Exhibit 10.1

LOGO [g73264g51m58.jpg]

HAND-DELIVERED

Jean-Claude Kunz

Lausanne, June 15th, 2010

Early Retirement

Dear Jean-Claude,

We refer to our recent discussion regarding the additional terms and conditions
relating to the ending of your employment with Philip Morris International
Management SA (the “Company”). We would like to confirm the terms and conditions
relating to your early retirement as follows.

 

1) Definitions

In this Agreement the expressions below shall have the following meanings:

 

(a) An “Affiliate” of a company means any person, company, group of companies or
other entity, which directly or indirectly owns, is owned by, has common
owner(s) with, or shares ownership interest in that company.

 

(b) The “Tobacco Business” means the manufacturing, sale, marketing and/or
distribution of cigarettes or other tobacco products.

 

2) Ending of Employment Agreement

As per your decision reflected in our letter dated June 15, 2010, your
employment with the Company will end on August 31, 2010 (the “Early Retirement
Date”).

As agreed with your supervisor, you will be exempt from any further obligation
of physical attendance at the office as from July 1, 2010 (the “Physical Exit
Date”) and furthermore you agree to assist the Company, should your help be
needed for transition purposes, until August 31, 2010.

Philip Morris International Management S.A.

AVENUE DE COUR 107   •   CASE POSTALE 1171  •  1001
LAUSANNE  •  SWITZERLAND  •  TELEPHONE: +41 21 61861 11  •  TELEFAX: +41 21 618
46 18

 

1

--------------------------------------------------------------------------------

3) Payments by the Company to the Early Retirement Date

Your salary will be paid up to and including the Early Retirement Date, together
with

 

  (i) the pro-rated 13th salary for the period from January 1, 2010 to the Early
Retirement Date;

 

  (ii) any outstanding vacation entitlement, as per Company records provided
that you have not exceeded your pro-rated vacation entitlement for the year
2010, in which case the Company will deduct the excess vacation days; and

 

  (iii) your pro-rated fidelity premium.

 

4) Additional Payments by the Company

 

  a) In recognition of your contribution to the Company, and subject to your
countersignature of this Agreement, you will receive a payment in the total
gross amount of CHF 1’054’560.- which also includes your agreement to, and
compliance with, the non-competition clause under Section 13. This payment will
be paid to you in two installments: the first payment in the amount of CHF
527’280.- will be paid by August 31, 2010 together with your last salary, and
the second payment in the amount of CHF 527’280.- will be paid by August 31,
2011. These amounts will be paid in consideration and satisfactory completion of
your non-compete obligation and subject to the condition that you fully comply
with your obligations to the Company under this Agreement.

 

  b) In addition, and subject to your signature of this Agreement and to your
compliance with the terms and conditions of this Agreement, you will receive
your pro-rated 2010 incentive Compensation. This IC payment will be made at the
end of February 2011 on the basis of the target percentage of an optimal rating
at the relevant 2010 IC Company rating and subject to Internal Revenue Code
Section 162(m) maximums.

 

  c) In the event of your death before the payment to you of any amounts
referred to above, the Company will pay your widow (or other designated
beneficiary) within two months from your death, the balance of the amounts
unpaid, subject to your having complied in full with the terms of this Agreement
at the date of your death.

 

5) Tax, Social security and other payments

The amounts payable pursuant to Sections 3 and 4 of this Agreement will be
subject to income tax and employee AVS/AI/AC deductions, if applicable. It shall
be your responsibility to make these and any other tax payments in respect of
these amounts; should you no longer be residing in Switzerland when such
payments are made, the Company will make any applicable tax withholdings from
such payments.

 

2

--------------------------------------------------------------------------------

Furthermore, any outstanding balance on the Company corporate credit card issued
in your name and any other amounts that you may owe the Company as of the Early
Retirement Date will be set-off against the sums payable pursuant to Sections 3
and 4 of this Agreement.

 

6) Pension fund

Please contact our Pension Fund Administration (Phone 058 242 1365) about your
acquired rights.

 

7) Tax advice

The Company will pay the fees of KPMG for the preparation of your 2010 and 2011
Swiss tax returns. The fees paid by the Company represent a taxable benefit to
you and will be subject to income tax and social security deductions, if
applicable.

