Exhibit 10.2

FINAL VERSION

 

 

EMPLOYEE MATTERS AGREEMENT

between

KRAFT FOODS INC.

and

KRAFT FOODS GROUP, INC.

Dated as of September 27, 2012

 

 

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TABLE OF CONTENTS

 

         Page  

ARTICLE I DEFINITIONS

     1   

Section 1.1

  Table of Definitions      1   

Section 1.2

  Certain Defined Terms      2   

Section 1.3

  Other Capitalized Terms      9   

ARTICLE II GENERAL PRINCIPLES; EMPLOYEE TRANSFERS

     9   

Section 2.1

  SnackCo Group Employee Liabilities      9   

Section 2.2

  GroceryCo Group Employee Liabilities      9   

Section 2.3

  SnackCo Benefit Plans/GroceryCo Benefit Plans      9   

Section 2.4

  Plan-Related Litigation      10   

Section 2.5

  Vacation and Sick Pay      10   

Section 2.6

  Employee Transfers      10   

Section 2.7

  Annual Bonuses      11   

Section 2.8

  Seconded Employees      11   

Section 2.9

  Certain Canadian Matters      12   

ARTICLE III SERVICE CREDIT

     13   

Section 3.1

  Service Credit for Employee Transfers      13   

Section 3.2

  SnackCo Benefit Plans      13   

Section 3.3

  GroceryCo Benefit Plans      13   

ARTICLE IV CERTAIN WELFARE BENEFIT PLAN MATTERS

     14   

Section 4.1

  SnackCo Retained Welfare Plans      14   

Section 4.2

  SnackCo Spinoff Welfare Plans      14   

Section 4.3

  Continuation of Elections      14   

Section 4.4

  Deductibles and Other Cost-Sharing Provisions      15   

Section 4.5

  Flexible Spending Account Treatment      15   

Section 4.6

  Workers' Compensation      15   

ARTICLE V TAX-QUALIFIED DEFINED BENEFIT PLANS

     15   

Section 5.1

  SnackCo Spinoff DB Plans      15   

Section 5.2

  Continuation of Elections      17   

ARTICLE VI U.S. TAX-QUALIFIED DEFINED CONTRIBUTION PLANS

     17   

Section 6.1

  SnackCo Retained Defined Contribution Plans      17   

Section 6.2

  SnackCo Spinoff DC Plans      18   

Section 6.3

  Continuation of Elections      19   

Section 6.4

  Contributions Due      19   

 

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TABLE OF CONTENTS

(Continued)

 

         Page   ARTICLE VII NONQUALIFIED RETIREMENT PLANS      20   

Section 7.1

  SnackCo Retained Nonqualified Plans      20   

Section 7.2

  SnackCo Spinoff Nonqualified Plans      20   

Section 7.3

  General Foods Plan      22   

Section 7.4

  No Distributions on Separation      22   

Section 7.5

  Section 409A      22   

Section 7.6

  Continuation of Elections      22   

Section 7.7

  Delayed Transfer Employees      22   

Section 7.8

  Kraft Foods Inc. Directors’ Plans      22    ARTICLE VIII KRAFT FOODS EQUITY
COMPENSATION AWARDS      23   

Section 8.1

  Outstanding Kraft Foods Equity Compensation Awards      23   

Section 8.2

  Tax Withholding, Reporting and Deductions      27   

Section 8.3

  Employment Treatment      28   

Section 8.4

  Payment of Option Exercise Prices      28   

Section 8.5

  Dividends/Dividend Equivalents      29   

Section 8.6

  Equity Award Administration      29   

Section 8.7

  Forfeiture-Related Payments      29   

Section 8.8

  Registration      29   

Section 8.9

  Non-Employee Directors' Stock Units      30    ARTICLE IX BENEFIT PLAN
REIMBURSEMENTS, BENEFIT PLAN THIRD-PARTY CLAIMS      31   

Section 9.1

  General Principles      31   

Section 9.2

  Benefit Plan Third-Party Claims      31    ARTICLE X INDEMNIFICATION      31
  

Section 10.1

  Indemnification      31    ARTICLE XI COOPERATION      32   

Section 11.1

  Cooperation      32   

 

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TABLE OF CONTENTS

(Continued)

 

         Page  

ARTICLE XII MISCELLANEOUS

     32   

Section 12.1

  Vendor Contracts      32   

Section 12.2

  Further Assurances      32   

Section 12.3

  Employment Taxes Withholding Reporting Responsibility      32   

Section 12.4

  Data Privacy      33   

Section 12.5

  Third Party Beneficiaries      33   

Section 12.6

  Effect if Distribution Does Not Occur      33   

Section 12.7

  Incorporation of Separation Agreement Provisions      33   

Section 12.8

  No Representation or Warranty      33                            

Schedule 2.3: Material SnackCo Benefit Plans

Schedule 4.1: SnackCo Retained Welfare Plans

Schedule 4.2: Split Welfare Plans

Schedule 5.1(a): Split DB Plans

Schedule 5.1(b): SnackCo Spinoff DB Plans Participating in the SnackCo Master DB
Trust

Schedule 6.2(a): Split DC Plans

Schedule 6.2(b): SnackCo Spinoff DC Plans Participating in the SnackCo Master DC
Trust

Schedule 7.1(a): SnackCo Retained Nonqualified Plans

Schedule 7.2(a): Split Nonqualified Plans

Schedule 7.2(b): SnackCo Spinoff Nonqualified Plans

  

  

  

  

  

  

  

  

  

  

 

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EMPLOYEE MATTERS AGREEMENT

EMPLOYEE MATTERS AGREEMENT, dated as of September 27, 2012 (this “Employee
Matters Agreement” ), between Kraft Foods Inc., a Virginia corporation (“Kraft
Foods Inc.” or “SnackCo”), and Kraft Foods Group, Inc., a Virginia corporation
(“GroceryCo” ).

RECITALS

A. The parties to this Employee Matters Agreement have entered into the
Separation and Distribution Agreement (the “Separation Agreement” ), dated as of
the date hereof, pursuant to which Kraft Foods Inc. intends to distribute to its
shareholders, on a pro rata basis, all the outstanding shares of common stock,
no par value, of GroceryCo then owned by Kraft Foods Inc. (the “Distribution”).

B. The parties wish to set forth their agreements as to certain matters
regarding the treatment of, and the compensation and employee benefits provided
to, current and former employees of SnackCo and GroceryCo and their
Subsidiaries.

AGREEMENT

In consideration of the foregoing and the mutual covenants and agreements herein
contained, and intending to be legally bound hereby, the parties agree as
follows, effective as of the Distribution Date:

ARTICLE I

DEFINITIONS

Section 1.1 Table of Definitions. The following terms have the meanings set
forth on the pages referenced below:

 

Definition

   Page  

Affiliate

     2   

Applicable Transfer Date

     10   

Benefit Plan

     3   

Delayed Transfer Employee

     10   

Employee Matters Agreement

     1   

Employment Agreement

     3   

ERISA

     3   

Estimated Retirement Plan Transfer Amount

     16   

Fair Value

     3   

Final Nonqualified Plan Transfer Amount

     21   

Final Nonqualified Plan Transfer Date

     21   

Final Retirement Plan Transfer Amount

     16   

Final Transfer Date

     16   

Definition

   Page  

Former Cadbury Employee

     3   

Former GroceryCo Business Employee

     4   

Former SnackCo Business Employee

     4   

GroceryCo

     1   

GroceryCo Benefit Plan

     4   

GroceryCo Common Stock

     4   

GroceryCo Deferred Stock Unit

     4   

GroceryCo Director

     30   

GroceryCo Employee

     4   

GroceryCo Employment Agreement

     5   

GroceryCo Equity Compensation Award

     5   

GroceryCo Master DB Trust

     16   

GroceryCo Option

     5   

 

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GroceryCo Performance Incentive Plans

     5   

GroceryCo Performance Share

     5   

GroceryCo Price

     5   

GroceryCo Rabbi Trusts

     21   

GroceryCo Restricted Share

     5   

GroceryCo SAR

     5   

GroceryCo Seconded Employees

     11   

GroceryCo Spinoff Welfare Plans

     14   

GroceryCo Transferees

     11   

GroceryCo Welfare Plan

     5   

Initial Nonqualified Plan Transfer Amount

     21   

Intrinsic Value

     5   

Kraft Foods Common Stock

     6   

Kraft Foods Deferred Stock Unit

     6   

Kraft Foods Director Plans

     22   

Kraft Foods Equity Compensation Award

     6   

Kraft Foods Inc.

     1   

Kraft Foods Option

     6   

Kraft Foods Performance Incentive Plans

     6   

Kraft Foods Performance Share

     6   

Kraft Foods Pre-Adjustment Price

     6   

Kraft Foods Restricted Share

     6   

Kraft Foods SAR

     6   

Liabilities

     6   

Nonqualified Plan True-Up Amount

     21   

Option Conversion Ratio

     7   

Original Group

     13   

Plan Payee

     7   

Puerto Rico Savings Plans

     18   

Seconded Employees

     11   

Separation Agreement

     1   

SnackCo

     1   

SnackCo Benefit Plans

     7   

SnackCo Common Stock

     7   

SnackCo Deferred Stock Unit

     7   

SnackCo Director

     30   

SnackCo Employee

     7   

SnackCo Employment Agreement

     7   

SnackCo Equity Compensation Award

     7   

SnackCo Master DB Trust

     16   

SnackCo Master DC Trust

     18   

SnackCo Option

     8   

SnackCo Performance Share

     8   

SnackCo Price

     8   

SnackCo Restricted Share

     8   

SnackCo Retained Benefit Plan

     8   

SnackCo Retained Nonqualified Plans

     20   

SnackCo Retained Welfare Plans

     14   

SnackCo SAR

     8   

SnackCo Seconded Employees

     11   

SnackCo Spinoff DB Plans

     15   

SnackCo Spinoff DC Plans

     18   

SnackCo Spinoff Nonqualified Plans

     20   

SnackCo Spinoff Plans

     8   

SnackCo Transferees

     11   

SnackCo Welfare Plan

     8   

Split DB Plans

     15   

Split DC Plans

     18   

Split Nonqualified Plans

     20   

Split Plans

     8   

Split Welfare Plans

     14   

Temporary Employment Period

     11   

Transferee Group

     13   

True-Up Amount

     16   

Vendor Contract

     32   

Welfare Plan

     8   

Workers’ Compensation Event

     9   

 

 

Section 1.2 Certain Defined Terms. For the purposes of this Employee Matters
Agreement:

“Affiliate” of any Person means a Person that controls, is controlled by, or is
under common control with such Person; provided, however, that for purposes of
this Employee Matters Agreement, from and after the Distribution, none of the
SnackCo Entities shall be deemed to be an Affiliate of any GroceryCo Entity and
none of the

 

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GroceryCo Entities shall be deemed to be an Affiliate of any SnackCo Entity. As
used in this definition of “Affiliate,” “control” means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such entity, whether through ownership of voting securities or
other interests, by contract or otherwise.

“Benefit Plan” means, with respect to an entity, each plan, program, policy,
agreement, arrangement or understanding that is maintained primarily for the
benefit of employees in the United States or Puerto Rico and is a deferred
compensation, executive compensation, incentive bonus or other bonus, pension,
profit sharing, savings, retirement, severance pay, salary continuation, life,
death benefit, health, hospitalization, sick leave, vacation pay, disability or
accident insurance or other employee benefit plan, program, agreement or
arrangement, including any “employee benefit plan” (as defined in Section 3(3)
of ERISA) sponsored, maintained or contributed to by such entity or to which
such entity is a party or under which such entity has any obligation; provided
that no Kraft Foods Equity Compensation Award, nor any plan under which any such
Kraft Foods Equity Compensation Award is granted, shall constitute a “Benefit
Plan” under this Employee Matters Agreement. In addition, no Employment
Agreement shall constitute a Benefit Plan for purposes hereof.

“Distribution Date” means the date, determined by the Kraft Foods Inc. Board of
Directors, on which the Distribution occurs.

“Distribution Ratio” means the number of shares of GroceryCo Common Stock to be
distributed in respect of each share of Kraft Foods Common Stock in the
Distribution, which ratio shall be determined by the Kraft Foods Inc. Board of
Directors prior to the Record Date.

“Employment Agreement” means any individual employment, retention, consulting,
change in control, split dollar life insurance, sale bonus, incentive bonus,
severance or other individual compensatory agreement between any current or
former employee and Kraft Foods Inc. or any of its Affiliates.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Fair Value” means, in the case of GroceryCo Options and SnackCo Options, the
anticipated value of the options, determined using the Modified Black-Scholes
option pricing model used by Kraft Foods Inc. in the preparation of its most
recent annual or quarterly financial reporting prepared before the Distribution
Date with such modifications as may be determined before the Distribution Date
by Kraft Foods Inc.

