PepsiCo ( PEP) said the Securities and Exchange Commission plans a civil action against the company after determining two employees helped Kmart ( KMRT) improperly record revenue in early 2001.

According to PepsiCo, two non-executive employees signed documents prepared by Kmart acknowledging $3 million in payments from Pepsi-Cola and $2.8 million from Frito-Lay, the SEC will allege. The SEC says Kmart allegedly used the documents to improperly record the timing of revenue from PepsiCo.

"Pepsi-Cola and Frito-Lay are cooperating fully with the investigation, and submitting reasons why they do not believe an action should be recommended or brought," the company said. "Based on an internal review, no officers of PepsiCo, Pepsi-Cola or Frito-Lay are involved. The matter does not involve any allegations regarding PepsiCo's own accounting for its transactions with Kmart or PepsiCo's financial statements."

Two former Kmart merchandise managers were indicted in February 2003 on fraud charges for allegedly misleading the company's accounting department in a scheme to improperly recognized a $42 million payment from a card company in June 2001.

PepsiCo shares were recently up 53 cents, or 1%, to $54.64. Shares of Kmart, which emerged from bankruptcy last summer and is now under different management, were recently down $1.10, or 2.5%, to $42.81.