SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 9, 2004 ALTRIA GROUP, INC. (Exact name of registrant as specified in its charter) Virginia 1-8940 13 -3260245 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 120 Park Avenue, New York, New York 10017-5592 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (917) 663-4000 (Former name or former address, if changed since last report) Item 5. Other Events. On July 9, 2004, Philip Morris International Inc., a wholly-owned subsidiary of Altria Group, Inc. ("Altria"), along with certain of Philip Morris International Inc.'s subsidiaries (together "PMI"), entered into an agreement with the European Commission (acting on behalf of the European Community) and ten Member States of the European Union ( Belgium, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Portugal, and Spain) that provides for broad cooperation with European law enforcement agencies on anti -contraband and anti- counterfeit efforts (the "Agreement"). The Agreement resolves all disputes between Altria and its subsidiaries, on the one hand, and the European Community and the Member States that sign the Agreement, on the other hand, relating to these issues. Under the terms of the Agreement, PMI will make funds available to the European Commission and the Member States, which may serve as a source of additional funding for anti-contraband and anti-counterfeit initiatives . PMI will make 13 payments over 12 years and has recorded a pre-tax charge of $250 million for the initial payment in its earnings for the second quarter of 2004. The Agreement calls for additional payments of $150 million on the first anniversary of the Agreement, $100 million on the second anniversary and $75 million each year thereafter for 10 years, each of which is to be adjusted based on certain variables, including PMI's market share in the European Union in the year preceding payment. Because future additional payments are subject to these variables, PMI will record charges for them as an expense in cost of sales when product is shipped. PMI will adhere to compliance and tracking protocols, approved by the European Commission, regarding the sale, distribution, storage, and shipment of Philip Morris cigarettes in and through the territory of the European Union and certain designated countries. Altria Group, Inc. has provided an assurance that if any of its other subsidiaries begin selling cigarettes the European Union or certain designated countries, it will ensure that those entities adhere to the terms of the Agreement. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits 10.01* – Anti-Contraband and Anti-Counterfeit Agreement and General Release Dated July 9, 2004 and Appendixes. *Filed herewith. Portions of this Exhibit have been omitted pursuant to a request for confidential treatment pending with the Securities and Exchange Commission. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ALTRIA GROUP, INC. Date: By: July 9, 2004 /s/ G. Penn Holsenbeck Name: G. Penn Holsenbeck Title: Vice President, Associate General Counsel and Corporate Secretary INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION 10.01* Anti-Contraband and Anti-Counterfeit Agreement and General Release Dated July 9, 2004 and Appendixes. *Filed herewith. Portions of this Exhibit have been omitted pursuant to a request for confidential treatment pending with the Securities and Exchange Commission. EXHIBIT 10.01 ANTI-CONTRABAND AND ANTI-COUNTERFEIT AGREEMENT AND GENERAL RELEASE dated as of July 9, 2004 among PHILIP MORRIS INTERNATIONAL INC., PHILIP MORRIS PRODUCTS INC., PHILIP MORRIS DUTY FREE INC., and PHILIP MORRIS WORLD TRADE SARL THE EUROPEAN COMMUNITY REPRESENTED BY THE EUROPEAN COMMISSION AND EACH MEMBER STATE LISTED ON THE SIGNATURE PAGES HERETO ARTICLE 1 DEFINITIONS Section 1.01. Definitions..................................................3 ARTICLE 2 PHILIP MORRIS INTERNATIONAL'S SALES AND DISTRIBUTION PRACTICES Section 2.01. EC Compliance Procedures....................................11 Section 2.02. Certification of Compliance with EC Compliance Protocols......................................11 ARTICLE 3 ANTI-CONTRABAND AND ANTI-COUNTERFEIT INITIATIVES Section 3.01. Anti-Contraband and Anti-Counterfeit Initiatives............13 Section 3.02. Support for Anti-Contraband and Anti-Counterfeit Initiatives..............................13 ARTICLE 4 ANTI-CONTRABAND AND ANTI-COUNTERFEIT COOPERATION Section 4.01. Contraband and Counterfeit Seizures.........................14 ARTICLE 5 TRACKING AND TRACING Section 5.01. Tracking and