Altria Group (MO)

SECTION 2. Definitions

For purposes of the Plan, the following terms are defined as set forth below:

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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.

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DEFINITIONS

1.01 General. For the purposes of this Agreement, the terms set forth below shall have the following meanings.

“Altria Consolidated Return Group” means Altria and any direct or indirect Subsidiary of Altria that is, from time to time, a member of the affiliated group of corporations with respect to which Altria is the common parent corporation. For the avoidance of doubt, the Altria Consolidated Return Group includes, but is not limited to, any company that for any period prior to the execution of this Agreement was a direct or indirect Subsidiary of Altria and that during such period was eligible to join with Altria, with respect to Federal Income Taxes, in the filing of a consolidated United States Federal Income Tax return.

“Altria U.S. Group” means Altria and any direct or indirect Subsidiary of Altria that is not also a member of the PMI Group or otherwise a direct or indirect Subsidiary of PMI and that would be eligible, from time to time, to join with Altria, with respect to Federal Income Taxes, in the filing of a consolidated United States Federal Income Tax return and/or, with respect to Combined State Taxes, in the filing of a consolidated, combined or unitary income or franchise tax return. For the avoidance of doubt, the Altria U.S. Group includes, but is not limited to, any company that for any period prior to the execution of this Agreement was a direct or indirect Subsidiary of Altria and that during such period was eligible to join with Altria, with respect to Federal Income Taxes, in the filing of a consolidated United States Federal Income Tax return and, with respect to Combined State Taxes, in the filing of a consolidated, combined or unitary income or franchise tax return, but only if and to the extent that such company was not a member of the PMI Group during such period.

“Altria U.S. Group Tax” means with respect to any taxable period (or portion thereof) (i) the Federal Income Tax liability of the Altria Consolidated Return Group less the PMI Federal Income Tax Liability; (ii) the Altria Combined State Tax liability less the PMI Combined State Tax Liability; (iii) any other Tax imposed on any member of the Altria U.S. Group or, with respect to any taxable year, any other Tax imposed on any direct or indirect Subsidiary of Altria (excluding, however, the PMI Group and any direct or indirect Subsidiary of PMI) that is not a member of the Altria U.S. Group; and (iv) liability of any member of the Altria U.S. Group for the payment of any amounts of the type described in (i), (ii) or (iii) as a result of any express or implied obligation to indemnify any other person.

“Combined State Tax” means, with respect to each state or local taxing jurisdiction, any income or franchise tax payable to such state or local taxing jurisdiction in which a member of the PMI Group files tax returns with a member of the Altria U.S. Group on a consolidated, combined or unitary basis for purposes of such income or franchise tax.

“Distribution Date” shall mean the date on which the Distribution becomes effective.

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“Distribution Taxes” shall mean any Taxes imposed on, increase in Taxes incurred by, or reduction of a Tax Asset of Altria, and any Taxes of an Altria shareholder that are paid or reimbursed by Altria, together with any fines or penalties, pursuant to a Final Determination resulting from, or arising in connection with, the failure of the Distribution to qualify as a tax-free transaction under Section 355 of the Code (including, without limitation, any Tax resulting from the application of Section 355(d) or Section 355(e) to the Distribution) or corresponding provisions of the laws of any other jurisdictions. Any Tax referred to in the immediately preceding sentence shall be determined using the highest applicable statutory corporate income tax rate for the relevant taxable period (or portion thereof).

“Effective Realization” (and the correlative term “Effectively Realized”) means, with respect to a tax saving or tax benefit, including from the use of any Tax Asset, the earliest to occur of (i) the receipt by Altria or PMI (or any other member of Altria U.S. Group or PMI Group) of cash from a Taxing Authority reflecting such tax saving or tax benefit, or (ii) the application of such tax saving or tax benefit to reduce any payments, including estimated tax payments, with respect to (A) the tax liability on a return of any of such entities or of any consolidated group of which any of such entities is a member, or (B) any other outstanding tax liability of any of such entities or of any such consolidated group, provided that any reference in this definition to tax shall include, without limitation, a reference to a recovery of statutory interest.

“Federal Income Tax” means any Tax imposed under Subtitle A of the Code and any related interest and any penalties, additions to such Tax, or additional amounts imposed with respect thereto.

