Articles of Incorporation - Kraft Holdings Virginia Inc.


                         KRAFT HOLDINGS VIRGINIA INC.
                                        
                           ARTICLES OF INCORPORATION



                                   ARTICLE I
                                        
     The name of the Corporation is Kraft Holdings Virginia Inc.

                                  ARTICLE II
                                        
     The purpose for which the Corporation is organized is the transaction of
any or all lawful business not required to be specifically stated in these
Articles.

                                  ARTICLE III
                                        
     The Corporation shall have the authority to issue three billion
(3,000,000,000) shares of Class A Common Stock, without par value, two billion
(2,000,000,000) shares of Class B Common Stock, without par value, and five
hundred million (500,000,000) shares of Preferred Stock, without par value.  The
Class A Common Stock and the Class B Common Stock are hereinafter sometimes
collectively referred to as "Common Stock."  The rights, preferences, voting
powers and the qualifications, limitations and restrictions of the authorized
stock shall be as follows:

A.   Voting Powers

1.   Each share of Class A Common Stock outstanding on any record date shall be
entitled to one vote and each share of Class B Common Stock outstanding on such
record date shall be entitled to ten votes in respect of any action of
shareholders for which such record date was fixed. Except as otherwise required
by the Virginia Stock Corporation Act, the Class A Common Stock and the Class B
Common Stock shall vote together as a single voting group and the exclusive
general voting power for all purposes shall be vested therein.

2.   Except as otherwise required by the Virginia Stock Corporation Act or by
the Board of Directors acting pursuant to subsection C of Section 13.1-707 of
the Virginia Stock Corporation Act (or any successor provision):

     (i) the vote required to constitute any voting group's approval of any
     corporate action except the election of directors, an amendment or
     restatement of these Articles, a merger, a share exchange, a sale or other
     disposition of all or substantially all of the Corporation's property
     otherwise than in the usual and regular course of business, or the
     dissolution of the Corporation, shall be a

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      majority of all votes cast on the matter by such voting group at a meeting
      at which a quorum of such voting group exists;

      (ii)   directors shall be elected by a plurality of the votes cast by
      shares entitled to vote in the election at a meeting at which a quorum is
      present; and

      (iii)  the vote required to constitute approval of an amendment or
      restatement of these Articles, a merger, a share exchange, a sale or other
      disposition of all or substantially all of the Corporation's property
      otherwise than in the usual and regular course of business or the
      dissolution of the Corporation shall be a majority of all votes entitled
      to be cast by each voting group entitled to vote on such action.

B.    Class A and Class B Common Stock

      Except as otherwise set forth below in this Article III, the relative
rights, preferences, qualifications, limitations and restrictions of the Class A
Common Stock and Class B Common Stock shall be identical in all respects.

1.    Dividends

      Subject to the rights of the holders of Preferred Stock, holders of Class
A Common Stock and Class B Common Stock shall be entitled to receive such
dividends and other distributions in cash, stock of any corporation (other than
Common Stock) or property of the Corporation as may be declared thereon by the
Board of Directors from time to time out of assets or funds of the Corporation
legally available therefor and shall share equally on a per share basis in all
such dividends and other distributions. In the case of dividends or other
distributions payable in Common Stock, including distributions pursuant to stock
splits or divisions of Common Stock, only shares of Class A Common Stock shall
be paid or distributed with respect to Class A Common Stock and only shares of
Class B Common Stock shall be paid or distributed with respect to Class B Common
Stock and all such dividends or distributions shall be payable at the same rate
per share on Class A Common Stock and Class B Common Stock so as to retain,
immediately before and immediately after giving effect to such dividend or other
distribution, the relative proportion of outstanding shares of Class A Common
Stock and Class B Common Stock.

2.    Liquidation

      In the event of any dissolution, liquidation or winding up of the affairs
of the Corporation, whether voluntary or involuntary, after payment in full of
the amounts required to be paid to the holders of Preferred Stock, the remaining
assets and funds of the Corporation shall be distributed pro rata to the holders
of Common Stock, and the holders of Class A Common Stock and the holders of
Class B Common Stock will be entitled to receive the same amount per share in
respect thereof.  For purposes of this Article III(B)(2), the voluntary sale,
conveyance, lease, exchange or transfer (for cash, shares of stock, securities
or other consideration) of all or substantially all of the assets of the

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Corporation or a merger or share exchange involving the Corporation and one or
more other corporations (whether or not the Corporation is the corporation
surviving such merger) shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary.