 

8) Company Car

You will have the option to buy your present company car at its current net book
value of CHF 11’821.50, exercisable before September 1st, 2010. The current
market value being CHF 35’580.—, the difference between the book and the market
value represents a taxable benefit for you and will be subject to income tax and
social security deductions, if applicable. The transfer will be effective on the
Early Retirement Date. Insurance of the car will become your responsibility on
the Early Retirement Date. The Company does not require reimbursement of the
registration tax paid for 2010, but payment for 2011 and beyond shall be your
responsibility. Payment for the car will be deducted from the payment amount
which is paid to you on your Early Retirement Date, pursuant to Section 3. No
warranties will be given as to the condition of the car, of which you will be
deemed to have full knowledge. If you decide not to exercise your option to buy
the Company car, it will be your obligation to return it to the Company on or
before the Early Retirement Date and in accordance with the terms of the
relevant Company car policy.

 

9) Equity awards

You will be permitted to exercise all vested stock options issued to you by the
Company in accordance with the terms of the relevant plan documents and option
agreements. If you have any questions in this regard, please contact Laurence
Duc in the PMI Global Processes Department in Lausanne.

Subject to your compliance with the terms and conditions of this Agreement, the
previous unvested stock grants and awards made to you will fully vest on your
Early Retirement Date.

The accelerated vesting will be performed by UBS Financial Services Inc. (“UBS”)
on your Early Retirement Date. The Company will comply with local laws and
regulations including wage tax withholding (income and/or social security) and
information reporting to the taxing authorities as may be required;

 

3

--------------------------------------------------------------------------------

Your wage tax withholding (and any other withholding payroll taxes) will be
satisfied by deducting the number of shares equal in value to the amount of the
withholding requirements from your stock award; therefore, the number of shares
deposited into your UBS account on the vesting date will be net of the shares
used to satisfy applicable withholding taxes (rounded up to the nearest whole
share);

You understand and agree that these vestings are being made and the valuations
will be determined in accordance with the terms established at the sole
discretion of the Company.

 

10) Health / Accident Insurance

All your benefits will be kept in force until the Early Retirement Date, with
the exception of the accident insurance (LAA coverage only), which will cover
you for an additional thirty (30) days. After that, you may elect to maintain
your participation in the current Medical Plan Collective agreement at your own
full expense, for as long as, and to the extent that, it is offered to PMI
retirees, or seek alternative private coverage, also at your own full expense.

 

11) Confidentiality

You acknowledge that during your employment you were engaged in a position of
trust and confidence and you were privy to Confidential Information (as defined
below). You acknowledge that it benefits both the Company and its employees for
the Company to protect its Confidential Information and to obtain the rights to
discoveries, inventions, improvements, innovations and other works developed by
its employees. You agree that, unless you are required by subpoena or court
order, you will not disclose or cause to be disclosed in any way:

 

•  

any Confidential Information (as defined below); or

 

•  

any documents or information obtained by you relating to or arising out of your
employment with the Company or the operations of the Company;

 

•  

any information about business or legal strategies;

 

•  

any information covered by the attorney client privilege or constituting
attorney work product; or

 

•  

the terms of this Agreement.

You understand that use or disclosure of Confidential Information would violate
this Agreement and applicable law, and would cause immediate and irreparable
harm to the Company and its competitive position. You thus acknowledge and agree
that the Company is entitled to (and you will be bound by) preliminary and
permanent injunctive relief in order to prevent or stop such violations, in
addition to damages, costs, and other relief that may be appropriate. If you are
required by subpoena or court order to disclose any Confidential Information,
you agree to notify the Company (specifically, the Company representative who
has signed this Agreement, or his successor) as soon as practicable. This
Agreement does not prevent you or the Company from responding truthfully to a
lawfully-issued subpoena, court order or other lawful request by any regulatory
agency or governmental authority. You must return any Confidential Information
in tangible or electronic form in your possession, including any copy by the
Early retirement Date at the latest.

 

4

--------------------------------------------------------------------------------

For purposes of this Agreement, Confidential Information shall mean any
information obtained as a result of your employment by the Company including its
current or former employees, current or former customers, or potential customers
that belongs to the Company or is private (not publicly known or available),
whether or not it is designated that way in writing. Examples of Confidential
Information include, but are not limited to: trade secrets; intellectual
property; business strategies; litigation strategies; customers or prospective
customers; sales, marketing or advertising; business policies; government
relations; finances; products, services, or pricing; business development
matters; organizational structure; research and development; legal strategies;
technology (including methods, systems, techniques, procedures, designs,
specifications, formulae, inventions, know-how, hardware and software); data and
databases; testing or evaluation procedures; and other information of a similar
nature. Confidential Information also includes information you prepared or
developed during your employment with the Company, and other information to
which you had access. The information can take any form, including written or
electronic, and includes all copies of such Confidential Information.

