Business Employee that will provide benefits on and after the effective time of such cessation of participation in the Cadbury Canadian Savings Plans.

(c) DPSG shall assume and be responsible for all liabilities and obligations relating to Canadian Savings Plan benefits for each DPSG Business Employee and Cadbury shall have all liability and obligations relating to Canadian Savings Plan benefits for Cadbury Business Employees.

ARTICLE 4
CANADIAN PENSION PLANS & SUPPLEMENTAL PENSION PLANS

Section 4.01 Cessation of Participation .

(a) Cadbury and DPSG shall take any and all action as shall be necessary or appropriate so that active participation in, and benefit accruals under, the Cadbury Designated Pension Plans by each DPSG Business Employee shall cease to be effective on or before the close of business on the Distribution Date and DPSG and each DPSG Subsidiary shall cease to be a participating employer under the terms of such Cadbury Designated Pension Plans as of such date.

(b) In respect of each DPSG Business Employee participating in Cadbury Designated Pension Plans, as set forth in Schedule 4.01(b), DPSG or DPSG Subsidiary shall assume and be responsible for all liabilities and obligations relating to Canadian Pension Plan benefits to be provided to each DPSG Business Employee for service on and after the cessation of participation in the Cadbury Designated Pension Plans as provided in Section 4.01(a). Subject to applicable funding or balance sheet adjustments between DPSG and Cadbury on an IAS19 liability basis as of December 31, 2007, Cadbury or a Cadbury Subsidiary shall retain or assume and be responsible for all liabilities and obligations relating to all benefits accrued by, and which remains payable to, DPSG Business Employees or Former DPSG Employees, under the terms of the Cadbury Designated Pension Plans, without further benefit accrual or otherwise on after the cessation of participation in the Cadbury Designated Pension Plans as provided for above.

ARTICLE 5
THIRD PARTY SERVICE PROVIDER AGREEMENTS

In connection with any agreements entered into by Cadbury or a Cadbury Subsidiary with third party service providers for the provision of services to be performed in connection with the administration of the Canadian Plans (“Service Provider Agreements”),

(a) where such Service Provider Agreements relate solely to the provision of services in connection with DPSG Canadian Plans, then the Parties will use reasonable commercial efforts to have such agreements assigned to DPSG or a DPSG Subsidiary on or before the Distribution Date or DPSG shall enter into new agreements in connection with the services so performed in connection with the DPSG Canadian Plans effective on or before the Distribution Date, and DPSG will be liable for all obligation and liabilities in connection with such Service Provider Agreements.

(b) where such Service Provider Agreements relate to the provision of services with respect to both Cadbury Canadian Plans and DPSG Canadian Plans then DPSG shall, effective on or before the Distribution Date, enter into new agreements in connection with the services so performed in connection with the DPSG Canadian Plans and

thereafter any such existing Service Provider Agreements shall apply only to Cadbury Canadian Plans.

Schedule 4.01(b)
DPSG Business Employees Participating in Cadbury Designated Pension Plans

For purposes of this Appendix 2, Andrew Bayfield, Wayne Delfino and Ron Segal are participants in the Cadbury Designated Pension Plans.

Exhibit 12.1

DR PEPPER SNAPPLE GROUP, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In millions, except ratio amounts)


	For the Three
	Months Ended
	March 31,			For the Fiscal Years
	2010			2009			2008			2007			2006
	( in millions )
Calculation of fixed charges ratio:
Income (loss) before provision (benefit) for income taxes, equity in earnings of unconsolidated subsidiaries and cumulative effect of change in accounting policy	$	157		$	868		$	(375	)	$	817		$	805

Add/(deduct):
Fixed Charges		38			265			285			274			273
Amortization of capitalized interest		1			2			1			1			1
Capitalized interest		(1	)		(8	)		(8	)		(6	)		(3	)

Total earnings available for fixed charges	$	195		$	1,127		$	(97	)	$	1,086		$	1,076


Fixed charges :
Interest expense	$	34		$	243		$	257		$	253		$	257
Capitalized interest		1			8			8			6			3
Interest component of rental expense ⁽¹⁾		3			14			20			15			13

Total fixed charges	$	38		$	265		$	285		$	274		$	273


Ratio of earnings to fixed charges		5.1	x		4.3	x		—			4.0	x		3.9	x

Deficiency in the coverage of earnings to fixed charges	$	—		$	—		$	382		$	—		$	—


(1)		Represents a reasonable estimate of the interest component of rental expense incurred by us.

Exhibit 31.1

CERTIFICATION

I, Larry D. Young, certify that:

1.		I have reviewed this Quarterly Report on Form 10-Q of Dr Pepper Snapple Group, Inc.;

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

	(d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	(a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2010



	/s/ Larry D. Young
	Larry D. Young
	President and Chief Executive Officer of Dr Pepper Snapple Group, Inc.

Exhibit 31.2

CERTIFICATION

I, John O. Stewart, certify that:

1.		I have reviewed this Quarterly Report on Form 10-Q of Dr Pepper Snapple Group, Inc.;

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

	(d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	(a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2010



	/s/ John O. Stewart
	John O. Stewart
	Executive Vice President and Chief Financial Officer of Dr Pepper Snapple Group, Inc.

Exhibit 32.1

Certification Pursuant To 18 U.S.C. Section 1350,
As Adopted Pursuant To
Section 906 of the Sarbanes-Oxley Act of 2002

I, Larry D. Young, President and Chief Executive Officer of Dr Pepper Snapple Group, Inc. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

	(1)		the Quarterly Report on Form 10-Q of the Company for the first quarterly period ended March 31, 2010, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

	(2)		the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 6, 2010



	/s/ Larry D. Young
	Larry D. Young
	President and Chief Executive Officer of Dr Pepper Snapple Group, Inc.

Exhibit 32.2

Certification Pursuant To 18 U.S.C. Section 1350,
As Adopted Pursuant To
Section 906 of the Sarbanes-Oxley Act of 2002

I, John O. Stewart, Executive Vice President and Chief Financial Officer of Dr Pepper Snapple Group, Inc. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

	(1)		the Quarterly Report on Form 10-Q of the Company for the first quarterly period ended March 31, 2010, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

	(2)		the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date: May 6, 2010	/s/ John O. Stewart
	John O. Stewart
	Executive Vice President and Chief Financial Officer of Dr Pepper Snapple Group, Inc.