Exhibit 10.1
[Execution Copy]
SEPARATION AGREEMENT AND
GENERAL RELEASE
David S. Johnson
(“Johnson”) has been employed by Kraft Foods Global,
Inc. (“Kraft”) as President, North America Commercial
in Northfield, Illinois. Johnson’s employment relationship
with Kraft has ended and Kraft has offered Johnson benefits as set
forth in this Agreement, certain of which benefits are greater than
what Johnson is entitled to receive, and Johnson has decided to
accept Kraft’s offer. Therefore, Johnson and Kraft both agree
and promise as follows:
1.
Johnson’s last day of active work at Kraft was September 12,
2006; however, Johnson will be paid his regular salary by Kraft
through October 31, 2006 (“Termination Date”). Johnson
will thereafter not receive any further salary payments from Kraft
until May 1, 2007. After that date Johnson will be paid the
following Separation Payments by Kraft: (a) by May 10, 2007 a lump
sum payment, less applicable withholding, equal to six (6) months
of Johnson’s base salary in effect on the Termination Date;
and (b) twelve (12) months of his salary to be paid on a salary
continuation basis, at his bi-weekly base salary in effect on the
Termination Date, from May 1, 2007 through April 30, 2008 (the
“Salary Continuation Period”). Johnson will be eligible
to receive Kraft medical, dental, life, long-term disability and
personal accident insurance coverage pursuant to the terms of these
Kraft benefit plans as if he were an employee until April 30, 2008.
While he is on Salary Continuation Johnson’s cost for medical
and dental insurance coverage will be deducted from his Salary
Continuation payments; and, for the period from November 1, 2006
through April 30, 2007, Johnson will pay Kraft the applicable cost
in a single lump sum within thirty (30) days after receipt of an
invoice from Kraft. Johnson will be credited with pension service
under Kraft’s Retirement Plan (both qualified and
non-qualified) from November 1, 2006 through April 30, 2008.
Johnson will not be eligible to receive Kraft short-term disability
insurance coverage or business travel accident coverage, or be
eligible to make 401(k) Plan contributions or receive Kraft’s
matching contribution under the 401(k) Plan after the Termination
Date.
2.
Provided that Johnson complies with Sections 7, 10, 11 and 12 of
this Agreement, Johnson will receive a payment in respect of his
2006 annual incentive award under the Kraft Management Incentive
Plan (“MIP”) to be pro-rated for the period from
January 1, 2006 through the Termination Date and paid on the basis
of Johnson’s individual target percentage and the actual
business unit rating for Kraft for full fiscal 2006, as determined
by the Compensation Committee of Kraft’s Board of Directors
(the “Committee”). This payment, less required
deductions, will be made at such time as MIP payments for the 2006
performance period are made to Kraft’s senior executives. In
addition, Johnson will, provided that he complies with Sections 7,
10, 11 and 12 of this Agreement, receive a payment of his 2004-2006
Long-Term Incentive Plan (“LTIP”) award to be pro-rated
from January 1, 2004 through the Termination Date and paid on the
basis of Johnson’s individual target percentage and the
actual Kraft LTIP rating, as determined by the Committee. This
payment, less required deductions, will be made at
such time as LTIP payments for the
2004-2006 performance period are made to Kraft’s senior
executives.
3.
Johnson will be eligible for continued financial counseling in
accordance with current practice through the end of the Salary
Continuation Period. In addition, Johnson will be eligible to
continue participating in the Kraft executive car policy through
the Salary Continuation Period. Following the Salary
Continuation Period, Johnson will have the choice of purchasing the
car based on 100% of the wholesale value plus all applicable taxes,
license fees and any administrative fees charged by the leasing
company, or returning the car to Kraft’s Northfield location
or another mutually agreed upon location. During the Salary
Continuation Period, Kraft will continue to be responsible for
paying all normal repair, and normal maintenance.
4.
Johnson will be entitled to exercise any vested stock options that
he holds in Altria Group, Inc. (formerly Philip Morris Companies
Inc.) and Kraft Foods Inc. stock pursuant to the terms of the
applicable option grant. His separation from employment will
be treated for stock option exercise purposes as an involuntary
termination without cause and he will have 12 months from his
Termination Date to exercise any unexercised options. Johnson
will forfeit any right, title and interest to his unvested 2004,
2005 and 2006 Kraft restricted stock awards.
5.
Kraft will pay
Johnson, in a single lump sum less required deductions,
$1,877,000. This payment will be made to Johnson by October
31, 2006.
6.
If Johnson were to die prior to his receipt of the payments due him
pursuant to Sections 1, 2 and 5 above, Kraft agrees to pay
Johnson’s surviving spouse (or estate if no surviving spouse)
any Salary Continuation payments not yet received under paragraph
1, the payments provided for in Section 2, and the lump sum payment
provided for in Section 5, provided that if the amount of
the payments described in Section 2 have not yet been determined at
the time of Johnson’s death, such payments will be made at
such time as their amount has been determined.
7.
As consideration for Kraft’s payment to Johnson of the monies
provided for in Sections 1, 2 and 5, Johnson agrees that he will
not engage in Prohibited Conduct from the date of this Agreement
through October 31, 2007. Prohibited Conduct will be: (1)
working for, or providing services, directly or indirectly (whether
as an employee, consultant, officer, director, partner, joint
venturer, manager, member, principal, agent, or independent
contractor, individually, in concert with others, or in any other
manner), to any of the companies listed below, or of an entity that
has a controlling equity interest or management control of any such
company, without the written consent of Kraft’s Executive
Vice President Global Human Resources, or designee, such consent to
be provided by Kraft in its sole and absolute discretion; or (2)
soliciting, directly or indirectly, any employee of Kraft to leave
Kraft and to work for any other entity, whether as an employee,
independent contractor or in any other capacity.
2
The companies are: Cadbury
Schweppes plc, Campbell Soup Company, The Coca-Cola Company,
ConAgra Foods, Inc., General Mills, Inc., Groupe Danone, H.J. Heinz
Company, Hershey Foods Corporation, Kellogg Company, Nestlé
S.A., PepsiCo, Inc., The Procter & Gamble Company, Sara Lee
Corporation, and Unilever N.V., or any subsidiaries, affiliates or
subsequent parent or merger partner if any of these companies are
acquired or merge. For purposes of this Agreement,
“affiliate” of a specified person or entity means a
person or entity that directly or indirectly controls, is
controlled by, or is under common
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