Exhibit 10.1
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BY HAND

Matteo Pellegrini

Lausanne, July 21, 2015

EARLY RETIREMENT AGREEMENT (the “Agreement”) and RELEASE

Dear Matteo,

We refer to the discussion you have had with representatives of Philip Morris
Services SA (“the Company”) during which you communicated your final decision to
take early retirement. The Company and you mutually agree on the following terms
and conditions to apply to your Early Retirement.

1.
Definitions

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

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

“Confidential Information” shall have the meaning set out in Section 14.

2.
Ending of employment agreement

We hereby agree that your employment with the company and your secondment with
Philip Morris Asia Ltd. will end on September 30, 2015 and that you will take an
Early Retirement as from this date (the “Early Retirement Date”). As the
decision to take Early Retirement is mutually agreed, no notice of termination
is required by you to us, or by us to you.

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3.
Payments by the Company

(a)    Your salary will be paid up to and including the Early Retirement Date
together with:

(i)
any outstanding vacation entitlement, as per Company records, provided that you
have not exceeded your pro-rated vacation entitlement in which case the Company
would deduct the vacation days you took in excess.

            
(ii)
your prorated Fidelity Premium;

            
(iii)
all overbase elements of your expatriate compensation package (provided you are
not leaving the Host country before the Early Retirement Date).

The amounts described above will be subject to normal hypothetical tax and
social security deductions and paid by the Early Retirement Date.

(b)
In addition, and subject to your countersignature of this Agreement and to your
compliance with the terms and conditions of this Agreement, you will receive
your 2015 Incentive Compensation (IC) pro-rated through September 30, 2015. This
IC payment will be made at the end of February 2016 on the basis of the relevant
2015 IC Company rating and your individual performance rating and subject to
internal Revenue Code Section 162(m) maximum levels. The IC payment will be
subject to normal hypothetical tax and social security deductions. The rate of
hypothetical tax applied to the IC payment made in 2016 will be the hypothetical
tax rate applicable to compensation received during 2015.

(c)
In recognition of your contribution to the Company, the Company will make a
contribution of CHF 2,721,476.-- (the “Retirement Benefit”) to the Pension
Schemes of Philip Morris in Switzerland (the “Pension Fund’’) in order to
provide you an early retirement benefit until you attain the statutory pension
age under the Pension Fund. As a consequence, you will receive a pension from
the Pension Fund until you reach age 58, at which point you attain the regular
pension age under the Pension fund. This amount is granted in recognition of
your contribution to the Company, subject to your countersignature of this
Agreement and the conditions that you fully comply with your obligations to the
Company under this Agreement, as well as that you remain employed until the
Early Retirement Date and continue to perform your normal role (including
handover and knowledge transfer and any other duties reasonably required of you
by the Company) until the Early Retirement Date.

(i)    If the Early Retirement Date as defined in this Agreement is postponed
for any reason whatsoever, the Retirement Benefit shall be automatically
forfeited. In such a case, should the Company have already paid the amount to
the Pension Fund, you hereby authorize the Pension Fund to cancel the
transaction and to return the amount to the Company.

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(ii)    Should the Pension Fund have to pay to you any amount in connection with
a disability status after the execution of this Agreement, both parties to this
Agreement hereby give permission to the Pension Fund to take into consideration
the amount paid according to this Section 3(c)(i) when determining the
additional payments to be made.

4.
Deferred Stock Awards

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.

You agree that you will not receive any 2016 Stock Award.

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

Any applicable tax withholding (and any other withholding payroll taxes or
social security deduction when applicable) 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 or other applicable deductions (rounded up to the nearest
whole share). However, if you are not subject to income tax withholdings, or if
the withholdings do not fully cover your income tax liability, you will be
responsible for satisfying any tax liabilities due on these amounts;

You understand and agree that these vestings are being made and the valuations
will be determined in compliance with applicable laws, regulations and
practices.

5.
Tax treatment on end of employment payments

Payments made in connection with the end of your employment, including early
vesting of deferred stock, are not subject to tax equalization. As a result, the
payments and benefits described in this agreement (with the exception of
payments described in sections 3(a) and 3(b)) will not be subject to
hypothetical tax or hypothetical social security deduction. You will be
personally responsible for any actual income tax and social security liabilities
arising on these amounts in your home, host or any other countries. If

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an income tax or social security tax withholding obligation arises for the
Company in accordance with legislation in the home, host, or any other country,
the Company will fully comply with its obligations and will apply an appropriate
withholding rate to any amounts paid to you that are linked to the end of your
employment. The Company will not be responsible for any double taxation which
may arise should you decide to remain in the host country or to relocate to any
country other than your home country following of the decision to end your
employment.