You agree that you shall remain bound to the terms and conditions set forth in
any confidentiality agreement in place between you and the Company.

These confidentiality obligations continue to be valid and enforceable after the
end of your employment relationship.

 

12) Company Property

In addition to your obligation to return Confidential Information by the Early
Retirement Date, at the latest, you will also return to the Company by that date
all files, documents, tapes, CDs, and copies thereof, and other items belonging
to the Company and its Affiliates, including credit cards, telephone cards,
keys, access and identification cards, company car if you have not exercised
your option to buy it, computers, and, if requested, you will certify that this
has been done to the best of your belief. You may, however, keep the mobile
telephone provided to you by the Company or its Affiliates, on condition that
you pay all future bills and bear all expenses related thereto as of the Early
Retirement Date.

 

13) Non-Competition

You recognize and agree that you have access to information relating to the
Company and its Affiliates, and their respective businesses, including business
plans and strategies, which are highly confidential, and that you have been
employed by the Company in a special position of trust. You also recognize that
the Company is undertaking, pursuant to Section 4 of this Agreement, to make
substantial payments to you generally, and specifically in respect of your
obligations under this Section. In consideration of the foregoing, you agree
that you will not, without the prior written consent of the General Counsel,
Philip Morris International Inc., provide any services for a period of one
(1) year from the Early Retirement Date, directly or indirectly, whether as an
employee, consultant or otherwise, to any person, company, group of companies or
other entity (i) engaged in the Tobacco Business, or (ii) which owns directly or
indirectly, either individually or jointly with other parties and whether
through ownership of voting securities or otherwise, more than 25 % of the
equity ownership of any person, company, group of companies or other entity
engaged in the Tobacco Business, or (iii) one of the purposes of which is to
take positions or actions in opposition to the Tobacco Business.

 

5

--------------------------------------------------------------------------------

Your obligations in the preceding paragraph shall apply worldwide, including
without limitation with respect to Japan Tobacco Inc., Imperial Tobacco Group
plc, British American Tobacco p.l.c., China Tobacco Corporation, and their
Affiliates.

You further agree for a period of one (1) year from the Early Retirement Date
not to acquire a financial interest or shares in an enterprise engaged in the
Tobacco Business or to enter into a partnership with such an enterprise.
However, the acquisition of 5% or less of shares in a publicly held corporation
will not be deemed a violation of this covenant not to compete.

In case of any violation of this covenant not to compete you agree that the
Company will retain, and you will forfeit your right to, the amount of CHF
1’054’560.— provided for in consideration for the non competition obligation, or
if already paid, you will return such amount to the Company. Moreover, in case
of such a violation, a contractual penalty of CHF 100’000.— shall be due by you
to the Company. In addition, the Company reserves the right to seek further
damages and/or specific performance of this covenant not to compete.

 

14) Future Cooperation

You agree that, consistent with applicable law and to the extent the Company or
any of its Affiliates so requests, you will cooperate reasonably and truthfully
in connection with any matter, including any legal or business dispute,
concerning which you were involved or had knowledge while employed by the
Company and its Affiliates, including, but not limited to, any inquiry,
proceeding, hearing, or investigation by or before any administrative,
executive, judicial or legislative body or agency, or within the Company and its
Affiliates. You agree to make yourself available if and when reasonably required
by the Company, its Affiliates or relevant counsel, taking into account your
schedule. The Company will reimburse you for all reasonable travel and other
out-of-pocket expenses incurred by you in connection with your compliance with
this obligation.

You agree that, to the extent consistent with applicable law, you will not aid,
assist, or participate in any legal action or proceeding filed by third parties
against the Company, its Affiliates, or against any of its and their current or
former officers, directors, employees, employee benefit plans or pension funds.

Nothing in this section shall prohibit you from responding truthfully to a
lawfully-issued subpoena, court order, or other lawful request by any regulatory
agency or governmental authority.

 

15) Affiliate Directorships

You agree to resign as a Director or Manager of all Affiliates of the Company of
which you are a director or a manager on or before the Early Retirement Date, by
signing the resignation letter(s) that the Company shall submit to you.

