Document:

Transition Services Agreement

 Exhibit 10.1 
 TRANSITION SERVICES AGREEMENT 
 BY AND BETWEEN 
 ALTRIA CORPORATE SERVICES, INC. 
 AND 
 PHILIP MORRIS INTERNATIONAL INC. 
 DATED AS OF MARCH 28, 2008 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	ARTICLE I	  	  DEFINITIONS	  	1
			
	ARTICLE II	  	  SERVICES TO BE PROVIDED	  	4
		
	 2.1.    Exhibits.
	  	4
	 2.2.    Independent Contractors.
	  	4
	 2.3.    Standard of Care.
	  	4
	 2.4.    Records.
	  	4
			
	ARTICLE III	  	  FEES	  	5
		
	 3.1.    General.
	  	5
	 3.2.    Payments.
	  	5
			
	ARTICLE IV	  	  REPRESENTATIVES	  	5
		
	 4.1.    Representatives.
	  	5
			
	ARTICLE V	  	  THIRD PARTY AGREEMENTS	  	5
			
	ARTICLE VI	  	  AUTHORITY; INFORMATION; COOPERATION; CONSENTS	  	6
		
	 6.1.    Authority.
	  	6
	 6.2.    Information Regarding Transition Services.
	  	6
	 6.3.    Cooperation.
	  	6
	 6.4.    Further Assurances.
	  	7
			
	ARTICLE VII	  	  AUTHORITY AS AGENT	  	7
			
	ARTICLE VIII	  	  CONFIDENTIAL INFORMATION	  	7
		
	 8.1.    Definition.
	  	7
	 8.2.    Nondisclosure.
	  	7
	 8.3.    Permitted Disclosure.
	  	7
	 8.4.    Ownership of Confidential Information.
	  	8
			
	ARTICLE IX	  	  TERM AND TERMINATION	  	8
		
	 9.1.    Term.
	  	8
	 9.2.    Termination.
	  	8
	 9.3.    Termination Assistance Services.
	  	8

  

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	ARTICLE X	 	  LIMITATION OF LIABILITY; INDEMNIFICATION	  	9
		
	 10.1.    Limitation of Liability.
	  	9
	 10.2.    Indemnification.
	  	9
			
	ARTICLE XI	 	  DISPUTE RESOLUTION	  	9
			
	ARTICLE XII	 	  MISCELLANEOUS	  	10
		
	 12.1.    Original Services Agreement.
	  	10
	 12.2.    Incorporation of Distribution Agreement Provisions.
	  	10
	 12.3.    Governing Law.
	  	10
	 12.4.    References.
	  	10
	 12.5.    Notices.
	  	10

  

 ii 

 TRANSITION SERVICES AGREEMENT 
 THIS TRANSITION SERVICES AGREEMENT, dated as of March 28, 2008 (as amended and supplemented pursuant to the terms hereof, this
“Agreement”), is entered into by and between Altria Corporate Services, Inc., a New York corporation (“ALCS”), and Philip Morris International Inc., a Virginia corporation (“PMI”). 
 WITNESSETH: 
 WHEREAS, ALCS
currently provides certain services to PMI and its wholly-owned subsidiaries pursuant to a Services Agreement, dated as of January 1, 2004, as amended (the “Original Services Agreement”); and 
 WHEREAS, Altria Group Inc., a Virginia corporation (“Altria”), and PMI have entered into a Distribution Agreement, dated as of
January 30, 2008 (the “Distribution Agreement”), providing for, among other things, the distribution by Altria of its entire ownership interest in PMI through a pro-rata distribution of all of the outstanding shares of PMI Common
Stock owned by Altria on the Distribution Date to the holders of Altria Common Stock pursuant to the terms and subject to the conditions of the Distribution Agreement (the “Distribution”); and 
 WHEREAS, ALCS and PMI desire to enter into this Agreement to supercede the Original Services Agreement and to set forth the roles and
responsibilities with regard to services to be provided by ALCS to PMI for certain transition periods not to exceed twenty-four months following the Distribution. 
 NOW, THEREFORE, the parties agree as follows: 
 ARTICLE I 
 DEFINITIONS 
 Affiliate: with
respect to any specified Person, a Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person; provided, however, that for purposes of this Agreement, no
member of either Group and no officer or director of any member of either Group shall be deemed to be an Affiliate of any member of the other Group. 
 ALCS: as defined in the preamble to this Agreement. 
 Altria: as defined in the recitals to
this Agreement. 
 Altria Common Stock: the common stock, par value $0.33 1/3 per share, of Altria. 
 Altria Group: Altria and the Subsidiaries of Altria other than members of the PMI Group. 

 Arbitration Act: the United States Arbitration Act, 9 U.S.C. §§ 1-16, as the same
may be amended from time to time. 
 Business Day: any day other than a Saturday, a Sunday or a day on which banking institutions
located in the Commonwealth of Virginia or the State of New York are authorized or obligated by Law or executive order to close. 
 Confidential Information: as defined in Section 8.1 hereof. 
 Distribution: as defined in the recitals to
this Agreement. 
 Distribution Agreement: as defined in the recitals to this Agreement. 
 Distribution Date: the date on which the Distribution becomes effective. 
 Employee Costs: for each employee of ALCS performing the Transition Services, the salaries, fringe benefits, executive compensation benefits (if
applicable) and depreciation/amortization of office equipment and software (if applicable) attributable to the employee, based on the ratio of ALCS’s estimate of the time spent by the employee on behalf of PMI divided by the total time spent by
the employee. 
 Employee Matters Agreement: as defined in Section 3.1 hereof. 
 Exhibits: as defined in Section 2.1 hereof. 
 Fees: as defined in Section 3.1 hereof. 
 Governmental Authority: any federal,
national, state, provincial, local, foreign, international or other court, government, department, commission, board, bureau or agency, authority (including, but not limited to, any central bank or taxing authority) or instrumentality (including,
but not limited to, any court, tribunal or grand jury). 
 Group: the Altria Group or the PMI Group, as the context requires.

 Law: any federal, national, state, provincial, local or foreign statute, ordinance, regulation, code, license, permit,
authorization, approval, consent, common law, legal doctrine, order, judgment, decree, injunction or requirement of any Governmental Authority or any order or award of any arbitrator, now or hereafter in effect. “Law” shall specifically
include, but shall not be limited to, any state, federal, or foreign statute or common law for deceptive and unfair trade practices, unfair and fraudulent business practices, fraud, or violation of the Racketeer Influenced and Corrupt Practices Act
(“RICO”) or similar statute. 
 Liabilities: means any and all claims, debts, Losses, liabilities, assessments, guarantees,
assurances, commitments and obligations, of any kind, character or description (whether absolute, contingent, matured, not matured, liquidated, unliquidated, accrued, known, unknown, direct, indirect, derivative or otherwise or whether based in
contract, tort, implied or express warranty, strict liability, criminal or civil statute, or otherwise) whenever arising, including, but not limited to, those arising under or in connection with any Law, and those arising under any contract,
guarantee, commitment or undertaking. 
  

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 Losses: with respect to any Person, all losses, damages (whether compensatory, punitive,
consequential, multiple or other), judgments, settlements, equitable or injunctive relief or disgorgements, including, where applicable, all punitive damages and criminal and civil fines and penalties, but excluding damages in respect of actual or
alleged lost profits, suffered by such Person, and including all costs, expenses and interest relating thereto (including, but not limited to, all expenses of investigation, all accountant or attorneys’ fees and all other out-of-pocket
expenses), regardless of whether any such losses, damages, judgments, settlements, costs, expenses, fines and penalties relate to or arise out of such Person’s own alleged or actual negligent, grossly negligent, reckless or intentional
misconduct. 
 Original Services Agreement: as defined in the preamble to this Agreement. 
 Parties: ALCS and PMI (Party means either ALCS or PMI). 
 PMI: as defined in the preamble to this Agreement. 
 PMI Common Stock: the common stock, no
par value, of PMI. 
 PMI Group: PMI and the PMI Subsidiaries. 
 Person: an individual, a partnership, a joint venture, a corporation, a trust, a limited liability company, an unincorporated organization, or any
government or any department or agency thereof. 
 Records: as defined in Section 2.4 hereof. 
 Representatives: as defined in Section 4.1 hereof. 
 Subsidiary: with respect to any specified Person, any corporation or other legal or other entity of which such Person or any of its Subsidiaries controls or owns, directly or indirectly, more than 50% of the
stock or other equity interest entitled to vote on the election of members to the board of directors or similar governing body; provided, however, that for purposes of this Agreement, (1) the PMI Subsidiaries shall be deemed to be Subsidiaries
of PMI and (2) no member of the PMI Group shall be deemed to be a Subsidiary of any member of the Altria Group. 
 Transition
Services (or “Services”): as defined in Section 2.1 hereof. 
 Transition Period: as defined for each
Service in the appropriate Exhibit. 
  

 3 

 ARTICLE II 
 SERVICES TO BE PROVIDED 
  

	 	2.1.	Exhibits. 

 (a) Exhibits 1 through 9
(collectively, the “Exhibits”) attached to and made a part of this Agreement describe the services to be provided by ALCS to PMI and one or more members of the PMI Group, as designated from time to time by PMI (the “Transition
Services” or “Services”). The Parties have made a good faith effort as of the date hereof to identify each Transition Service and to complete the content of the Exhibits accurately. It is anticipated that the Parties will modify the
Transition Services from time to time. In that case or to the extent that any Exhibit is incomplete, the Parties will use good faith efforts to modify the Exhibits. There are certain terms that are specifically addressed in the Exhibits attached
hereto that may differ from the terms provided hereunder. In those cases, the specific terms described in the Exhibits shall govern that Transition Service. 
 (b) The Parties may also identify additional Services that they wish to incorporate into this Agreement. The Parties will create additional Exhibits setting forth the description of such Services, the Fees for such
Services and any other applicable terms. 
  

	 	2.2.	Independent Contractors. 

 ALCS will provide
the Transition Services either through its own resources, through the resources of its subsidiaries or Affiliates, or by contracting with independent contractors as agreed hereunder. To the extent that ALCS decides to provide a Transition Service
through an independent contractor in the future, ALCS shall consult with and obtain the prior approval of PMI, which approval shall not be unreasonably withheld. 
  

	 	2.3.	Standard of Care. 

 In providing the
Transition Services hereunder, ALCS will exercise the same degree of care as it has historically exercised in providing such Transition Services to its Affiliates prior to the date hereof, including at least the same level of quality, responsiveness
and timeliness as has been exercised by ALCS with respect to such Transition Services. 
  

	 	2.4.	Records. 

 ALCS shall keep full and detailed
records dealing with all aspects of the Transition Services performed by it hereunder (the “Records”) and: 
 (a) shall provide
access to the Records to PMI at all reasonable times; and 
 (b) shall maintain the Records in accordance with good record management
practices and with at least the same degree of completeness and care as it maintains for its other similar business interests. 
  

 4 

 ARTICLE III 
 FEES 
  

	 	3.1.	General. 

 PMI will pay to ALCS a fixed fee
for each Transition Service as set forth in the attached Exhibits (collectively, the “Fees”). The Fees constitute full compensation to ALCS for all charges, costs and expenses incurred by ALCS on behalf of PMI in providing the Services,
unless otherwise specifically provided in the Exhibits. Notwithstanding the terms of any of the Exhibits, the Fees for each Transition Service shall be reduced by any amounts PMI is required to pay pursuant to Section 4.1(c) of the
Employee Matters Agreement (the “Employee Matters Agreement”), dated as of even date herewith, between PMI and Altria, with respect to any person who provides Services under this Agreement and thereafter becomes a PMI Transferee (as
defined in the Employee Matters Agreement). Except as specifically provided herein or in the Exhibits, or as subsequently agreed by PMI and ALCS, PMI will not be responsible to ALCS or any independent contractor retained by ALCS, for any additional
fees, charges, costs or expenses relating to the Services, unless such additional fees, charges, costs or expenses are a direct result of PMI’s unilateral deviation from the scope of the services defined in the Exhibits. 
  

	 	3.2.	Payments. 

 ALCS will deliver to PMI, no
later than five days following the last day of each month, an invoice for the aggregate Fees incurred for that month. PMI will pay to ALCS monthly no later than the third Wednesday of the following month, the aggregate Fees incurred during the
previous month. 
 ARTICLE IV 
 REPRESENTATIVES 
  

	 	4.1.	Representatives. 

 (a) The Controller of
Altria and the Controller—Financial Reporting of PMI will serve as administrative representatives (“Representative(s)”) of ALCS and PMI, respectively, to facilitate day-to-day communications and performance under this Agreement. Each
Party may treat an act of a Representative of the other Party as being authorized by such other Party. Each Party may replace its Representative by giving written notice of the replacement to the other Party. 
 (b) No additional Exhibits, modifications to existing Exhibits, or amendments to this Agreement shall be effective unless and until executed by the
Representatives of each of ALCS and PMI. 
 ARTICLE V 
 THIRD PARTY AGREEMENTS 
 To the extent that it is not practicable to have PMI as the contracting
Party for a third party obligation, ALCS, with respect to all Services supplied by ALCS or contracted for by ALCS on behalf of PMI, shall use commercially reasonable efforts to cause all such third party 

  

 5 

 
contracts to extend to and be enforceable by PMI, or to assign such contracts to PMI. In the event that such contracts are not extendable or assignable, ALCS
shall act as agent for PMI in the pursuit of any claims, issues, demands or actions against such third party provider at PMI’s expense. PMI will indemnify ALCS for any liability under third party contracts arising directly out of the acts or
omissions of PMI. 
 ARTICLE VI 
 AUTHORITY; INFORMATION; COOPERATION; CONSENTS 
  

	 	6.1.	Authority. 

 Each Party represents to the
other Party that: 
 (a) it has the requisite corporate authority to enter into and perform this Agreement; 
 (b) its execution, delivery and performance of this Agreement have been duly authorized by all requisite corporate action on its behalf; 
 (c) this Agreement is enforceable against it; and 
 (d) it has obtained all consents or approvals of Governmental Authorities and other Persons that are conditions to its entering into this Agreement. 
  

