Altria Letter to shareholders
QUESTIONS AND ANSWERS REGARDING THE SPIN-OFF OF KRAFT FOODS INC.
1. I own Altria shares. What will I receive as a result of the spin-off?
Altria will distribute 0.692024 of a share of Kraft Class A common stock for each share of Altria common stock outstanding as of the Record Date for the Distribution, subject to adjustment as provided herein. The distribution ratio is based on the number of Kraft shares owned by Altria divided by the Altria shares outstanding on that date.
2. What do I need to do to receive my Kraft shares?
No action is required by Altria’s shareholders to receive their Kraft Class A common stock. The Distribution of Kraft’s outstanding shares owned by Altria will be made on the Distribution Date.
3. What is the Record Date for the Distribution, and when will the Distribution occur?
The Record Date is March 16, 2007, and ownership is determined as of 5:00 p.m. Eastern Time on that date. Shares of Kraft Class A common stock will be distributed on March 30, 2007. We refer to this date as the Distribution Date.
4. What do I have to do to participate in the Distribution?
You will receive 0.692024 of a share of Kraft Class A common stock for each share of Altria common stock held as of the Record Date, subject to adjustment as provided herein. You may also participate in the Distribution if you purchase Altria common stock in the “regular way” market and retain your Altria shares through the Distribution Date.
5. If I sell my shares of Altria common stock before the Distribution Date, will I still be entitled to receive Kraft shares in the Distribution?
If you sell your shares of Altria common stock prior to or on the Distribution Date, you may also be selling your right to receive shares of Kraft Class A common stock. You are encouraged to consult with your financial advisor regarding the specific implications of selling your Altria common stock prior to or on the Distribution Date.
6. How will the spin-off affect the number of shares of Altria I currently hold?
The number of shares of Altria held by a shareholder will be unchanged. On the Distribution Date, Altria’s shareholders will receive 0.692024 of a share of Kraft Class A common stock for each share of Altria common stock that they own, subject to adjustment as provided herein. The market value of each Altria share, however, will adjust to reflect the spin-off and, hence, the loss of the valueof the Kraft stock.
7. What are the tax consequences of the Distribution to Altria shareholders?
Altria has received an opinion from outside legal counsel to the effect that the Distribution will be tax free to its shareholders for U.S. federal income tax purposes, except for any cash received in lieu of a fractional share of Kraft Class A common stock. You should consult your own tax advisor regarding the particular consequences of the Distribution to you, including the applicability and effect of any U.S. federal, state and local and foreign tax laws. Altria will provide its U.S. shareholders with information to enable them to compute their tax basis in both Altria and Kraft shares. This information will be posted on Altria’s website,
www.altria.com/Kraftspinoff, on or around March 30, 2007.
8. When will I receive my Kraft shares? Will I receive a stock certificate for Kraft shares distributed as a result of the spin-off?
Registered holders of Altria common stock who are entitled to receive the Distribution will receive a book-entry account statement reflecting their ownership of Kraft Class A common stock. For additional information, registered shareholders in the U.S. and Canada should contact Altria’s transfer agent, Computershare Trust Company, at 1-866-538-5172 or by e-mail at firstname.lastname@example.org. Shareholders from outside the U.S. and Canada may call 1-781-575-3572. If you would like to receive physical certificates evidencing your Kraft shares, please contact Kraft’s transfer agent. See “Kraft Transfer Agent and Registrar,” on page 8.
9. What if I hold my shares through a broker, bank or other nominee?
Altria shareholders who hold their shares through a broker, bank or other nominee will have their brokerage account credited with Kraft Class A common stock. For additional information, those shareholders should contact their broker or bank directly. Questions regarding the Distribution can also be directed to our information agent, D.F. King & Co., Inc., at 1-800-290-6431.
10. What if I have stock certificates reflecting my shares of Altria common stock? Should I send them to the transfer agent or to Altria?
No, you should not send your stock certificates to the transfer agent or to Altria. You should retain your Altria stock certificates. No certificates representing your shares of Kraft Class A common stock will be mailed to you. Kraft Class A common stock will be issued as uncertificated shares registered in book-entry form through the direct registration system.
11. If I was enrolled in an Altria dividend reinvestment plan, will I automatically be enrolled in the Kraft dividend reinvestment plan?
Yes. If you elected to have your Altria cash dividends applied toward the purchase of additional Altria shares, the Kraft shares you receive in the Distribution will be automatically enrolled in the Kraft Direct Stock Purchase and Dividend Reinvestment Plan sponsored by Computershare Trust Company (Kraft’s transfer agent and registrar), unless you notify Computershare that you do not want to reinvest any Kraft cash dividends in additional Kraft shares. Contact information for the Kraft plan sponsor (Computershare) is provided on page 8 of this Information Statement. Additional frequently asked questions and other information are available at www.altria.com/Kraftspinoff.