 

6

--------------------------------------------------------------------------------

16) Agreement and Release

By countersigning this Agreement and in consideration of the payments to be made
by the Company to you or for your benefit:

 

  (i) you hereby confirm that you accept and agree to all of the terms and
conditions set forth in this Agreement;

 

  (ii) you hereby acknowledge and agree that all overtime work you might have
performed, if any, has been compensated in full;

 

  (iii) you hereby agree that this Agreement sets out all the terms and
conditions relating to the ending of your employment with the Company, and
supersedes all discussions and understandings, if any, oral or written;

 

  (iv) if any provision of this Agreement is held by a court of competent
jurisdiction to be overbroad, unreasonable or unenforceable, such provision
shall be given effect by the court to the maximum extent possible by narrowing
or not enforcing that aspect of the provision found overbroad, unreasonable or
unenforceable, without affecting the validity or enforceability of the remainder
of this Agreement; and

 

  (v) you also acknowledge that this Agreement provides consideration to you
which you are not entitled to receive under usual Company policy or under any
other agreement. In exchange for receiving this additional consideration, you
agree, on behalf of yourself, your heirs, personal representatives, executors,
administrators, successors and assigns, to forever release and discharge the
Company, its Affiliates, and its and their respective successors, predecessors,
divisions, assigns, assets, employee benefit plans or funds, pension funds, and
any of its or their respective past, present and/or future representatives,
shareholders, directors, officers, fiduciaries, agents, trustees,
administrators, and employees (collectively referred to as the “Releasees”),
from any and all claims, demands, damages, remedies, contracts (express or
implied) and causes of action of any kind or nature whatsoever, whether known or
unknown, which you had, now have or in the future may or could have against the
Releasees, or any of them, by reason of any matter, act, omission or event that
occurred, or is alleged to have occurred, up to the date of this Agreement,
including, but not limited to, any and all claims in connection with your
employment with the Company (or with any other Releasee) and/or the end of said
employment.

You represent that you have not, and agree that, to the extent permitted by law,
you will not, bring or cause to be brought any charges, claims, demands, or
actions in any forum against the Company or any other Releasee arising from any
matter, act, omission or event that occurred or is alleged to have occurred, up
to the date of this Agreement, including, but not limited to, any charge or
claim in connection with your employment and/or the end of said employment,
except for any claim related to settlement of any outstanding expenses pursuant
to the Company’s Expense Account Policy and the payments to be made pursuant to
Sections 3 and 4 above.

This waiver and release includes all claims of any kind which you now have, had,
or may hereafter claim to have had against the Company and its Affiliates, and
their current and former officers,

 

7

--------------------------------------------------------------------------------

directors, employees, employee benefit plans or pension funds, by reason of any
matter, act, omission, or event that has occurred or is alleged to have occurred
up to the date of this Agreement, except for claims that cannot be waived or
released under Swiss law.

 

17) Non-binding Offer

This offer of Early Retirement is non-binding and made without prejudice. It
will be null and void if not accepted by August 2, 2010. Such acceptance shall
be evidenced by initialing each page and signing this Agreement.

 

18. Governing law and Jurisdiction

Any issues relating to or arising out of this Agreement shall be governed
exclusively by the laws of Switzerland without regard to its conflict of law
provisions and shall be subject to the exclusive jurisdiction of the competent
courts of the Canton de Vaud, Switzerland. However, each party is hereby
expressly authorized and entitled to initiate judicial action seeking
preliminary or permanent injunctive relief with respect to the obligations set
forth under confidentiality and non-compete provisions of this Agreement, before
any other court of competent jurisdiction.

      Yours faithfully,      

PHILIP MORRIS INTERNATIONAL

MANAGEMENT S.A.

/s/ Daniele Regorda

     

/s/ Andre Calantzopoulos

Daniele Regorda       Andre Calantzopoulos Senior Vice President Human Resources
      Chief Operating Officer

I agree to the above terms:

Name:   /s/ Jean-Claude Kunz   Jean-Claude Kunz Date: July 10, 2010

 

8

--------------------------------------------------------------------------------

LOGO [g73264g49p13.jpg]

BY HAND

Jean-Claude Kunz

Lausanne, June 15, 2010

Dear Jean-Claude,

This is to confirm that we have taken good note of your decision to retire from
Philip Morris International Management SA (“the Company”). Thus, we accept that
your employment agreement will end on August 31,2010.

 

    Yours faithfully,    

PHILIP MORRIS INTERNATIONAL

MANAGEMENT SA

/s/ Daniele Regorda

   

/s/ Andre Calantzopoulos

Daniele Regorda     Andre Calantzopoulos Senior Vice President Human Resources  
  Chief Operating Officer

Received:

 

Name:

 

/s/ Jean-Claude Kunz

  Jean-Claude Kunz Date: July 5, 2010

Philip Morris International Management S.A.

AVENUE DE RHODANIE 50   •   1007 LAUSANNE    •   SWITZERLAND    •   TELEPHONE:
+41 58 242 00 00    •   TELEFAX: +41 58 242 01 01

www.philipmorrisinternational.com