“Final Determination” shall mean (i) with respect to Federal Income Taxes, a “determination” as defined in Section 1313(a) of the Code or execution of an Internal Revenue Service Form 870-AD and, with respect to taxes other than Federal Income Taxes, any decision, judgment, decree or other order by a court of competent jurisdiction that, under applicable law, is not subject to further appeal, review or modification through proceedings or otherwise; (ii) a closing agreement or accepted offer in compromise under Sections 7121 or 7122 of the Code, or a comparable agreement under the laws of a State, local, or foreign taxing jurisdiction; (iii) the payment of tax by any member of the Altria Consolidated Return Group with respect to any item disallowed or adjusted by a Taxing Authority, provided that Altria determines that no action should be taken to recoup such payment; or (iv) any other final disposition, by mutual agreement of the Parties or by reason of the expiration of a statute of limitations or period for the filing of claims for refunds, amended returns, or appeals from adverse determinations.

“PMI Combined State Tax Liability” shall mean, with respect to any taxable period (or portion thereof) in the Pre-Distribution Period, an amount of Combined State Taxes, including any interest, penalties and other additions to such taxes for such taxable year except to the extent attributable to Altria’s negligence, determined by taking

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the total separately computed state income or franchise tax liabilities of the PMI Group over the total separately computed state income or franchise tax liabilities of the Altria Consolidated Return Group multiplied by the combined state income or franchise tax liability of the Altria Consolidated Return Group.

“PMI Current Federal Income Tax Provision” shall mean, with respect to any financial statement year (or portion thereof) in the Pre-Distribution Period, the sum of the PMI Group’s current federal income tax provision determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) recorded on the PMI Group’s books and records and reported in the PMI Group’s published financial statements.

“PMI Federal Income Tax Liability” shall mean, with respect to any taxable period (or portion thereof) in the Pre-Distribution Period, the sum of the PMI Group’s Federal Income Tax liability and other additions to such Taxes except to the extent attributable to Altria’s negligence (as determined under the applicable principles of agency law rather than Section 6662 of the Code) for such taxable period (or portion thereof), computed as if the PMI Group were not and never were part of the Altria Consolidated Return Group, but rather were a separate affiliated group of corporations filing a consolidated United States Federal Income Tax return pursuant to Section 1501 of the Code (provided, however, that transactions with members of the Altria U.S. Group or between members of the PMI Group shall be reflected according to the provisions of the consolidated return regulations promulgated under the Code governing intercompany transactions). Such computation shall be made: (A) without regard to the income, deductions (including net operating loss and capital loss deductions) and credits in any year of any member of the Altria Consolidated Return Group that is not a member of the PMI Group, (B) by taking account of any Tax Asset of the PMI Group in accordance with Section 2.02(e) hereof, (C) with regard to net operating loss and capital loss carryforwards and carrybacks and minimum tax credits from earlier years of the PMI Group, (D) as though the highest rate of tax specified in Section 11(b) of the Code were the only rate set forth in that subsection, and (E) reflecting the positions, elections and accounting methods and periods used with respect to the PMI Group in preparing the Altria consolidated Federal Income Tax return.

“PMI Group” shall mean PMI and any direct or indirect Subsidiary of PMI that would be eligible, from time to time, to join with PMI, with respect to Federal Income Taxes, in the filing of a consolidated United States Federal Income Tax return and, with respect to Combined State Taxes, in the filing of a consolidated, combined or unitary income or franchise tax return if PMI were not a member of the Altria Consolidated Return Group. For the avoidance of doubt, the PMI Group includes, but is not limited to, any company that for any period prior to the execution of this Agreement was a direct or indirect Subsidiary of PMI and that during such period would have been eligible to join with PMI, with respect to Federal Income Taxes, in the filing of a consolidated United States Federal Income Tax return and, with respect to Combined

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State Taxes, in the filing of a consolidated, combined or unitary income or franchise tax return if PMI were not a member of the Altria Consolidated Return Group, but only if and to the extent that such company was not a member of the Altria U.S. Group during such period.

“PMI Group Tax” means (i) PMI Federal Income Tax Liability; (ii) PMI Combined State Tax Liability; (iii) any other Tax imposed on any member of the PMI Group or, with respect to any taxable year, any other Tax imposed on any direct or indirect Subsidiary of PMI that is not a member of the PMI Group; and (iv) liability of any member of the PMI Group for the payment of any amounts of the type described in (i), (ii) or (iii) as a result of any express or implied obligation to indemnify any other person.