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3.   Reorganization

     Subject to the rights of the holders of Preferred Stock, in case of any
reorganization, share exchange or merger of the Corporation with another
corporation in which shares of Class A Common Stock or Class B Common Stock are
converted into (or entitled to receive with respect thereto) shares of stock
and/or other securities or property (including cash), each holder of a share of
Class A Common Stock and each holder of a share of Class B Common Stock shall be
entitled to receive with respect to each such share the same kind and amount of
shares of stock and other securities and property (including cash).  In the
event that the holders of shares of Class A Common Stock (or of shares of Class
B Common Stock) are granted rights to elect to receive one of two or more
alternative forms of consideration, the foregoing provision shall be deemed
satisfied if holders of shares of Class A Common Stock and holders of shares of
Class B Common Stock are granted substantially identical election rights.

4.   Conversion of Class B Common Stock

     (a)  Prior to the date on which shares of Class B Common Stock are
transferred to shareholders of Philip Morris Companies in a Tax-Free Spin-Off
(as defined in Article III(B)(4)(b) below), each record holder of shares of
Class B Common Stock may convert any or all of such shares into an equal number
of shares of Class A Common Stock by surrendering the certificates, if any, for
such shares, accompanied by any payment required for documentary, stamp or
similar issue or transfer taxes and by a written notice by such record holder to
the Corporation stating that such record holder desires to convert such shares
of Class B Common Stock into the same number of shares of Class A Common Stock
including for the purpose of the sale or other disposition of such shares of
Class A Common Stock, and requesting that the Corporation issue all of such
shares of Class A Common Stock to persons named therein, setting forth the
number of shares of Class A Common Stock to be issued to each such person and
the denominations in which the certificates, if any, therefor are to be issued.
To the extent permitted by law, such voluntary conversion shall be deemed to
have been effected at the close of business on the date of such surrender.
Following a Tax-Free Spin-Off, shares of Class B Common Stock shall no longer be
convertible into shares of Class A Common Stock.

     (b)  Prior to a Tax-Free Spin-Off, each share of Class B Common Stock shall
automatically be converted into one share of Class A Common Stock upon the
transfer of such share if, after such transfer, such share is not beneficially
owned by Philip Morris Companies.  Shares of Class B Common Stock shall not
convert automatically into shares of Class A Common Stock (i) as a result of a
distribution of Class B Common Stock to shareholders of Philip Morris Companies
in a transaction (including any distribution in exchange for shares of capital
stock or securities of Philip Morris Companies) intended to qualify as a tax-
free distribution under Section 355 of the Internal Revenue Code of 1986, as
amended (the "Code"), or any successor provision (a "Tax-Free Spin-Off") or (ii)
in any transfer after a Tax-Free Spin-Off.  For purposes of this Article
III(B)(4), a Tax-Free Spin-Off shall be deemed to have occurred at the time
shares are first transferred to 

                                       4

 
shareholders of Philip Morris Companies following receipt of a certificate
described in clause (ii) of the first sentence of Article III(B)(4)(d) below.


                                       5

 
     For purposes of these Articles:

          (i)   "Philip Morris Companies" shall mean Philip Morris Companies
     Inc., a Virginia corporation, and any of its successors by way of merger,
     share exchange or sale of all or substantially all of its assets;

          (ii)  "subsidiary" shall mean, as to any person, a corporation,
     partnership, joint venture, association or other entity in which such
     person beneficially owns (directly or indirectly) 50% or more of the
     outstanding voting power or partnership interests or similar voting
     interests;

          (iii) "beneficial ownership" shall have the meaning given to such
     term in Rule 13d-3 promulgated under the Securities Exchange Act of 1934,
     as amended; and

          (iv)  "person" shall mean a natural person, corporation, partnership,
     joint venture, association, or legal entity of any kind; each reference to
     a "natural person" (or to a "record holder" of shares, if a natural person)
     shall be deemed to include in his or her representative capacity a
     guardian, committee, executor, administrator or other legal representative
     of such natural person or record holder.

