Document

Exhibit 10.7








PRIVATE & CONFIDENTIAL
Mr. Jorge Insuasty
Email delivery












Neuchâtel, October 8, 2020


Dear Mr. Insuasty,


Following our discussions and subject to the approval of the Board of Directors of Philip Morris International Inc. and the Compensation and Leadership Development Committee (the "Committee") of the Board of Directors of Philip Morris International Inc., the terms and conditions of your employment with Philip Morris Products S.A. (hereafter referred to as the "Company") will be as follows:




Position


You will be appointed Chief Life Sciences Officer, reporting to Mr. André Calantzopoulos, Chief Executive Officer PMI, and based in Neuchâtel, Switzerland.




Effective Date 


This contract will be effective as of January 1, 2021 (the “Effective Date”), with a physical start date on January 4, 2021, for an indefinite period of time.




Annual Base Salary 


Your gross annual base salary, to be paid in 13 installments, will be Swiss Francs (CHF) 700’011.--, corresponding to your grade, which is 22.


The 13th installment will be pro-rated for the number of months worked in a given year, and paid to you in November.


































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Philip Morris Products S.A., Quai Jeanrenaud 3, 2000 Neuchâtel, Switzerland 
T:+41 (58) 242 11 11, F: +41 (58) 242 81 11





Sign-On Cash Award 
    
You will receive a sign-on bonus amount of CHF 600'000.-- gross, payable in two equal installments. The first installment (CHF 300'000.--) will be paid with your first salary payment, subject to social security deductions and taxes, and the second installment (CHF 300'000.--), subject to your still being an employee of the Company or an affiliate of the Company on July 1, 2021, with your salary payment for July 2021, also subject to social security deductions and taxes. 


Should you voluntarily cease to be employed by the Company or an affiliate of the Company for any reason or should the Company terminate your employment for a reason which constitutes a “Cause” (as defined in this contract) the following will apply:
•within 6 months of the Effective Date, you will be liable to repay the full amount of the first installment to the Company.
•between 7 and 12 months of the Effective Date, you will be liable to repay the full amount of the first installment and the second installment. 
•between 13 and 24 months of the Effective Date, you will be liable to repay the full amount of the second installment. 




Sign-On Stock Awards 


You will be granted Restricted Stock Units (“RSUs”) with a fair market value of CHF 1’400’000.--.  on the later of (1) the date you start employment or (2) the date the Committee approves the stock award.This stock grant is scheduled to vest in two equal installments, in January 2022 and in January 2023, respectively.


On February 4, 2021 (provided you are still employed by the Company at this time), you will be granted a stock award with a fair market value of CHF 840’000 as follows:
(a)45% in the form of RSUs and
(b)55% in the form of Performance Share Units (“PSUs”). The performance measures and targets for the PSUs will be reflected in the respective award statement.
(c)Both RSUs and PSUs are scheduled to vest in February 2024.


You will be entitled to receive dividend equivalents during the vesting periods for the RSUs. You will receive dividend equivalents on your vested PSUs after the end of the performance period when the company performance is certified and the final number of vested PSUs is determined.


The stock awards will be subject to the terms of the 2017 Performance Incentive Plan and the applicable stock agreements.






















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Philip Morris Products S.A., Quai Jeanrenaud 3, 2000 Neuchâtel, Switzerland 
T:+41 (58) 242 11 11, F: +41 (58) 242 81 11





Incentive Compensation Award Program 


As a grade 22 employee, you will be eligible to participate in the Incentive Compensation (“IC”) Award Program, which is administered at the sole discretion of the Committee pursuant and subject to the terms of the 2017 Performance Incentive Plan (or any similar plan adopted from time to time). Each eligible employee has an annual IC award target that assumes a PMI company performance rating and an individual performance rating of 100. 


For a grade 22 employee, the current target is 90% of annual base salary. Targets are reviewed annually and are made available to employees under the PMI 23-G4 Guidelines Global Variable Compensation Programs Annex 1.




Stock Award Program 


As a grade 22 employee, you will be eligible to participate in the Stock Award Program, which is administered at the sole discretion of the Committee pursuant and subject to the terms of the 2017 Performance Incentive Plan (or any similar plan adopted from time to time). Each eligible employee has an annual stock award target that assumes an individual performance rating of 100. 