“PMI Pro Forma Combined State Return” means, for each state in which a combined state income tax return may be filed, either a formal combined state income tax return, or, in the alternative, a schedule on which the PMI Combined State Tax Liability is reflected.

“PMI Pro Forma Federal Return” means either a formal Form 1120, or, in the alternative, a schedule on which the PMI Federal Income Tax Liability is reflected.

“Post-Distribution Period” means any taxable period (or portion thereof) beginning after the close of business on the Distribution Date.

“Pre-Distribution Period” means any taxable period (or portion thereof) ending on or before the close of business on the Distribution Date.

“Ruling and Tax Opinion Documents” means (i) the private letter ruling received from the Internal Revenue Service regarding certain tax consequences of the Distribution, (ii) the request for private letter ruling submitted to the Internal Revenue Service in connection with the Distribution (including all supplemental submissions) and (iii) the tax opinion related to the Distribution delivered by Sutherland Asbill & Brennan LLP (“Tax Advisor”), including all exhibits to each, which contain, inter alia, information and representations provided by Altria and PMI in connection with the Distribution.

“Subsidiary” means any corporation or other legal entity (or any successor thereto) directly or indirectly “controlled”, where “control” means the ownership of 50% or more of the ownership interests (by vote or value) of such corporation or other legal entity (or any successor thereto) or the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such corporation or other legal entity.

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“Tax” or “Taxes” shall mean all national, federal, state (including, but not limited to the Ohio Commercial Activities tax or the Texas Margin tax), county, local, foreign or other taxes, levies, or imposts, including any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, capital stock, occupation, property, real property gains, social security or disability, environmental or windfall profit tax, premium, custom duty or other tax, governmental fee, or other like assessment or charge of any kind whatsoever, together with any interest, penalty, addition to tax or additional amount imposed by any Taxing Authority responsible for the imposition of any such tax (United States or non-United States).

“Tax Asset” means any federal or state net operating loss, net capital loss, general business credit, foreign tax credit, charitable deduction, or any other loss, credit, deduction, or tax attribute which could reduce any Tax (including, without limitation, deductions, credits, alternative minimum net operating loss carryforwards related to alternative minimum taxes or additions to the basis of property).

“Taxing Authority” means any governmental authority (whether United States or non-United States, and including, without limitation, any state, municipality, political subdivision or governmental agency) responsible for the imposition of any Tax.

“Tax Contest” means any audit, review, examination, assessment, notice of deficiency or any other administrative or judicial proceeding with the purpose or effect of redetermining any Taxes (including any administrative or judicial review of any claim for refund).

“Tax-Free Status” means qualification of the Distribution as tax-free under Section 355 of the Code.

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 Kraft 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.

Class A Common Stock: the Class A common stock, no par value, of Kraft.

Class B Common Stock: the Class B common stock, no par value, of Kraft.

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 Kraft 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, 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.

Group: the Altria Group or the Kraft Group, as the context requires.

Kraft: as defined in the preamble to this Agreement.

Kraft Group: Kraft and the Kraft Subsidiaries.

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.

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Liabilities: means any and all claims, debts, liabilities, assessments, guarantees, assurances, commitments, obligations, fines, 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.

Original Services Agreement: as defined in the preamble to this Agreement.

Parties: ALCS and Kraft (Party means either ALCS or Kraft).

Person: an individual, 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.

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 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 Kraft Subsidiaries shall be deemed to be Subsidiaries of Kraft and (2) no member of the Kraft 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.

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DEFINITIONS

1.01 General. For the purposes of this Agreement, the terms set forth below shall have the following meanings.

“Altria Non-Food Group” means Altria and any direct or indirect Subsidiary of Altria that is not also a member of the Kraft Group or otherwise a direct or indirect Subsidiary of Kraft and that would be eligible, from time to time, to join with Altria, with respect to Federal Income Taxes, in the filing of a consolidated United States Federal Income Tax return and, with respect to Combined State Taxes, in the filing of a consolidated, combined or unitary income or franchise tax return.

“Altria Non-Food Group Tax” means (i) the Federal Income Tax liability of the Altria Consolidated Return Group less the Kraft Federal Income Tax Liability; (ii) the Altria Combined State Tax liability less the Kraft Combined State Tax Liability; (iii) any other Tax imposed on any member of the Altria Non-Food Group or, with respect to any taxable year, any other Tax imposed on any direct or indirect Subsidiary of Altria (excluding, however, the Kraft Group and any direct or indirect Subsidiary of Kraft) that is not a member of the Altria Non-Food Group; and (iv) liability of any member of the Altria Non-Food Group for the payment of any amounts of the type described in (i), (ii) or (iii) as a result of any express or implied obligation to indemnify any other person.