“Former Cadbury Employee” means any individual who (i) was employed by Cadbury
Limited (formerly Cadbury plc) or an Affiliate of Cadbury Limited prior to the
acquisition by Kraft Foods Inc. of the outstanding ordinary shares of Cadbury
Limited, and (ii) terminated employment with Kraft Foods Inc. and its Affiliates
(or the predecessors thereof, including Cadbury Limited and its Affiliates)
prior to the close of business on the Distribution Date.

 

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“Former GroceryCo Business Employee” means any individual who (i) before the
close of business on the Distribution Date retired or otherwise separated from
service from Kraft Foods Inc. and its Affiliates, and (ii) is not a Former
SnackCo Business Employee or a Former Cadbury Employee; provided, however, that
any individual who otherwise would be treated as a Former SnackCo Business
Employee hereunder shall be treated as a Former GroceryCo Business Employee if
such individual is receiving or is eligible to commence receiving severance
benefits from Kraft Foods Inc. or an Affiliate immediately prior to the
Distribution Date.

“Former SnackCo Business Employee” means any individual (i) who before the close
of business on the Distribution Date retired or otherwise separated from service
from Kraft Foods Inc. and its Affiliates, and (ii) whose last day worked with
Kraft Foods Inc. and its Affiliates prior to the close of business on the
Distribution Date was with (A) the SnackCo Business, or (B) SnackCo or any
Person that will be a direct or indirect Subsidiary of SnackCo immediately after
the Distribution. However, any individual who otherwise would be treated as a
Former SnackCo Business Employee hereunder shall be treated as a Former
GroceryCo Business Employee if such individual is receiving or is eligible to
commence receiving severance benefits from Kraft Foods Inc. or an Affiliate
immediately prior to the Distribution Date. Except as specifically provided
herein, and notwithstanding the immediately-preceding sentence, each Former
Cadbury Employee shall also be treated as a Former SnackCo Business Employee.

“GroceryCo Benefit Plan” means any Benefit Plan sponsored or maintained by any
member of the GroceryCo Group. GroceryCo Benefit Plan shall also mean any
multiemployer plan (as defined in Section 3(37) of ERISA) to which any member of
the GroceryCo Group contributes for the benefit of its employees. For the
avoidance of doubt, no member of the GroceryCo Group shall be deemed to sponsor
or maintain any Benefit Plan if its relationship to such Benefit Plan is solely
to administer such Benefit Plan or provide to SnackCo any reimbursement in
respect of such Benefit Plan. The GroceryCo Benefit Plans (excluding any
multiemployer plans) shall be those Benefit Plans sponsored solely by one or
more members of the GroceryCo Group following the Distribution Date. For the
avoidance of doubt, no Benefit Plan sponsored or maintained by Kraft Foods Inc.
or its Affiliates outside the United States (including its territories) and
Canada as of the Distribution Date shall be a GroceryCo Benefit Plan, and the
GroceryCo Group shall have no liability with respect to any such Benefit Plan.

“GroceryCo Common Stock” means the common stock, no par value, of GroceryCo.

“GroceryCo Deferred Stock Unit” means a deferred stock obligation relating to
GroceryCo Common Stock granted by GroceryCo as of the Distribution Date under a
GroceryCo Performance Incentive Plan pursuant to Section 8.1(a)(ii)(B).

“GroceryCo Employee” means each individual who, as of the close of business on
the Distribution Date, is employed by a member of the GroceryCo Group
(including, for the avoidance of doubt, any such individual who is on a leave of
absence, whether paid or unpaid, from which such employee is permitted to return
(in accordance with GroceryCo’s personnel policies)). GroceryCo Employees also
include GroceryCo Transferees, effective as of the Applicable Transfer Date.

 

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“GroceryCo Employment Agreement” means any Employment Agreement to which any
member of the GroceryCo Group is a party. The GroceryCo Employment Agreements
shall be the responsibility of one or more members of the GroceryCo Group
following the Distribution Date.

“GroceryCo Equity Compensation Award” means each GroceryCo Option, GroceryCo
SAR, GroceryCo Performance Share, GroceryCo Restricted Share or GroceryCo
Deferred Stock Unit.

“GroceryCo Option” means an option to acquire GroceryCo Common Stock granted by
GroceryCo as of the Distribution Date under a GroceryCo Performance Incentive
Plan pursuant to Section 8.1(a)(i)(B).

“GroceryCo Performance Incentive Plans” means the Kraft Foods Group, Inc. 2012
Performance Incentive Plan and any stock-based or other incentive plan
identified by GroceryCo before the Distribution Date.

“GroceryCo Performance Share” means performance-based awards of shares of
GroceryCo Common Stock granted by GroceryCo as of the Distribution Date under a
GroceryCo Performance Incentive Plan pursuant to Section 8.1(a)(iii)(A).

“GroceryCo Price” means the Kraft Foods Pre-Adjustment Price multiplied by a
fraction, (a) the numerator of which is the closing price of GroceryCo Common
Stock on the NASDAQ Global Select Market on the Distribution Date (as traded on
the “when issued” market) and (b) the denominator of which is the sum of the
numerator multiplied by the Distribution Ratio plus the closing price of SnackCo
Common Stock on the NASDAQ Global Select Market on the Distribution Date (as
traded on the “when issued” market).

“GroceryCo Restricted Share” means a share of restricted common stock relating
to GroceryCo Common Stock granted by GroceryCo as of the Distribution Date under
a GroceryCo Performance Incentive Plan pursuant to Section 8.1(a)(ii)(A).

“GroceryCo SAR” means a cash-settled stock appreciation right based on the value
of GroceryCo Common Stock granted by GroceryCo as of the Distribution Date under
a GroceryCo Performance Incentive Plan pursuant to Section 8.1(a)(i)(B).

“GroceryCo Welfare Plan” means each GroceryCo Benefit Plan that is a Welfare
Plan.

“Intrinsic Value” means, with respect to each stock option and stock
appreciation right, (i) the number of such options or stock appreciation rights,
multiplied by (ii) the difference between the exercise price of such options or
stock appreciation rights and (A) for Kraft Foods Options and Kraft Foods SARs,
the Kraft Foods Pre-Adjustment Price, (B) for SnackCo Options and SnackCo SARs,
the SnackCo Price, and (C) for GroceryCo Options and GroceryCo SARs, the
GroceryCo Price.

 

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“Kraft Foods Common Stock” means the Class A common stock, no par value, of
Kraft Foods Inc.

“Kraft Foods Deferred Stock Unit” means a deferred stock obligation relating to
Kraft Foods Common Stock granted by Kraft Foods Inc. under a Kraft Foods
Performance Incentive Plan before the Distribution Date.

“Kraft Foods Equity Compensation Award” means each Kraft Foods Option, Kraft
Foods SAR, Kraft Foods Performance Share, Kraft Foods Restricted Share or Kraft
Foods Deferred Stock Unit.

“Kraft Foods Option” means an option to acquire Kraft Foods Common Stock granted
by Kraft Foods Inc. under a Kraft Foods Performance Incentive Plan before the
Distribution Date.

“Kraft Foods Performance Incentive Plans” means any of the Kraft Foods Inc. 2001
Performance Incentive Plan, the Kraft Foods Inc. 2005 Performance Incentive
Plan, the Kraft Foods Inc. Amended and Restated 2005 Performance Incentive Plan,
the Kraft Foods Inc. 2001 Compensation Plan for Non-Employee Directors, the
Kraft Foods Inc. 2006 Stock Compensation Plan for Non-Employee Directors, the
Kraft Foods Inc. Amended and Restated 2006 Stock Compensation Plan for
Non-Employee Directors and any stock-based or other incentive plan identified by
Kraft Foods Inc. before the Distribution Date.

“Kraft Foods Performance Share” means performance-based awards of shares of
Kraft Foods Common Stock granted by Kraft Foods Inc. under a Kraft Foods
Performance Incentive Plan before the Distribution Date.

“Kraft Foods Pre-Adjustment Price” means the closing price of Kraft Foods Common
Stock on the NASDAQ Global Select Market on the Distribution Date (as traded on
the “regular way” market).

“Kraft Foods Restricted Share” means a share of restricted common stock granted
by Kraft Foods Inc. under a Kraft Foods Performance Incentive Plan before the
Distribution Date.

“Kraft Foods SAR” means a cash-settled stock appreciation right based on the
value of Kraft Foods Common Stock granted by Kraft Foods Inc. under a Kraft
Foods Performance Incentive Plan before the Distribution Date.

“Liabilities” means any and all losses, claims, charges, debts, demands,
Actions, damages, obligations, payments, costs and expenses, sums of money,
bonds, indemnities and similar obligations, penalties, covenants, contracts,
controversies, agreements, promises, omissions, guarantees, make whole
agreements and similar obligations, and other liabilities, including all
contractual obligations, whether absolute or

 

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contingent, inchoate or otherwise, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown, whenever arising, and
including those arising under any Law, Action, threatened or contemplated Action
(including the costs and expenses of demands, assessments, judgments,
settlements and compromises relating thereto and attorneys’ fees and any and all
costs and expenses (including allocated costs of in-house counsel and other
personnel), whatsoever incurred in investigating, preparing or defending against
any such Actions or threatened or contemplated Actions), order or consent decree
of any Governmental Authority or any award of any arbitrator of any kind, and
those arising under any contract, commitment or undertaking, including those
arising under this Employee Matters Agreement or incurred by a party hereto or
thereto in connection with enforcing its rights to indemnification hereunder, in
each case, whether or not recorded or reflected or required to be recorded or
reflected on the books and records or financial statements of any Person.

“Option Conversion Ratio” means the ratio of the pre-adjustment exercise price
of the applicable Kraft Foods Option or Kraft Foods SAR to the Kraft Foods
Pre-Adjustment Price.

“Plan Payee” means, as to an individual who participates in a Benefit Plan, such
individual’s dependents, beneficiaries, alternate payees and alternate
recipients, as applicable under such Benefit Plan.

“SnackCo Benefit Plans” means the SnackCo Retained Benefit Plans and the SnackCo
Spinoff Plans.

“SnackCo Common Stock” means the Class A common stock, no par value, of SnackCo.

“SnackCo Deferred Stock Unit” means a deferred stock obligation relating to
SnackCo Common Stock relating to a Kraft Foods Deferred Stock Unit described in
Section 8.1(a)(ii)(B).

“SnackCo Employee” means each individual who, as of the close of business on the
Distribution Date, is employed by a member of the SnackCo Group (including, for
the avoidance of doubt, any such individual who is on a leave of absence,
whether paid or unpaid, from which such employee is permitted to return (in
accordance with SnackCo’s personnel policies)). SnackCo Employees also include
SnackCo Transferees, effective as of the Applicable Transfer Date.

“SnackCo Employment Agreement” means any Employment Agreement to which any
member of the SnackCo Group is a party and to which no member of the GroceryCo
Group is a party. The SnackCo Employment Agreements shall be the sole
responsibility of one or more members of the SnackCo Group following the
Distribution Date.

“SnackCo Equity Compensation Award” means each SnackCo Option, SnackCo SAR,
SnackCo Performance Share, SnackCo Restricted Share or SnackCo Deferred Stock
Unit.

 

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“SnackCo Option” means an option to acquire SnackCo Common Stock relating to a
Kraft Foods Option described in Section 8.1(a)(i)(A).

“SnackCo Performance Share” means performance shares of SnackCo Common Stock
granted by SnackCo as of the Distribution Date under a SnackCo Performance
Incentive Plan pursuant to Section 8.1(a)(iii)(B).

“SnackCo Price” means the Kraft Foods Pre-Adjustment Price multiplied by a
fraction, (a) the numerator of which is the closing price of SnackCo Common
Stock on the NASDAQ Global Select Market on the Distribution Date (as traded on
the “when issued” market) and (b) the denominator of which is the sum of the
numerator plus the closing price of GroceryCo Common Stock on the NASDAQ Global
Select Market on the Distribution Date (as traded on the “when issued” market)
multiplied by the Distribution Ratio.

“SnackCo Restricted Share” means a share of restricted common stock with respect
to SnackCo Common Stock relating to Kraft Foods Restricted Shares pursuant to
Section 8.1(a)(ii)(A).

“SnackCo Retained Benefit Plan” means any Benefit Plan that, as of the close of
business on the day before the Distribution Date, is sponsored or maintained
solely by any member of the SnackCo Group. SnackCo Retained Benefit Plan shall
also mean any multiemployer plan (as defined in Section 3(37) of ERISA) to which
any member of the SnackCo Group contributes for the benefit of its employees.
For the avoidance of doubt, no member of the SnackCo Group shall be deemed to
sponsor or maintain any Benefit Plan if its relationship to such Benefit Plan is
solely to administer such Benefit Plan or provide to GroceryCo any reimbursement
in respect of such Benefit Plan. The SnackCo Retained Benefit Plans (excluding
any multiemployer plans) shall be sponsored solely by one or more members of the
SnackCo Group following the Distribution Date.

