Tobacco Documents Online

4 • 16 PHILIP MORRIS COMPANIES INC. 120 PARK AVENUE, NEW YORK, N Y 10017 • TELEPHONE (212) 880-5000 November 20, 1989 / TO THE MEMBERS OF THE BOARD OF DIRECTORS _ RE: 1990 Annual Meeting: Shareholder Proposals We have received four shareholder proposals for inclusion in the Company's 1990 proxy statement. These proposals, copies of which are attached and are also summarized below, were timely received. It is anticipated that we will file no- action requests with the Securities and Exchange Commission with respect to all four proposals. • I. The Sisters of Saint Francis Proposal This proposal would require the Company to make available to requesting shareholders a report listing for each year from 1985 to 1989 the total number of persons, the monies expended, and any and all organizations and trade groups funded by the Company that were involved in lobbying efforts (i) to influence domestic and foreign legislation restricting cigarette advertising as well as smoking in public places in the United States and elsewhere, and (ii) to open foreign markets to American tobacco products. II. The Evangelical Lutheran Church in America Proposal This proposal calls for the formation of a review committee (the "Review Committee") to report to the Board of Directors by September 1, 1991 its findings regarding (i) the impact of promotional practices and sampling on children's decisions to smoke the Company's brands, (ii) evaluation of how promotional techniques such as advertisements and sponsorships, paid product placements and free sampling affect children's purchases of the Company's cigarette products, (iii) what policies/practices the Company might implement to insure that minors not be targeted with the foregoing, and (iv) consideration of adoption of a policy that "profits realized by the illegal sale" of the Company's cigarettes be transferred to public health organizations for anti-smoking campaigns geared to minors and enforcement of laws to insure that the Company's cigarettes not be sold to minors. The proposal further resolves that "the Review

November 20, 1989 Page 2 Committee's recommendations, along with management's implementation plan, be available to all requesting shareholders" by January 1, 1992. III. The Adrian Dominican Sisters Proposal This proposal requires that the official description of the purposes of the Company (presumably in its articles of incorporation) be amended to add the phrase: "except for the production, marketing, and sale of cigarettes anywhere in the world by the year 2000." The proposal requires the Board to take the necessary steps between now and then to implement this change. IV. The Province of Saint Joseph of the Capuchin Order Proposal • This proposal requests the Board to initiate the process of amending the Company's articles of incorporation to provide that the Company shall not conduct any business in tobacco or tobacco products. The proposal is quite similar to the Adrian Dominican Sisters proposal. Donald FrIed \ Vice President, Associate General Counsel and Secretary 0 DF: tg Enclosures