“Combined State Tax” means, with respect to each state or local taxing jurisdiction, any income or franchise tax payable to such state or local taxing jurisdiction in which a member of the Kraft Group files tax returns with a member of the Altria Consolidated Return Group that is not also a member of the Kraft Group on a consolidated, combined or unitary basis for purposes of such income or franchise tax.

“Distribution Date” shall mean the date on which the Distribution becomes effective.

“Distribution Taxes” shall mean any Taxes imposed on, increase in Taxes incurred by, or reduction of a Tax Asset of Altria, and any Taxes of an Altria shareholder that are paid or reimbursed by Altria, together with any fines or penalties, pursuant to a Final Determination resulting from, or arising in connection with, the failure of the Distribution to qualify as a tax-free transaction under Section 355 of the Code (including, without limitation, any Tax resulting from the application of Section 355(d) or Section 355(e) to the Distribution) or corresponding provisions of the laws of any other jurisdictions. Any Tax referred to in the immediately preceding sentence shall be determined using the highest applicable statutory corporate income tax rate for the relevant taxable period (or portion thereof).

“Effective Realization” (and the correlative term “Effectively Realized”) means, with respect to a tax saving or tax benefit, including from the use of any Tax Asset, the earliest to occur of (i) the receipt by Altria or Kraft (or any other member of Altria Non-Food Group or Kraft Group) of cash from a Taxing Authority reflecting such tax saving or tax benefit, or (ii) the application of such tax saving or tax benefit to reduce any payments, including estimated tax payments, with respect to (A) the tax liability on a return of any of such entities or of any consolidated group of which any of such entities is

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a member, or (B) any other outstanding tax liability of any of such entities or of any such consolidated group, provided that any reference in this definition to tax shall include, without limitation, a reference to a recovery of statutory interest.

“Federal Income Tax” means any Tax imposed under Subtitle A of the Code and any related interest and any penalties, additions to such Tax, or additional amounts imposed with respect thereto.

“Final Determination” shall mean (i) with respect to Federal Income Taxes, a “determination” as defined in Section 1313(a) of the Code or execution of an Internal Revenue Service Form 870-AD and, with respect to taxes other than Federal Income Taxes, any decision, judgment, decree or other order by a court of competent jurisdiction that, under applicable law, is not subject to further appeal, review or modification through proceedings or otherwise; (ii) a closing agreement or accepted offer in compromise under Sections 7121 or 7122 of the Code, or a comparable agreement under the laws of a State, local, or foreign taxing jurisdiction; (iii) the payment of tax by any member of the Altria Consolidated Return Group with respect to any item disallowed or adjusted by a Taxing Authority, provided that Altria determines that no action should be taken to recoup such payment; or (iv) any other final disposition, by mutual agreement of the Parties or by reason of the expiration of a statute of limitations or period for the filing of claims for refunds, amended returns, or appeals from adverse determinations.

“Kraft Combined State Tax Liability” shall mean, with respect to any taxable period (or portion thereof) in the Pre-Distribution Period, an amount of Combined State Taxes, including any interest, penalties and other additions to such taxes for such taxable year except to the extent attributable to Altria’s negligence, determined by taking the total separately computed state income or franchise tax liabilities of the Kraft Group over the total separately computed state income or franchise tax liabilities of the Altria Consolidated Return Group multiplied by the combined state income or franchise tax liability of the Altria Consolidated Return Group.

“Kraft Current Federal Income Tax Provision” shall mean, with respect to any financial statement year (or portion thereof) in the Pre-Distribution Period, the sum of the Kraft Group’s current federal income tax provision determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) recorded on the Kraft Group’s books and records and reported in the Kraft Group’s published financial statements.