	 	6.2.	Information Regarding Transition Services. 

 Each Party shall make available to the other Party any information required or reasonably requested by that other Party regarding the performance of any Service and shall be responsible for providing that information on a timely basis and
for ensuring the accuracy and completeness of that information; provided, however, that a Party shall not be liable for not providing any information that is subject to a confidentiality obligation owed by it to a Person other than an
Affiliate of it or the other Party. ALCS shall not be liable for any impairment of any Service caused by ALCS not receiving information from PMI, either timely or at all, or by its receiving inaccurate or incomplete information from PMI, in each
case that is required or reasonably requested regarding that Service. 
  

	 	6.3.	Cooperation. 

 The Parties will use good
faith efforts to cooperate with each other in all matters relating to the provision and receipt of Services. Such good faith cooperation will include providing electronic access to systems used in connection with Services and using commercially
reasonable efforts to obtain all consents, licenses, sublicenses or approvals necessary to permit each Party to perform its obligations. The Parties will cooperate with each other in making such information available as needed in the event of any
and all internal or external audits, whether in the United States or any other country. If this Agreement is terminated in whole or in part, the Parties will cooperate with each other in all reasonable respects in order to effect an efficient
transition and to minimize the disruption to the business of both Parties, including the assignment or transfer of the rights and obligations under any contracts. 
  

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	 	6.4.	Further Assurances. 

 Each Party shall take
such actions, upon request of the other Party and in addition to the actions specified in this Agreement, as may be necessary or reasonably appropriate to implement or give effect to this Agreement. 
 ARTICLE VII 
 AUTHORITY AS AGENT 

 ALCS is hereby authorized to act as agent for PMI for the purpose of performing Services hereunder and as is necessary or desirable to
perform such Services. PMI will execute and deliver or cause the appropriate member of the PMI Group to execute and deliver to ALCS any document or other evidence which may be reasonably required by ALCS to demonstrate to third parties the authority
of ALCS described in this Article VII. 
 ARTICLE VIII 
 CONFIDENTIAL INFORMATION 
  

	 	8.1.	Definition. 

 For the purposes of this
Agreement, “Confidential Information” means non-public information about the disclosing Party’s or any of its Affiliates’ business or activities that is proprietary and confidential, which shall include, without limitation, all
business, financial, technical and other information, including software (source and object code) and programming code, of a Party or its Affiliates marked or designated “confidential” or “proprietary” or by its nature or the
circumstances surrounding its disclosure should reasonably be regarded as confidential. Confidential Information includes not only written or other tangible information, but also information transferred orally, visually or electronically or by any
other means. Confidential Information will not include information that (i) is in or enters the public domain without breach of this Agreement, or (ii) the receiving Party lawfully receives from a third party without restriction on
disclosure and, to the receiving Party’s knowledge without breach of a nondisclosure obligation. 
  

	 	8.2.	Nondisclosure. 

 Each of ALCS and PMI agree
that (i) it will not disclose to any third party or use any Confidential Information disclosed to it by the other except as expressly permitted in this Agreement, and (ii) it will take all reasonable measures to maintain the
confidentiality of all Confidential Information of the other Party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar type and importance.

  

	 	8.3.	Permitted Disclosure. 

 Notwithstanding the
foregoing, each Party may disclose Confidential Information (i) to the extent required by a court of competent jurisdiction or other Governmental Authority or otherwise as required by Law, including without limitation disclosure obligations
imposed under the federal securities laws, provided that such Party has given the other Party prior notice of such 

  

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requirement when legally permissible to permit the other Party to take such legal action to prevent the disclosure as it deems reasonable, appropriate or
necessary, or (ii) on a “need-to-know” basis under an obligation of confidentiality to its consultants, legal counsel, Affiliates, accountants, banks and other financing sources and their advisors. 
  

	 	8.4.	Ownership of Confidential Information. 

 All
Confidential Information supplied or developed by either Party shall be and remain the sole and exclusive property of the Party who supplied or developed it. 
 ARTICLE IX 
 TERM AND TERMINATION 
  

	 	9.1.	Term. 

 This Agreement shall remain in effect
until such time as it has been terminated as to all Transition Services in accordance with Section 9.2 hereof. 
  

	 	9.2.	Termination. 

 Either Party may terminate
this Agreement without cause with respect to one or more Services under this Agreement by providing three months’ written notice to the other Party or as otherwise agreed between the Parties hereto; provided that the Services set
forth in Exhibits 1 through 9 shall terminate not later than two years following the Distribution. 
  

	 	9.3.	Termination Assistance Services. 

 ALCS
agrees that, upon termination of this Agreement or any of the Services set forth in the Exhibits, ALCS will cooperate in good faith with PMI to provide PMI (or its designee) with reasonable assistance to make an orderly transition from ALCS to
another supplier of the Services. If requested by PMI, ALCS will provide transition assistance services, including the following: 
 (a)
developing a transition plan with assistance from PMI or its designee; 
 (b) providing training to PMI personnel or its designee’s
personnel to perform the Services; and 
 (c) organizing and delivering to PMI records and documents necessary to allow continuation of the
Services, including delivering such materials in electronic forms and versions as requested by PMI. 
  

 8 

 ARTICLE X 
 LIMITATION OF LIABILITY; INDEMNIFICATION 
  

	 	10.1.	Limitation of Liability. 

 Except as may be
provided in Section 10.2 below and Article V above, ALCS and its Affiliates (each, an “ALCS Party”) shall not be liable to any member of the PMI Group and its respective Affiliates (each, a “PMI Party”) and
each PMI Party shall not be liable to any ALCS Party, in each case, for any Liabilities of a PMI Party or an ALCS Party arising in connection with this Agreement and the Services provided hereunder. 
  

	 	10.2.	Indemnification. 

 (a) ALCS shall indemnify,
defend and hold harmless each of the PMI Parties from and against all Liabilities, of any kind or nature, (i) incurred by a PMI Party or (ii) of third parties unrelated to any PMI Party, in each case caused by or arising in connection with
the gross negligence or willful misconduct of any employee of ALCS in connection with the performance of the Services, except to the extent that the Liabilities were caused directly or indirectly by acts or omissions of any PMI Party.
Notwithstanding the foregoing, ALCS shall not be liable for any special, indirect, incidental, or consequential damages relating to such claims. Any Liability incurred by ALCS pursuant to this Agreement on or after the Distribution Date shall be
deemed to be an Altria Group Liability for purposes of Article III of the Distribution Agreement. 
 (b) PMI shall indemnify, defend and hold
harmless each of the ALCS Parties from and against all Liabilities of any kind or nature, (i) incurred by an ALCS Party or (ii) of third parties unrelated to any ALCS Party, in each case caused by or arising in connection with the gross
negligence or willful misconduct of any employee of PMI in connection with PMI’s performance under this Agreement, except to the extent that Liabilities were caused directly or indirectly by acts or omissions of any ALCS Party. Notwithstanding
the foregoing, PMI shall not be liable for any special, indirect, incidental, or consequential damages relating to such claims. Any Liability incurred by PMI pursuant to this Agreement on or after the Distribution Date shall be deemed to be a PMI
Group Liability for purposes of Article III of the Distribution Agreement. 
 ARTICLE XI 
 DISPUTE RESOLUTION 
 If the Parties are
unable to resolve any service or performance issues or if there is a material breach of this Agreement that has not been corrected within thirty (30) days of receipt of notice of such breach, the Controller—Financial Reporting and CFO of
PMI, on behalf of PMI, and the Controller and CFO of Altria, on behalf of ALCS, will meet promptly to review and resolve those issues in good faith. 
  

 9 

 ARTICLE XII 
 MISCELLANEOUS 
  

	 	12.1.	Original Services Agreement. 

 This Agreement
terminates and supersedes the Original Services Agreement, which shall have no further force and effect following the effectiveness of this Agreement. 
  

	 	12.2.	Incorporation of Distribution Agreement Provisions. 

 The following provisions of the Distribution Agreement are hereby incorporated herein by reference, and unless otherwise expressly specified herein, such provisions shall apply as if fully set forth herein (references in this
Section 12.2 to an “Article” or “Section” shall mean Articles and Sections of the Distribution Agreement, and except as expressly set forth below, references in the material incorporated herein by reference shall be
references to the Distribution Agreement): Article III (relating to Mutual Releases and Indemnification); Article IV (relating to certain Additional Covenants); Article V (relating to Access to Information); and Article IX (relating to
Miscellaneous). 
  

	 	12.3.	Governing Law. 

 This Agreement shall be
governed by, and construed and interpreted in accordance with, the laws of the Commonwealth of Virginia (other than the laws regarding the choice of laws and conflict of laws) as to all matters, including matters of validity, construction, effect,
performance and remedies provided, however, that the Arbitration Act shall govern the matters described in Article X. 
  

	 	12.4.	References. 

 Except as provided in
Section 12.2 hereof all references to Sections, Articles or Exhibits contained herein mean Sections, Articles or Exhibits of or to this Agreement, as the case may be, unless otherwise stated. 
  

	 	12.5.	Notices. 

 All notices, requests, claims,
demands and other communications hereunder (collectively, “Notices”) shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by cable, telegram, facsimile, electronic mail or
other standard form of telecommunications (provided confirmation is delivered to the recipient the next Business Day in the case of facsimile, electronic mail or other standard form of telecommunications) or by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows: 
 If to ALCS: 
 Controller, Altria Group, Inc. 
 P.O. Box
26603 
 Richmond, VA 23261 
  

 10 

 If to PMI: 
 Controller—Financial Reporting, Philip Morris International Inc. 
 120 Park Avenue 
 New York, NY 10017 
 or to such other address as any party
hereto may have furnished to the other parties by a notice in writing in accordance with this Section 12.5. 
  

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 IN WITNESS WHEREOF, the Parties have signed this Agreement on the date first set forth above.

  

			
	 ALTRIA CORPORATE SERVICES, INC.

		
	 By:
	 	     /s/ Sean X. McKessy

	 Name:
	 	     Sean X. McKessy

	 Title:
	 	     Secretary and Treasurer

	
	 PHILIP MORRIS INTERNATIONAL INC.

		
	 By:
	 	     /s/ André Calantzopoulos

	 Name:
	 	      André Calantzopoulos

	 Title:
	 	     President and Chief Executive Officer

  

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 EXHIBIT 1 
 CORPORATE TAX SERVICES 
  

	I	SPECIFIC TRANSITION SERVICES 

  

	 	•	 	 Provide assistance in filing 2007 U.S. Federal and state income tax returns pertaining to PMI until these functions are fully absorbed by PMI, estimated by
December 31, 2008 

  

	II	SERVICE FEES 

 The Fee payable for Corporate Tax services
for 2008 shall include: (i) the relevant Employee Costs associated with the filing assistance provided; (ii) a management fee equal to 5% of the aggregate amount calculated pursuant to (i); and (iii) third-party expenses, including
travel and entertainment, consulting fees and printing costs incurred on behalf of PMI by ALCS. 
  

 1.1 

 EXHIBIT 2 
 FINANCIAL SERVICES 
  

	I	SPECIFIC TRANSITION SERVICES 

 A. U.S. Offices of PMI

  

	 	•	 	 Provide Travel and Expense Statement and Accounts Payable processing until PMI can transfer these functions to its shared service center in Krakow, Poland, expected
in the third quarter of 2008. 

  

	 	•	 	 Provide payroll services under Altria’s existing contract with ADP until PMI completes its own contract with ADP, expected in the second quarter of 2008.

 B. Latin America Markets 
  

	 	•	 	 Transition of Travel and Expense Statement and Accounts Payable processing back to local markets along timeline developed in 2007 with PMI.

  

	 	•	 	 Consulting and transaction resolution until September 30, 2008 to ensure smooth transition to local markets. 

  

	II	SERVICE FEES 

 The Fee payable for the financial services
for 2008 shall include: (i) the relevant Employee Costs associated with the processing of accounts payable, time and expense reports and ADP payroll submissions/reconciliations; (ii) the pro rata share of infrastructure and fixed costs
(stationery, depreciation, amortization of software) in the San Antonio shared service center based on the number of employees performing PMI work divided by the total number of San Antonio employees times the previously mentioned infrastructure and
fixed costs; (iii) a management fee equal to 5% of the aggregate amount calculated pursuant to (i) and (ii); and (iv) third-party expenses, including ADP fees, travel and entertainment, consulting fees and printing costs incurred on
behalf of PMI by ALCS. 
  