“SnackCo SAR” means a cash-settled stock appreciation right with respect to
SnackCo Common Stock relating to a Kraft Foods SAR described in
Section 8.1(a)(i)(A).

“SnackCo Spinoff Plans” means the SnackCo Spinoff DB Plans, SnackCo Spinoff DC
Plans, SnackCo Spinoff Nonqualified Plans and SnackCo Spinoff Welfare Plans.

“SnackCo Welfare Plan” means each SnackCo Benefit Plan that is a Welfare Plan.

“Split Plans” means the Split Welfare Plans, Split DB Plans, Split DC Plans and
Split Nonqualified Plans.

“Welfare Plan” means each Benefit Plan that provides life insurance, health
care, dental care, vision care, employee assistance programs (EAP), accidental
death and dismemberment insurance, disability, severance, vacation or other
group welfare or fringe benefits and is an “employee welfare benefit plan” as
described in Section 3(1) of ERISA.

 

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“Workers’ Compensation Event” means the event, injury, illness or condition
giving rise to a workers’ compensation claim.

Section 1.3 Other Capitalized Terms. Capitalized terms not defined in this
Employee Matters Agreement shall have the meanings ascribed to them in the
Separation Agreement.

ARTICLE II

GENERAL PRINCIPLES; EMPLOYEE TRANSFERS

Section 2.1 SnackCo Group Employee Liabilities. Except as specifically provided
in this Employee Matters Agreement, the SnackCo Group shall be solely
responsible for (i) all employment, compensation and employee benefits
Liabilities relating to SnackCo Employees and Former SnackCo Business Employees,
(ii) all Liabilities arising under each SnackCo Benefit Plan and SnackCo
Employment Agreement, (iii) except with respect to matters covered by Article
VIII hereof, all Liabilities arising before the Distribution Date with respect
to employment outside the United States (including its territories) and Canada
by current or former employees of Kraft Foods Inc. and its Affiliates, and
(iv) all Liabilities with respect to Benefit Plans maintained outside the United
States (including its territories) and Canada (and the GroceryCo Group shall not
retain or assume sponsorship of any such Benefit Plan).

Section 2.2 GroceryCo Group Employee Liabilities. Except as specifically
provided in this Employee Matters Agreement, the GroceryCo Group shall be solely
responsible for (i) all employment, compensation and employee benefits
Liabilities relating to GroceryCo Employees and Former GroceryCo Business
Employees, (ii) all Liabilities arising under each GroceryCo Benefit Plan and
GroceryCo Employment Agreement, and (iii) such obligations as are assigned to
the GroceryCo Group pursuant to Article VIII hereof.

Section 2.3 SnackCo Benefit Plans/GroceryCo Benefit Plans.

(a) Schedule 2.3 sets forth a complete list of all material SnackCo Benefit
Plans. Effective immediately prior to the Distribution, SnackCo or another
member of the SnackCo Group shall, as applicable in accordance with this
Employee Matters Agreement, adopt, continue or, to the extent necessary, assume
sponsorship of each SnackCo Benefit Plan, and the GroceryCo Group shall use
reasonable efforts to transfer or cause to be transferred to SnackCo all plan
documents, trust agreements, insurance policies, administrative agreements, and
other agreements and instruments reasonably required for the maintenance and
administration of the SnackCo Benefit Plans. To facilitate SnackCo’s
establishment of the SnackCo Spinoff Plans, GroceryCo shall, prior to the
Distribution, provide SnackCo with draft plan documents of the SnackCo Spinoff
Plans for SnackCo’s review and consideration, but such plan documents shall
ultimately be the responsibility of SnackCo.

 

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(b) Effective as of the Distribution, the SnackCo Group shall be exclusively
responsible for administering each SnackCo Benefit Plan in accordance with its
terms and for all obligations and liabilities with respect to the SnackCo
Benefit Plans and all benefits owed to participants in the SnackCo Benefit
Plans, whether arising before, on or after the Distribution Date. Except as
specifically provided herein, SnackCo shall not assume sponsorship, maintenance
or administration of any Benefit Plan that is not a SnackCo Benefit Plan or
receive or assume any assets or liabilities in connection with any such Benefit
Plan.

(c) Effective as of the Distribution, the GroceryCo Group shall be exclusively
responsible for administering each GroceryCo Benefit Plan in accordance with its
terms and for all obligations and liabilities with respect to the GroceryCo
Benefit Plans and all benefits owed to participants in the GroceryCo Benefit
Plans, whether arising before, on or after the Distribution Date.

Section 2.4 Plan-Related Litigation. Notwithstanding anything herein to the
contrary, the management of the defense of all litigation related to the
GroceryCo Benefit Plans and the SnackCo Benefit Plans shall be governed by
Article VI of the Separation Agreement, and this Employee Matters Agreement
shall govern the allocation of Liabilities related to any such litigation.

Section 2.5 Vacation and Sick Pay. The SnackCo Group shall assume responsibility
for accrued vacation and sick pay and any other paid time off attributable to
SnackCo Employees and Former SnackCo Business Employees (i.e., with respect to
Former SnackCo Business Employees, for vacation, sick pay and other paid time
off that has been accrued but not cashed out) as of the Distribution Date, or
Applicable Transfer Date. The GroceryCo Group shall assume responsibility for
accrued vacation and sick pay and any other paid time off attributable to
GroceryCo Employees and Former GroceryCo Business Employees (i.e., with respect
to Former GroceryCo Business Employees, for vacation, sick pay and other paid
time off that has been accrued but not cashed out) as of the Distribution Date,
or Applicable Transfer Date.

Section 2.6 Employee Transfers. Upon mutual agreement of GroceryCo and SnackCo,
any employee whose employment transfers within ninety (90) days after the
Distribution Date from the SnackCo Group to the GroceryCo Group or from the
GroceryCo Group to the SnackCo Group because they were inadvertently and
erroneously treated as employed by the wrong employer on the Distribution Date,
and who was continuously employed by a member of the GroceryCo Group or the
SnackCo Group (as applicable) from the Distribution Date through the date such
employee commences active employment with a member of the SnackCo Group or
GroceryCo Group (as applicable) shall be a “Delayed Transfer Employee .” For
purposes of this Employee Matters Agreement, the date on which a Delayed
Transfer Employee actually commences employment with the GroceryCo Group or the
SnackCo Group (as applicable) is referred to as such individual’s “Applicable
Transfer Date” and such Applicable Transfer Date shall, except as expressly
provided herein and in compliance with Law applicable to the Employee Plans, be
treated as the Distribution Date for Delayed Transfer Employees where the
Distribution Date is referenced in this Employee Matters Agreement.
Notwithstanding anything herein to the contrary, the mutual agreement with
respect to, and Applicable Transfer Date of, any Delayed Transfer Employee must
occur on or before ninety (90) days after the Distribution Date.

 

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For purposes of this Employee Matters Agreement, Delayed Transfer Employees who
transfer from the SnackCo Group to the GroceryCo Group are referred to as
“GroceryCo Transferees” and Delayed Transfer Employees who transfer from the
GroceryCo Group to the SnackCo Group are referred to as “SnackCo Transferees”.

Section 2.7 Annual Bonuses. The SnackCo Group shall be solely responsible for
all annual bonuses earned by SnackCo Employees and Former SnackCo Business
Employees (i.e., for accrued but unpaid bonuses for Former SnackCo Business
Employees) with respect to periods ending on or after January 1, 2012. The
GroceryCo Group shall be solely responsible for all annual bonuses earned by
GroceryCo Employees and Former GroceryCo Business Employees (i.e., for accrued
but unpaid bonuses for Former GroceryCo Business Employees) with respect to
periods ending on or after January 1, 2012.

Section 2.8 Seconded Employees.

(a) Prior to the Distribution Date, the parties shall mutually agree to, and
identify, the (i) employees the parties intend will ultimately be employed by
the SnackCo Group but who will be seconded to the GroceryCo Group immediately
following the Distribution Date (“SnackCo Seconded Employees”), and
(ii) employees the parties intend will ultimately be employed by the GroceryCo
Group but who will be seconded to the SnackCo Group immediately following the
Distribution Date (“GroceryCo Seconded Employees” and, collectively with the
SnackCo Seconded Employees, the “Seconded Employees”). The period during which a
GroceryCo Seconded Employee is performing services for SnackCo or a SnackCo
Seconded Employee is performing services for GroceryCo is referred to herein as
the “Temporary Employment Period”. The Temporary Employment Period is intended
to be a short-term assignment and shall not exceed two (2) years following the
Distribution Date or such shorter time as agreed by the parties with respect to
a particular Seconded Employee.

(b) During the Temporary Employment Period, with respect to Seconded Employees,
except as provided in Section 2.8(c), (i) GroceryCo Seconded Employees shall
receive base salary, bonuses, incentive awards, employee benefits and other
terms and conditions of employment substantially similar to those of GroceryCo
Employees at a similar level and GroceryCo shall be solely responsible for all
employment taxes with respect to the GroceryCo Seconded Employees, and
(ii) SnackCo Seconded Employees shall receive base salary, bonuses, incentive
awards, employee benefits and other terms and conditions of employment
substantially similar to those of SnackCo Employees at a similar level and
SnackCo shall be solely responsible for all employment taxes with respect to the
SnackCo Seconded Employees. GroceryCo shall provide SnackCo a monthly invoice
detailing the cash compensation, direct cost of employee benefits, and
employment taxes paid with respect to the GroceryCo Seconded Employees it
employed during the month, and SnackCo shall reimburse GroceryCo for such
amounts within sixty (60) days following receipt of such invoice. SnackCo shall
provide GroceryCo a monthly invoice detailing the cash compensation, direct cost
of employee benefits, and employment taxes paid with respect to the SnackCo
Seconded Employees it employed during the month, and GroceryCo shall reimburse
SnackCo for such amounts within sixty (60) days following receipt of such
invoice. Equity incentive awards, if any, shall be provided by GroceryCo to
GroceryCo Seconded Employees and by SnackCo to SnackCo Seconded Employees.

 

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(c) During the Temporary Employment Period, SnackCo Seconded Employees who are
not United States citizens or residents will remain on the payroll systems of
their home countries and receive base salary, bonuses, employee benefits and
other terms and conditions substantially similar to those of employees employed
by the same entity at a similar level in their home countries. SnackCo shall
provide GroceryCo a monthly invoice detailing the cash compensation, direct cost
of employee benefits, and employment taxes paid with respect to such SnackCo
Seconded Employees it employed during the month, and GroceryCo shall reimburse
SnackCo for such amounts within sixty (60) days following receipt of such
invoice.

(d) Immediately following the end of the applicable Temporary Employment Period,
the GroceryCo Group shall return each GroceryCo Seconded Employee and the
SnackCo Group shall return each SnackCo Seconded Employee to a position, in each
case with substantially similar terms and conditions of employment as for
similarly-situated employees of the GroceryCo Group or the SnackCo Group,
respectively. In the event that the GroceryCo Group offers employment to a
SnackCo Seconded Employee or the SnackCo Group offers employment to a GroceryCo
Seconded Employee immediately following the end of the applicable Temporary
Employment Period, each such employee shall be treated as a newly hired employee
of the GroceryCo Group or the SnackCo Group, respectively, for Benefit Plan
purposes.

Section 2.9 Certain Canadian Matters. Mondelez Canada Inc. and Kraft Canada Inc.
have entered into the Canadian Asset Transfer Agreement addressing the parties’
respective rights and obligations with respect to certain of the matters
addressed in this Employee Matters Agreement. Notwithstanding any other
provision of this Employee Matters Agreement to the contrary, (a) Article 6 of
the Canadian Asset Transfer Agreement between Mondelez Canada Inc. and Kraft
Canada Inc. shall govern the treatment of Canadian pension and benefits matters
in lieu of Articles IV through VII hereof, and (b) nothing in this Employee
Matters Agreement shall effect, constitute or change the timing of (i) any
transfer, assignment, conveyance or other disposition of, or any amendment,
modification, supplement or other change of or to, any right, title, interest or
benefits in any Assets owned or held by Kraft Canada Inc., Mondelez Canada Inc.,
any of their direct or indirect Subsidiaries (including partnerships), or any
trust or plan settled or established by any of the foregoing, or (ii) any
transfer, assumption, forgiveness or release of, or any amendment, modification,
supplement or other change of or to, any Liabilities of Kraft Canada Inc.,
Mondelez Canada Inc., any of their direct or indirect Subsidiaries (including
partnerships), or any trust or plan settled or established by any of the
foregoing. For greater certainty, Kraft Foods Options held by persons who are
residents of Canada or who worked in Canada at any time since the date that they
were awarded a Kraft Foods Option shall be disposed of in exchange for SnackCo
Options and GroceryCo Options as provided in Section 8.1(a)(i).