“Kraft Federal Income Tax Liability” shall mean, with respect to any taxable period (or portion thereof) in the Pre-Distribution Period, the sum of the Kraft Group’s Federal Income Tax liability and other additions to such Taxes except to the extent attributable to Altria’s negligence (as determined under the applicable principles of agency law rather than Section 6662 of the Code) for such taxable period (or portion thereof), computed as if the Kraft Group were not and never were part of the Altria

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Consolidated Return Group, but rather were a separate affiliated group of corporations filing a consolidated United States Federal Income Tax return pursuant to Section 1501 of the Code (provided, however, that transactions with members of the Altria Non-Food Group or between members of the Kraft Group shall be reflected according to the provisions of the consolidated return regulations promulgated under the Code governing intercompany transactions). Such computation shall be made: (A) without regard to the income, deductions (including net operating loss and capital loss deductions) and credits in any year of any member of the Altria Consolidated Return Group that is not a member of the Kraft Group, (B) by taking account of any Tax Asset of the Kraft Group in accordance with Section 2.02(e) hereof, (C) with regard to net operating loss and capital loss carryforwards and carrybacks and minimum tax credits from earlier years of the Kraft Group, (D) as though the highest rate of tax specified in Section 11(b) of the Code were the only rate set forth in that subsection, and (E) reflecting the positions, elections and accounting methods and periods used with respect to the Kraft Group in preparing the Altria consolidated Federal Income Tax return.

“Kraft Group” shall mean Kraft and any direct or indirect Subsidiary of Kraft that would be eligible, from time to time, to join with Kraft, with respect to Federal Income Taxes, in the filing of a consolidated United States Federal Income Tax return and, with respect to Combined State Taxes, in the filing of a consolidated, combined or unitary income or franchise tax return if Kraft were not a member of the Altria Consolidated Return Group.

“Kraft Group Tax” means (i) Kraft Federal Income Tax Liability; (ii) Kraft Combined State Tax Liability; (iii) any other Tax imposed on any member of the Kraft Group with respect to any taxable year, or, with respect to any taxable year, any other Tax imposed on any direct or indirect Subsidiary of Kraft that is not a member of the Kraft Group; and (iv) liability of any member of the Kraft Group for the payment of any amounts of the type described in (i), (ii) or (iii) as a result of any express or implied obligation to indemnify any other person.

“Kraft Pro Forma Combined State Return” means, for each state in which a combined state income tax return may be filed, either a formal combined state income tax return, or, in the alternative, a schedule on which the Kraft Combined State Tax Liability is reflected.

“Kraft Pro Forma Federal Return” means either a formal Form 1120, or, in the alternative, a schedule on which the Kraft Federal Income Tax Liability is reflected.

“Post-Distribution Period” means any taxable period (or portion thereof) beginning after the close of business on the Distribution Date.

“Pre-Distribution Period” means any taxable period (or portion thereof) ending on or before the close of business on the Distribution Date.

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“Subsidiary” means any corporation or other legal entity (or any successor thereto) directly or indirectly “controlled”, where “control” means the ownership of 50% or more of the ownership interests (by vote or value) of such corporation or other legal entity (or any successor thereto) or the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such corporation or other legal entity.

“Tax” or “Taxes” shall mean all national, federal, state (including, but not limited to the Ohio Commercial Activities tax or the Texas Margin tax), county, local, foreign or other taxes, levies, or imposts, including any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, capital stock, occupation, property, real property gains, social security or disability, environmental or windfall profit tax, premium, custom duty or other tax, governmental fee, or other like assessment or charge of any kind whatsoever, together with any interest, penalty, addition to tax or additional amount imposed by any Taxing Authority responsible for the imposition of any such tax (United States or non-United States).

“Tax Asset” means any federal or state net operating loss, net capital loss, general business credit, foreign tax credit, charitable deduction, or any other loss, credit, deduction, or tax attribute which could reduce any Tax (including, without limitation, deductions, credits, alternative minimum net operating loss carryforwards related to alternative minimum taxes or additions to the basis of property).

“Taxing Authority” means any governmental authority (whether United States or non-United States, and including, without limitation, any state, municipality, political subdivision or governmental agency) responsible for the imposition of any Tax.

“Tax Contest” means any audit, review, examination, assessment, notice of deficiency or any other administrative or judicial proceeding with the purpose or effect of redetermining any Taxes (including any administrative or judicial review of any claim for refund).

“Tax-Free Status” means qualification of the Distribution as tax-free under Section 355 of the Code.

“Tax Opinion Document” means the tax opinion related to the Distribution delivered by Sutherland Asbill & Brennan LLP (“Tax Advisor”) and including all exhibits thereto, which contain, inter alia, information and representations provided by Altria and Kraft in connection with the Distribution.

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