 2.1 

 EXHIBIT 3 
 INTERNAL AUDIT SERVICES 
  

	I	SPECIFIC TRANSITION SERVICES 

  

	 	•	 	 Provide temporary staffing to support PMI Latin America audit requirements until these functions are filled by PMI, estimated by June 30, 2008.

  

	II	SERVICE FEES 

 The Fee payable for the Internal Auditing
services for 2008 shall include: (i) the relevant Employee Costs associated with PMI’s Latin America Audit functions; (ii) a management fee equal to 5% of the aggregate amount calculated pursuant to (i); and (iii) third-party
expenses, including travel and entertainment, consulting fees and printing costs incurred on behalf of PMI by ALCS. 
  

 3.1 

 EXHIBIT 4 
 INFORMATION TECHNOLOGY SERVICES 
  

	I	SPECIFIC TRANSITION SERVICES 

 Applications required by PMI
for business continuity and Global Network Services will continue normal operations and provide current services until the completion of PMI’s migration of these applications. The estimated completion date for transition of all services is no
later than December 31, 2008. 
 The systems & services in scope include but are not limited to: 
  

	 	–	Human Resource & Benefits applications required for business continuity of PMI headquarters location and other US-based PMI, including but not limited to:

  

	 	•	 	 Payroll services & related ALCS SAP Business Warehouse reporting services for PMI’s US-based employees using ALCS ADP & SAP BW solutions

  

	 	•	 	 Retirement services for PMI’s US-based employees using ALCS ADP/Fidelity solution 

  

	 	•	 	 Profit Sharing services for PMI’s US-based employees using ALCS ADP/Fidelity solution 

  

	 	•	 	 Health & Welfare Plans for PMI’s US-based employees using ALCS Fidelity solution 

  

	 	•	 	 Employee Stock Plans for all eligible PMI employees using the ALCS UBS solution 

  

	 	–	Legal Administration support applications. The systems & services in scope include but are not limited to: 

  

	 	•	 	 Law Manager – Matter Management & related e-Invoicing, My Legal Zone, and Brio Reporting systems 

  

	 	•	 	 Investor Relations service support 

  

	 	–	Global and shared network infrastructure, including but not limited to: 

  

	 	•	 	 Moorefield, VA to PMI Network 

  

	 	•	 	 San Antonio, TX to PMI Network 

  

	 	•	 	 Tobacco Farmers Network 

  

	 	•	 	 PMI data center & systems management support services 

  

	 	•	 	 PMI servers in Rye Brook 

  

 4.1 

	 	•	 	 Network connectivity to Westchester Airport 

  

	 	•	 	 Network connectivity between PMI systems (e.g. HR2U) and ALCS systems (e.g. SHARP) that are in scope of the transition services agreement

  

	 	•	 	 Network, data and telephone services to (PMI Inc Headquarters) either through ALCS’s own resources or by contracting with other independent contractors. The
services will include network telephone access, move, add and change services, system administration, and invoice processing 

  

	 	–	ALCS contracts consulting services related to negotiation of separate enterprise contracts between PMI and major information technology vendors, including but not limited to IBM,
Oracle, Microsoft and SAP, including the following actions: 

  

	 	•	 	 Continue to communicate to suppliers Altria’s intent to separate global contracts and subsequently receive written consents from the suppliers.

  

	 	•	 	 Track progress and inform PMI management of any potential service issues, cost impact or major contractual challenges. 

  

	 	•	 	 Coordinate with PMI to assign a copy of, or have PMI negotiate, a new master contract. 

  

	II	SERVICE FEES 

  

	 	–	The Fee payable for the information technology transition services for 2008 shall be based on the following: 

  

	 	•	 	 Global Applications & Network Services. The Fee will include: (i) the relevant Employee Costs associated with the requested services;
(ii) a management fee equal to 5% of the aggregate amount calculated pursuant to (i); and (iii) third-party expenses, including travel and entertainment and printing costs, incurred on behalf of PMI by ALCS. Direct pass through on any
direct charges (i.e. circuit charges, routers or monitoring) that are currently provided by ALCS or its contracted third party. This would also include any maintenance and license fee required to maintain PMI operations until appropriate separation
can be achieved. 

  

 4.2 

	 	•	 	 Information Technology Contracts Consulting. The Fee will include: (i) PMI’s charges under each information technology contract (primarily
AT&T, IBM, Oracle, Microsoft and SAP contracts), (collectively, the “IT Contracts”), allocated by usage under the IT Contracts as provided by the service provider; (ii) the relevant Employee costs; (iii) a management fee of
5% of the aggregate amount calculated pursuant to (ii); and (iv) third-party expenses, including travel and entertainment and printing costs, incurred on behalf of PMI by ALCS. 

  

	 	•	 	 In the event that Altria and PMI do not complete all required negotiations by May 31, 2008 and PMI is still operating certain software under an ALCS licensee,
any third party fee incurred by Altria for this continuation of service will be passed on to PMI for appropriate settlement. 

  

 4.3 

 EXHIBIT 5 
 HUMAN RESOURCES SERVICES 
  

	I	SPECIFIC TRANSITION SERVICES 

  

	 	•	 	 Provide Health and Welfare programs to PMI’s US employees through December 31, 2008. 

  

	II	SERVICE FEES 

 The Fee payable for the Health and Welfare
programs for 2008 shall include: (i) the relevant Employee Costs associated with administering the program for PMI’s US employees; (ii) a management fee equal to 5% of the aggregate amount calculated pursuant to (i); and
(iii) third-party expenses, including travel and entertainment, administrative and consulting fees incurred on behalf of PMI by ALCS. 
  

 5.1 

 EXHIBIT 6 
 RISK MANAGEMENT 
  

	I	SPECIFIC TRANSITION SERVICES 

  

	 	•	 	 Consultation as requested by PMI, on insurance renewals through November 1, 2008. 

  

	II	SERVICE FEES 

 The Fee payable for 2008 shall include:
(i) the relevant Employee Costs associated with consultation time requested; (ii) a management fee equal to 5% of the aggregate amount calculated pursuant to (i); and (iii) third-party expenses, including travel and entertainment, and
consulting fees incurred on behalf of PMI by ALCS. 
  

 6.1 

 EXHIBIT 7 
 LEGAL SERVICES 
  

	I	SPECIFIC TRANSITION SERVICES 

  

	 	•	 	 Provide legal services in connection with Corporate Affairs, Government Affairs and Facilities to PMI as needed through December 31, 2008.

  

	 	•	 	 Provide legal support for Information Services contract group and records management as needed through December 31, 2008. 

  

	II	SERVICE FEES 

 The Fee payable for the legal services for
2008 shall include: (i) the relevant Employee Costs associated with providing the services; (ii) a management fee equal to 5% of the aggregate amount calculated pursuant to (i); and (iii) third-party expenses, including travel and
entertainment, administrative and consulting fees incurred on behalf of PMI by ALCS. 
  

 7.1 

 EXHIBIT 8 
 AVIATION SERVICES 
  

	I	SPECIFIC TRANSITION SERVICES 

  

	 	•	 	 Provide hangar and office space at Westchester County Airport until Westchester County authorizes transfer of lease to PMI. 

  

	II	SERVICE FEES 

 The Fee payable shall be monthly rent under
the existing lease until the date that the lease is transferred to PMI. 
  

 8.1 

 EXHIBIT 9 
 CORPORATE AFFAIRS SERVICES 
  

	I	SPECIFIC TRANSITION SERVICES 

  

	 	A.	GOVERNMENT AFFAIRS 

  

	 	•	 	 Lease of office space for Government Affairs in the Washington DC location for no more than three months from March 28, 2008. 

  

	II	SERVICE FEES 

  

	 	•	 	 The Fee payable for corporate affairs transition services shall include the monthly rent of $17,939 based upon the ratio of the number of PMI employees utilizing
the leased space divided by total occupants of the leased space times the monthly rent and expenses. 

  

 9.1Employee Matters Agreement

 Exhibit 10.2 
 EMPLOYEE MATTERS AGREEMENT 
 BY AND BETWEEN 
 ALTRIA GROUP, INC. 
 AND

 PHILIP MORRIS INTERNATIONAL INC. 
 DATED AS OF MARCH 28, 2008 

 TABLE OF CONTENTS 
  

					
	 	 	 	  	Page
			
	 ARTICLE I
	 	DEFINITIONS	  	1
			
	 1.1
	 	General	  	1
	 1.2
	 	References to Time	  	9
			
	 ARTICLE II
	 	GENERAL PRINCIPLES	  	9
			
	 2.1
	 	Altria Group Employees	  	9
	 2.2
	 	PMI Group Employees	  	10
			
	 ARTICLE III
	 	PMI Group Plans	  	10
			
	 3.1
	 	PMI Group Plans	  	10
			
	 ARTICLE IV
	 	EMPLOYEE TRANSFERS	  	13
			
	 4.1
	 	PMI Transferees	  	13
	 4.2
	 	Altria Transferees	  	14
	 4.3
	 	Payments	  	15
			
	 ARTICLE V
	 	EQUITY COMPENSATION	  	15
			
	 5.1
	 	Altria Options	  	15
	 5.2
	 	Kraft SARs Issued by Altria	  	17
	 5.3
	 	Restricted Stock and pre-January 31, 2007 Deferred Stock	  	17
	 5.4
	 	Deferred Stock	  	18
	 5.5
	 	Existing Kraft Equity Compensation	  	19
	 5.6
	 	Payments Previously Made By PMI	  	20
	 5.7
	 	Other	  	20
			
	 ARTICLE VI
	 	PROFIT-SHARING PLANS	  	23
			
	 6.1
	 	Maintenance of Stock Investment Options	  	23
			
	 ARTICLE VII
	 	ALTRIA STOCK PURCHASE PLAN	  	24
			
	 7.1
	 	Termination of Participation	  	24
			
	 ARTICLE VIII
	 	GENERAL AND ADMINISTRATIVE	  	24
			
	 8.1
	 	Sharing of Participant Information	  	24
	 8.2
	 	No Third-Party Beneficiaries	  	24
	 8.3
	 	Audit Rights with Respect to Information Provided	  	25
	 8.4
	 	Fiduciary Matters	  	25
	 8.5
	 	Collective Bargaining	  	25
	 8.6
	 	Consent of Third Parties	  	26
			
	 ARTICLE IX
	 	INDEMNIFICATION	  	26
			
	 9.1
	 	Indemnification	  	26
			
	 ARTICLE X
	 	MISCELLANEOUS	  	26
			
	 10.1
	 	Relationship of Parties	  	26
	 10.2
	 	Affiliates	  	26

  

 i 

					
	 10.3
	 	Employee Communications	  	26
	 10.4
	 	Incorporation of Distribution Agreement Provisions	  	26
	 10.5
	 	Governing Law	  	27
	 10.6
	 	References	  	27

  

 -ii- 

 EMPLOYEE MATTERS AGREEMENT 
 THIS EMPLOYEE MATTERS AGREEMENT, dated as of March 28, 2008 (as amended and supplemented pursuant to the terms hereof, this
“Agreement”), is entered into by and between Altria Group, Inc., a Virginia corporation (“Altria”), and Philip Morris International Inc., a Virginia corporation (“PMI”). 
 WITNESSETH: 
 WHEREAS, Altria
and PMI have entered into a Distribution Agreement, dated as of January 30, 2008 (the “Distribution Agreement”), providing for, among other things, the distribution by Altria of its entire ownership interest in PMI through a pro-rata
distribution of all of the outstanding shares of PMI Common Stock owned by Altria on the Distribution Date to the holders of Altria Common Stock pursuant to the terms and subject to the conditions of the Distribution Agreement (the
“Distribution”); and 
 WHEREAS, Altria and PMI wish to set forth their agreement as to certain matters regarding the
treatment of, and the compensation and employee benefits provided to, employees and former employees of the Altria Group and the PMI Group (as hereinafter defined). 
 NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained and intending to be legally bound hereby, the parties hereto agree as follows: 
 ARTICLE I 
 DEFINITIONS

 1.1 General. As used in this Agreement, the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined): 
 Adjusted Altria Option: an Altria Option as adjusted
pursuant to Section 5.1 hereof. 
 Affiliate: with respect to any specified Person, a Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person; provided, however, that for purposes of this Agreement, no member of either Group and no officer or director
of any member of either Group shall be deemed to be an Affiliate of any member of the other Group. 
 Altria: as defined in the
preamble to this Agreement. 
 Altria Benefit Liabilities: as defined in Section 2.1 hereof. 
 Altria Common Stock: the common stock, par value $0.33  1
/3 per share, of Altria. 

