The LTIP authorizes the grant of performance-based awards for performance periods beginning on or after January 1, 2011 to executive officers, including individuals who were designated named executive officers of Kraft Foods in our last proxy statement, and other selected key employees of Kraft Foods or any of our affiliates. The LTIP also allows us to grant awards that are intended to be treated as "qualified performance-based compensation" under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), thereby allowing us to preserve the deductibility of the awards payable to executive officers covered by Code Section 162(m). The provisions of the LTIP are substantially identical to the terms of the long-term incentive plan that we have maintained as part of our executive compensation program as described in our last proxy statement.

The awards granted under the LTIP may be paid in cash or shares of Kraft Foods common stock, as determined by the Human Resources and Compensation Committee at the beginning of the performance period. The amount payable under an LTIP award is determined based on an objective formula set forth in the LTIP and related award agreement consisting of a participant's incentive target, which is generally stated as a percentage of a participant's base salary, percentage of an incentive pool, or a combination of both, and a percentage representing the rate at which the long-term performance goals established for the applicable performance period are determined to have been attained. No award will be paid to a participant if the minimum performance targets are not attained, as determined by the Human Resources and Compensation Committee.

No awards have been granted under the LTIP for the performance period beginning January 1, 2011.