     The Corporation will provide notice of any automatic conversion of all
outstanding shares of Class B Common Stock to holders of record of the Common
Stock as soon as practicable following such conversion; provided, however, that
                                                        --------  -------  ----
the Corporation may satisfy such notice requirement by providing such notice
prior to such conversion.  Such notice shall be provided by any means then
permitted by the Virginia Stock Corporation Act, including by electronic
transmission or mailing notice of such conversion first class postage prepaid,
to each holder of record of the Common Stock, at such holder's address as it
appears on the transfer books of the Corporation; provided, however, that no
                                                  --------  -------         
failure to give such notice nor any defect therein shall affect the validity of
the automatic conversion of any shares of Class B Common Stock.  Each such
notice shall state, as appropriate, the following:

          (i)   the automatic conversion date;

          (ii)  that all outstanding shares of Class B Common Stock are
     automatically converted;

          (iii)   the place or places where certificates, if any, for such
     shares may be surrendered in exchange for certificates, if any,
     representing Class A Common Stock.

          Immediately upon such conversion, the rights of the holders of shares
of Class B Common Stock as such shall cease and such holders shall be treated
for all purposes as having become the record owners of the shares of Class A
Common Stock issuable upon such conversion; provided, however, that such persons
                                            --------  -------  ----             
shall be entitled to 

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receive when paid any dividends declared on the Class B Common Stock as of a
record date preceding the time of such conversion and unpaid as of the time of
such conversion, subject to Article III(B)(4)(f) below.

     (c) Prior to a Tax-Free Spin-Off, holders of shares of Class B Common Stock
may (i) sell or otherwise dispose of or transfer any or all of such shares held
by them, respectively, only in connection with a transfer that meets the
qualifications of Article III(B)(4)(d) below, and under no other circumstances,
or (ii) convert any or all of such shares into shares of Class A Common Stock,
including for the purpose of effecting the sale or disposition of such shares of
Class A Common Stock to any person as provided in Article III(B)(4)(a) above.
Prior to a Tax-Free Spin-Off, no one other than those persons in whose names
shares of Class B Common Stock become registered on the original stock ledger of
the Corporation, or transferees or successive transferees who receive shares of
Class B Common Stock in connection with a transfer that meets the qualifications
set forth in Article III(B)(4)(d) below, shall have the status of an owner or
holder of shares of Class B Common Stock or be recognized as such by the
Corporation or be otherwise entitled to enjoy for his or her own benefit the
special rights and powers of a holder of shares of Class B Common Stock.

     Holders of shares of Class B Common Stock may at any and all times transfer
to any person the shares of Class A Common Stock issuable upon conversion of
such shares of Class B Common Stock.

     (d)  Prior to a Tax-Free Spin-Off, shares of Class B Common Stock shall be
transferred on the books of the Corporation upon presentation at the office of
the Secretary of the Corporation (or at such additional place or places as may
from time to time be designated by the Secretary or any Assistant Secretary of
the Corporation) of proper transfer documents, accompanied by either of the
following:

          (i)  a certificate from Philip Morris Companies stating that such
     transfer is to a subsidiary of Philip Morris Companies; or

          (ii)  a certificate from Philip Morris Companies stating that such
     transfer is to the shareholders of Philip Morris Companies in connection
     with a Tax-Free Spin-Off.

     (e)  Prior to the occurrence of a Tax-Free Spin-Off, every certificate for
shares of Class B Common Stock, if any, shall bear a legend on the face thereof
reading as follows:

          "The shares of Class B Common Stock represented by this certificate
     may not be transferred to any person in connection with a transfer that
     does not meet the qualifications set forth in Article III(B)(4)(d) of the
     Articles of Incorporation of this Corporation and no person who receives
     such shares in connection with a transfer that does not meet the
     qualifications prescribed by Article III(B)(4)(d) is entitled to own or to
     be registered as the record holder of such shares of Class B 

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     Common Stock, but the record holder of this certificate may at such time
     and in the manner set forth in Article III(B)(4) of the Articles of
     Incorporation convert such shares of Class B Common Stock into the same
     number of shares of Class A Common Stock for purposes of effecting the sale
     or other disposition of such shares of Class A Common Stock to any person.
     Each holder of this certificate, by accepting the same, accepts and agrees
     to all of the foregoing."