 Altria Deferred Stock: a deferred stock obligation relating to Altria Common Stock granted by
Altria before the Distribution Date under an Altria Performance Incentive Plan. 
 Altria Group: Altria and the Subsidiaries of Altria
other than members of the PMI Group. 
 Altria Group Employee: any individual, excluding a PMI Transferee, who (i), as of the close of
business on the Distribution Date, is either employed by, or on a leave of absence (as defined by the personnel policies of the Altria Group) from, a member of the Altria Group; (ii) is a Former Altria Group Employee; or (iii) is or
becomes an Altria Transferee. 
 Altria Group Plans: 
 (i) the Altria Pension Plans; 
 (ii) the Altria Profit-Sharing Plans; 
 (iii) the Altria Welfare and Other Plans; and

 (iv) the Altria Performance Incentive Plans. 
 Altria Option: an option to acquire Altria Common Stock granted by Altria under an Altria Performance Incentive Plan before the Distribution Date. 
 Altria Participating Company: any company of the Altria Group whose eligible employees participate in the Altria Pension Plans and Altria
Profit-Sharing Plans. 
 Altria Pension Plan: any of the Retirement Plan for Salaried Employees, the Retirement Plan for Hourly
Employees, the Benefit Equalization Plan, the Supplemental Management Employees’ Retirement Plan, the Retirement Plan for Employees of Philip Morris de Puerto Rico and any other qualified or non-qualified defined benefit plan or program that is
identified by Altria before the Distribution Date as providing retirement income to Altria Group Employees, all as in effect as of the time relevant to the applicable provisions of this Agreement. 
 Altria Performance Incentive Plans: any of the 1992 Incentive Compensation and Stock Option Plan, the 1997 Performance Incentive Plan, the 2000
Performance Incentive Plan or the 2005 Performance Incentive Plan, or any stock-based or other incentive plan for Altria Group Employees that is identified by Altria before the Distribution Date, all as in effect as of the time relevant to the
applicable provisions of this Agreement. 
 Altria Post-Adjustment Price: the Altria Pre-Adjustment Price multiplied by a fraction,
the numerator of which is the closing price of Altria Common Stock on the NYSE on the Distribution Date (as traded on the “when issued” market) and the denominator of which is the sum of the numerator plus the closing price of PMI Common
Stock on the NYSE on the Distribution Date (as traded on the “when issued” market). 
  

 2 

 Altria Pre-Adjustment Price: the closing price of Altria Common Stock on the NYSE on the
Distribution Date (as traded on the “regular way” market). 
 Altria Profit-Sharing Plan: any of the Deferred Profit-Sharing
Plan for Salaried Employees, the Deferred Profit-Sharing Plan for Tobacco Workers, the Deferred Profit-Sharing Plan for Craft Employees, the Benefit Equalization Plan, the Supplemental Management Employees’ Retirement Plan, the Savings Plan for
Employees of Philip Morris de Puerto Rico and any other qualified or non-qualified defined contribution plan or program for Altria Group Employees that is identified by Altria before the Distribution Date, all as in effect as of the time relevant to
the applicable provisions of this Agreement. 
 Altria Restricted Stock: restricted Altria Common Stock granted by Altria before the
Distribution Date under an Altria Performance Incentive Plan. 
 Altria Stock Investment Option: the investment option offered under
the following Altria Profit-Sharing Plans: the Deferred Profit-Sharing Plan for Salaried Employees, the Deferred Profit-Sharing Plan for Tobacco Workers, the Deferred Profit-Sharing Plan for Craft Employees; and the investment option offered under
the PMI Deferred Profit-Sharing Plan whose value in each case is based on the value of Altria Common Stock. 
 Altria Stock Purchase
Plan: the Plan sponsored by Altria and administered by Computershare Trust Company, N.A., that allows eligible employees of Altria and its subsidiaries to purchase shares of Altria Common Stock through automatic payroll deductions, additional
cash contributions and dividend reinvestment without incurring any brokerage commissions or other costs. 
 Altria Transferee: any
employee of a member of the PMI Group who will transfer employment to a member of the Altria Group on or after the Distribution Date, but on or prior to December 31, 2008. 
 Altria Welfare and Other Plans: any plan, fund or program that provides health, medical, surgical, hospital or dental care, severance, survivor
income, long-term disability, cafeteria, flexible benefits or other welfare benefits or benefits in the event of sickness, accident or disability, or death benefits to Altria Group Employees, all as in effect as of the time relevant to the
applicable provisions of this Agreement. 
 Arbitration Act: the United States Arbitration Act, 9 U.S.C. §§ 1-16, as
the same may be amended from time to time. 
 Auditing Party: as defined in Section 8.3(a) hereof. 
 Business Day: any day other than a Saturday, a Sunday or a day on which banking institutions located in the Commonwealth of Virginia or the State
of New York are authorized or obligated by law or executive order to close. 
 Code: the Internal Revenue Code of 1986, as amended.

 Distribution: as defined in the recitals to this Agreement. 
 Distribution Agreement: as defined in the recitals to this Agreement. 
  

 3 

 Distribution Date: the date on which the Distribution becomes effective. 
 Equity Compensation: Altria Options, Adjusted Altria Options, PMI Options, Kraft SARs, Altria Restricted Stock, PMI Restricted Stock, Altria
Deferred Stock and PMI Deferred Stock. 
 ERISA: Employee Retirement Income Security Act of 1974, as amended. 
 Existing Kraft Deferred Stock: a deferred stock obligation relating to Kraft Class A Common Stock granted by Kraft as of or before
March 30, 2007 under a Kraft Performance Incentive Plan. 
 Existing Kraft Options: an option to acquire Kraft Class A
Common Stock, granted by Kraft as of or before March 30, 2007 under a Kraft Performance Incentive Plan. 
 Existing Kraft Restricted
Stock: restricted Kraft Class A Common Stock granted by Kraft as of or before March 30, 2007 under a Kraft Performance Incentive Plan. 
 Fair Value: in the case of PMI Options and Adjusted Altria Options, the anticipated value of the options, determined using the Modified Black-Scholes option pricing model used by Altria in the preparation of
its most recent annual or quarterly financial reporting prepared before the Distribution Date with such modifications as may be determined before the Distribution Date by Altria. 
 In the case of Existing Kraft Options, the Fair Value shall be the Fair Value used for such options pursuant to the Employee Matters Agreement By and
Between Altria Group, Inc. and Kraft Foods Inc. 
 Former Altria Group Employee: any individual who: (i) before the Distribution
Date has retired from or otherwise separated from service from a member of the Altria Group and has not been re-employed by a member of the PMI Group before the Distribution Date; or (ii) has transferred from a member of the Altria Group or
Former Altria Group that was an Altria Participating Company to a member of the Former Altria Group that was not an Altria Participating Company and thereafter separated from service from a member of the Former Altria Group and has not been
re-employed by a member of the PMI Group before the Distribution Date; and, in all cases participates in, receives, or is entitled to receive, benefits under, any Altria Group Plan; provided, however, that a Former Altria Group
Employee shall not include a PMI Group Transferee. 
 Former Altria Group: shall mean the Altria Group as in existence on and prior to
March 30, 2007 and shall include Altria and the then Subsidiaries of Altria other than members of the PMI Group. 
 Former PMI Group
Employee: any individual who: (i) before the Distribution Date has retired from or otherwise separated from service from a member of the PMI Group and has not been re-employed by a member of the Altria Group before the Distribution Date; or
(ii) has transferred from a member of the PMI Group to a member 

  

 4 

 
of the Former Altria Group that was not an Altria Participating Company and thereafter is separated from service from a member of the Former Altria Group
that was not an Altria Participating Company and has not been re-employed by a member of the Altria Group before the Distribution Date; and, in each such case, participates in, receives or is entitled to receive, benefits under, any PMI Group Plan;
or (iii) was employed by a PMI Participating Company, died before the Distribution Date while so employed and whose spouse and/or child are in receipt of a survivor income benefit allowance from the Survivor Income Benefit Plan for Salaried
Employees on the Distribution Date; or (iv) was employed by a PMI Participating Company, suffered a disability (as defined in the Long-Term Disability Plan for Salaried Employees) before the Distribution Date while so employed and is in receipt
of a disability allowance from the Long-Term Disability Plan for Salaried Employees on the Distribution Date; provided, however, that a Former PMI Group Employee shall not include an Altria Transferee. 
 Governmental Authority: any federal, state, local, foreign or international court, government, department, commission, board, bureau or agency,
authority (including, but not limited to, any central bank or taxing authority) or instrumentality (including, but not limited to, any court, tribunal or grand jury) exercising executive, prosecutorial, legislative, judicial, regulatory or
administrative functions of or pertaining to government or any other regulatory, administrative or governmental authority, including the NYSE or any other exchange on which Altria or PMI Common Stock may be listed. 
 Group: the Altria Group or the PMI Group, as the context requires. 
 Information: all records, books, contracts, instruments, computer data and other data and information. 
 Intrinsic Value: with respect to the relevant options, the product of (i) the number of such options and (ii) the difference between the exercise price of such options and, for Altria Options, the Altria Pre-Adjustment
Price, for Adjusted Altria Options, the Altria Post-Adjustment Price, and for PMI Options, the PMI Price, as applicable. 
 Kraft:
Kraft Foods Inc., a Virginia corporation. 
 Kraft Class A Common Stock: the Class A common stock, no par value, of Kraft.

 Kraft Group: Kraft and the Kraft Subsidiaries. 
 Kraft Price: the closing price of Kraft Class A Common Stock on the NYSE on the Distribution Date. 
 Kraft Performance Incentive Plan: the 2001 Kraft Foods Inc. Performance Incentive Plan or the Kraft Foods Inc. 2005 Performance Incentive Plan. 
 Kraft SAR: a cash-settled stock appreciation right based on the value of Kraft Class A Common Stock resulting from an option to acquire Kraft Class A Common Stock originally granted by Altria as of
June 12, 2001. 
  

 5 

 Kraft Stock Investment Option: the investment option offered under the PMI Deferred Profit-Sharing
Plan whose value is based on the value of Kraft Class A Common Stock. 
 Kraft Subsidiaries: all of the Subsidiaries of Kraft as
of March 30, 2007. 
 Law: any federal, state or local statute, ordinance, regulation, code, license, permit, authorization,
approval, consent, common law, legal doctrine, order, judgment, decree, injunction or requirement of any Governmental Authority or any order or award of any arbitrator, now or hereafter in effect. 
 Liabilities: any and all claims, debts, liabilities, assessments, guarantees, assurances, commitments, obligations, fines, excise taxes,
penalties, damages (whether compensatory, punitive, consequential, multiple or other), losses, disgorgements and obligations, of any kind, character or description (whether absolute, contingent, matured, not matured, liquidated, unliquidated,
accrued, known, unknown, direct, indirect, derivative or otherwise) whenever arising, including, but not limited to, those arising under or in connection with any Law, and those arising under any contract, guarantee, commitment or undertaking,
whether sought to be imposed by any Governmental Authority or arbitrator, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, or otherwise, and including all costs, expenses and interest
relating thereto (including, but not limited to, all expenses of investigation, all attorneys’ fees and all out-of-pocket expenses in connection with any action or threatened action). 
 Losses: with respect to any Person, all losses, Liabilities, damages, claims, demands, judgments or settlements of any nature or kind, known or
unknown, fixed, accrued, absolute or contingent, liquidated or unliquidated, including all costs and expenses (legal, accounting or otherwise as such costs are incurred) relating thereto, including punitive damages and criminal fines and penalties,
but excluding damages in respect of actual or alleged lost profits, suffered by such Person, regardless of whether any such losses, Liabilities, damages, claims, demands, judgments, settlements, costs, expenses, fines and penalties relate to or
arise out of such Person’s own alleged or actual negligent, grossly negligent, reckless or intentional misconduct or the capacity in which such Person was acting. 
 Non-parties: as defined in Section 8.3(b) hereof. 
 Non-PMI Group: the Altria
Group, the Kraft Group, and SABMiller. 
 NYSE: the New York Stock Exchange, Inc. 
 Option Conversion Ratio: the ratio of the pre-adjustment exercise price of the applicable Altria Options to the Altria Pre-Adjustment Price.

 Permissible Offset: with respect to an Altria Pension Plan, any benefit earned under a PMI Pension Plan (including, for this
purpose, any defined benefit plan or program that provides retirement income for PMI Group Employees, regardless of 

  

 6 

 
whether such PMI Group Employee is a U.S. payroll-based PMI Group Employee) that may be used to offset a benefit earned under an Altria Pension Plan, but
only if such benefit is attributable to a period of service used to determine the amount of his or her benefit under the Altria Pension Plan; and with respect to a PMI Pension Plan, any benefit earned under an Altria Pension Plan that may be used to
offset a benefit earned under a PMI Pension Plan, but only if such benefit is attributable to a period of service used to determine the amount of his benefit under the PMI Pension Plan. 
 Person: an individual, a committee, a partnership, a joint venture, a corporation, a trust, a limited liability company, an unincorporated
organization, or a government or any department or agency thereof. 
 Personal Data: as defined in Section 8.1 hereof.

 PMI: as defined in the preamble to this Agreement. 
 PMI Benefit Liabilities: as defined in Section 2.2 hereof. 
 PMI Common Stock: the
common stock, no par value, of PMI. 
 PMI Deferred Stock: a deferred stock obligation relating to PMI Common Stock granted by PMI as
of the Distribution Date under a PMI Performance Incentive Plan pursuant to Section 5.3(a) and Section 5.4(a) hereof. 
 PMI Group: PMI and the PMI Subsidiaries; provided, however, that solely for the purpose of determining whether a former employee of the PMI Group is a Former PMI Group Employee, PMI Group shall include PM Duty Free, Inc. 