 

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ARTICLE III

SERVICE CREDIT

Section 3.1 Service Credit for Employee Transfers. The Benefit Plans shall
provide the following service crediting rules effective as of the Distribution
Date:

(a) If a Delayed Transfer Employee becomes employed by a member of the SnackCo
Group or GroceryCo Group on or before ninety (90) days after the Distribution
then such Delayed Transfer Employee’s service with the GroceryCo Group or the
SnackCo Group (as applicable) following the Distribution shall be recognized for
purposes of eligibility, vesting and pension credit under the appropriate
SnackCo Benefit Plans or GroceryCo Benefit Plans as appropriate, subject to the
terms of those plans.

(b) If a former employee of the GroceryCo Group or the SnackCo Group (such
Group, the “Original Group”) (whether or not a Delayed Transfer Employee)
becomes employed by a member of the other Group (such Group, the “Transferee
Group” ) either (i) later than ninety (90) days after the Distribution, or
(ii) without having been continuously employed by a member of the Original Group
from the Distribution through the date such former employee commences active
employment with a member of the Transferee Group, then the Benefit Plans of the
Transferee Group shall only recognize for any purpose such individual’s service
with the Original Group before or after the Distribution to the extent required
by Law or provided under the terms of the applicable Benefit Plan. If a former
employee is rehired by his or her Original Group, then all such individual’s
service shall be recognized by the Benefit Plans of the Original Group to the
extent required by Law or provided by the terms of the applicable Benefit Plan.

Section 3.2 SnackCo Benefit Plans. Subject to Section 3.1, from and after the
Distribution Date, or Applicable Transfer Date, SnackCo shall, and shall cause
its Affiliates and successors to, provide credit under the SnackCo Benefit Plans
to GroceryCo Employees who become employees of the SnackCo Group for their
pre-Distribution (or, as applicable, pre-Applicable Transfer Date) service with
GroceryCo and its predecessors and Affiliates (including Kraft Foods Inc. and
any of its Affiliates, the GroceryCo Group, and the SnackCo Group) for purposes
of determining eligibility for vacation/paid time-off, 5-year bonus week of paid
time-off, service awards (for hourly employees) and short-term disability
benefits consistent with the policies of Kraft Foods Inc. as of the date of this
Employee Matters Agreement; provided, however, that service shall not be
recognized to the extent that such recognition would result in the duplication
of benefits.

Section 3.3 GroceryCo Benefit Plans. Subject to Section 3.1, from and after the
Distribution Date, or Applicable Transfer Date, GroceryCo shall, and shall cause
its Affiliates and successors to, provide credit under the GroceryCo Benefit
Plans to SnackCo Employees who become employees of the GroceryCo Group for their
pre-Distribution (or, as applicable, pre-Applicable Transfer Date) service with
SnackCo and its predecessors and Affiliates (including Kraft Foods Inc. and any
of its Affiliates, the GroceryCo Group, and the SnackCo Group) for purposes of
determining eligibility for vacation/paid time-off, 5-year bonus week of paid
time-off, service awards (for hourly employees) and short-term disability
benefits consistent with the policies of Kraft Foods Inc. as of the date of this
Employee Matters Agreement; provided, however, that service shall not be
recognized to the extent that such recognition would result in the duplication
of benefits.

 

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ARTICLE IV

CERTAIN WELFARE BENEFIT PLAN MATTERS

Section 4.1 SnackCo Retained Welfare Plans. SnackCo shall cause a member of the
SnackCo Group to retain, or to the extent necessary, assume sponsorship of, the
Welfare Plans listed on Schedule 4.1 (the “SnackCo Retained Welfare Plans” ) and
take all necessary actions to continue contributions to the SnackCo Retained
Benefit Plans that are multiemployer Welfare Plans. To the extent necessary,
prior to the Distribution, SnackCo shall cause a member of the SnackCo Group to
assume sponsorship of the SnackCo Retained Welfare Plans. GroceryCo shall use
reasonable efforts to transfer or cause to be transferred to a member of the
SnackCo Group all plan documents, trust agreements, insurance policies,
administrative agreements and other agreements and instruments in the possession
of the members of the GroceryCo Group that are reasonably required for the
maintenance and administration of the SnackCo Retained Welfare Plans. From and
after the Distribution Date, the SnackCo Group shall be exclusively responsible
for all obligations and liabilities with respect to the SnackCo Retained Welfare
Plans, and all benefits owed to participants in the SnackCo Retained Welfare
Plans, whether accrued before, on or after the Distribution Date.

Section 4.2 SnackCo Spinoff Welfare Plans. Effective not later than the
Distribution, SnackCo or a member of the SnackCo Group shall establish certain
welfare benefit plans (such plans, the “SnackCo Spinoff Welfare Plans” ). Each
SnackCo Spinoff Welfare Plan shall have terms and features (including benefit
coverage options and employer contribution provisions) that are substantially
identical to one of the Benefit Plans listed on Schedule 4.2 (such Benefit
Plans, the “Split Welfare Plans” ) such that (for the avoidance of doubt) each
Split Welfare Plan is substantially replicated by a SnackCo Spinoff Welfare
Plan. Each SnackCo Spinoff Welfare Plan shall assume all liability from the
corresponding Split Welfare Plan with respect to, and shall provide benefits to,
those SnackCo Employees and Former Cadbury Employees and their respective Plan
Payees who immediately prior to the Distribution were participating in, or
entitled to present or future benefits under, the corresponding Split Welfare
Plan. From and after the Distribution Date, SnackCo and the SnackCo Group shall
be solely and exclusively responsible for all obligations and liabilities with
respect to, or in any way related to, the SnackCo Spinoff Welfare Plans, whether
accrued before, on or after the Distribution Date.

Section 4.3 Continuation of Elections. As of the Distribution Date, or
Applicable Transfer Date, SnackCo shall cause the SnackCo Spinoff Welfare Plans
to recognize and maintain all elections and designations (including, without
limitation, all coverage and contribution elections and beneficiary
designations) in effect with respect to SnackCo Employees and Former Cadbury
Employees prior to the Distribution Date, or Applicable Transfer Date, under the
corresponding Split Welfare Plan and apply such elections and designations under
the SnackCo Spinoff Welfare Plans for the remainder of the period or periods for
which such elections or designations are by their original terms effective.

 

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Section 4.4 Deductibles and Other Cost-Sharing Provisions. As of the
Distribution Date, or Applicable Transfer Date, SnackCo shall cause the SnackCo
Spinoff Welfare Plans to recognize all amounts applied to deductibles,
co-payments and out-of-pocket maximums with respect to SnackCo Employees and
Former Cadbury Employees under the corresponding Split Welfare Plan during the
plan year in which the Distribution or Applicable Transfer Date occurs, and the
SnackCo Spinoff Welfare Plans will not impose any limitations on coverage for
preexisting conditions other than such limitations as were applicable under the
corresponding Split Welfare Plan prior to the Distribution Date or Applicable
Transfer Date.

Section 4.5 Flexible Spending Account Treatment. With respect to the portion of
a Split Welfare Plan that consists of medical and dependent care flexible
spending accounts, as of the Distribution, SnackCo shall be solely responsible
for all liabilities with respect to SnackCo Employees and Former Cadbury
Employees, and the applicable SnackCo Spinoff Welfare Plan shall, as required
under Section 4.3, give effect to the elections of SnackCo Employees and Former
Cadbury Employees (i.e., Former Cadbury Employees who elected “COBRA” with
respect to their medical care flexible spending accounts) that were in effect
under the corresponding Split Welfare Plan as of the Distribution Date or
Applicable Transfer Date.

Section 4.6 Workers’ Compensation. The SnackCo Group shall be solely responsible
for all United States (including its territories) workers’ compensation claims
of (a) GroceryCo Employees and Former GroceryCo Business Employees with respect
to Workers’ Compensation Events occurring before the Distribution Date, and
(b) SnackCo Employees and Former SnackCo Business Employees, regardless of when
the Workers’ Compensation Events occur. The GroceryCo Group shall be solely
responsible for all workers’ compensation claims of GroceryCo Employees with
respect to Workers’ Compensation Events occurring on or after the Distribution
Date, except for claims that are defined by individual state workers’
compensation boards as “Cumulative Trauma” claims. Cumulative Trauma claims are
governed by Section 4.7(f) of the Separation Agreement.

ARTICLE V

TAX-QUALIFIED DEFINED BENEFIT PLANS

Section 5.1 SnackCo Spinoff DB Plans.

(a) Effective as of the Distribution Date, SnackCo or another member of the
SnackCo Group shall assume certain defined benefit plans established effective
September 1, 2012 that are intended to qualify under Code Section 401(a) or
under Puerto Rico tax law, along with a related master trust or trusts that is
exempt under Code Section 501(a) (such plans and trusts, the “SnackCo Spinoff DB
Plans” ). Each SnackCo Spinoff DB Plan shall have terms and features (including
benefit accrual provisions) that are substantially identical to one of the
Benefit Plans listed on Schedule 5.1(a) (such Benefit Plans, the “Split DB
Plans” ), such that (for the avoidance of doubt) each Split DB Plan is
substantially replicated by a corresponding SnackCo Spinoff DB Plan. Each
SnackCo Spinoff DB Plan shall assume liability for all benefits accrued or
earned (whether or not vested) by SnackCo Employees and Former Cadbury Employees
and their respective Plan

 

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Payees under the corresponding Split DB Plan as of the Distribution Date.
SnackCo or a member of the SnackCo Group shall be solely responsible for taking
all necessary, reasonable, and appropriate actions (including the submission of
the SnackCo Spinoff DB Plans to the Internal Revenue Service for a determination
of Tax-qualified status) to establish, maintain and administer the SnackCo
Spinoff DB Plans so that they are qualified under Section 401(a) of the Code and
that the related trusts thereunder are exempt under Section 501(a) of the Code.
The portion of liabilities relating to SnackCo Employees and Former Cadbury
Employees and their respective Plan Payees shall cease to be liabilities of the
applicable Split DB Plan, and shall be assumed by the corresponding SnackCo
Spinoff DB Plan in accordance with this Section and Section 414(l) of the Code,
Treasury Regulation Section 1.414(l)-1 and Section 208 of ERISA.

(b) A master trust (the “SnackCo Master DB Trust”) has been established to hold
the assets of the SnackCo Spinoff DB Plans. The SnackCo Spinoff DB Plans that
will participate in the SnackCo Master DB Trust effective as of the Distribution
are specified on Schedule 5.1(b). Kraft Foods Inc. or a member of the SnackCo
Group shall cause its actuary to determine the estimated value, as of August 31,
2012, of the assets required to be held on behalf of each SnackCo SpinOff DB
Plan in accordance with the assumptions and methodologies set forth in Treasury
Regulation Section 1.414(l)-1 and ERISA Section 4044 (the “Estimated Retirement
Plan Transfer Amount” for each such plan). Prior to or as of the Distribution,
GroceryCo or a member of the GroceryCo Group shall cause the master trust for
each Split DB Plan (the “GroceryCo Master DB Trust”) to transfer to the SnackCo
Master DB Trust on behalf of each corresponding SnackCo Spinoff DB Plan an
amount in cash or in-kind equal to the Estimated Retirement Plan Transfer Amount
for such plan, as adjusted for earnings based on actual earnings of the
applicable Split DB Plan from September 1, 2012 through the actual date of
transfer.