For a grade 22 employee, the current target is 120% of annual base salary. Targets are reviewed annually and are made available to employees under the PMI 23-G4 Guidelines Global Variable Compensation Programs Annex 2.


The Incentive Compensation and Stock Award Programs are discretionary and do not obligate the Company to make an award nor entitle employees to receive an award. Eligibility to participate in the Programs does not guarantee receipt of an award and receiving an annual award does not guarantee receipt of an award in the future. Any awards that are made may be higher or lower than the targets mentioned above. Targets may be amended at the discretion of the Company at any time without prior notice.  
    


Vacation Days 


Your vacation entitlement will be a minimum of 25 working days per calendar year or more according to the Company guidelines. For every incomplete calendar year your entitlement will be calculated pro rata temporis.


In addition, the Company grants (i) two Floating Days per calendar year, that may be taken at any time during the year (these two days cannot be carried over to the following year), and (ii) two fixed days as company holidays in addition to the public holidays of the Canton de Neuchâtel. This corresponds to the current Company practice, which the Company has the right to change at any time without notice or compensation.




Fidelity Premium


For each completed year of service, the Company pays a cumulative bonus of CHF 150.-- on each anniversary of the Effective Date, up to a maximum of CHF 3'000.-- for 20 years of service.


















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Philip Morris Products S.A., Quai Jeanrenaud 3, 2000 Neuchâtel, Switzerland 
T:+41 (58) 242 11 11, F: +41 (58) 242 81 11





Trial Period


No trial period will apply.




Termination of Employment


This contract shall be terminable in accordance with Swiss law. Each party may terminate the agreement for the end of a month by giving one month notice within the first year of employment, two months notice from the second to ninth year of employment or three months notice as of the tenth year of employment. 


Should the Company unilaterally terminate your employment within 12 (twelve) months of the Effective Date (reference: end of employment date as notified by the employer) for a reason which does not constitute a “Cause” as defined in this section, the Company shall offer you a lump sum severance payment covering (a) the base salary you would have received from the end of employment date until the end of the 12 month period following the Effective Date and (b) an amount in lieu of the prorated Incentive Compensation that you would have received through the end of the 12 month period, provided you shall execute the separation agreement proposed by the Company. In such a case, the period between the end of employment date and the end of the 12 month period following the Effective Date will serve as a worldwide non-compete period, compensated through the severance payment. 


Should the Company unilaterally terminate your employment within 24 (twenty-four) months of the Effective Date (reference: end of employment date as notified by the employer) for a reason which does not constitute a “Cause” as defined in this section, the Company shall offer you a lump sum severance payment covering (a) the base salary you would have received from the end of employment date until the end of the 24 month period following the Effective Date and (b) an amount in lieu of the Incentive Compensation that you would have received through the end of the 24 month period, provided you shall execute the separation agreement proposed by the Company. In such a case, the period between the end of employment date and the end of the 24 month period following the Effective Date will serve as a worldwide non-compete period, compensated through the severance payment.


The PMI policy regarding the adjustment or recovery of compensation shall also apply to the severance conditions stipulated under this section.


The treatment of compensation granted under the PMI performance incentive plans upon a change of control shall be governed by the applicable performance incentive plan.


Any individual tax and social security obligations that may arise under the severance conditions stipulated under this section in any jurisdiction are solely the employee's. The Company will have no responsibility, directly or indirectly, with respect to such obligations, including any obligation to pay, reimburse or gross up any payments to the employee. 


For the purposes of this contract, “Cause” means termination because of:


(i) continued failure to substantially perform the employee’s job duties (other than resulting from incapacity due to disability) after a written demand by the Company (or any of its subsidiaries or affiliates, as the case may be) that identifies the manner in which the Company (or any of its subsidiaries or affiliates, as the case may be) has reasonably determined that the employee has not performed his or her duties; or












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Philip Morris Products S.A., Quai Jeanrenaud 3, 2000 Neuchâtel, Switzerland 
T:+41 (58) 242 11 11, F: +41 (58) 242 81 11







Termination of Employment (cont’d)


(ii) gross negligence in the performance of the employee’s job duties, willful misconduct, or a material violation of Company policy (including the PMI Guidebook for Success), that the Company has reasonably determined has resulted in, or is likely to result in, a material and demonstrable detriment to the business, operations, properties, financial condition or reputation of the Company (or any of its subsidiaries or affiliates); or
(iii) the employee’s conviction of a felony or a plea of nolo contendere by the employee with respect to a felony.