PMI Group Employee: any individual, excluding an Altria Transferee, who (i), as of the close of business on the Distribution Date, is either
employed by, or on leave of absence (as defined by the personnel policies of the PMI Group) from, a member of the PMI Group; (ii) is a Former PMI Group Employee; or (iii) is or becomes a PMI Transferee. 
 PMI Group Plans: 
 (i)
the PMI Pension Plans; 
 (ii) the PMI Profit-Sharing Plans; 
 (iii) the PMI Welfare and Other Plans; and 
 (iv) the PMI Performance Incentive Plans. 
 PMI Option: an option to acquire PMI Common Stock granted
by PMI as of the Distribution Date under the PMI Performance Incentive Plan in partial substitution for the Altria Options. 
  

 7 

 PMI Participating Company: any company of the PMI Group whose eligible employees participated in
the Altria Pension Plans and Altria Profit-Sharing Plans prior to January 1, 2008. 
 PMI Pension Plans: any of PMI Retirement
Plan, the PMI Benefit Equalization Plan, the PMI Supplemental Management Plan for Salaried Employees, and any other qualified or non-qualified defined benefit plan or program that provides retirement income for U.S. payroll-based PMI Group Employees
that is identified by PMI no later than the Distribution Date, all as in effect as of the time relevant to the applicable provisions of this Agreement. 
 PMI Performance Incentive Plans: the PMI 2008 Performance Incentive Plan, or any other stock-based or other incentive plan for PMI Group Employees that is identified by PMI before the Distribution Date, all as
in effect as of the time relevant to the applicable provisions of this Agreement. 
 PMI Price: the Altria Pre-Adjustment Price
multiplied by a fraction, the numerator of which is the closing price of PMI Common Stock on the NYSE on the Distribution Date (as traded on the “when issued” market) and the denominator of which is the sum of the numerator plus the
closing price of Altria Common Stock on the NYSE on the Distribution Date (as traded on the “when issued” market). 
 PMI
Profit-Sharing Plans: any of the PMI Deferred Profit-Sharing Plan, the PMI Benefit Equalization Plan, the PMI Supplemental Management Plan for Salaried Employees, the Philip Morris Products Inc. 401(k) Savings Plan and any other qualified or
non-qualified defined contribution plan or program that provides retirement income for U.S. payroll-based PMI Group Employees that is identified by PMI before the Distribution Date, all as in effect as of the time relevant to the applicable
provisions of this Agreement. 
 PMI Restricted Stock: restricted PMI Common Stock distributed as of the Distribution Date and subject
to terms and conditions pursuant to Section 5.3(b) hereof. 
 PMI Stock Investment Option: the investment option to be
offered under the following Altria Profit-Sharing Plans: the Deferred Profit-Sharing Plan for Salaried Employees, the Deferred Profit-Sharing Plan for Tobacco Workers, the Deferred Profit-Sharing Plan for Craft Employees and the investment option to
be offered under the PMI Deferred Profit-Sharing Plan whose value in each case is based on the value of PMI Common Stock. 
 PMI
Subsidiaries: all of the Subsidiaries of PMI. 
 PMI Transferee: any employee of a member of the Altria Group who will transfer
employment to a member of the PMI Group on or after the Distribution Date, but on or prior to December 31, 2008. 
 PMI Welfare and
Other Plans: any plan, fund or program that provides health, medical, surgical, hospital or dental care, severance, survivor income, long-term 

  

 8 

 
disability, cafeteria, flexible benefits or other welfare benefits or benefits in the event of sickness, accident or disability, or death benefits to PMI
Group Employees, all as in effect as of the time relevant to the applicable provisions of this Agreement. 
 Record Date: the close of
business on the date to be determined by Altria’s Board of Directors as the record date for determining the holders of Altria Common Stock entitled to receive shares of PMI Common Stock pursuant to the Distribution. 
 SEC: the United States Securities and Exchange Commission. 
 Securities Act: the Securities Act of 1933, as amended, or any successor statute. 
 Securities
Exchange Act: the Securities Exchange Act of 1934, as amended, or any successor statute. 
 Subsidiary: with respect to any
specified Person, any corporation or other legal entity of which such Person or any of its Subsidiaries controls or owns, directly or indirectly, more than 50% of the stock or other equity interest entitled to vote on the election of members to the
board of directors or similar governing body; provided, however, that for purposes of this Agreement, (1) the PMI Subsidiaries shall be deemed to be Subsidiaries of PMI; and (2) no member of the PMI Group shall be
deemed to be a Subsidiary of any member of the Altria Group. 
 1.2 References to Time. All references in this Agreement to
times of the day shall be to Richmond, Virginia time, except as otherwise specifically provided herein. 
 ARTICLE II 
 GENERAL PRINCIPLES 
 2.1 Altria
Group Employees. 
 (a) Obligations. Except as specifically provided in this Agreement, to the exclusion of the
PMI Group, the appropriate member of the Altria Group shall continue to be responsible for and pay, perform and discharge each and every of the employment, compensation and employee benefits Liabilities relating to the Altria Group Employees and
Former PMI Group Employees described in clauses (iii) and (iv) of the definition of Former PMI Group Employees that arise from employment with the Altria Group, the Former Altria Group and the PMI Group before the Distribution Date and
that arise with respect to Altria Group Employees from employment with the Altria Group on or after the Distribution Date, including each and every Liability arising under an Altria Group Plan or assumed pursuant to the terms of this Agreement
(collectively, the “Altria Benefit Liabilities”); provided, however, that nothing shall preclude any Altria Pension Plan to reduce or eliminate any such Altria Benefit Liability by a Permissible Offset. 
 (b) Reimbursement. As soon as practicable following the Distribution Date, PMI shall reimburse Altria in an amount equal to the
present value of the 

  

 9 

 
Altria Benefit Liabilities retained by Altria with respect to Former PMI Group Employees described in clauses (iii) and (iv) of the definition of
Former PMI Group Employees. 
 (c) Crediting Service. As of the Distribution Date, the service used to determine the
eligibility for, the vested portion of and the amount of, any benefit under any Altria Group Plan of each Altria Group Employee shall not be less than the service that such Altria Group Employee earned with the Altria Group, the Former Altria Group
and the PMI Group with respect to such Altria Group Plan to such date. 
 2.2 PMI Group Employees. 
 (a) Obligations. Except as specifically provided in this Agreement, to the exclusion of the Altria Group, the appropriate member of
the PMI Group shall continue to be responsible for and pay, perform and discharge each and every of the employment, compensation and employee benefits Liabilities relating to PMI Group Employees (other than Former PMI Group Employees described in
clauses (iii) and (iv) of the definition of Former PMI Group Employees) that arise from employment with the PMI Group, the Altria Group and the Former Altria Group before the Distribution Date and that arise with respect to PMI Group
Employees from employment with the PMI Group on or after the Distribution Date, including each and every Liability arising under a PMI Group Plan or assumed pursuant to the terms of this Agreement (collectively, the “PMI Benefit
Liabilities”); provided, however, that nothing shall preclude any PMI Pension Plan to reduce or eliminate any such PMI Benefit Liability by a Permissible Offset. 
 (b) Crediting of Service. As of the Distribution Date, the service used to determine the eligibility for, the vested portion of and
the amount of, any benefit under any PMI Group Plan (including, for purposes of this subparagraph (b), any PMI Group employee benefit plan that provides retirement income, regardless of whether it covers only U.S. payroll-based PMI Group Employees)
of each PMI Group Employee (including, for purposes of this subparagraph (b), any PMI Group employee, regardless of whether such employee is a U.S. payroll-based PMI Group Employee) shall not be less than the service that such PMI Group Employee
earned with the Altria Group, the Former Altria Group and the PMI Group with respect to such PMI Group Plan to such date. 
 ARTICLE III

 PMI GROUP PLANS 
 3.1 PMI Group Plans. The following principles shall apply. 
 (a) PMI Pension Plans. A member of
the PMI Group has previously adopted and established the PMI Pension Plans for the benefit of eligible PMI Group Employees. PMI shall timely take all actions necessary to obtain a favorable determination letter from the Internal Revenue Service that
the PMI 

  

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Retirement Plan is qualified under Section 401(a) of the Code and the related trust forms part of a qualified plan and is therefore exempt from tax
under Section 501(a) of the Code. 
 (b) Transfer of Assets. 
 (i) Prior Asset Transfer. At or about the time of the establishment of the PMI Retirement Plan by a member of the PMI Group, Altria
caused the trust under the Retirement Plan for Salaried Employees to make a direct transfer of assets to the trust established under the PMI Retirement Plan. The value of the assets transferred and to be transferred from the Retirement Plan for
Salaried Employees to the trust under the PMI Retirement Plan was and will be the amount required to be transferred pursuant to Section 414(l) of the Code. Such amount was determined by the actuary for the Retirement Plan for Salaried
Employees and the PMI Retirement Plan. Any amount required to be transferred pursuant to this section shall be adjusted for (i) allocable gains and/or losses of the trust under the Retirement Plan for Salaried Employees, (ii) benefit
payments on behalf of the PMI Retirement Plan, and (iii) allocable expenses. 
 (ii) Subsequent Asset Transfer.

 (A) As soon as practicable after December 31, 2008, or such earlier date that may be agreed upon by the Altria Group
and the PMI Group, but in no event earlier than 30 days following the filing of Form 5310-A with the Internal Revenue Service, if required, Altria agrees to cause the trust under the Retirement Plan for Salaried Employees to make a direct transfer
(or transfers) of assets to the trust established under the PMI Retirement Plan in an amount determined by the actuary for the Retirement Plan for Salaried Employees and agreed to by the actuary for the PMI Retirement Plan, equal to the amount
required to be transferred pursuant to Section 414(l) of the Code with respect to those PMI Group Employees who were participants in the Retirement Plan for Salaried Employees and for whom assets were not transferred pursuant to clause
(i) hereof. The value of the assets to be transferred from the trust under the Retirement Plan for Salaried Employees to the trust under the PMI Retirement Plan will be determined in accordance with Section 414(l) of the Code
without regard to Section 414(l)(2) of the Code. The PMI Group similarly agrees to cause the trust under the Philip Morris International Retirement Plan to make a direct transfer (or transfers) of assets to the trust established under
the Retirement Plan for Salaried Employees in an amount determined by the actuary for the Philip Morris International Retirement Plan and agreed to by the actuary for the Retirement Plan for Salaried Employees, equal to the amount required to be
transferred pursuant to Section 414(l) of the Code with respect to those Altria Transferees who were participants in the Philip Morris International Retirement Plan and who transferred after the Distribution Date. 
 (B) Altria and PMI shall reasonably cooperate with each other in order to facilitate the foregoing provisions of this clause (ii).

  

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 (c) Credit for Service with the Altria Group. The PMI Pension Plans shall provide
that each PMI Group Employee (regardless of the date of employment with the PMI Group) shall be credited with eligibility and vesting service that is not less than the eligibility and vesting service that the PMI Group Employee had earned under the
comparable or equivalent Altria Group Pension Plan. 
 (d) Credit under all other PMI Group Plans. No later than as of
the Distribution Date, each PMI Group Plan shall provide that each PMI Group Employee (regardless of the date of employment with the PMI Group) shall be credited with eligibility and vesting service that is not less than the eligibility and vesting
service that the PMI Group Employee had earned under the comparable or equivalent Altria Group Plan. 
 (e) PMI
Profit-Sharing Plans. 
 (i) Creation and Qualification of Plans. PMI has previously adopted and established the
PMI Profit-Sharing Plans with respect to eligible PMI Group Employees. PMI shall take all actions necessary to timely obtain a favorable determination letter from the Internal Revenue Service that the PMI Deferred Profit-Sharing Plan is qualified
under Section 401(a) of the Code and the related trust forms part of a qualified plan and is therefore exempt from tax under Section 501(a) of the Code. 
 (f) Transfer of Assets. 
 (i) Prior Asset Transfer. Contemporaneously with the establishment of the PMI Profit-Sharing Plan, Altria caused the Deferred Profit-Sharing Plan for Salaried Employees to make a direct transfer of assets from
such plan to the trust established under the PMI Deferred Profit-Sharing Plan. The value of the assets transferred from the trust under the Deferred Profit-Sharing Plan for Salaried Employees to the trust under the PMI Deferred Profit-Sharing Plan
was determined in accordance with Section 414(l) of the Code, to be equal to the value of the accounts of the then identified PMI Group Employees. 
 (ii) Subsequent Asset Transfer. 
 (A) On or before April 30, 2008, but in no event earlier than 30 days following the filing of Form 5310-A with the Internal Revenue Service, if required, Altria agrees to cause the trust under the Deferred
Profit-Sharing Plan for Salaried Employees to make a direct transfer (or transfers) of assets to the trust established under the PMI Deferred Profit-Sharing Plan in an amount equal to the accounts of the PMI Group Employees for whom assets were not
transferred pursuant to clause (i) hereof, except that Altria shall not cause the transfer of assets with respect to PMI Transferees who 

  

 12 

 
have transferred to a member of the PMI Group after the Distribution Date, such assets to be retained in the trust under the Deferred Profit-Sharing Plan for
Salaried Employees pending further direction from the PMI Transferee. The value of the assets to be transferred will be determined in accordance with Section 414(l) of the Code. 
 (B) Altria and PMI shall reasonably cooperate with each other in order to facilitate the foregoing provisions of clause (ii). 

