Philip Morris International Spin-off (Completed)
Stock-Based Plans

For Employees with Altria Deferred Stock

Altria Deferred Stock Awarded:

Prior to Jan 30, 2008

On or After Jan 30, 2008 - Altria Employees

On or After Jan 30, 2008 - PMI Employees

Altria Deferred Stock Awarded On or After January 30, 2008 - Altria Employees

If you received an Altria deferred stock grant on or after January 30, 2008, the treatment differs from that described in the section addressing Altria Deferred Stock Awarded Prior to January 30, 2008.

If you received an Altria deferred stock grant and will be employed by Altria after the Spin-off, you received additional deferred shares of Altria stock to ensure that the aggregate value of your Altria deferred shares immediately before and after the Adjustment remained the same. For each share of Altria deferred stock awarded on or after January 30, 2008, the ratio of the pre-Adjustment fair market value of Altria stock to the post-Adjustment price of Altria stock determined the number of additional shares of Altria deferred stock you received as a result of the Spin-off.  See the example below for more information.

Your additional Altria deferred shares will be subject to the same restrictions and other terms and conditions as those governing your other Altria deferred stock awarded on or after January 30, 2008. After the Distribution Date, you will be able to view your adjusted award on the UBS One Source Web site, www.ubs.com/onesource/mo. Due to the proximity of the January 30, 2008 deferred stock award to the Distribution Date and the administrative complexity of the Spin-off, the original award communicated to you on your January award statement will not be posted on the UBS One Source Web site until after the Distribution Date.

Example

In this example, let's take a look at how the Spin-off affects the deferred stock of Diane, an Altria Corporate Services, Inc. employee. Some of the assumptions used in this example were first introduced in the stock option example.

• Diane was awarded 1,000 shares of Altria deferred stock on January 30, 2008, that have a value of $78,000 on the Distribution Date (1,000 shares x Altria pre-Adjustment fair market value of $78 per share).
• The post-Adjustment price of Altria stock is $26.
• The ratio of the pre-Adjustment fair market value to the post-Adjustment price is 3.0 ($78 / $26).

After the Spin-off, Diane will have 3,000 deferred shares of Altria. This is calculated as follows:

• 1,000 (original award of Altria deferred shares) x 3.0 (ratio) = 3,000 (adjusted award of Altria deferred shares). 

Since only whole shares may be granted, if this ratio results in a fractional share, the value of the fractional share will be delivered in the form of a cash payment through local payroll. The cash payment, if any, is immediately taxable. 

After the Spin-off, Diane's holdings will have the following value:

• 3,000 Altria deferred shares with a value of $78,000 (3,000 shares x $26 per share).

Note: The above example is for illustrative purposes only and is not intended to reflect the price of Altria stock on the Distribution Date.

Altria Deferred Stock Awarded:

Prior to Jan 30, 2008

On or After Jan 30, 2008 - Altria Employees

On or After Jan 30, 2008 - PMI Employees

Glossary

Contact Information

Altria Contacts
www.ubs.com/
onesource/mo
Tel: 1-800-315-5250
(U.S. only)
Tel: 1-201-352-2316
(Outside U.S.)

Philip Morris International Contacts
www.ubs.com/
onesource/pm
Tel: 1-877-762-8827
(U.S. only)
Tel: 1-201-272-7741
(Outside U.S.)