Pension Fund


In accordance with the Swiss Federal Pension Law (“LPP”), you will become a member of the “Caisse de pension Philip Morris en Suisse” (the “Pension Fund”), providing old age, disability, and survivor’s benefits. For further details, please refer to the Pension Fund regulations.


Your contribution to the Pension Fund will be deducted each month from your salary according to the current Pension Fund regulations.




Swiss Social Security Schemes (AVS/AI/APG/AC)


Contributions to the various Swiss Federal insurance schemes will be deducted from your compensation each month in accordance with the applicable Swiss laws.




Accident Insurance


In accordance with Swiss Federal Insurance Law (LAA), you are automatically covered for accident in the event of occupational or non-occupational accidents. This cover is paid for by the Company.




Health Insurance 


If you wish, you may join the Company group health insurance contract. All permanent employees can enroll into this group health insurance scheme. The Company bears a portion of the insurance premium cost. You can enroll your immediate family members in the ‘family’ group insurance schemes at your own cost. No Company contributions will be paid if you choose to arrange an individual cover outside the group scheme.






























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Philip Morris Products S.A., Quai Jeanrenaud 3, 2000 Neuchâtel, Switzerland 
T:+41 (58) 242 11 11, F: +41 (58) 242 81 11





Salary Continuation in the Event of Sickness 


In accordance with the regulations of the Company’s insurer, 100% of the annual base salary is paid for up to 2 years from the first day you are unable to work. This cover is paid for by the Company without affecting the right of each party to end the contract.




Life Insurance


In accordance with the regulations of the Company’s insurer and in coordination with the Pension Fund, you are provided with an insurance cover in case of death paid for by the Company.




Office Working Hours 


The weekly basic work schedule is 40 hours spread over 5 days, from Monday to Friday, based on a full time occupational rate. You understand and agree that your annual base salary includes all compensation for time worked in excess of the basic work schedule, and that there will be no extra compensation for such work. For further details, please refer to the People & Culture Department. 




Protective Clothing and Equipment


Depending on the location and type of work, protective wear is compulsory. Such protective clothing and equipment (safety shoes, safety glasses and ear plugs) shall be provided to the Employee free of charge.




Relocation Expenses 


With prior approval of the People & Culture Department, the Company will pay a remover selected by the Company to pack, transport, store if necessary, and unpack your household goods from your current home location to Switzerland, in accordance with Company Policy. The Relocation Services Department will coordinate this with you. Your move should take place within eighteen months from the Effective Date.


The Company will also pay you a relocation allowance amounting to CHF 34'014.-- with the first feasible payroll upon your physical relocation to Switzerland. This amount will be subject to social security deductions and will be taxable.


The Company will also pay for the travel costs associated with your relocation from your current home location to Switzerland, in accordance with the Company’s Business Travel policy.




Temporary Accommodation


Temporary accommodation will be provided to you until August 31, 2021. As of September 1, 2021 this provision will no longer apply. 


















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Philip Morris Products S.A., Quai Jeanrenaud 3, 2000 Neuchâtel, Switzerland 
T:+41 (58) 242 11 11, F: +41 (58) 242 81 11





Tax Assistance


The Company will pay the fees of tax advisers chosen by the Company on the first and second occasions you are required to complete a tax declaration in Switzerland (provided you are still employed by the Company at this time). Should you not opt for this benefit, please send a note at YOURHR@pmi.com within three months from the Effective Date of the contract. This entitlement may be subject to income tax and/or social security deductions if applicable, which the Company does not compensate.


After this initial period, the Company will either (i) pay the fees of tax advisers chosen by the Company on the occasions you are required to complete a tax declaration in Switzerland subject to you contributing for CHF 3’500.-- per year (amount to be deducted from your salary) or (ii) pay you an allowance of          CHF 1’500.-- per year in lieu of tax assistance. This entitlement may be subject to income tax and/or social security deductions, if applicable. You must indicate your preference by sending a note at YOURHR@pmi.com. Should no preference be indicated, the Company will automatically opt for the second (ii) option.