(c) Within 12 months following the Distribution Date, GroceryCo or another
member of the GroceryCo Group shall cause its actuary to provide SnackCo with a
revised calculation of the value, as of the Distribution of the assets to be
transferred to each SnackCo Spinoff DB Plan determined in accordance with the
assumptions and methodologies set forth in Treasury Regulation
Section 1.414(l)-1 and ERISA Section 4044 and reflecting any Delayed Transfer
Employees and their respective Applicable Transfer Dates and any demographic
updates (the “Final Retirement Plan Transfer Amount” for each such SnackCo
Spinoff DB Plan). Within 45 days of the receipt from the actuary of the
determination of the Final Retirement Plan Transfer Amount (determined as of
September 1, 2012), GroceryCo shall cause each Split DB Plan to transfer to the
corresponding SnackCo Spinoff DB Plan (the date of each such transfer, the
“Final Transfer Date” for each such plan) an amount in cash or in kind equal to
(i) the Final Retirement Plan Transfer Amount, minus (ii) the sum of (A) the
Estimated Retirement Plan Transfer Amount, and (B) the aggregate amount of
payments made from the Split DB Plan to SnackCo Employees and Former Cadbury
Employees and their respective Plan Payees in order to satisfy any benefit
obligation with respect to such participants following the Distribution, or
Applicable Transfer Date for Delayed Transfer Employees, plus (iii) any payments
made from a SnackCo Spinoff DB Plan to a GroceryCo Transferee prior to when such
GroceryCo Transferee transferred from the SnackCo Group to the GroceryCo Group
(such amount, the “True-Up Amount” ). However, if the True-Up Amount is a

 

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negative number with respect to any SnackCo Spinoff DB Plan, GroceryCo shall not
be required to cause any such additional transfer and instead SnackCo shall be
required to cause a transfer of cash within 45 days of the receipt of written
notification by SnackCo from such SnackCo Spinoff DB Plan to the corresponding
Split DB Plan of the amount by which the sum of clauses (ii)(A) and (B) above,
minus the amount in (iii) above, exceeds the Final Retirement Plan Transfer
Amount. The True-Up Amount or the amount described in the immediately-preceding
sentence shall be adjusted to reflect actual earnings or losses of the Master DB
Trust from which the assets are being transferred from September 1, 2012 through
the Final Transfer Date. The parties hereto acknowledge that the Split DB Plans’
transfer of the True-Up Amount to the corresponding SnackCo Spinoff DB Plans
shall be in full settlement and satisfaction of the obligations of GroceryCo and
the Split DB Plans to transfer assets to the SnackCo Spinoff DB Plans pursuant
to this Section. In the event that SnackCo is obligated to cause any SnackCo
Spinoff DB Plan to reimburse the corresponding Split DB Plan pursuant to this
Section, such reimbursement or earnings calculation shall be performed in
accordance with the same principles set forth herein with respect to the payment
of the True-Up Amount.

(d) From and after the Distribution Date, SnackCo and the members of the SnackCo
Group shall be solely and exclusively responsible for all obligations and
liabilities with respect to, or in any way related to, the SnackCo Spinoff DB
Plans, whether accrued before, on or after the Distribution Date. For the
avoidance of doubt, the SnackCo Spinoff DB Plans shall have the sole and
exclusive obligation to restore the unvested accrued benefits attributable to
any individual who becomes employed by a member of the SnackCo Group and whose
employment with Kraft Foods Inc. or any of its Affiliates or a member of the
GroceryCo Group terminated on or before the Distribution at a time when such
individual’s benefits under the Split DB Plan were not fully vested.
Furthermore, the SnackCo Spinoff DB Plans shall have the sole obligation to
restore accounts attributable to any lost participants who were formerly
employed in the SnackCo Business.

Section 5.2 Continuation of Elections. As of the Distribution Date, or
Applicable Transfer Date, SnackCo (acting directly or through a member of the
SnackCo Group) shall cause the SnackCo Spinoff DB Plans to recognize and
maintain all existing elections, including beneficiary designations, payment
form elections and rights of alternate payees under qualified domestic relations
orders with respect to SnackCo Employees and Former Cadbury Employees and their
respective Plan Payees under the corresponding Split DB Plan.

ARTICLE VI

U.S. TAX-QUALIFIED DEFINED CONTRIBUTION PLANS

Section 6.1 SnackCo Retained Defined Contribution Plans. Prior to the
Distribution Date, SnackCo shall cause a member of the SnackCo Group to retain
or, to the extent necessary, assume sponsorship of the Cadbury Puerto Rico
Savings Plan (and its related trust). GroceryCo shall use reasonable efforts to
transfer or cause to be transferred to a member of the SnackCo Group all plan
documents, trust agreements, insurance policies, administrative agreements and
other agreements and instruments in the possession of the members of the
GroceryCo Group that are reasonably required for the maintenance

 

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and administration of the Cadbury Puerto Rico Savings Plan. From and after the
Distribution Date, the SnackCo Group shall be exclusively responsible for all
obligations and liabilities with respect to the Cadbury Puerto Rico Savings
Plan, all assets of the Cadbury Puerto Rico Savings Plan, and all benefits owed
to participants in the Cadbury Puerto Rico Savings Plan, whether accrued before,
on or after the Distribution Date. GroceryCo will retain sponsorship of the
Kraft Puerto Rico Savings Plan (collectively with the Cadbury Puerto Rico
Savings Plan, the “Puerto Rico Savings Plans” ) and shall be responsible for all
obligations and liabilities thereunder. In the event that a SnackCo Employee
transfers employment to the GroceryCo Group or a GroceryCo Employee transfers
employment to the SnackCo Group before or on the Distribution Date, his or her
account under the applicable Puerto Rico Savings Plan shall be transferred to
the other Puerto Rico Savings Plan using the same principles as specified in
Section 6.2(c) below.

Section 6.2 SnackCo Spinoff DC Plans.

(a) Effective as of the Distribution Date, SnackCo or another member of the
SnackCo Group shall assume certain defined contribution plans established
effective September 1, 2012 that are intended to qualify under Code
Section 401(a), and a related master trust or trusts exempt under Code
Section 501(a) (such plans and trusts, the “SnackCo Spinoff DC Plans” ). Each
SnackCo Spinoff DC Plan shall have terms and features (including employer
contribution provisions) that are substantially identical to one of the Benefit
Plans listed on Schedule 6.2(a) (such Benefit Plans, the “Split DC Plans” ) such
that (for the avoidance of doubt) each Split DC Plan is substantially replicated
by a corresponding SnackCo Spinoff DC Plan. SnackCo or a member of the SnackCo
Group shall be solely responsible for taking all necessary, reasonable, and
appropriate actions (including the submission of the SnackCo Spinoff DC Plans to
the Internal Revenue Service for a determination of Tax-qualified status) to
establish, maintain and administer the SnackCo Spinoff DC Plans so that they are
qualified under Section 401(a) of the Code and that the related trusts
thereunder are exempt under Section 501(a) of the Code. Each SnackCo Spinoff DC
Plan shall assume liability for all benefits accrued or earned (whether or not
vested) by SnackCo Employees and Former Cadbury Employees and their respective
Plan Payees under the corresponding Split DC Plan as of the Distribution Date or
Applicable Transfer Date.

(b) A master trust (the “SnackCo Master DC Trust”) has been established to hold
the assets of the SnackCo Spinoff DC Plans. The SnackCo Spinoff DC Plans that
will participate in the SnackCo Master DC Trust effective as of the Distribution
are specified on Schedule 6.2(b). Kraft Foods Inc. or a member of the SnackCo
Group shall cause the assets required to be held on behalf of each SnackCo
SpinOff DC Plan to be transferred to the SnackCo Master DC Trust no later than
the business day before the Distribution Date. All such asset transfers shall
equal the account balances of the affected participants and Plan Payees as of
the Transfer Date and shall be in the same form of property as held under the
trust for the applicable Split DC Plan. On or as soon as reasonably practicable
following the Distribution Date or Applicable Transfer Date, GroceryCo or
another member of the GroceryCo Group shall cause each Split DC Plan to transfer
to the applicable SnackCo Spinoff DC Plan, and SnackCo or another member of the
SnackCo Group shall cause such SnackCo Spinoff DC Plan to accept the transfer
of,

 

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the accounts, liabilities and related assets in such Split DC Plan attributable
to SnackCo Employees and Former Cadbury Employees and their respective Plan
Payees. The transfer of assets shall be in cash or in kind (as determined by the
transferor) and include outstanding loan balances and amounts forfeited by
Former Cadbury Employees that have not yet been reallocated or applied to the
payment of contributions or expenses and be conducted in accordance with Code
Section 414(l) and Treasury Regulation Section 1.414(1)-1 and Section 208 of
ERISA.

(c) On or as soon as reasonably practicable following the Applicable Transfer
Date (but not later than thirty (30) days thereafter), SnackCo or a member of
the SnackCo Group shall cause the accounts, related liabilities, and related
assets in the corresponding SnackCo Spinoff DC Plan(s) attributable to any
GroceryCo Transferees and their respective Plan Payees (including any
outstanding loan balances) to be transferred in cash or in-kind (as determined
by the transferor) in accordance with Code Section 414(l) and Treasury
Regulation Section 1.414(l)-1 and Section 208 of ERISA to the applicable Split
DC Plan(s). GroceryCo or another member of the GroceryCo Group shall cause the
applicable Split DC Plan(s) to accept such transfer of accounts, liabilities and
assets.

(d) From and after the Distribution Date, except as specifically provided in
paragraph (c) above, SnackCo and the SnackCo Group shall be solely and
exclusively responsible for all obligations and liabilities with respect to, or
in any way related to, the SnackCo Spinoff DC Plans, whether accrued before, on
or after the Distribution Date. For the avoidance of doubt, the SnackCo Spinoff
DC Plans shall have the sole and exclusive obligation to restore the unvested
portion of any account attributable to any individual who becomes employed by a
member of the SnackCo Group and whose employment with Kraft Foods Inc. or any of
its Affiliates, or a member of the GroceryCo Group terminated on or before the
Distribution at a time when such individual’s benefits under the Split DC Plans
were not fully vested. Furthermore, the SnackCo Spinoff DC Plans shall have the
sole obligation to restore accounts attributable to any lost participants who
were formerly employed in the SnackCo Business.

Section 6.3 Continuation of Elections. As of the Distribution Date, or
Applicable Transfer Date, SnackCo (acting directly or through a member of the
SnackCo Group) shall cause the SnackCo Spinoff DC Plans to recognize and
maintain all elections, including investment and payment form elections,
beneficiary designations, and the rights of alternate payees under qualified
domestic relations orders with respect to SnackCo Employees and Former Cadbury
Employees and their respective Plan Payees under the corresponding Split DC
Plan.

Section 6.4 Contributions Due. All contributions payable to the Split DC Plans
with respect to employee deferrals, matching contributions and employer
contributions for SnackCo Employees through the Distribution Date, determined in
accordance with the terms and provisions of the Split DC Plans, ERISA and the
Code, shall be paid by GroceryCo or another member of the GroceryCo Group to the
appropriate Split DC Plan prior to the date of any asset transfer described in
Section 6.2.

 

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ARTICLE VII

NONQUALIFIED RETIREMENT PLANS

Section 7.1 SnackCo Retained Nonqualified Plans.

(a) Prior to the Distribution Date, SnackCo shall cause a member of the SnackCo
Group to retain or, to the extent necessary, assume sponsorship of, the SnackCo
Retained Nonqualified Plans set forth on Schedule 7.1(a) (the “SnackCo Retained
Nonqualified Plans” ). GroceryCo shall use reasonable efforts to transfer or
cause to be transferred to a member of the SnackCo Group all plan documents,
administrative agreements and other agreements and instruments in the possession
of the members of the GroceryCo Group that are reasonably required for the
maintenance and administration of the SnackCo Retained Nonqualified Plans. From
and after the Distribution Date, the SnackCo Group shall be exclusively
responsible for all obligations and liabilities with respect to the SnackCo
Retained Nonqualified Plans, and all benefits owed to participants in the
SnackCo Retained Nonqualified Plans, whether accrued before, on or after the
Distribution Date.

(b) GroceryCo shall cause to be transferred to SnackCo the applicable rabbi
trusts established to pay benefits under the SnackCo Retained Nonqualified
Plans.

Section 7.2 SnackCo Spinoff Nonqualified Plans.

(a) Effective as of the Distribution, SnackCo or another member of the SnackCo
Group shall establish certain nonqualified retirement plans (such plans, the
“SnackCo Spinoff Nonqualified Plans” ). Each SnackCo Spinoff Nonqualified Plan
shall have terms and features (including employer contribution provisions) that
are substantially identical to one of the GroceryCo Benefit Plans listed on
Schedule 7.2(a) (such plans, the “Split Nonqualified Plans” ) such that (for the
avoidance of doubt), each Split Nonqualified Plan is substantially replicated by
a corresponding SnackCo Spinoff Nonqualified Plan. SnackCo or a member of the
SnackCo Group shall be solely responsible for taking all necessary, reasonable,
and appropriate actions to establish, maintain and administer the SnackCo
Spinoff Nonqualified Plans so that they do not result in adverse Tax
consequences under Code Section 409A. Each SnackCo Spinoff Nonqualified Plan
shall assume liability for all benefits accrued or earned (whether or not
vested) by SnackCo Employees and Former Cadbury Employees and their respective
Plan Payees under the corresponding Split Nonqualified Plan as of the
Distribution Date. From and after the Distribution Date, SnackCo and the SnackCo
Group shall be solely and exclusively responsible for all obligations and
liabilities with respect to, or in any way related to, the SnackCo Spinoff
Nonqualified Plans, whether accrued before, on or after the Distribution Date.
Furthermore, SnackCo and the SnackCo Group shall have the sole obligation to
restore in the SnackCo Spinoff Nonqualified Plans benefits under the Split
Nonqualified Plans attributable to any lost participants who were formerly
employed in the SnackCo Business.