(g) PMI Welfare and Other Benefits. PMI Group Employees shall be entitled to participate in the PMI Welfare and Other Plans in
accordance with the Altria Group practices in effect as of the Distribution Date, provided, however, that nothing herein shall preclude PMI Group Employees from continuing to participate in Altria Group Welfare and Other Plans for the calendar year
of the Distribution if mutually agreed to by PMI and Altria. 
 (h) PMI Directors’ Plans. PMI has adopted the PMI
Deferred Fee Plan for Non-Employee Directors and the PMI Stock Compensation Plan for Non-Employee Directors effective as of January 29, 2008. Effective as of the Distribution Date, PMI shall assume, under the PMI directors’ plans, the liability
for deferred amounts under the Altria Group, Inc. Deferred Fee Plan for Non-Employee Directors, the Altria Group, Inc. Stock Compensation Plan for Non-Employee Directors, and the Altria Group, Inc. Unit Plan for Incumbent Non-Employee Directors with
respect to each individual who is a member of the Board of Directors of Altria in 2008 before the Distribution Date and who is a member of the Board of Directors of PMI on the Distribution Date. As soon as practicable following the Distribution
Date, Altria shall pay to PMI an amount equal to such liability determined as of the close of business on the Distribution Date. 
 ARTICLE
IV 
 EMPLOYEE TRANSFERS 
 4.1 PMI Transferees. The following principles shall apply to any PMI Transferee. Except as specifically noted in this Agreement as otherwise agreed in writing by the parties, each PMI Transferee will become, or continue to be,
eligible upon transfer for the rights and benefits of similarly situated PMI Group Employees. 
 (a) Amendments. No member of the PMI
Group shall cause any amendments to be made to the PMI Group Plans or any policies regarding the PMI Group Plans (other than amendments to provide for Permissible Offsets) to be implemented that have the direct or indirect effect of treating the PMI
Transferees less favorably than the other PMI Group Employees similarly situated in seniority and job responsibilities. 
 (b)
Profit-Sharing Plans. 
 (i) Participation. As soon as administratively practicable following the date on which
the PMI Transferee transfers, the PMI Transferee shall be eligible to commence participation in the appropriate PMI Profit-Sharing Plan. Any service requirements contained in such PMI Profit-Sharing Plan with respect to eligibility to participate
generally or eligibility to share in any employer contributions thereunder shall be waived for the PMI Transferee. 
 (c) Company Contribution for PMI Transferee. If any PMI Transferee is transferred to the PMI Group after the Distribution Date but on or prior to December 31st of the calendar year in which the Distribution Date occurs and would otherwise be eligible for a company contribution (within the meaning of the Deferred Profit-Sharing Plan for
Salaried Employees) under the Deferred Profit-Sharing Plan for Salaried Employees for that calendar year, the appropriate member of the Altria Group will contribute (or credit, as applicable) to each such PMI Transferee’s account in the Altria

  

 13 

 
Profit-Sharing Plans the pro-rated amount of any employer contribution to which the PMI Transferee is entitled based on his compensation (as defined in the
Deferred Profit-Sharing Plan for Salaried Employees) received from an Altria Participating Company through the date of transfer and irrespective of whether such PMI Transferee is employed by the PMI Group on the last day of the calendar year in
which he or she transferred. Any PMI Transferee who has an outstanding loan from the Deferred Profit-Sharing Plan for Salaried Employees as of the date of transfer to PMI may continue to repay such loan in accordance with the terms of such Deferred
Profit-Sharing Plan for Salaried Employees. 
 4.2 Altria Transferees. The following principles shall apply to any Altria
Transferee. Except as specifically noted in this Agreement as otherwise agreed in writing by the parties, each Altria Transferee will become, or continue to be, eligible upon transfer for the rights and benefits of similarly situated Altria Group
Employees. 
 (a) Amendments. No member of the Altria Group shall cause any amendments to be made to the Altria Group Plans or any
policies regarding the Altria Group Plans (other than amendments to provide for Permissible Offsets) to be implemented that have the direct or indirect effect of treating the Altria Transferees less favorably than the other Altria Group Employees
similarly situated in seniority and job responsibilities. 
 (b) Profit-Sharing Plan. 
 (i) Participation. As soon as administratively practicable following the date on which the Altria Transferee transfers, the Altria
Transferee shall be eligible to commence participation in the appropriate Altria Profit-Sharing Plan. Any service requirements contained in such Altria Profit-Sharing Plan with respect to eligibility to participate generally to share in any employer
contributions thereunder shall be waived for the Altria Transferee. 
 (c) Company
Contribution for Altria Transferee. If any Altria Transferee is transferred to the Altria Group after the Distribution Date but on or prior to December 31st of the calendar year in which the Distribution Date occurs and would otherwise be eligible for a company contribution (within the meaning of the PMI Deferred Profit-Sharing Plan) under the PMI Deferred Profit-Sharing
Plan for that calendar year, the appropriate member of the PMI Group will contribute (or credit, as applicable) to each such Altria Transferee’s account in the PMI Profit-Sharing Plans the pro-rated amount of any employer contribution to which
the Altria Transferee is entitled based on his compensation (as defined in the PMI Deferred Profit-Sharing Plan) received from a Participating Company (as defined in the PMI Deferred Profit-Sharing Plan) through the date of transfer and irrespective
of whether such Altria Transferee is employed by the Altria Group on the last day of the calendar year in which he transferred. Any Altria Transferee who has an outstanding loan from the PMI Deferred Profit-Sharing Plan as of the date of transfer to
the Altria Group may continue to repay such loan in accordance with the terms of such PMI Deferred Profit-Sharing Plan. 
  

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 4.3 Payments. As soon as practicable following the Distribution Date, Altria shall pay to
PMI an amount representing the excess of the reasonably estimated present values of (a), with respect to certain employees of the Altria Group scheduled to transfer to the PMI Group, (i) liabilities accrued for financial reporting purposes for
post-retirement medical and life insurance benefits and certain other agreed post-employment benefits as of December 31, 2007, (ii) defined benefit obligations under Altria’s Benefit Equalization Plan and Altria’s Supplemental Management
Employees’ Retirement Plan as of December 31, 2007 (less relevant offsets for amounts previously paid pursuant to the Altria Secular Trust Program and the Altria Executive Trust Arrangement) plus (iii) those target payments that would
reasonably be anticipated to be earned, assuming continued payment of target payments, during such employees’ service with PMI no later than December 31, 2012 that are in lieu of the increase in the value of benefits with respect to service
before January 1, 2008 to which the transferees would have become entitled (assuming continued employment) as a result of attaining early retirement eligibility, had they been covered by Altria’s Benefit Equalization Plan and Altria’s
Supplemental Management Employees’ Retirement Plan, over (b) the results of similar calculations for post-retirement medical, life insurance and other post-employment benefit liabilities, defined benefit obligations and anticipated target
payments to be paid by Altria with respect to an employee of the PMI Group who transferred to the Altria Group in anticipation of the Distribution and any other mutually agreed employees of the PMI Group scheduled to transfer to the Altria Group.

 ARTICLE V 
 EQUITY
COMPENSATION 
 5.1 Altria Options. 
 (a) Adjustment Methodology. Each Altria Option shall be adjusted in the manner described below, effective as of the time of the Distribution, so that each Altria Option holder shall hold Adjusted Altria Options
and PMI Options in lieu of the Altria Options previously held. The following procedure shall be applied to each grant of Altria Options with the same grant date and exercise price held by each Altria Option holder. For the avoidance of doubt, the
term “exercise price” refers to the amount payable by an option holder in order to acquire shares pursuant to a stock option award. 
 (i) The Adjusted Altria Options shall have an exercise price equal to the Altria Post-Adjustment Price multiplied by the Option Conversion Ratio. The number of Adjusted Altria Options shall equal the number of Altria
Options. 
 (ii) The PMI Options shall have an exercise price equal to the PMI Price multiplied by the Option Conversion
Ratio. The number of PMI Options shall equal the number of Altria Options. If the resulting aggregate Intrinsic Value of the Adjusted Altria Options and PMI Options is less than the Intrinsic Value of the Altria Options, then the difference shall be
paid to the option holder in cash as soon as practicable following the Distribution Date. If the resulting aggregate Intrinsic Value of the Adjusted Altria Options and PMI Options is greater than the Intrinsic Value of the Altria Options, then the
number of PMI Options shall be reduced until the aggregate Intrinsic Value of the Adjusted Altria 

  

 15 

 
Options and PMI Options is less than or equal to the Intrinsic Value of the Altria Options, and any difference shall be paid to the option holder in cash as
soon as practicable following the Distribution Date. Notwithstanding the foregoing, if the Intrinsic Value of the Altria Options is negative, only the first two sentences of this Section 5.1(a)(ii) shall be applied. The cash payment
described above shall be made by Altria to individuals who are Non-PMI Group employees on the Distribution Date (or individuals no longer performing services for the Non-PMI Group or the PMI Group but whose last employment was with the Non-PMI
Group), and by PMI to individuals who are PMI Group employees on the Distribution Date (or individuals no longer performing services for the Non-PMI Group or the PMI Group but whose last employment was with the PMI Group). 
 (iii) The calculation described in the preceding sentence shall be applied using the rounding conventions determined by Altria to carry
out the purpose of this Section 5.1. 
 (b) Issuing Entity and Settlement. Altria will adjust the exercise price of the
Altria Options to become Adjusted Altria Options pursuant to the Altria Performance Incentive Plan. After the Distribution Date, Adjusted Altria Options, regardless of by whom held, shall be settled by Altria pursuant to the Altria Performance
Incentive Plan. PMI will issue the PMI Options pursuant to the PMI Performance Incentive Plan. After the Distribution Date, PMI Options, regardless of by whom held, shall be settled by PMI pursuant to the PMI Performance Incentive Plan. 

(c) Option Agreement Terms. The Adjusted Altria Options and the PMI Options shall have terms that are substantially identical to the terms of
the Altria Options, provided, however, that (i) the Adjusted Altria Options shall provide that individuals who are employees of the PMI Group on the Distribution Date or who are PMI Transferees shall continue while employed
by the PMI Group to be treated as employees of an Altria Affiliate solely for purposes of determining the exercise period under the option agreements; (ii) the PMI Options shall provide that individuals who are employees of the Non-PMI Group on
the Distribution Date or who are Altria Transferees shall continue while employed by the Non-PMI Group to be treated as employees of a PMI Affiliate solely for purposes of determining the exercise period under the option agreements; and
(iii) the PMI Options shall refer to both PMI and members of the Non-PMI Group as appropriate to effectuate the intent of this Section 5.1 including references to the Non-PMI Group disability and retirement plans. 
 (d) Consideration. As soon as practicable following the Distribution Date, Altria shall pay to PMI the Fair Value of the PMI Options held by
individuals who are Non-PMI Group employees on the Distribution Date (or individuals no longer performing services for the Non-PMI Group or the PMI Group but whose last employment was with the Non-PMI Group) and PMI shall pay to Altria the Fair
Value of the Adjusted Altria Options held by individuals who are PMI Group employees on the Distribution Date (or individuals no longer performing services for the Non-PMI Group or the PMI Group but whose last employment was with the PMI Group). The
parties shall settle the obligations of the preceding sentence in cash on a net basis such that the party required to pay the greater amount to the other shall pay the difference between the two amounts to the other. 
  