6.
Miscellaneous on payments and benefits

(a)    No other payment, benefits or compensation shall be due to you by the
Company and/or any Affiliate during the employment or after the Early Retirement
Date, except those expressly stipulated in this Agreement.

(b)    Any outstanding balance on the account of the corporate credit card
issued in your name as of the Early Retirement Date and any other amounts that
for any reason you may owe the Company may be set-off against any amounts
payable by the Company pursuant to this Agreement.

7.
Tax return filing assistance and settlement

The Company will cover the fees of the Company’s tax provider for the
preparation of your 2015 and 2016 Swiss and 2015/2016 Hong Kong tax returns,
where required to report income that relates to your international
assignment(s).
You will be required to comply with your Home and Host country income tax filing
obligations for the relevant years by providing your tax-related information to
the Company’s tax provider within the requested deadlines.

At the time of preparing your income tax returns, the Company’s tax provider
will also prepare the following calculations, if required:
•
A reconciliation of your Home hypothetical taxes withheld during the period of
your employment with the Company

•
A reconciliation of actual Host taxes paid during your international
assignment(s) by yourself and the Company respectively.

These calculations will be prepared in accordance with the Company’s
International Assignment Guidelines and the conditions contained in this
Agreement. Any amount due to you from the Company will be paid to you within 30
days of notification by the Company’s Tax provider.

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Similarly, if there is an amount refundable to the Company by you, you agree
that you will repay such amount to the company within 30 days of notification.
You also agree that any overpayment of Host tax paid on your behalf by the
Company related to your assignment in the Host country will be refunded to the
Company within 30 days of receipt.

You agree that, if you owe any outstanding tax refunds or tax reconciliation
payments to the Company, these may be deducted from your final salary, or if not
sufficient, from any other payments due to you under this Agreement.

The Company will extend the Host Country tax return filing assistance to the
year following the end of employment date in situations where Host Country tax
filing requirements for that year refers exclusively to assignment related
Compensation & Benefits as outlined in the PMI’s Global LTA Guidelines.

8.
Schooling

The Company will continue to pay the schooling costs for your child until the
end of 2014-15 school year. This benefit shall be granted on the basis of the
relevant PMI policies.

9.
Relocation

In the event that you decide to relocate from Hong Kong to Lausanne, Switzerland
within one year from the Early Retirement Date, the Company agrees to pay for
the removal of your furniture and household goods, excluding storage fees, to
your new home in Lausanne, Switzerland. Should you decide to relocate to another
country (out of Hong Kong but not Switzerland), the budget for the shipment will
be capped to the cost of the same shipment to Lausanne, Switzerland. The Company
will choose and contract with a removal company of its choice and the relevant
provisions of the PMI Global Long Term Assignment Guidelines will apply. Within
one year from the Early Retirement Date, the Company will also pay for a one-way
air ticket from Hong Kong to Switzerland or to the country where you shall
relocate (the budget for the air ticket(s) in such a case being capped to the
cost of the air ticket(s) to Switzerland), for you and your family members
living with you, according to the Business Travel Policy.

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10.    Housing

The Company will continue to pay for the rent and utilities of your current
Company provided accommodation until Early Retirement Date. Your exit inspection
must be performed in your presence prior to your physical departure and you
shall be responsible for any costs arising from the inspection (breakages,
damage). In the event that those costs have not been directly paid to the
landlord by the Early Retirement Date then such amounts may be directly deducted
from the amounts to be paid by the Company to you under this Agreement.

11.     Company car

You may use your present company car until the Early Retirement Date at the
latest subject to the terms of the relevant Company car policy. It will be your
obligation to return it to the Company on or before said date and in accordance
with the terms of the relevant Company car policy.

12.    Pension Fund

Please contact directly our Pension Fund Administration (tel. +41 58 242 1365)
about your accrued rights.

13.    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 30 days. After that, each type of coverage ends and you
may elect to maintain your participation in the current PMI retirees Medical
Plan at your full expense, to the extent that it is feasible and offered to PMI
retirees, or to seek alternative private coverage at your full expense.

14.    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. 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.

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You must return any Confidential Information in tangible or electronic form in
your possession by the Early Retirement Date at the latest.
You agree that, unless you are required by a lawfully issued subpoena, court
order or other lawful request by any regulatory agency or governmental
authority, 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; or

•
any information about business or legal strategies; or

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

•
the terms of this Agreement, except that you may discuss the terms of the
proposed Agreement with your attorneys, tax advisors/accountants and life
partner.

