Offer of Employment Letter



 Exhibit 10.1 
 



 
 Karen J May 

Executive Vice President 
 Human Resources

 Three Lakes Drive 
 Northfield, IL
60093 
 XXX-XXX-XXXX - phone 

XXX-XXX-XXXX - fax 
 XXXXX.XXX@kraftfoods.com

 PERSONAL AND CONFIDENTIAL 

June 20, 2011 
 Mr. Daniel Myers

 Dear Daniel, 
 I am very pleased to
provide you with this letter confirming the verbal offer that has been extended to you for the position of Executive Vice President Supply Chain located in Northfield, Illinois, USA. If you accept our offer, it is our interest that you join Kraft as
soon as possible which we understand will be in early September. This letter sets forth all of the terms and conditions of the offer. 
 Listed
below are details of your compensation and benefits that will apply to this offer. 
 Annualized Compensation (Range of Opportunity)

  

					
	 	  	Target - Maximum	 
		
	 Annual Base Salary
	  	$	575,000	  
		
	 Annual Incentive Plan (Target* - 60%)
	  	$	345,000 - $862,500	  
		
	 Long-Term Incentives**
	  	$	838,750 - $1,502,500	  
		
	 - Performance Shares (Target* - 85%)
	  	$	488,750 - $977,500	  
		
	 - Restricted Stock/Stock Options Award Range
	  	$	350,000 - $525,000	  
		
	 Total Annual Compensation
	  	$	1,758,750 - $2,940,000	  

  

	*	Target as a percent of base salary. 


	**	The value of the long-term incentive awards reflects the “economic value” of equity awards. For performance and restricted shares, the value reflects grant
value. For stock option value, the value approximates the Company’s Black-Scholes value. 









 June 20, 2011 
  Page
 2
 of 6 
  

 Annual Incentive Plan 
 You will be eligible to participate in the Kraft Management Incentive Plan (MIP), which is the Company’s annual incentive program. Your target award opportunity under the MIP is equal to 60% of your
base salary. The actual amount you will receive may be lower or higher depending on your individual performance and the performance of Kraft Foods Inc. Your 2011 award will be payable in March 2012. Your MIP eligibility will begin on your date of
employment. 
 Long-Term Incentives 
 Performance Shares 
 Your eligibility for the Kraft performance share program (referred to
as Kraft Foods’ Long-Term Incentive Plan or LTIP) will commence with the 2012 – 2014 performance cycle. Your target opportunity under the LTIP is equal to 85% of your base salary at the beginning of the performance cycle. The actual award
you will receive may be lower or higher depending upon the performance of Kraft Foods Inc. during the performance cycle. The number of performance shares under the 2012 – 2014 performance cycle is equal to your target value divided by the fair
market value of Kraft stock on the first business day of the performance cycle. 
 The 2012-2014 performance shares will vest in early 2015. It
is anticipated that a new three year performance cycle will begin each year in January. Beginning in 2015, if you remain employed and performance is above threshold, performance shares will vest each year at the conclusion of each performance cycle.

 In the event that you voluntarily leave the organization after your five year anniversary, any performance share grants that are in the final
year of the performance cycle will vest on a prorated basis, based on your date of separation. The actual award will be paid at the same time as other executives and the actual award amount will be dependent on the actual performance achieved during
the respective performance cycle. All other outstanding awards will be forfeit upon your separation. In the event that you voluntarily leave the organization prior to your five year anniversary, you may receive prorated amounts as described earlier
in this paragraph at the sole discretion of the Human Resources and Compensation Committee of the Board of Directors. 
 Restricted
Stock/Stock Option Program 
 You will also be eligible to participate in the Company’s restricted stock and stock option award program.
Stock awards are typically made on an annual basis, with the next award anticipated to be granted in the first quarter of 2012. Awards are delivered as follows: 50% of equity value is delivered in restricted stock and 50% in stock options. Actual
award size is based on individual potential and performance. You will receive dividends on the restricted shares during the vesting period consistent in amount and timing with that of Common Stock shareholders. 

  
 2 









 June 20, 2011 
  Page
 3
 of 6 
  

 The number of stock options granted is typically communicated as a ratio relative to the number of
restricted shares granted based on the “economic value” of the stock options. In 2011, Kraft Foods granted 6 stock options for every restricted sharer awarded. This ratio may change from year to year. 

In the event that you voluntarily leave the organization after your five year anniversary, any restricted grant that will vest in the subsequent year
will partially vest on a two-thirds basis at the time of your separation. In addition, all stock options granted in years prior to the year of separation will continue to vest on their regularly scheduled vesting dates and will have their full
original term in which you may exercise. All other outstanding awards will be forfeit upon your separation. In the event that you voluntarily leave the organization prior to your five year anniversary, you may receive prorated awards as described
earlier in this paragraph at the sole discretion of the Human Resources and Compensation Committee of the Board of Directors. 

Restricted Stock Sign-On 
 As part
of your employment offer, to offset loss of compensation at your current employer and to ensure that you begin participating in our long-term compensation programs immediately, you will receive a one-time restricted stock award equal in value to
$1,400,000. The vesting of these shares will be as follows: 
  

	 	•	 	 $500,000 will vest approximately one-third (or 33%, 33%, and 34%) on each of the first three anniversary dates from the date of grant.