Tracing Protocols..............................22 Section 5.02. Certification of Compliance with Tracking and Tracing Protocols.....................................23 ARTICLE 6 REVIEW OF AGREEMENT Section 6.01. Annual Meetings.............................................23 ARTICLE 7 FULFILLMENT OF OBLIGATIONS AND OBJECTIVES Section 7.01. Promotion of Public Policy..................................23 Section 7.02. Respect for Obligations.....................................23 Section 7.03. Agreement Consistent with EC and Applicable National Laws...24 Section 7.04. The Parties' Intentions.....................................24 ARTICLE 8 REPRESENTATIONS AND WARRANTIES Section 8.01. Mutual Representations......................................24 ARTICLE 9 RELEASE AND DISMISSAL OF CLAIMS Section 9.01. Release.....................................................25 Section 9.02. Dismissal Of Claims.........................................26 ARTICLE 10 SETOFF Section 10.01. Right of Setoff............................................26 Section 10.02. No Other Effect............................................29 ARTICLE 11 TERMINATION Section 11.01. Termination................................................30 Section 11.02. Subsequent Agreement.......................................31 ARTICLE 12 DISPUTE RESOLUTION Section 12.01. The Role of the European Court of First Instance and the European Court of Justice........................31 Section 12.02. Dispute Resolution for Claims Brought Under the Terms of the Agreement.........................34 ARTICLE 13 MISCELLANEOUS Section 13.01 . Notices...................................................35 Section 13.02 . Waivers...................................................35 Section 13.03 . Expenses..................................................35 Section 13.04 . Nature of Payments........................................35 Section 13.05 . Successors and Assigns....................................35 Section 13.06 . Legality and Severability.................................36 Section 13.07 . Counterparts; Effectiveness; Third Party Beneficiaries...........................................36 Section 13.08 . Entire Agreement..........................................36 Section 13.09 . Captions..................................................37 Section 13.10 . Designated EC Representative..............................37 Section 13.11 . Amendments................................................37 Section 13.12 . Authorship................................................37 Section 13.13 . Use of Information Provided by Philip Morris International...........................................37 Section 13.14 . Equal Treatment Provision.................................37 Section 13.15 . Additional Participating Member States....................38 Section 13.16 . Use of the Agreement......................................38 ii Attachments, Exhibits & Schedules Appendix A Fiscal Compliance Policy Appendix B EC Compliance Protocols Appendix C Philip Morris International's Monetary Contributions Appendix D Tracking and Tracing Protocols Appendix E Schedule of Applicable Taxes and Duties Appendix F Factors for Establishing Counterfeit Philip Morris Cigarettes Appendix G List of Designated States Appendix H Form of Dismissals Appendix I List of Philip Morris Trademarks Appendix J List of Arbitrators Appendix K Amendments to the Baseline Amount and Article 4 iii ANTI -CONTRABAND AND ANTI -COUNTERFEIT AGREEMENT AND GENERAL RELEASE This Anti-Contraband and Anti-Counterfeit Agreement and General Release dated as of July 9, 2004, (this "Agreement") is made by and among the European Community (the "EC") represented by the European Commission, the Member States of the EC that have executed a copy of this Agreement and become parties hereto (the "Participating Member States", and together with the EC, "the Relevant Administrations") and Philip Morris International Inc., Philip Morris Products Inc., Philip Morris Duty Free Inc. and Philip Morris World Trade SARL (collectively with the Relevant Administrations, "the Parties"). W I T N E S S E T H : (1) WHEREAS, the smuggling of Cigarettes, both authentic and counterfeit, results in great economic loss and causes other various harms to the Relevant Administrations; (2) WHEREAS, the Relevant Administrations are fully committed to combat the illegal introduction of both authentic and counterfeit Cigarettes into the Territory of the Member States; (3) WHEREAS, Philip Morris International is committed to take commercially reasonable steps as a manufacturer