Upon and after the transfer of shares in a Tax-Free Spin-Off, certificates for
shares of Class B Common Stock, if any, shall no longer bear the legend set
forth above in this Article III(B)(4)(e).

     (f)  Upon any conversion of shares of Class B Common Stock into shares of
Class A Common Stock pursuant to the provisions of this Article III(B)(4), any
dividend, for which the record date or payment date shall be subsequent to such
conversion, which may have been declared on the shares of Class B Common Stock
so converted shall be deemed to have been declared, and shall be payable, with
respect to the shares of Class A Common Stock into or for which such shares of
Class B Common Stock shall have been so converted, and any such dividend that
shall have been declared on such shares payable in shares of Class B Common
Stock shall be deemed to have been declared, and shall be payable, in shares of
Class A Common Stock.

     (g)  The Corporation shall at all times reserve and keep available, out of
its authorized but unissued Common Stock, such number of shares of Class A
Common Stock as would become issuable upon the conversion of all shares of Class
B Common Stock then outstanding.

C.   Preferred Stock

     The Board of Directors may determine the preferences, limitations and
relative rights, to the extent permitted by the Virginia Stock Corporation Act,
of any class of shares of Preferred Stock before the issuance of any shares of
that class, or of one or more series within a class before the issuance of any
shares of that series.  Each class or series shall be  appropriately designated
by a distinguishing designation prior to the issuance of any shares thereof.
The Preferred Stock of all series shall have preferences, limitations and
relative rights identical with those of other shares of the same series and,
except to the extent otherwise provided in the description of the series, with
those of shares of other series of the same class.

     Prior to the issuance of any shares of a class or series of Preferred
Stock, (1) the Board of Directors shall establish such class or series by
adopting a resolution and by filing with the State Corporation Commission of
Virginia articles of amendment setting forth the designation and number of
shares of the class or series and the relative rights and preferences thereof,
and (2) the State Corporation Commission of Virginia shall have issued a
certificate of amendment.

                                  
                                       8

                                  ARTICLE IV
 
  No holder of shares of any class of the Corporation shall have any preemptive
or preferential right to purchase or to subscribe to (A) any shares of any class
of the Corporation, whether now or hereafter authorized; (B) any warrants,
rights, or options to purchase any such shares; or (C) any securities or
obligations convertible into or exchangeable for any such shares or convertible
into or exchangeable for warrants, rights, or options to purchase any such
shares.

                                   ARTICLE V

  The number of directors shall be fixed in the By-Laws or, in the absence of a
By-Law fixing the number, the number shall be two.

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                                  ARTICLE VI

                                        
A.    Definitions

      For purposes of this Article VI, the following terms shall have the
meanings indicated:

1.    "eligible person" means a person who is or was a director, officer or
employee of the Corporation or a person who is or was serving at the request of
the Corporation as a director, trustee, partner, officer or employee of another
corporation, affiliated corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise.  A person shall be considered to be serving an
employee benefit plan at the Corporation's request if his duties to the
Corporation also impose duties on, or otherwise involve services by, him to the
plan or to participants in or beneficiaries of the plan;

2.    "expenses" includes, without limitation, counsel fees;

3.    "liability" means the obligation to pay a judgment, settlement, penalty,
fine (including any excise tax assessed with respect to an employee benefit
plan), or reasonable expenses incurred with respect to a proceeding;

4.    "party" includes, without limitation, an individual who was, is, or is
threatened to be made a named defendant or respondent in a proceeding; and

5.    "proceeding" means any threatened, pending, or completed action, suit, or
proceeding whether civil, criminal, administrative, or investigative and whether
formal or informal.