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 5.2 Kraft SARs Issued by Altria. Upon the Distribution Date, PMI shall assume the liability
for Kraft SARs held by individuals who are employees of the PMI Group on the Distribution Date (or individuals no longer performing services for the Non-PMI Group or the PMI Group but whose last employment was with the PMI Group). PMI shall settle
such Kraft SARs upon exercise and assume all other obligations under such Kraft SARs. Altria and PMI shall amend such Kraft SARs effective as of the Distribution Date to replace references to Altria with references to PMI and otherwise as
appropriate to effectuate the intent of this Section 5.2. 
 5.3 Restricted Stock and pre-January 31, 2007 Deferred
Stock. 
 (a) Adjustment. Pursuant to the Distribution, each holder of Altria Restricted Stock will receive from Altria as of
the time of the Distribution shares of PMI Common Stock in the same manner and based on the same ratio as other shareholders of Altria Common Stock. Such PMI Common Stock shall be subject to the same vesting requirements and dates and other terms
and conditions as the Altria Restricted Stock to which it relates (including the right to receive all dividends or other distributions paid on PMI Common Stock). Effective at the time of the Distribution, each holder of Altria Deferred Stock that
was granted before January 31, 2007 shall receive a number of PMI Deferred Stock shares based on the same ratio as shareholders of Altria Common Stock. Such PMI Deferred Stock shall be subject to the provisions of Section 5.4(b) through
Section 5.4(e). 
 (b) Restricted Stock Agreement Terms. The PMI Restricted Stock shall have the same terms as the Altria
Restricted Stock; provided, however, that (i) the Altria Restricted Stock shall provide that individuals who are employees of the PMI Group on the Distribution Date or who are PMI Transferees shall continue to be treated
while so employed as employees of an Altria Affiliate for purposes of continued vesting in the restricted stock; (ii) the PMI Restricted Stock shall provide that individuals who are employees of the Non-PMI Group on the Distribution Date or who
are Altria Transferees shall continue to be treated while so employed as employees of a PMI Affiliate for purposes of continued vesting in the restricted stock; and (iii) the PMI Restricted Stock shall refer to both PMI and members of the
Non-PMI Group as appropriate to effectuate the intent of this Section 5.3. 
 (c) Forfeiture of PMI Stock and Consideration. If
a holder of PMI Restricted Stock forfeits such stock under the terms of the PMI Restricted Stock, the forfeited stock shall be returned to PMI, not Altria. In consideration of the anticipated receipt of such forfeitures, PMI shall pay in cash to
Altria as soon as practicable following the Distribution Date the anticipated value of forfeitures attributable to PMI Restricted Stock held by individuals who are Non-PMI Group employees on the Distribution Date. In addition, PMI shall pay in cash
to Altria as soon as practicable following the Distribution Date the value of the Altria Restricted Stock held by the PMI Group employees on the 

  

 17 

 
Distribution Date. The anticipated value of the PMI Restricted Stock that may be forfeited by holders and returned to PMI shall be determined using the PMI
Price and the forfeiture assumption used for Statement of Financial Accounting Standards 123(R) purposes in Altria’s most recent quarterly or annual financial reporting prepared before the Distribution Date for forfeitures of Altria Restricted
Stock. The value of the Altria Restricted Stock shall be equal to the Altria Pre-Adjustment Price of the underlying Altria shares, reduced by assumed forfeitures based on the assumptions used for Statement of Financial Accounting Standards 123(R)
purposes in Altria’s most recent quarterly or annual financial reporting prepared before the Distribution Date for forfeitures of Altria Restricted Stock. 
 5.4 Deferred Stock. 
 (a) Adjustment. Effective at the time of the Distribution, each
holder of Altria Deferred Stock that was granted on or after January 31, 2007 and before January 30, 2008 shall receive a number of PMI Deferred Stock shares based on the same ratio as holders of Altria Common Stock. Effective at the time
of the Distribution, each holder of Altria Deferred Stock that was granted on or after January 30, 2008 shall receive (i) in the case of a holder who is an employee of the Non-PMI Group on the Distribution Date, additional Altria Deferred
Stock, such that following the Distribution Date the holder will have the number of shares of Altria Deferred Stock equal to the number of shares of Altria Deferred Stock held before the Distribution multiplied by the ratio of the Altria
Pre-Adjustment Price to the Altria Post-Adjustment Price; and (ii) in the case of a holder who is a PMI Group Employee on the Distribution Date, PMI Deferred Stock in substitution for such holder’s Altria Deferred Stock, such that
following the Distribution Date the holder will have the number of shares of PMI Deferred Stock equal to the number of shares of Altria Deferred Stock held before the Distribution multiplied by the ratio of the Altria Pre-Adjustment Price to the PMI
Price. Any fractional shares of Altria or PMI Deferred Stock resulting from the adjustment in the preceding sentence shall be paid to the holder in cash as soon as practicable following the Distribution Date; provided, however,
that with respect to any individual holding Deferred Stock that is subject to Code Section 409A, any fractional shares of Altria or PMI Deferred Stock shall instead be rounded up to a whole share of Altria or PMI Deferred Stock. The cash
payment described above shall be made by Altria to individuals who are Non-PMI Group employees on the Distribution Date, and by PMI to individuals who are PMI Group employees on the Distribution Date. 
 (b) Issuing Entity and Settlement. After the Distribution Date, Altria shall be responsible for any cash payments in lieu of dividends required
pursuant to the terms of the Altria Deferred Stock, and such Altria Deferred Stock, regardless of by whom held, shall be settled by Altria pursuant to the Altria Performance Incentive Plan. PMI will issue PMI Deferred Stock pursuant to the PMI
Performance Incentive Plan. After the Distribution Date, PMI shall be responsible for any cash payments in lieu of dividends required pursuant to the terms of the PMI Deferred Stock, and such deferred stock, regardless of by whom held, shall be
settled by PMI pursuant to the PMI Performance Incentive Plan. 
  

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 (c) Deferred Stock Agreement Terms. The PMI Deferred Stock shall have the same terms as the Altria
Deferred Stock, provided, however, that (i) the Altria Deferred Stock shall provide that individuals who are employees of the PMI Group on the Distribution Date or who are PMI Transferees shall continue to be treated while
so employed as employees of an Altria Affiliate for purposes of continued vesting in the deferred stock; (ii) the PMI Deferred Stock shall provide that individuals who are employees of the Non-PMI Group on the Distribution Date or who are
Altria Transferees shall continue to be treated while so employed as employees of a PMI Affiliate for purposes of continued vesting in the deferred stock; and (iii) the PMI Deferred Stock shall refer to both PMI and members of the Non-PMI Group
as appropriate to effectuate the intent of this Section 5.4. 
 (d) Consideration. As soon as practicable following the
Distribution Date, Altria shall pay to PMI the value of the PMI Deferred Stock held by individuals who are Non-PMI Group employees on the Distribution Date and PMI shall pay to Altria the value of the Altria Deferred Stock held by individuals who
are PMI Group employees on the Distribution Date. The parties shall settle the obligations of the preceding sentence in cash on a net basis such that the party required to pay the greater amount to the other shall pay the difference between the two
amounts to the other. For purposes of this Section 5.4(d), the value of the Altria Deferred Stock or PMI Deferred Stock shall be determined based on the Altria Post-Adjustment Price and the PMI Price, respectively, reduced by assumed
forfeitures based on the assumptions used for Statement of Financial Accounting Standards 123(R) purposes in Altria’s most recent quarterly or annual financial reporting prepared before the Distribution Date for forfeitures of Altria Deferred
Stock. 
 (e) Taxes. Altria shall reimburse any Altria Group employee, and PMI shall reimburse any PMI Group employee, who becomes
liable for income taxes with respect to Altria or PMI Deferred Stock earlier or in an amount greater than would have been the case absent the implementation of Section 5.3(a) or Section 5.4(a) in an amount equal to the excess
of (i) any income taxes to which such employee becomes liable over (ii) the present value of such income taxes had such income taxes been paid at such time as the Altria or PMI Deferred Stock would otherwise have been subject to income
taxes, assuming, for purposes of determining present value, the same value for Deferred Stock used for purposes of clause (i) of this sentence and a discount rate equal to the weighted average discount rate used for Altria’s domestic
pension plans at December 31, 2007, which was 6.2%. Any such reimbursement shall be further adjusted to hold the employee harmless from all additional taxes on the reimbursement payment itself. The amounts payable pursuant to this
Section 5.4(e) shall be calculated using reasonable assumptions (in addition to those specified above) as may be determined by the third-party accounting firm or firms selected by the party responsible for the reimbursement. 

5.5 Existing Kraft Equity Compensation. 
 (a) Consideration. As soon as practicable following the Distribution Date, PMI shall pay to Altria the Fair Value of the Existing Kraft Options held by individuals who are PMI Group employees on the
Distribution Date (or individuals no longer 

  

 19 

 
performing services for the Non-PMI Group or the PMI Group, but whose last employment was with PMI Group). As soon as practicable following the Distribution
Date, PMI shall also pay to Altria the value of Existing Kraft Restricted Stock and the Existing Kraft Deferred Stock held by individuals who are PMI Group employees on the Distribution Date (or individuals no longer performing services for the
Non-PMI Group or the PMI Group but whose last employment was with the PMI Group). The value of the Existing Kraft Restricted Stock and Existing Kraft Deferred Stock shall be determined based on a Kraft stock price of $31.66, and reduced by assumed
forfeitures based on the assumptions used for purposes of Section 4.4(d) of the Employees Matters Agreement by and between Altria Group, Inc. and Kraft with respect to Kraft Deferred Stock held by Altria Group Employees. 
 (b) Employment Treatment. Equity compensation issued by Kraft before the Distribution Date shall provide that individuals who are PMI Group
Employees on the Distribution Date shall continue while employed by the PMI Group to be treated as employees of a member of the Kraft Group for purposes of determining the exercise period of Existing Kraft Options and continued vesting in Existing
Kraft Restricted Stock and Deferred Stock. 
 5.6 Payments Previously Made By PMI. Any payments to be made by PMI to Altria
under this Article V with respect to Equity Compensation shall be reduced by payments previously made by PMI to Altria with respect to such Equity Compensation in the normal course of business before the Distribution Date. 
 5.7 Other. 
 (a)
Administration and Withholding. 
 (i) Altria and PMI agree that UBS Financial Services Inc. shall be the administrator
and recordkeeper for the Adjusted Altria Options, PMI Options, Kraft SARs, Altria Restricted Stock, PMI Restricted Stock, Altria Deferred Stock and PMI Deferred Stock for the life of the options, restricted stock and deferred stock, unless the
parties mutually agree otherwise. 
 (ii) Altria will be responsible for all payroll taxes, withholding and reporting with
respect to Equity Compensation of Altria Group employees (or individuals no longer performing services for the Non-PMI Group or PMI Group but whose last employment was with the Altria Group). PMI will be responsible for all payroll taxes,
withholding and reporting with respect to Equity Compensation of PMI Group employees (or individuals no longer performing services for the Non-PMI Group or the PMI Group but whose last employment was with the PMI Group). Altria and PMI agree to
designate the other party as an agent for withholding pursuant to IRS Revenue Procedure 70-6 and to accept such designation to effectuate the intent of this Section 5.7(a). 
 (iii) Upon the exercise of an Adjusted Altria Option or PMI Option held by Altria Group or PMI Group employees (or individuals no longer

  

 20 

 
performing services for the Non-PMI Group or PMI Group but whose last employment was with the Altria Group or PMI Group), the exercise price shall be
remitted in cash by the option administrator to the issuer of the option (Altria or PMI, as applicable) and the applicable withholding shall be remitted in cash by the option administrator to the entity (Altria or PMI, as applicable) responsible for
payroll taxes, withholding and reporting with respect to the option. Upon vesting or payment, as applicable, of Altria and PMI Restricted Stock, Altria and PMI Deferred Stock and Kraft SARs held by Altria Group or PMI Group employees (or individuals
no longer performing services for the Non-PMI Group or PMI Group but whose last employment was with the Altria Group or PMI Group), the applicable withholding shall be remitted in cash by the administrator to the entity (Altria or PMI, as
applicable) responsible for payroll taxes, withholding and reporting with respect to the Restricted or Deferred Stock or Kraft SARs. To the extent necessary to provide the withholding amount in cash to the entity responsible for payroll taxes,
withholding, and reporting, the issuer of the applicable Equity Compensation shall provide the withholding amount in cash. 
 (iv) With respect to dividends on PMI Restricted Stock or dividend equivalents on PMI Deferred Stock payable by PMI to an Altria Group employee, PMI shall make such payments to Altria, and Altria, as an agent for PMI, shall make such
payments to its employees and former employees and shall be responsible for payroll taxes, withholding and reporting in accordance with this Section 5.7(a). With respect to dividends on Altria Restricted Stock or dividend equivalents on
Altria Deferred Stock payable by Altria to a PMI Group employee, Altria shall make such payments to PMI, and PMI, as an agent for Altria, shall make such payments to its employees and former employees and shall be responsible for payroll taxes,
withholding and reporting in accordance with this Section 5.7(a). 
 (v) PMI will cooperate with Kraft to
establish appropriate procedures consistent with this Section 5.7(a) for tax withholding, remitting withholding taxes, payroll taxes, dividends, dividend equivalents, fractional shares and exercise prices to the appropriate party, and
tax reporting, including, to the extent necessary, withholding agency designations pursuant to IRS Revenue Procedure 70-6, with respect to (A) PMI Options, PMI Restricted Stock and PMI Deferred Stock of employees of the Kraft Group (or
individuals no longer performing services for the Kraft Group, the Non-PMI Group or the PMI Group but whose last employment was with the Kraft Group) and (B) Existing Kraft Options, Existing Kraft Restricted Stock and Existing Kraft Deferred
Stock of PMI Group employees (or individuals no longer performing services for the Kraft Group, the Non-PMI Group or the PMI Group but whose last employment was with the PMI Group). 
 (vi) If, after the Distribution Date, Altria or PMI identify an administrative error in the individuals identified as holding Equity
Compensation, the amount of Equity Compensation so held, the vesting level of such Equity Compensation, or any other similar error, Altria and PMI shall mutually cooperate 

  

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in taking such actions as are necessary or appropriate to place, as nearly as reasonable practicable, the individual and Altria and PMI in the position in
which they would have been had the error not occurred. 
 (b) Scheduled Transfers. For purposes of this Article V only, if an
individual is, by mutual agreement between the parties, scheduled to transfer employment shortly after the Distribution Date between the PMI Group and the Altria Group, such individual shall be treated as employed on the Distribution Date by the
entity to which he or she is scheduled to transfer. 
 (c) Tax Deductions. With respect to the Equity Compensation held by individuals
who are Altria Group employees at the time the Equity Compensation becomes taxable and individuals who are not employees of the PMI Group or Non-PMI Group at such time but were last employees of the Altria Group, Altria shall claim any federal,
state and/or local tax deductions after the Distribution Date, and PMI shall not claim such deductions. With respect to the Equity Compensation held by individuals who are employees of the PMI Group at the time the Equity Compensation becomes
taxable and individuals who are not employees of the PMI Group or Non-PMI Group at such time but were last employees of the PMI Group, PMI shall claim any federal, state and/or local tax deductions after the Distribution Date, and Altria shall not
claim such deductions. If either Altria or PMI determines in its reasonable judgment that there is a substantial likelihood that a tax deduction that was assigned to Altria or PMI pursuant to this Section 5.7(c) will instead be available
only to the other party (whether as a result of a determination by the Internal Revenue Service, a change in the Code or the regulations or guidance thereunder, or otherwise), it will notify the other party and both parties will negotiate in good
faith to resolve the issue in accordance with the following principle: the party entitled to the deduction shall pay to the other party an amount that places the other party in a financial position equivalent to the financial position the party
would have been in had the party received the deduction as intended under this Section 5.7(c). Such amount shall be paid within 90 days of filing the last tax return necessary to make the determination described in the preceding
sentence. 
 (d) Intended Results; Tax Benefit. If Altria determines in its reasonable judgment that any action required under this
Article IV will not achieve the intended tax, accounting and legal results, including, without limitation, the intended results under Code Section 409A and Statement of Financial Accounting Standards 123(R), then at the request of Altria, PMI
and Altria shall mutually cooperate in taking such actions as are necessary or appropriate to achieve such results, or most nearly achieve such results if the originally-intended results are not fully attainable. 
 (e) Registration. PMI shall register the PMI Common Stock relating to the PMI Options and PMI Deferred Stock and make any necessary filings with
the appropriate Governmental Authorities as required under U.S. and foreign securities Laws. 
  