Company Car (or Cash Allowance / Yearly Travel Pass)  


You will be entitled to a company car in accordance with Company policy. 


If you choose not to receive a company car, you may opt for a cash allowance or a travelcard in Switzerland for you and your partner in accordance with Company policy. 




Taxability of Benefits 


Certain benefits described in this contract are subject to income tax and social security deductions. Please also take into account that the tax and social security treatment of all benefits may change in the future according to Swiss law or Company policy. Details may be obtained from the People & Culture Department.




Data Protection


The Company will, in the course of its business, process personal data relating to you (for example, personal details, bank account information, or automated records of your use of information systems, or information required for building access control systems).


The Company may also in the course of its business, process personal information relating to other persons whose personal information you provide, such as your relative(s) or partner(s) (“Your Contacts”) (for example contact details or information in connection with employee benefits).


You give your consent to the Company to:


























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Philip Morris Products S.A., Quai Jeanrenaud 3, 2000 Neuchâtel, Switzerland 
T:+41 (58) 242 11 11, F: +41 (58) 242 81 11





Data Protection (cont’d)


(a)process your personal information for its, and its Affiliates’, business purposes. Those purposes include legal, personnel, administrative and management purposes (including, for example: payroll administration; correspondence; IT systems development, operation and maintenance; building access controls; performance review, and talent management);


(b)process your sensitive personal data (for example data relating to health), where this is necessary for the administration of the employment relationship, and is permitted by law (for example, to administer health benefits);


(c)make your personal information available to its Affiliates for them to process for their own benefit, for the same purposes as described above;


(d)make your personal information available, and to permit the Company’s Affiliates also to make your personal information available:


(i)to third parties who provide products or services to the Company or its Affiliates (such as advisers, payroll administrators, and information services providers) for the same purposes as described above; and
(ii)to other third parties, where required or permitted by law, including: regulatory authorities; potential or future employers; and governmental or quasi-governmental organisations.


You also confirm that, before providing us with personal information of Your Contacts, you will obtain their consent to the Company processing their data as above.                                                                                                                 


As a multi-national organisation, PMI transfers personal information globally. You consent to the transfer of your personal information, as outlined above, either within or outside Switzerland and including where the country or territory in question does not maintain data protection standards that are equivalent to those of Switzerland. In all cases, PMI will implement adequate measures for the treatment of the data in accordance with PMI 03-C.                                                                                                                                                                


You may request access to the personal information that we hold about you, or request the correction or deletion of your personal information, by contacting your People & Culture Department.




Confidential Information


Consistent with your obligations under Swiss law, you undertake not to disclose any Confidential Information (written or oral), whether before, during or after your employment by the Company, and upon termination of your employment to return any Confidential Information in tangible or electronic form in your possession. For these purposes “Confidential Information” means any trade secrets and other proprietary information pertaining to the Company or its affiliates, which has not been made available to the general public by an authorized representative of the Company or its affiliates, whether patentable or not, including for example any intellectual property, idea, formula, method, technique, invention, process, program, algorithm, know-how, equipment, business, marketing and sales plans, security protocols, legal strategies, status of regulatory submissions and approvals, financial, organizational and sales data, and similar information in line with all Company Records & Information Management (RIM) policies, procedures, and guidelines.














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Philip Morris Products S.A., Quai Jeanrenaud 3, 2000 Neuchâtel, Switzerland 
T:+41 (58) 242 11 11, F: +41 (58) 242 81 11





Confidential Information (cont’d)


The Company may provide you with information and/or documents with respect to your future position before the Effective Date, and some of them may be of confidential nature. You expressly agree that this section "Confidential Information" applies to any confidential information and/or documents you may have access to before the beginning of your employment.




Intellectual Property Rights


You hereby assign to the Company to the fullest extent permitted by law, throughout the world and for the entire term of protection, all copyrights (including all rights in software and databases) and neighboring rights in the works created by you, alone or with others, within and outside your contractual duties, while performing your activity for the Company. If and to the extent that an assignment of any of such rights is not permitted under applicable law, you agree not to assert them and authorize the Company to exercise such rights on your behalf. In particular, the Company shall have the unrestricted right to exercise the author's moral rights in the works, including without limitation the right to alter the works, create derivative works and to determine whether, when, how and under what name the works shall be published.