B.    Limitation of Liability

      To the full extent that the Virginia Stock Corporation Act, as it exists
on the date hereof or as hereafter amended, permits the limitation or
elimination of the liability of directors, officers or other eligible persons,
no director or officer of the Corporation or other eligible person made a party
to any proceeding shall be liable to the Corporation or its shareholders for
monetary damages arising out of any transaction, occurrence or course of
conduct, whether occurring prior or subsequent to the effective date of this
Article VI.

C.    Indemnification

      To the full extent permitted by the Virginia Stock Corporation Act, as it
exists on the date hereof or as hereafter amended, the Corporation shall
indemnify any person who was or is a party to any proceeding, including a
proceeding brought by or in the right of the Corporation or brought by or on
behalf of shareholders of the Corporation, by reason of the fact that such
person is or was an eligible person against any liability incurred by him in
connection with such proceeding.  To the same extent, the Corporation is

                                      10

 
empowered to enter into a contract to indemnify any eligible person against
liability in respect of any proceeding arising from any act or omission, whether
occurring before or after the execution of such contract.


D.  Termination of Proceeding

    The termination of any proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not of
itself create a presumption that the eligible person did not meet any standard
of conduct that is or may be a prerequisite to the limitation or elimination of
liability provided in Article VI(B) or to his entitlement to indemnification
under Article VI(C).

E.  Determination of Availability

    The Corporation shall indemnify under Article VI(C) any eligible person who
prevails in the defense of any proceeding.  Any other indemnification under
Article VI(C) (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that indemnification is
proper in the circumstances because the eligible person has met any standard of
conduct that is a prerequisite to his entitlement to indemnification under
Article VI(C).


    The determination shall be made:

        (a)    by the Board of Directors by a majority vote of a quorum
     consisting of directors not at the time parties to the proceeding;

        (b)    if a quorum cannot be obtained under clause (a) of this Article
     VI(E), by majority vote of a committee duly designated by the Board of
     Directors (in which designation directors who are parties may participate),
     consisting solely of two or more directors not at the time parties to the
     proceeding;

        (c)    by special legal counsel:

               (i)  selected by the Board of Directors or its committee in the
               manner prescribed in clause (a) or (b) of this Article VI(E); or

               (ii) if a quorum of the Board of Directors cannot be obtained
               under clause (a) of this Article VI(E) and a committee cannot be
               designated under clause (b) of this Article VI(E), selected by a
               majority vote of the full Board of Directors, in which selection
               directors who are parties may participate; or

                                      11

 
         (d) by the holders of Common Stock, but shares owned by or voted under
         the control of directors who are at the time parties to the proceeding
         may not be voted on the determination.

Authorization of indemnification and advancement of expenses and evaluation as
to reasonableness of expenses shall be made in the same manner as the
determination that indemnification is appropriate, except that if the
determination is made by special legal counsel, such authorization and
evaluations shall be made by those entitled under clause (c) of this Article
VI(E) to select counsel.

     Notwithstanding the foregoing, in the event there has been a change in the
composition of a majority of the Board of Directors after the date of the
alleged act or omission with respect to which indemnification, an advance or
reimbursement is claimed other than through successor Directors approved by the
Board of Directors, any determination as to such indemnification, advance or
reimbursement shall be made by special legal counsel agreed upon by the Board of
Directors and the eligible person.  If the Board of Directors and the eligible
person are unable to agree upon such special legal counsel, the Board of
Directors and the eligible person each shall select a nominee, and the nominees
shall select such special legal counsel.


F.   Advances

1.   The Corporation may pay for or reimburse the reasonable expenses incurred
by any eligible person (and for a person referred to in Article VI(G)) who is a
party to a proceeding in advance of final disposition of the proceeding or the
making of any determination under Article VI(C) if any such person furnishes the
Corporation:

         (a) a written statement, executed personally, of his good faith belief
         that he has met any standard of conduct that is a prerequisite to his
         entitlement to indemnification pursuant to Article VI(C) or Article
         VI(G); and

         (b) a written undertaking, executed personally or on his behalf, to
         repay the advance if it is ultimately determined that he did not meet
         such standard of conduct.