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 ARTICLE VI 
 PROFIT-SHARING PLANS 
 6.1 Maintenance of Stock Investment Options. 
 (a) PMI Deferred Profit-Sharing Plan. The PMI Deferred Profit-Sharing Plan will be amended as of the Distribution Date: 
 (i) to provide that no new amounts may be contributed to the Altria Stock Investment Option whether through employee contribution,
employer contribution, dividend payment or intra-plan transfers. PMI further will cause the Altria Stock Investment Option in the PMI Deferred Profit-Sharing Plan to be maintained until the fiduciary for the PMI Deferred Profit-Sharing Plan in
determines that the maintenance of such Altria Stock Investment Option is no longer consistent with ERISA. 
 (ii) to provide
that the Kraft Stock Investment Option in the PMI Deferred Profit-Sharing Plan will be maintained until the fiduciary for the Plan determines that the maintenance of such Kraft Stock Investment Option is no longer consistent with ERISA. 

(iii) (A) to create a PMI Stock Investment Option; (B) to enable the PMI Stock Investment Option to receive shares of PMI
Common Stock to be distributed in the Distribution on behalf of PMI Deferred Profit-Sharing Plan participants; (C) to provide that, following the Distribution, new purchases of PMI Common Stock via an investment in the PMI Stock Investment
Option will be permitted, whether through employee contribution, employer contribution, reinvestment of dividends on shares of PMI Common Stock or intra-plan transfer; and (D) to permit eligible employees to have any dividends on shares of PMI
Common Stock paid to the eligible employee in accordance with Section 404(k) of the Code or paid to the PMI Deferred Profit-Sharing Plan and reinvested in PMI Common Stock. PMI further will cause the PMI Stock Investment Option in the PMI
Deferred Profit-Sharing Plan to be maintained until the fiduciary for the Plan determines that the maintenance of such PMI Stock Investment Option is no longer consistent with ERISA. 
 (b) Altria Profit-Sharing Plans. Each of the Altria Profit-Sharing Plans that offer Altria Stock in the Altria Stock Investment Option as of the
Distribution Date will be amended as of the Distribution Date: (A) to create a PMI Stock Investment Option; (B) to enable the PMI Stock Investment Option to receive shares of PMI Common Stock to be distributed in the Distribution on behalf
of Altria Profit-Sharing Plan participants; and (C) to provide that, following the Distribution, no new amounts may be contributed to a PMI Stock Investment Option whether through employee contribution, employer contribution, dividend payment
or intra-plan transfer. Altria further will cause the PMI Stock Investment Option in each of the Altria Profit-Sharing Plans that offer Altria Stock in the Altria Stock Investment Option as of the Distribution Date to be maintained until the
fiduciary for the Altria Profit-Sharing Plan determines that the maintenance of such PMI Stock Investment Option is no longer consistent with ERISA. 
  

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 ARTICLE VII 
 ALTRIA STOCK PURCHASE PLAN 
 7.1 Termination of Participation. As of the Distribution
Date, the PMI Group Employees shall cease to be eligible to participate in the Altria Stock Purchase Plan, in accordance with the terms of such plan. 
 ARTICLE VIII 
 GENERAL AND ADMINISTRATIVE 
 8.1 Sharing of Participant Information. Altria and PMI shall share, Altria shall cause each applicable member of the Altria Group to share,
and PMI shall cause each applicable member of the PMI Group to share, with each other and their respective agents and vendors (without obtaining releases), all participant information necessary for the efficient and accurate administration of each
of the Altria Group Plans and the PMI Group Plans, as well as the performance of their respective obligations under this Agreement. Altria and PMI and their respective authorized agents shall, subject to applicable Laws on confidentiality, data
protection and labor, be given reasonable and timely access to, and may make copies of, all information relating to the subjects of this Agreement in the custody of the other party, to the extent necessary for such administration. All participant
information shall be provided in a manner and medium that is compatible with the data processing systems of Altria as in effect as of the Distribution Date, unless otherwise agreed to by Altria and PMI. Altria and PMI shall ensure that they each
have in place appropriate technical and organizational security measures to protect the personal data of the transferring participants (“Personal Data”). Each of Altria and PMI shall comply fully with its obligations
under applicable Laws as controller of any Personal Data and shall do all such things as may be necessary to discharge such obligations. 
 8.2 No Third-Party Beneficiaries. No provision of this Agreement or the Distribution Agreement shall be construed to create any right, or accelerate entitlement, to any compensation or benefit whatsoever on the part of any
Person (other than parties thereto and their respective successors and permitted assigns), including any PMI Transferee, any Altria Transferee or other future, present, or former employee of Altria, a member of the Altria Group, PMI or a member of
the PMI Group under any Altria Group Plan or PMI Group Plan or otherwise. Without limiting the generality of the foregoing: (i) except as expressly provided in this Agreement, nothing in this Agreement shall preclude PMI or any member of the
PMI Group, at any time after the Distribution Date, from amending, merging, modifying, terminating, eliminating, reducing or otherwise altering in any respect any PMI Group Plan, any benefit under any plan or any trust, insurance policy or funding
vehicle related to any PMI Group Plan; and (ii) except as expressly provided in this Agreement, nothing in this Agreement shall preclude Altria or any member of the Altria Group, at any time after the Distribution modifying, terminating,
eliminating, reducing or otherwise altering in any respect any Altria Group 

  

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Plan, any benefit under any plan or any trust, insurance policy or funding vehicle related to any Altria Group Plan. In no event shall any provision of this
Agreement be deemed to amend any Altria Group Plan or PMI Group Plan. 
 8.3 Audit Rights with Respect to Information Provided.

 (a) Each of Altria and PMI, and their duly authorized representatives, shall have the right to conduct audits with respect to all
information provided to it by the other party. The party conducting the audit (the “Auditing Party”) shall have the sole discretion to determine the procedures and guidelines for conducting audits and the selection of audit representatives
under this Section 8.3(a). The Auditing Party shall have the right to make copies of any records at its expense, subject to the confidentiality provisions set forth in the Distribution Agreement, which are incorporated by reference
herein. The party being audited shall provide the Auditing Party’s representatives with reasonable access during normal business hours to its operations, computer systems and paper and electronic files, and provide workspace to its
representatives. After any audit is completed, the party being audited shall have the right to review a draft of the audit findings and to comment on those findings in writing within five business days after receiving such draft. 
 (b) The Auditing Party’s audit rights under this Section 8.3(b) shall include the right to audit, or participate in an audit facilitated
by the party being audited, any Subsidiaries and Affiliates of the party being audited and any benefit providers and third parties with whom the party being audited has a relationship, or agents of such party, to the extent any such persons are
affected by or addressed in this Agreement (collectively, the “Non-parties”). The party being audited shall, upon written request from the Auditing Party, provide an individual (at the Auditing Party’s expense) to supervise any audit
of a Non-party. The Auditing Party shall be responsible for supplying, at the Auditing Party’s expense, additional personnel sufficient to complete the audit in a reasonably timely manner. The responsibility of the party being audited shall be
limited to providing, at the Auditing Party’s expense, a single individual at each audited site for purposes of facilitating the audit. 
 8.4 Fiduciary Matters. Altria and PMI each acknowledge that actions required to be taken pursuant to this Agreement may be subject to fiduciary duties or standards of conduct under ERISA or other applicable law, and no party
shall be deemed to be in violation of this Agreement if it fails to comply with any provisions hereof based upon its good faith determination that to do so would violate such a fiduciary duty or standard. Each party shall be responsible for taking
such actions as are deemed necessary and appropriate to comply with its own fiduciary responsibilities. 
 8.5 Collective
Bargaining. To the extent any provision of this Agreement is contrary to the provisions of any collective bargaining agreement to which Altria or PMI or their respective Affiliates is a party, the terms of such collective bargaining
agreement shall prevail. Should any provisions of this Agreement be deemed to relate to a topic determined by an appropriate authority to be a mandatory subject of collective bargaining, Altria or PMI may be obligated to bargain with the union
representing affected employees concerning those subjects. 
  

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 8.6 Consent of Third Parties. If any provision of this Agreement is dependent on the
consent of any third party (such as a vendor or a union) and such consent is withheld, Altria and PMI shall use their reasonable best efforts to implement the applicable provisions of this Agreement to the full extent practicable. If any provision
of this Agreement cannot be implemented due to the failure of such third party to consent, Altria and PMI shall negotiate in good faith to implement the provision in a mutually satisfactory manner. The phrase “reasonable best efforts” as
used herein shall not be construed to require the incurrence of any non-routine or unreasonable expense or Liability or the waiver of any right. 
 ARTICLE IX 
 INDEMNIFICATION 
 9.1 Indemnification. All Liabilities retained or assumed by or allocated to Altria or the Altria Group pursuant to this Agreement shall be deemed to be Altria Group Liabilities for purposes of Article
III of the Distribution Agreement, and all Liabilities retained or assumed by or allocated to PMI or the PMI Group pursuant to this Agreement shall be deemed to be PMI Group Liabilities for the purposes of Article III of the Distribution Agreement.

 ARTICLE X 
 MISCELLANEOUS 
 10.1 Relationship of Parties. Nothing in this Agreement shall be deemed or construed by the
parties or any third party as creating the relationship of principal and agent, partnership or joint venture between or among the parties, it being understood and agreed that no provision contained herein, and no act of the parties, shall be deemed
to create any relationship between the parties other than the relationship set forth herein. 
 10.2 Affiliates. Each of Altria
and PMI shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement to be performed by a member of the Altria Group or a member of the PMI Group. 
 10.3 Employee Communications. PMI will coordinate with Altria all written and electronic communications to the PMI Group employees
regarding the terms of this Employee Matters Agreement to assure that all such communications are uniform, consistent and accurate. 
 10.4 Incorporation of Distribution Agreement Provisions. The following provisions of the Distribution Agreement are hereby incorporated herein by reference, and unless otherwise expressly specified herein, such provisions
shall apply as if fully set forth herein (references in this Section 10.4 to an “Article” or “Section” shall mean Articles or Sections of the Distribution Agreement, and, except as expressly set forth below,
references in the material incorporated herein by reference shall be references to 

  

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the Distribution Agreement): Article III (relating to Mutual Releases and Indemnification); Article IV (relating to certain Additional Covenants); Article V
(relating to Access to Information); Article VI (relating to Dispute Resolution); and Article IX (relating to Miscellaneous). 
 10.5
Governing Law. To the extent not preempted by applicable federal law, this Agreement shall be governed by, construed and interpreted in accordance with the laws of the Commonwealth of Virginia (other than the laws regarding the choice of
laws and conflict of laws as to all matters), including matters of validity, construction, effect, performance and remedies provided, however, that the Arbitration Act shall govern the matter described in Article IX. 

10.6 References. Except as provided in Section 10.4 hereof, all references to Sections, Articles or Schedules contained
herein mean Sections, Articles or Schedules of or to this Agreement, as the case may be, unless otherwise stated. 
  

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 IN WITNESS WHEREOF, the parties have caused this Employee Matters Agreement to be duly executed as
of the day and year first above written. 
  

			
	ALTRIA GROUP, INC.
		
	By:	 	 /s/ LOUIS C. CAMILLERI

	Name:	 	Louis C. Camilleri
	Title:	 	Chairman and Chief Executive Officer
	
	PHILIP MORRIS INTERNATIONAL INC.
		
	By:	 	 /s/ ANDRÉ CALANTZOPOULOS

	Name:	 	André Calantzopoulos
	Title:	 	President and Chief Executive Officer

  

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