 

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(b) Unless SnackCo and GroceryCo agree otherwise before the Distribution, prior
to or on the Distribution Date, GroceryCo or another member of the GroceryCo
Group shall cause its actuary to determine the estimated value, as of the
Distribution, of the amount of assets to be transferred from the rabbi trusts
established to pay benefits under one or more of the Split Nonqualified Plans
(the “GroceryCo Rabbi Trusts” ) to one or more trusts established or maintained
by SnackCo as designated by SnackCo with respect to the SnackCo Spinoff
Nonqualified Plans specified on Schedule 7.2(b) (the “Initial Nonqualified Plan
Transfer Amount”). The Initial Nonqualified Plan Transfer Amount shall be
determined by an actuary selected by the GroceryCo Group.

(c) Within 12 months following the Distribution, GroceryCo or another member of
the GroceryCo Group shall cause its actuary to provide SnackCo with a revised
calculation of the value, as of the Distribution, of the assets to be
transferred with respect to each SnackCo Spinoff Nonqualified Plan specified on
Schedule 7.2(b), as determined by the actuary selected by the GroceryCo Group,
and reflecting any Delayed Transfer Employees and their respective Applicable
Transfer Dates and any demographic updates (the “Final Nonqualified Plan
Transfer Amount” for each such plan).

Within 45 days of the receipt from the actuary of the determination of the Final
Nonqualified Plan Transfer Amount, GroceryCo shall cause the applicable
GroceryCo Rabbi Trust to transfer to a trust specified by SnackCo (the date of
each such transfer, the “Final Nonqualified Plan Transfer Date” for each such
plan) an amount in cash equal to (i) the Final Nonqualified Plan Transfer
Amount, minus (ii) the sum of (A) the Initial Nonqualified Plan Transfer Amount
and (B) the aggregate amount of payments made pursuant to the Split Nonqualified
Plan to SnackCo Employees, Delayed Transfer Employees and their respective Plan
Payees in order to satisfy any benefit obligation with respect to such
participants following the Distribution, or Applicable Transfer Date for Delayed
Transfer Employees, plus (iii) any payments made from a SnackCo Spinoff
Nonqualified Plan specified on Schedule 7.2(b) to a Delayed Transfer Employee
prior to when such Delayed Transfer Employee transferred from the SnackCo Group
to the GroceryCo Group (such amount the “Nonqualified Plan True-Up Amount”).
However, if the Nonqualified Plan True-Up Amount is a negative number with
respect to any SnackCo Spinoff Nonqualified Plan, GroceryCo shall not be
required to cause any such additional transfer and instead SnackCo shall be
required to cause a transfer of cash within 45 days of the receipt of written
notification by GroceryCo from the relevant SnackCo trust to the GroceryCo Rabbi
Trust specified by GroceryCo the amount by which the sum of clauses (ii)(A) and
(B) above, minus the amount in (iii) above, exceeds the Final Nonqualified Plan
Transfer Amount. The Nonqualified Plan True-Up Amount or the amount described in
the immediately-preceding sentence shall be adjusted to reflect earnings or
losses using the same principles described in Section 5.1(c). The parties hereto
acknowledge that the GroceryCo Rabbi Trusts’ transfer of the Nonqualified Plan
True-Up Amount to a SnackCo trust shall be in full settlement and satisfaction
of the obligations of GroceryCo and the GroceryCo Rabbi Trusts to transfer
assets to SnackCo or any SnackCo trust pursuant to this Section 7.2(c).

(d) Except for individual grantor/secular trusts covering SnackCo Employees, no
individual grantor/secular trusts shall be transferred to SnackCo.

 

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Section 7.3 General Foods Plan. GroceryCo shall retain sponsorship of, and shall
be responsible for all liabilities arising under, the General Foods Deferred
Compensation Plan. The corporate-owned life insurance policies that fund benefit
payments under such Plan shall remain the property of GroceryCo.

Section 7.4 No Distributions on Separation. SnackCo and GroceryCo acknowledge
that neither the Distribution nor any of the other transactions contemplated by
this Employee Matters Agreement, the Separation Agreement or the other Ancillary
Agreements will trigger a payment or distribution of compensation under any
Benefit Plan that is a nonqualified retirement plan for any SnackCo Employee,
GroceryCo Employee, former SnackCo Employee or Former GroceryCo Business
Employee and, consequently, that the payment or distribution of any compensation
to which any SnackCo Employee, GroceryCo Employee, former SnackCo Employee or
Former GroceryCo Business Employee is entitled under any such Benefit Plan will
occur upon such individual’s separation from service from the SnackCo Group or
the GroceryCo Group, as applicable, or at such other time as specified in the
applicable Benefit Plan.

Section 7.5 Section 409A. SnackCo and GroceryCo shall cooperate in good faith so
that the Distribution will not result in adverse Tax consequences under Code
Section 409A to any current or former employee of any member of the SnackCo
Group or any member of the GroceryCo Group, or their respective Plan Payees, in
respect of his or her benefits under any SnackCo Benefit Plan or GroceryCo
Benefit Plan.

Section 7.6 Continuation of Elections. As of the Distribution Date, or
Applicable Transfer Date, SnackCo (acting directly or through a member of the
SnackCo Group) shall cause each SnackCo Spinoff Nonqualified Plan to recognize
and maintain all elections, including deferral, investment and payment form
elections, beneficiary designations, and the rights of alternate payees under
qualified domestic relations orders with respect to SnackCo Employees and their
Plan Payees under the corresponding Split Nonqualified Plan.

Section 7.7 Delayed Transfer Employees. Any SnackCo Transferee shall be treated
in the same manner as a SnackCo Employee under this Article VII. As indicated in
Section 2.6, such a SnackCo Transferee’s Applicable Transfer Date shall be
treated as the Distribution Date. In addition, the GroceryCo Group shall assume
and be solely responsible, pursuant to the terms of the applicable Split
Nonqualified Plan, for any benefits accrued by any GroceryCo Transferee under
any SnackCo Spinoff Nonqualified Plan, and the SnackCo Group shall have no
liability with respect thereto.

Section 7.8 Kraft Foods Inc. Directors’ Plans. Kraft Foods Inc. has adopted the
2001 Kraft Foods Inc. Compensation Plan for Non-Employee Directors, the Kraft
Foods Inc. 2001 Stock Compensation Plan for Non-Employee Directors, the Kraft
Foods Inc. 2006 Stock Compensation Plan for Non-Employee Directors and the Kraft
Foods Inc. Amended and Restated 2006 Stock Compensation Plan for Non-Employee
Directors (collectively, the “Kraft Foods Director Plans”). Effective as of the
Distribution Date, GroceryCo shall assume, under corresponding GroceryCo
director plans, the accrued liability for deferred amounts under the Kraft Foods
Director Plans with respect to each

 

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GroceryCo Director. Except as otherwise provided in Section 8.9, as soon as
practicable following the Distribution Date, SnackCo shall pay to GroceryCo an
amount equal to such accrued liability (as determined for financial reporting
purposes as of the close of business on the Distribution Date).

ARTICLE VIII

KRAFT FOODS EQUITY COMPENSATION AWARDS

Section 8.1 Outstanding Kraft Foods Equity Compensation Awards.

(a) Each Kraft Foods Equity Compensation Award that is outstanding as of the
Distribution Date shall be adjusted as described below, so that each holder of a
Kraft Foods Equity Compensation Award shall hold adjusted equity awards with
respect to either a GroceryCo Equity Compensation Award, a SnackCo Equity
Compensation Award or both; provided, however, that, effective immediately prior
to the Distribution, the Human Resources and Compensation Committee of the Board
of Directors of Kraft Foods Inc. may provide for different adjustments with
respect to some or all of a holder’s Kraft Foods Equity Compensation Awards. For
greater certainty, any adjustments made by the Human Resources and Compensation
Committee of the Board of Directors of Kraft Foods Inc. shall be deemed
incorporated by reference herein as if fully set forth below and shall be
binding on the parties hereto and their respective Subsidiaries.

(i) Each Kraft Foods Option or Kraft Foods SAR generally shall be adjusted in
the manner described below, effective as of the Distribution Date and
immediately prior to the Distribution, so that each Kraft Foods Option and Kraft
Foods SAR holder, respectively, shall hold SnackCo Options (or SnackCo SARs) and
GroceryCo Options (or GroceryCo SARs) in lieu of the Kraft Foods Options (or
Kraft Foods SARs) previously held. The following procedure shall generally be
applied to each Kraft Foods Option (or Kraft Foods SAR) with the same grant date
and exercise price held by each Kraft Foods Option (or Kraft Foods SAR) holder
as of the Distribution Date. For the avoidance of doubt, the term “exercise
price” refers to the amount payable by an option holder in order to acquire
shares pursuant to a stock option award and to the base share value from which
the amount of appreciation due to a stock appreciation right holder upon
exercise of such stock appreciation right shall be measured:

(A) The SnackCo Option or SnackCo SAR shall have an exercise price equal to the
SnackCo Price multiplied by the Option Conversion Ratio. The number of SnackCo
Options or SnackCo SARs shall equal the number of Kraft Foods Options or Kraft
Foods SARs to which they relate. Such SnackCo Options and SnackCo SARs shall be
subject to the same vesting requirements and dates and other terms and
conditions as the Kraft Foods Options or Kraft Foods SARs to which they relate.

 

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(B) The GroceryCo Options and GroceryCo SARs shall have an exercise price equal
to the GroceryCo Price multiplied by the Option Conversion Ratio. The number of
GroceryCo Options and GroceryCo SARs shall equal the number of Kraft Foods
Options or Kraft Foods SARs, as applicable, multiplied by the Distribution
Ratio, rounded down to the nearest whole option or stock appreciation right, as
applicable. Such GroceryCo Options and GroceryCo SARs shall be subject to the
same vesting requirements and dates and other terms and conditions as the Kraft
Foods Options or Kraft Foods SARs to which they relate.

(C) If the resulting aggregate Intrinsic Value of the SnackCo Options or SnackCo
SARs and GroceryCo Options or GroceryCo SARs is less than the Intrinsic Value of
the corresponding Kraft Foods Options or Kraft Foods SARs, as the case may be,
then the difference shall be paid to the option holder in cash, less any
applicable taxes, as soon as practicable following the Distribution Date. If the
resulting aggregate Intrinsic Value of the SnackCo Options or SnackCo SARs and
GroceryCo Options or GroceryCo SARs, as the case may be, is greater than the
Intrinsic Value of the Kraft Foods Options or Kraft Foods SARs, as the case may
be, then the number of GroceryCo Options or GroceryCo SARs shall be reduced
until the aggregate Intrinsic Value of the SnackCo Options or SnackCo SARs and
GroceryCo Options or GroceryCo SARs is less than or equal to the Intrinsic Value
of the Kraft Foods Options or Kraft Foods SARs, as the case may be, and any
difference shall be paid to the option or stock appreciation right holder in
cash, less any applicable taxes, as soon as practicable following the
Distribution Date. Notwithstanding the foregoing, if the Intrinsic Value of the
SnackCo Options or SnackCo SARs is negative, only Section 8.1(a)(i)(B) shall be
applied. The cash payment described above shall be made by SnackCo to
individuals who are SnackCo Employees on the Distribution Date and by GroceryCo
to all other holders. Notwithstanding the foregoing, no cash shall be paid to an
option or stock appreciation right holder if Canadian tax would be payable by
the holder as a result of such cash payment.

(ii) With respect to Kraft Foods Restricted Shares and Kraft Foods Deferred
Stock Units:

(A) Each holder of Kraft Foods Restricted Shares will generally receive from
GroceryCo, as of the time of the Distribution Date and immediately prior to the
Distribution, GroceryCo Restricted Shares determined in the same manner as for
other shareholders of Kraft Foods Common Stock based on the Distribution Ratio,
rounded down to the nearest whole number of shares, with the value of any
fractional share paid to the grantee in cash, less any applicable taxes, as soon
as practicable following the Distribution Date (with such cash payment to be
made by SnackCo to individuals who are SnackCo Employees on the Distribution
Date and by GroceryCo to all other holders). Notwithstanding the foregoing, (I)
each holder of Kraft Foods Restricted Shares who is resident outside of the
United States or who is employed outside of the United States at the time of the
Distribution will generally receive from GroceryCo GroceryCo Deferred Stock
Units, in lieu of GroceryCo Restricted Stock, as provided in Section
8.1(a)(ii)(B); and (II) no cash shall be paid to a holder of Kraft Foods
Restricted Shares if Canadian tax would be payable by the holder as a result of
such cash payment. Such GroceryCo Restricted Shares shall be subject to the same
vesting requirements and dates and other terms and conditions as the Kraft Foods

 

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Restricted Shares to which they relate (including the right to receive dividends
or other distributions paid on GroceryCo Common Stock). Each Kraft Foods
Restricted Share shall continue to be one SnackCo Restricted Share which shall
be subject to the same vesting requirements and dates and other terms and
conditions as the Kraft Foods Restricted Shares to which it relates.