The undertaking required by clause (b) of this Article VI(F) shall be an
unlimited general obligation but need not be secured and may be accepted without
reference to financial ability to make repayment.

2.   Authorizations of payments under this Article VI(F) shall be made by the
persons specified in Article VI(E).



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G.   Indemnification of Others
 
     The Corporation is empowered to indemnify or contract to indemnify any
person not specified in Article VI(C) who was, is or may become a party to any
proceeding, by reason of the fact that he is or was an agent of or consultant to
the Corporation, to the same or a lesser extent as if such person were specified
as one to whom indemnification is granted in Article VI(C).  The provisions of
Article VI(D), Article VI(E) and Article VI(F), to the extent set forth therein,
shall be applicable to any indemnification provided hereafter pursuant to this
Article VI(G).

H.   Application; Amendment

     The provisions of this Article VI shall be applicable to all proceedings
commenced after it becomes effective, arising from any act or omission, whether
occurring before or after such effective date.  No amendment or repeal of this
Article VI shall impair or otherwise diminish the rights provided under this
Article VI (including those created by contract) with respect to any act or
omission occurring prior to such amendment or repeal.  The Corporation shall
promptly take all such actions and make all such determinations and
authorizations as shall be necessary or appropriate to comply with its
obligation to make any indemnity against liability, or to advance any expenses,
under this Article VI and shall promptly pay or reimburse all reasonable
expenses incurred by any eligible person or by a person referred to in Article
VI(G) in connection with such actions and determinations or proceedings of any
kind arising therefrom.

I.   Insurance
 
     The Corporation may purchase and maintain insurance to indemnify it against
the whole or any portion of the liability assumed by it in accordance with this
Article and may also procure insurance, in such amounts as the Board of
Directors may determine, on behalf of any eligible person (and for a person
referred to in Article VI(G)) against any liability asserted against or incurred
by him whether or not the Corporation would have power to indemnify him against
such liability under the provisions of this Article VI.

J.   Further Indemnity

1.   Every reference herein to directors, officers, trustees, partners,
employees, agents or consultants shall include former directors, officers,
trustees, partners, employees, agents or consultants and their respective heirs,
executors and administrators. The indemnification hereby provided and provided
hereafter pursuant to the power hereby conferred by this Article VI shall not be
exclusive of any other rights to which any person may be entitled, including any
right under policies of insurance that may be purchased and maintained by the
Corporation or others, with respect to claims, issues or matters in relation to
which the Corporation would not have the power to indemnify such person under
the provisions of this Article VI.
 
2.   Nothing herein shall prevent or restrict the power of the Corporation to
make or provide for any further indemnity, or provisions for determining
entitlement to indemnity, 

                                      13

 
pursuant to one or more indemnification agreements, By-Laws, or other
arrangements (including without limitation, creation of trust funds or security
interests funded by letters of credit or other means) approved by the Board of
Directors (whether or not any of the directors of the Corporation shall be a
party to or beneficiary of any such agreements, By-Laws or other arrangements);
provided, however, that any provision of such agreements, By-Laws or other
arrangements shall not be effective if and to the extent that it is determined
to be contrary to this Article or applicable laws of the Commonwealth of
Virginia, but other provisions of any such agreements, By-Laws or other
arrangements shall not be affected by any such determination.

K.   Severability

     Each provision of this Article VI shall be severable, and an adverse
determination as to any such provision shall in no way affect the validity of
any other provision.
 

                                  ARTICLE VII

     Article 14.1 of Chapter 9 of Title 13.1 of the Code of Virginia shall not
apply to the Corporation.

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                                 ARTICLE VIII

     The initial registered office of the Corporation is Hunton & Williams,
Riverfront Plaza, East Tower, 951 E. Byrd Street, Richmond, Virginia  23219-
4074.  The initial registered agent of the Corporation is Louanna O. Heuhsen, a
Virginia resident and a member of the Virginia State Bar whose business office
is identical with the Corporation's initial registered office.



                                           /s/ Louanna O. Heuhsen 
                                           ---------------------------------
                                           Louanna O. Heuhsen, Incorporator

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