  

	 	•	 	 $900,000 will vest 100% after five years. 


 The actual number of shares that you will receive will be determined based upon the fair market value of Kraft Foods Inc. Common Stock on your date of hire. You will be paid cash dividends on the shares
during the vesting period consistent in amount and timing with that of Common Stock shareholders. 
 The other terms and conditions set forth in
Kraft’s standard Stock Award Agreement will apply. 
 Perquisites 
 You will be eligible for a company car allowance equal to $15,000 per year under the executive perquisite policy. You will also be eligible for an annual financial counseling allowance of $7,500. You may
use any firm of your choosing and submit payments directly to the Company. 
 Deferred Compensation Program 

You will be eligible to participate in the Executive Deferred Compensation Program. This program allows you to voluntarily defer a portion of your salary
and/or your annual incentive to a future date. Investment opportunities under this program are designed to mirror the Company’s 401(k) plan. Additional information for this program can be made available upon request. 

  
 3 









 June 20, 2011 
  Page
 4
 of 6 
  

 Stock Ownership Guidelines 
 You will be required to attain and hold Company stock equal in value to four times your base salary. You will have five years from your date of employment to achieve this level of ownership. Stock held
for ownership determination includes common stock held directly or indirectly, unvested restricted stock or share equivalents held in the Company’s 401(k) plan. It does not include unexercised stock option shares. 

Other Benefits 
 Your offer
includes Kraft’s comprehensive benefits package available to full-time salaried employees. This benefits package is described in the enclosed Kraft Benefits Summary brochure. You will be eligible for 30 days of Paid Time Off (PTO). In addition,
you are eligible for ten designated holidays and two personal days. 
 You will be a U.S. employee of Kraft Foods and your employment status
will be governed by and shall be construed in accordance with the laws of the United States. As such, your status will be that of an “at will” employee. This means that either you or Kraft is free to terminate the employment relationship
at any time, for any reason. 
 If your employment with the Company ends due to an involuntary termination other than for cause, you will
receive severance arrangements no less favorable than those accorded recently terminated senior executives of the Company. The amount of any severance pay under such arrangements shall be paid in equal installments at the regularly scheduled dates
for payment of salary to Kraft executives and beginning within 30 days of your termination. 
 For purposes of this offer letter,
“cause” means: 1) continued failure to substantially perform the job’s duties (other than resulting from incapacity due to disability); 2) gross negligence, dishonesty, or violation of any reasonable rule or regulation of the Company
where the violation results in significant damage to the Company; or 3) engaging in other conduct which materially adversely reflects on the Company. 
 To assist in your relocation from Ohio to Illinois, we offer relocation assistance as outlined in Kraft’s Relocation Guide. 
 Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) 
 If you are a “specified employee” (within the meaning of Code section 409A) as of your separation from service (within the meaning of Code section 409A): (a) payment of any amounts under
this letter (or under any severance arrangement pursuant to this letter) which the Company determines constitute the payment of nonqualified deferred compensation (within the meaning of Code section 409A) and which would otherwise be paid upon your
separation from 

  
 4 









 June 20, 2011 
  Page
 5
 of 6 
  

 
service shall not be paid before the date that is six months after the date of your separation from service and any amounts that cannot be paid by reason of this limitation shall be accumulated
and paid on the first day of the seventh month following the date of your separation from service (within the meaning of Code section 409A); and (b) any welfare or other benefits (including under a severance arrangement) which the Company
determines constitute the payment of nonqualified deferred compensation (within the meaning of Code section 409A) and which would otherwise be provided upon your separation from service shall be provided at your sole cost during the first six-month
period after your separation from service and, on the first day of the seventh month following your separation from service, the Company shall reimburse you for the portion of such costs that would have been payable by the Company for that period if
you were not a specified employee. 
 Payment of any reimbursement amounts and the provision of benefits by the Company pursuant to this letter
(including any reimbursements or benefits to be provided pursuant to a severance arrangement) which the Company determines constitute nonqualified deferred compensation (within the meaning of Code section 409A) shall be subject to the following:

  

	(a)	the amount of the expenses eligible for reimbursement or the in-kind benefits provided during any calendar year shall not affect the amount of the expenses eligible for
reimbursement or the in-kind benefits to be provided in any other calendar year; 

  

	(b)	the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the calendar year in which the expense was incurred; and


  

	(c)	your right to reimbursement or in-kind benefits is not subject to liquidation or exchange for any other benefit. 


This offer is contingent upon successful completion of our pre-employment checks, which may include a background screen, reference check, and post-offer
drug test pursuant to testing procedures determined by Kraft Foods. 

  
 5 









 June 20, 2011 
  Page
 6
 of 6 
  

 If you have any questions, I can be reached at the office at (XXX) XXX-XXXX or on my cell phone at (XXX)
XXX-XXXX. 
 Sincerely, 
 /s/ Karen
May 
 I accept the offer as expressed above. 
  

							
	 /s/ Daniel P. Myers
	 		  	 June 20, 2011
	  	
	Signature	 		  	Date	  	

  

			
	Enclosure:	  	Kraft Foods Benefits Summary
		  	Kraft Foods Relocation Policy
		  	Management Incentive Plan Brochure
		  	Long-Term Incentive Plan Brochure
		  	Equity Brochure


  
 6