(B) Each holder of Kraft Foods Deferred Stock Units will generally receive from
GroceryCo, as of the time of the Distribution Date and immediately prior to the
Distribution, GroceryCo Deferred Stock Units, determined in the same manner as
for shareholders of Kraft Foods Common Stock based on the Distribution Ratio,
rounded down to the nearest whole number of shares, with the value of any
fractional share paid to the grantee in cash, less any applicable taxes, as soon
as practicable following the Distribution Date (with such cash payment to be
made by SnackCo to individuals who are SnackCo Employees on the Distribution
Date and by GroceryCo to all other holders). Notwithstanding the foregoing, no
cash shall be paid to a holder of Kraft Foods Deferred Stock Units if
(I) Canadian tax would be payable by the holder as a result of such cash
payment, or (II) the holder is subject to U.S. federal income tax on the
deferred stock units as of the Distribution Date and has attained normal
retirement age (within the meaning of the Kraft Foods Deferred Stock Units
agreement) or will attain normal retirement age before the GroceryCo Deferred
Stock Units become payable (or any other individual who holds Kraft Foods
Deferred Stock Units that are subject to Code Section 409A). All GroceryCo
Deferred Stock Units shall be subject to the same vesting requirements and dates
and other terms and conditions as the Kraft Foods Deferred Stock Units to which
they relate (including the right to be credited with dividends or other
distributions paid on GroceryCo Common Stock). Each Kraft Foods Deferred Stock
Unit shall continue to be a SnackCo Deferred Stock Unit which shall be subject
to the same vesting requirements and dates and other terms and conditions as the
Kraft Foods Deferred Stock Unit to which it relates.

(iii) With respect to Kraft Foods Performance Shares:

(A) An outstanding Kraft Foods Performance Share that, as of the Distribution
Date, is held by any GroceryCo Employee, shall be converted to a GroceryCo
Performance Share. Each GroceryCo Performance Share shall be adjusted into a
performance share award with respect to GroceryCo Common Stock. The adjustment
of the number of target shares will be determined by multiplying the target
number of Kraft Foods Performance Shares by the fraction with the numerator
equal to the Kraft Foods Pre-Adjustment Price and the denominator equal to the
average of the closing stock price of GroceryCo Common Stock as reported on the
NASDAQ Global Select Market for five consecutive trading days beginning with the
first trading day after the Distribution Date rounded down to the nearest whole
number of shares. The performance criteria applicable to any GroceryCo
Performance Shares shall also be adjusted as determined by the Compensation
Committee of GroceryCo’s Board of Directors to reflect the Distribution.

 

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(B) An outstanding Kraft Foods Performance Share that, as of the Distribution
Date, is held by any SnackCo Employee, shall be converted to a SnackCo
Performance Share. Each SnackCo Performance Share shall be adjusted into a
performance share award with respect to SnackCo Common Stock. The adjustment of
the number of target shares will be determined by multiplying the target number
of Kraft Foods Performance Shares by the fraction with the numerator equal to
the Kraft Foods Pre-Adjustment Price and the denominator equal to the average of
the closing stock price of SnackCo Common Stock as reported on the NASDAQ Global
Select Market for five consecutive trading days beginning with the first trading
day after the Distribution Date rounded down to the nearest whole number of
shares. The performance criteria applicable to any SnackCo Performance Shares
shall also be adjusted as determined by the Human Resources and Compensation
Committee of SnackCo’s Board of Directors to reflect the Distribution.

(b) In the event a change in control (as defined in the applicable equity
incentive plan or award agreement) occurs with respect to GroceryCo, then
(i) any accelerated vesting and/or exercisability applicable to GroceryCo Equity
Compensation Awards held by GroceryCo Employees and Former GroceryCo Business
Employees shall apply to the SnackCo Equity Compensation Awards then held by
such individuals, and (ii) all GroceryCo Equity Compensation Awards then held by
SnackCo Employees and Former SnackCo Business Employees shall fully vest (and,
to the extent applicable, become exercisable). In the event a change in control
(as defined in the applicable equity incentive plan or award agreement) occurs
with respect to SnackCo, then (i) any accelerated vesting and/or exercisability
applicable to SnackCo Equity Compensation Awards held by SnackCo Employees and
Former SnackCo Business Employees shall apply to the GroceryCo Equity
Compensation Awards then held by such individuals, and (ii) all SnackCo Equity
Compensation Awards then held by GroceryCo Employees and Former GroceryCo
Business Employees shall fully vest (and, to the extent applicable, become
exercisable).

(c) Prior to the Distribution Date, GroceryCo shall establish equity
compensation plans, so that upon the Distribution, GroceryCo shall have in
effect an equity compensation plan containing substantially the same terms as
each original Kraft Foods Inc. equity compensation plan under which any
GroceryCo Equity Compensation Award or GroceryCo Performance Share was granted.
From and after the Distribution Date, each GroceryCo Equity Compensation Award
and GroceryCo Performance Share shall be subject to the terms of the applicable
GroceryCo equity compensation plan, the award agreement governing such GroceryCo
Equity Compensation Award or GroceryCo Performance Share and any Employment
Agreement to which the applicable holder is a party. From and after the
Distribution Date, GroceryCo shall retain, pay, perform, fulfill and discharge
all Liabilities arising out of or relating to the GroceryCo Equity Compensation
Awards.

 

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(d) In all events, the adjustments provided for in this Section 8.1 shall be
made in a manner that, as determined by Kraft Foods Inc., avoids adverse Tax
consequences to holders under Code Section 409A.

Section 8.2 Tax Withholding, Reporting and Deductions.

(a) The appropriate member of the SnackCo Group shall be responsible for all
payroll taxes, withholding and reporting with respect to SnackCo Equity
Compensation Awards and GroceryCo Equity Compensation Awards held by SnackCo
Employees and Former SnackCo Business Employees. The appropriate member of the
GroceryCo Group shall be responsible for all payroll taxes, withholding and
reporting with respect to SnackCo Equity Compensation Awards and GroceryCo
Equity Compensation Awards held by GroceryCo Employees and Former GroceryCo
Business Employees. SnackCo and GroceryCo hereby designate the other party as an
agent for withholding pursuant to IRS Revenue Procedure 70-6 and to accept such
designation to effectuate the intent of this Section 8.2(a). Notwithstanding the
foregoing, to the extent any non-United States jurisdiction requires a different
withholding methodology or requires a different party to withhold applicable
taxes, such withholdings shall be effected in accordance with applicable local
law.

(b) With respect to the SnackCo Equity Compensation Awards and GroceryCo Equity
Compensation Awards held by SnackCo Employees or Former SnackCo Business
Employees, the appropriate member of the SnackCo Group shall claim any federal,
state and/or local tax deductions after the Distribution Date, and no member of
the GroceryCo Group shall claim any such deductions. With respect to the SnackCo
Equity Compensation Awards and GroceryCo Equity Compensation Awards held by
GroceryCo Employees or Former GroceryCo Business Employees, the appropriate
member of the GroceryCo Group shall claim any federal, state and/or local tax
deductions after the Distribution Date, and no member of the SnackCo Group shall
claim any such deductions. If either SnackCo or GroceryCo determines in its
reasonable judgment that there is a substantial likelihood that a tax deduction
that was assigned to the SnackCo Group or the GroceryCo Group pursuant to this
Section 8.2(b) will instead be available only to the other party (whether as a
result of a determination by the Internal Revenue Service or another tax
authority, a change in the Code or the regulations or guidance thereunder, or
otherwise), it shall notify the other party and both parties will negotiate in
good faith to resolve the issue in accordance with the following principle: the
party entitled to the deduction shall pay to the other party an amount that
places the other party in a financial position equivalent to the financial
position the party would have been in had the party received the deduction as
intended under this Section 8.2(b). Such amount shall be paid within ninety (90)
days after filing the last tax return necessary to make the determination
described in the preceding sentence.

(c) If SnackCo or GroceryCo determines in its reasonable judgment that any
action required under this Article VIII will not achieve the intended tax,
accounting and legal results, including, without limitation, the intended
results under Code Section 409A or FASB ASC Topic 718 – Stock Compensation, then
at the request of SnackCo or GroceryCo, as applicable, SnackCo and GroceryCo
shall mutually cooperate in taking such actions as are necessary or appropriate
to achieve such results, or most nearly achieve such results if the
originally-intended results are not fully attainable.

 

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Section 8.3 Employment Treatment.

(a) Continuous employment with the GroceryCo Group and the SnackCo Group
following the Distribution Date shall be deemed to be continuing service for
purposes of vesting and exercisability for the GroceryCo Equity Compensation
Awards and the SnackCo Equity Compensation Awards. However, in the event that a
GroceryCo Employee terminates employment after the Distribution Date and becomes
employed by the SnackCo Group, for purposes of Article VIII, the GroceryCo
Employee shall be deemed terminated and the terms and conditions of the
applicable performance incentive plan under which grants were made shall apply.
Similarly, in the event that a SnackCo Employee terminates employment after the
Distribution Date and becomes employed by the GroceryCo Group, for purposes of
Article VIII, the SnackCo Employee shall be deemed terminated and the terms and
conditions of the performance incentive plan under which grants were made shall
apply. Notwithstanding the foregoing, for purposes of this Article VIII only, if
an individual is, by mutual agreement between the parties, scheduled to transfer
employment shortly after the Distribution Date between the GroceryCo Group and
the SnackCo Group, such individual shall be treated as employed as of the
Distribution Date and thereafter by the entity to which he or she is scheduled
to transfer. In addition, a non-employee member of the board of directors of
SnackCo or GroceryCo shall be treated in a similar manner to that described in
this Section 8.3(a).

(b) If, after the Distribution Date, SnackCo or GroceryCo identifies an
administrative error in the individuals identified as holding SnackCo Equity
Compensation Awards and GroceryCo Equity Compensation Awards, the amount of such
awards so held, the vesting level of such awards, or any other similar error,
SnackCo and GroceryCo shall mutually cooperate in taking such actions as are
necessary or appropriate to place, as nearly as reasonable practicable, the
individual and SnackCo and GroceryCo in the position in which they would have
been had the error not occurred.

Section 8.4 Payment of Option Exercise Prices. Upon the exercise of a SnackCo
Option or a GroceryCo Option, the exercise price of such stock option shall be
remitted in cash by the option administrator to the issuer of the option (the
appropriate member of the SnackCo Group or the GroceryCo Group, as applicable)
and the applicable withholding taxes shall be remitted in cash by the option
administrator to the entity (the appropriate member of the SnackCo Group or the
GroceryCo Group, as applicable) responsible for payroll taxes, withholding and
reporting with respect to the option pursuant to Section 8.2. Upon vesting or
payment, as applicable, of restricted stock or deferred stock units, the
applicable withholding shall be remitted in cash by the administrator to the
entity (the appropriate member of the SnackCo Group or the GroceryCo Group, as
applicable) responsible for payroll taxes, withholding and reporting with
respect to such awards pursuant to Section 8.2. To the extent necessary to
provide the withholding amount in cash to the entity responsible for payroll
taxes, withholding, and reporting, the issuer of the applicable award shall
provide the withholding amount in cash. Notwithstanding the foregoing, the
method of remittance of the exercise price of any stock option or any applicable
withholding taxes may vary for legal or administrative reasons.

 

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Section 8.5 Dividends/Dividend Equivalents. With respect to dividends on
GroceryCo Restricted Shares or dividend equivalents on GroceryCo Deferred Stock
Units payable by GroceryCo to a SnackCo Employee, GroceryCo shall make such
payments to SnackCo, and SnackCo, as an agent for GroceryCo, shall make such
payments to such SnackCo Employees and shall be responsible for payroll taxes,
withholding and reporting in accordance with Section 8.2(a). With respect to
dividends on SnackCo Restricted Shares or dividend equivalents on SnackCo
Deferred Stock Units payable by SnackCo to a GroceryCo Employee, SnackCo shall
make such payments to GroceryCo, and GroceryCo, as an agent for SnackCo, shall
make such payments to such GroceryCo Employees and shall be responsible for
payroll taxes, withholding and reporting in accordance with Section 8.2(a).

Section 8.6 Equity Award Administration. GroceryCo and SnackCo agree that UBS
Financial Services Inc. shall be the administrator and recordkeeper for the
GroceryCo and SnackCo Equity Compensation Awards outstanding as of the
Distribution for the life of the relevant awards, unless the parties mutually
agree otherwise.

Section 8.7 Forfeiture-Related Payments.

(a) As soon as practicable following the Distribution Date, SnackCo shall pay to
GroceryCo the Fair Value of the GroceryCo Options held by individuals who are
SnackCo Employees or Former SnackCo Business Employees and GroceryCo shall pay
to SnackCo the Fair Value of the SnackCo Options held by GroceryCo Employees and
Former GroceryCo Business Employees. The parties shall settle the obligations of
the preceding sentence in cash on a net basis such that the party required to
pay the greater amount to the other shall pay the difference between the two
amounts to the other.