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. In
particular, if it will be established by a decision of any competent court, your
unconditional admission or mutual agreement that you have breached your duty to
keep Confidential Information confidential, you will not be entitled to any
future payments under this Agreement and will reimburse the Company for any and
all payments made to you hereunder. If you are required by a lawfully issued
subpoena, court order or other lawful request by any regulatory agency or
governmental authority 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.

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

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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.

Unless required by a lawfully issued subpoena, court order or other lawful
request by any regulatory agency or governmental authority to release
information, the Company will keep any information with respect to your
employment and/or the ending of your employment strictly confidential.

These confidentiality obligations continue to be valid and enforceable after the
end of your employment relationship but only so long as the Confidential
Information has been maintained confidential by the Company.

15.    Non-Disparagement

You agree not to make any disparaging, or derogatory statements to anyone
(including, without limitation, to the press or the media), whether spoken or
written, about the Company, its products or services, or any of the Company’s
current or former officers, directors or managers.

16.    Affiliate Directorships

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

17.    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, CD’s, and copies thereof, and other items belonging
to the Company and its Affiliates irrespective of their source and origin,
including, where applicable, credit cards, telephone cards, standard mobile
phones, blackberry, SmartPhones (HTC, QTEK), iPhones, iPads, keys, access and
identification cards, and computers, and, if requested, will certify that this
has been done to the best of your belief.

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The company car must be returned by the Early Retirement Date according to the
corresponding section of this Agreement.

18.    Future Relationship and 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
with the requesting company 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
enquiry, 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 or its Affiliates or, against any of its or their current or
former officers, directors, employees, employee benefit plans or funds or
pension funds.

19.    Reservation of rights

Nothing in this Agreement shall be construed as preventing you, the Company, or
any of its Affiliates from:

(a)
providing information to, or participating or cooperating in any inquiry
conducted by, a governmental agency; or

(b)
responding truthfully to a lawfully-issued subpoena, court order, or other
lawful request by any regulatory agency or governmental authority.

20.    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:

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

(ii)
you also acknowledge that this Agreement provides consideration to you which you
are not legally entitled to receive in connection with your employment with the
Company and/or the ending of said employment, 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 your separation therefrom. The
foregoing releases shall not apply to any claims under this Agreement.

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

(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
in part 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 hereby agree that this Agreement sets out all the terms and conditions
relating to the ending of your employment with the Company and your secondment
with Philip Morris Asia Ltd., and supersedes all discussions and understandings,
if any, oral or written. However, if requested to do it, you shall execute
additional documents to formalize the end of your employment or secondment with
the Company and/or an Affiliate, with no further compensation, and expressly
agree that it is a condition for you to receive the Retirement Benefit. Should
you receive any statutory amount in connection with the end of possible

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employment relationships out of Home country, the Company shall take it into
account and impact the Retirement Benefit accordingly.
    
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 your separation from 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,
respectively the benefits to be granted, pursuant to this Agreement.

This waiver and release includes all claims of any kind, whether they are known
to you or unknown, which you now have, had, or may hereafter claim to have had
against the Company, its Affiliates and other Releasees, or any of them, 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.

This Agreement does not waive or release any rights or claims that you may have
which arise after the date of this Agreement and Release is executed.

The making of this Agreement is not intended to be, and shall not be construed,
as an admission that the Company or any of the Releasees violated any federal,
state or local law (statutory or decisional), ordinance or regulation, breached
any contract or committed any wrong whatsoever against you.

21.    Review Period

This offer of mutual agreement is made without prejudice. The Agreement will be
null and void if not accepted by July 31, 2015. Such acceptance shall be
evidenced by your signature of this Agreement.
In addition, once executed, this Agreement shall be automatically cancelled
(and, as a consequence, all the payments and benefits stipulated in this
Agreement shall be cancelled) if you accept another position with the Company or
an Affiliate anywhere in the world on or before the Early Retirement Date.

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22.    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 provisions of this Agreement, before any other court
of competent jurisdiction.

Yours faithfully,

PHILIP MORRIS SERVICES S.A.

/s/ DAMIEN HIROUX
/s/ RALF ZYSK

 
Damien Hiroux
Ralf Zysk
 
Director Human Resources
Switzerland
Vice President Compensation & Benefits and International Assignments PMI
 

I agree to the above:

Signature: /s/ MATTEO PELLEGRINI
                  Matteo Pellegrini

 

 

Date: ___23.7.2015____________________

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