Concerning the inventions, patents and designs generated by you alone or with others while performing your employment activity for the Company:


a)If they have been generated within your contractual duties, they belong to the Company, regardless of whether they are protectable or not, and no specific compensation is due to you by the Company;


b)If they have been generated outside the performance of your contractual duties, the Company is entitled to acquire them. In this case, if you make such invention/patent/design, you shall promptly inform the Company thereof in writing. If the Company declares that it wishes to acquire such invention/patent/design, you shall be entitled to an appropriate special compensation, which shall be determined by taking into account all circumstances, such as the business value of the invention, patent or design, the contribution of the Company or its auxiliary persons, the utilization of the Company's installations, as well as your expenses and your position within the Company.


All tangible and/or intangible work result (including without limitation all documents, drawings, samples, know-how, trade secrets, concepts and ideas) and any intellectual property rights therein, which are generated by you, alone or with others, within and outside your contractual duties while performing your employment activity for the Company, shall belong to the Company.


Save for the special compensation according to the subsection b) above, you shall not be entitled to any compensation for the rights granted to the Company under this Section "Intellectual Property Rights" in addition to the salary agreed between the parties.


Insofar as a transfer of Intellectual Property Rights would be required, you shall at the Company's first request, co-operate and perform all actions that the Company may deem desirable or necessary to effectuate or formalize such transfer.


The provisions of this Section "Intellectual Property Rights" shall survive the termination or expiration of the employment relationship.


















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Philip Morris Products S.A., Quai Jeanrenaud 3, 2000 Neuchâtel, Switzerland 
T:+41 (58) 242 11 11, F: +41 (58) 242 81 11







Company Property


Furthermore upon termination of your employment, you should return to the Company and/or its affiliates all paper and electronic  files and documents, tapes, CD’s, and copies thereof and other items belonging to the Company and its affiliates, irrespective of their source and origin, including Company corporate cards, telephone cards, keys, access and identification cards, computers, and, if requested, will certify that this has been done to the best of your belief and that you also comply with all Company Records & Information Management (RIM) policies, procedures, and guidelines before your departure.


The settlement of any outstanding expenses due to the Company, including, but not limited to any outstanding balance on the account of the corporate card issued in your name could be set-off with any payable sums.




Duties of the Employee


You shall complete your tasks and promote the affairs of the Company diligently and carefully, and shall safeguard the interests of the Company.You have to exercise your responsibilities, functions, duties and powers in compliance with applicable laws and regulations and with the strategies and guidelines of the 
Company, and will comply with the codes, principles, practices and procedures that are applicable within the Company, as issued or amended during the employment relationship.




Governing Law, Applicable Policies and Jurisdiction


The validity, construction and performance of this Employment Agreement shall be governed 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 Neuchâtel, Switzerland. The Policies and Procedures of the Company, Philip Morris International, as amended or newly issued from time to time, shall also apply.




Miscellaneous


The foregoing represents the basis of your employment with the Company. Please indicate your acceptance thereof by signing and returning one copy of this contract to us by October 19, 2020 the latest. After this date this contract will become null and void.


Should you have any questions, feel free to contact Mr. Constantin Romanov, Global Head of Total Rewards.


































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Philip Morris Products S.A., Quai Jeanrenaud 3, 2000 Neuchâtel, Switzerland 
T:+41 (58) 242 11 11, F: +41 (58) 242 81 11





Miscellaneous (cont’d)


Regarding administrative matters, the People & Culture Department will contact you during your first weeks of employment.


We look forward to your joining PHILIP MORRIS PRODUCTS S.A. and remain,
    


Yours sincerely,


PHILIP MORRIS PRODUCTS S.A.












						
	/s/ CONSTANTIN ROMANOV	/s/ RALF ZYSK
	Constantin Romanov	Ralf Zysk
	Global Head of Total Rewards	Global Head of People Sustainability, Employee
		Relations








												
	Read and approved:	/s/ JORGE INSUASTY	Date:	16/10/2020
		(Jorge Insuasty)		






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Philip Morris Products S.A., Quai Jeanrenaud 3, 2000 Neuchâtel, Switzerland 
T:+41 (58) 242 11 11, F: +41 (58) 242 81 11