(b) As soon as practicable following the Distribution Date, SnackCo shall pay to
GroceryCo the value of the GroceryCo Deferred Stock Units and GroceryCo
Restricted Shares held by individuals who are SnackCo Employees or Former
SnackCo Business Employees and GroceryCo shall pay to SnackCo the value of the
SnackCo Deferred Stock Units and SnackCo Restricted Shares held by individuals
who are GroceryCo Employees or Former GroceryCo Business Employees. The parties
shall settle the obligations of the preceding sentence in cash on a net basis
such that the party required to pay the greater amount to the other shall pay
the difference between the two amounts to the other. For purposes of this
Section 8.7(b), the value of the GroceryCo Deferred Stock Units, GroceryCo
Restricted Shares, SnackCo Deferred Stock Units and SnackCo Restricted Shares
shall be determined based on the GroceryCo Price and the SnackCo Price,
respectively, reduced by assumed forfeitures based on the assumptions used for
FASB ASC Topic 718 – Stock Compensation purposes in Kraft Foods Inc.’s most
recent quarterly or annual financial reporting prepared before the Distribution
Date for forfeitures of Kraft Foods Deferred Stock Units and Kraft Foods
Restricted Shares, as applicable.

Section 8.8 Registration. GroceryCo shall register the GroceryCo Common Stock
relating to the GroceryCo Equity Compensation Awards and make any necessary
filings with the appropriate Governmental Authorities as required under U.S. and
foreign securities Laws.

 

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Section 8.9 Non-Employee Directors’ Stock Units.

(a) Any stock units granted to non-employee directors under any of the Kraft
Foods Director Plans and outstanding immediately prior to the Distribution shall
be adjusted on the Distribution Date in substantially the same manner as Kraft
Foods Deferred Stock Units are adjusted under Section 8.1(a)(ii)(B); provided,
that the number of such units shall be rounded down to the nearest whole number
of shares (with no cash paid for any fractional share). In all events, the
adjustments provided for in this Section 8.9 shall be made in a manner that, as
determined by Kraft Foods Inc., avoids adverse Tax consequences under Code
Section 409A.

(b) For purposes of this Employee Matters Agreement, each non-employee member of
the Board of Directors of Kraft Foods Inc. prior to the Distribution Date who is
a non-employee member of the Board of Directors of GroceryCo on the Distribution
Date shall be a “GroceryCo Director” and each other non-employee member of the
Board of Directors of Kraft Foods Inc. prior to the Distribution Date shall be a
“SnackCo Director” . With respect to dividend equivalents on GroceryCo stock
units payable by GroceryCo to a SnackCo Director, GroceryCo shall make such
payments to SnackCo, and SnackCo, as an agent for GroceryCo, shall make such
payments to such SnackCo Directors and shall be responsible for tax reporting of
such amounts. With respect to dividend equivalents on SnackCo stock units
payable by SnackCo to a GroceryCo Director, SnackCo shall make such payments to
GroceryCo, and GroceryCo, as an agent for SnackCo, shall make such payments to
such GroceryCo Directors and shall be responsible for tax reporting of such
amounts.

(c) Prior to the Distribution Date, GroceryCo shall establish a plan or plans
for non-employee directors, so that upon the Distribution, GroceryCo shall have
in effect a plan for non-employee directors containing substantially the same
terms as each original Kraft Foods Inc. stock compensation plan under which any
Kraft Foods Inc. stock unit award that is converted into a GroceryCo stock unit
award was granted. From and after the Distribution Date, each GroceryCo stock
unit award shall be subject to the terms of the applicable GroceryCo plan for
non-employee directors and the award agreement governing such GroceryCo award.
From and after the Distribution Date, GroceryCo shall retain, pay, perform,
fulfill and discharge all Liabilities arising out of or relating to the
GroceryCo stock units awards for non-employee directors.

(d) At the time that any SnackCo stock units held by a GroceryCo Director become
distributable pursuant to the terms of the applicable SnackCo non-employee
director plan, GroceryCo shall pay to SnackCo the value of such stock units,
determined using the closing price of SnackCo Common Stock on the NASDAQ Global
Select Market on the date of such distribution. At the time that any GroceryCo
stock units held by a SnackCo Director become distributable pursuant to the
terms of the applicable GroceryCo non-employee director plan, SnackCo shall pay
to GroceryCo the value of such units, determined using the closing price of
GroceryCo Common Stock on the NASDAQ Global Select Market on the date of such
distribution.

 

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ARTICLE IX

BENEFIT PLAN REIMBURSEMENTS, BENEFIT PLAN THIRD-

PARTY CLAIMS

Section 9.1 General Principles. From and after the Distribution Date, any
services that a member of the GroceryCo Group shall provide to the members of
the SnackCo Group or that a member of the SnackCo Group shall provide to the
members of the GroceryCo Group relating to any Benefit Plans shall be set forth
in the Transition Services Agreements (and, to the extent provided therein, a
member of the GroceryCo Group or the SnackCo Group shall provide administrative
services referred to in this Employee Matters Agreement).

Section 9.2 Benefit Plan Third-Party Claims.

(a) In the event of any conflict or inconsistency between the following
provision on the one hand, and the Separation Agreement or any of the Ancillary
Agreements on the other hand, the following provision shall control over the
inconsistent provisions to the extent of the inconsistency:

If a Third-Party Claim relates solely to the Benefit Plan of the Indemnifying
Party, GroceryCo and SnackCo shall take all actions necessary to substitute the
Indemnifying Party and/or the relevant Benefit Plan of the Indemnifying Party as
the proper party for such Third-Party Claim. If the Third-Party Claim relates to
both a GroceryCo Benefit Plan and a SnackCo Benefit Plan, GroceryCo and SnackCo
shall take all actions necessary to separate or otherwise partition the
Third-Party Claim so as to allow each party to solely defend the claim relating
to its own Benefit Plan (unless the parties mutually agree that such a
separation or partition is unnecessary or inadvisable). If the Third-Party Claim
cannot be transferred to the Indemnifying Party or separated or partitioned so
as to allow each party to solely defend the claim relating to its own Benefit
Plan, then SnackCo shall defend the Third-Party Claim and GroceryCo may elect to
participate in (but not control) the defense, compromise, or settlement of any
such Third-Party Claim at its own expense.

ARTICLE X

INDEMNIFICATION

Section 10.1 Indemnification. All Liabilities retained or assumed by or
allocated to GroceryCo or the GroceryCo Group pursuant to this Employee Matters
Agreement shall be deemed to be GroceryCo Liabilities for purposes of Article V
of the Distribution Agreement, and all Liabilities retained or assumed by or
allocated to SnackCo or the SnackCo Group pursuant to this Employee Matters
Agreement shall be deemed to be SnackCo Liabilities for purposes of Article V of
the Distribution Agreement.

 

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ARTICLE XI

COOPERATION

Section 11.1 Cooperation. Following the date of this Employee Matters Agreement,
SnackCo and GroceryCo shall, and shall cause their respective Subsidiaries,
agents and vendors to, use reasonable best efforts to cooperate with respect to
any

employee compensation, benefits or human resources systems matters that SnackCo
or GroceryCo, as applicable, reasonably determines require the cooperation of
both SnackCo and GroceryCo in order to accomplish the objectives of this
Employee Matters Agreement. Without limiting the generality of the preceding
sentence, (a) SnackCo and GroceryCo shall cooperate in coordinating each of
their respective payroll systems in connection with the transfers of SnackCo
Employees to the SnackCo Group and the Distribution, (b) GroceryCo shall
transfer records to SnackCo as reasonably necessary for the proper
administration of SnackCo Benefit Plans, to the extent such records are in
GroceryCo’s possession, (c) SnackCo and GroceryCo shall share, with each other
and their respective agents and vendors (without obtaining releases), all
participant information necessary for the efficient and accurate administration
of the Benefit Plans, and (d) SnackCo and GroceryCo shall share such information
as is necessary to administer equity awards pursuant to Article VIII, to provide
any required information to holders of such equity awards, and to make any
governmental filings with respect thereto.

ARTICLE XII

MISCELLANEOUS

Section 12.1 Vendor Contracts. Prior to the Distribution, SnackCo and GroceryCo
shall use reasonable best efforts to (a) negotiate with the current Third Party
providers to separate and assign the applicable rights and obligations under
each group insurance policy, health maintenance organization, administrative
services contract, Third Party administrator agreement, letter of understanding
or arrangement that pertains to one or more SnackCo Benefit Plans and one or
more GroceryCo Benefit Plans (each, a “Vendor Contract” ) to the extent that
such rights or obligations pertain to SnackCo Employees and Former SnackCo
Business Employees and their respective Plan Payees or, in the alternative, to
negotiate with the current Third Party providers to provide substantially
similar services to the SnackCo Benefit Plans on substantially similar terms
under separate contracts with SnackCo or the SnackCo Benefit Plans, and (b) to
the extent permitted by the applicable Third Party provider, obtain and maintain
pricing discounts or other preferential terms under the Vendor Contracts.

Section 12.2 Further Assurances. Prior to the Distribution, if either party
identifies any commercial or other service that is needed to ensure a smooth and
orderly transition of its business in connection with the consummation of the
transactions contemplated hereby, and that is not otherwise governed by the
provisions of this Employee Matters Agreement, the parties will cooperate in
determining whether there is a mutually acceptable arm’s-length basis on which
the other party will provide such service.

Section 12.3 Employment Taxes Withholding Reporting Responsibility. GroceryCo
and SnackCo hereby agree to follow the standard procedure for United States
employment Tax withholding as provided in Section 4 of Rev. Proc. 2004-53,
I.R.B. 2004-35. GroceryCo shall withhold and remit all employment taxes for the
last payroll date preceding the Distribution Date with respect to all current
and former employees of SnackCo and GroceryCo who receive wages on such payroll
date.

 

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Section 12.4 Data Privacy. The parties agree that any applicable data privacy
Laws and any other obligations of the GroceryCo Group and the SnackCo Group to
maintain the confidentiality of any employee information or information held by
any Benefit Plans in accordance with applicable Law shall govern the disclosure
of employee information among the parties under this Employee Matters Agreement.
GroceryCo and SnackCo shall ensure that they each have in place appropriate
technical and organizational security measures to protect the personal data of
the GroceryCo Employees, Former GroceryCo Business Employees, SnackCo Employees
and Former SnackCo Business Employees.

Section 12.5 Third Party Beneficiaries. Nothing contained in this Employee
Matters Agreement shall be construed to create any third-party beneficiary
rights in any individual, including without limitation any GroceryCo Employee,
SnackCo Employee, Former SnackCo Business Employee or Former GroceryCo Business
Employee (including any dependent or beneficiary thereof) nor shall this
Employee Matters Agreement be deemed to amend any Benefit Plan or to prohibit
SnackCo, GroceryCo or their respective Affiliates from amending or terminating
any Benefit Plan.

Section 12.6 Effect if Distribution Does Not Occur. If the Distribution does not
occur, then all actions and events that are, under this Employee Matters
Agreement, to be taken or occur effective as of the Distribution, or otherwise
in connection with the Distribution shall not be taken or occur except to the
extent specifically agreed by the parties.

Section 12.7 Incorporation of Separation Agreement Provisions. The following
provisions of the Separation Agreement are hereby incorporated herein by
reference, and unless otherwise expressly specified herein, such provisions
shall apply as if fully set forth herein (references in this Section 12.7 to an
“Article” or “Section” shall mean Articles or Sections of the Separation
Agreement, and references in the material incorporated herein by reference shall
be references to the Separation Agreement): Article IV (relating to Further
Assurances and Additional Agreements); Article V (relating to Mutual Releases;
Indemnification); Article VI (relating to Exchange of Information; Litigation
Management; Confidentiality); Article VII (relating to Dispute Resolution); and
Article VIII (relating to Miscellaneous).

Section 12.8 No Representation or Warranty. Kraft Foods Inc. makes no
representation or warranty with respect to any matter in this Employee Matters
Agreement, including, without limitation, any representation or warranty with
respect to the legal or Tax status or compliance of any Benefit Plan,
compensation arrangement or Employment Agreement, and Kraft Foods Inc. disclaims
any and all liability with respect thereto.

[The remainder of this page is intentionally left blank.]

 

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IN WITNESS WHEREOF, the parties have caused this Employee Matters Agreement to
be executed by their duly authorized representatives.

 

KRAFT FOODS INC. By:   /s/ Gerhard Pleuhs  

Name: Gerhard Pleuhs

Title:   Authorized Signatory

 

KRAFT FOODS GROUP, INC. By:   /s/ Timothy R. McLevish  

Name: Timothy R. McLevish

Title:   Authorized Signatory

[Signature Page to Employee Matters Agreement]