Tobacco Documents Online

Proposed resolution is a historic event U.S. tobacco companies, state attorneys general, public health organizations and plaintiff's lawyers reached an agreement on June 20, 1997, that sets forth a carefully negotiated framework on how the tobacco industry will operate in the future. The proposed resolution is a historic event for the tobacco industry and the country. R.J. Reynolds Tobacco and the other manufacturers see this settlement as a means to put behind them many of the issues that have threatened the future of the tobacco industry. "This agreement represents our best efforts to provide a peaceful and secure future for the employees and other stakeholders of Reynolds Tobacco," said Steven F. Goldstone, chairman and CEO of RJR Nabisco, the day the agreement was announced. "While it radically changes the way we do business, I have every confidence that the tobacco company will be able to compete vigor- ously, attack its market-share challenges, and make critically important financial contributions to enable RJRN to continue to add value to shareholders." The agreement has been sent to the White House for review and must be enacted by Congress and signed into law by the President before any of the provisions go into effect. However, news of the agreement immediately generated a nationwide reaction on the merits and demerits of a settlement, and is drawing criticism from some anti-smoking groups. At this point, neither the tobacco industry nor the negotiators on the other side of the table are predicting how long it may take for the agreement to wind its way through Congress. "No negotiated agreement among interests as diverse as those represented in these talks could be expected to satisfy everyone," says Andy Schindler, president and CEO of R.J. Reynolds Tobacco. "Certainly, some conces- sions made by our industry represent, at best, a difficult compromise that includes provisions with which we don't necessarily agree. While far from perfect, we believe that in total, the terms of the settlement should prove to be in the best long-term interests of our com- pany, its employees and its shareholders. We're hoping that the White House and Congress will complete their reviews quickly and that legislation will move forward," Schindler says. But until a Final agreement is enacted into law by Congress "it's business as usual for the most part," Schindler says. "At this point, the agreement is nothing more than an outline. "Although, adoption of the agreement will mean change for R.J. Reynolds Tobacco, I believe we will continue to he a successful, thriving compan3: And our (continued on page 8) Paul Crist and Jim Johnson, lawyers from Jones, Day, Reavis & Pogue, visited R.J. Reynolds Tobacco Co. recently to meet employees and answer questions concerning the recent company victory in the Raulerson lawsuit in Jacksonville, Fla. Crist and Johnson were the lead legal counsels who guided RJR to victory in the case. Tobaccoville employees (from left) Wayne Ray, Kirby Smitherman, James Matthews and Joe Inman greet Christ and Johnson. Lawyers guide R JR to victory in Floria(] paul Crist and Jim Johnson, lawyers from ,Jones, Day, Reavis & Pogue, were treated to a heroes welcome May 19 at R.J. Reynolds Tobacco Co. Crist and Johnson were the lead lawyers who guided Reynolds Tobacco to victory in the recent Raulerson lawsuit in Jacksonville, Fla. In introducing the two lawyers to employees during a noontime presentation in the Plaza Auditorium, Chuck Blixt, Reynolds Tobacco's senior vice president and general counsel, said, "In a trial of this magnitude, Reynolds Tobacco is represented by a whole litigation team that includes RJR lawyers such as Dan Donahue, Sharon Johe and Tom McKim, in addition to lawyers from outside firms. One thing I can tell you is that RJR has the best litigation team in the tobacco industry." Dan Donahue, senior vice president and deputy general counsel - litiga- tion for RJRT, said that both Crist and Johnson have been involved with RJR litigation from the early 198fls. "And, we're in very good hands." "Trying this case was a challenge," (continued on page I6) CONTENTS "No Bull" Campaign • Ned Leary • Winston set for comeback • Packaging ............ 4 * Retail .Winston's off to the races • Enthusiasm spans four decades ........ 8 People 10 T156730135

THE BULL STOPS HERE! After a successful one-year test market in the state of Florida, R.J. Reynolds Tobacco Co. will reposition its Winston brand by launching the "No Bull" marketing campaign nationwide. According to Ned Leafy, vice president of the Winston business unit, the No Bull campaign has two distinct elements. "The campaign establishes a strong attitude or personality for Winston in the marketplace, positioning Winston as an authentic, straight-up kind of brand," Leafy says. "And, this attitude is supported by a unique product point-of-difference. As part of this campaign, Winston has removed all additives from its blend in all of its styles, for the true taste of ]00-percent tobacco. "Together, the brand's personality and true tobacco taste give competi- tive adult smokers a reason to buy Winston," Leafy says. "And for Winston's adult franchise smokers, this positioning is not a departure from the roots of the brand -- Winston has always had the image of a straight forward, no-frills cigarette brand." As part of the repositioning, Winston vS_ll be supported by a comprehensive marketing program. The brand's print-advertising cam- paign-- developed in partnership with Long Haymes Cart of Winston- Salem, N.C. -- is directly tied to Winston's no-bull positioning, supporting both the attitude of the brand and its 100-parcent tobacco blend. Each ad consists of a no-bull tagline and a supporting visual that, together, directly communicate the attitude of the brand. The fact that Winston is the only leading brand to eliminate additives from its blend is highlighted in advertising through a side-by-side comparison. {See related story, Page 3.} Winston's packaging has also been changed to reflect the brand's 100- percent tobacco, no-additive blend, which delivers true tobacco taste. "A classic- rejuvenated" is how Leafy describes the new "wraparound" pack, on which the Winston brand name literally wraps around the package. "We retained Winston's red- white-red heritage, while developing an up-to-date pack design that supports the brand's no-bull atti- tude," he says. "And, we are pleased to report that the wraparound pack is Ned Lem3; ~qce president of the Winston business unit, .feels the No Bull campaign will successfully reposition RJB's flagship brand by establishing a strong personality for Winston in the marketplace and offering adull smokers a compelling product point-qf-d~ference ~ a lO0-percent tobacco blend for true tobacco taste. preferred by both our franchise smokers (two- to-one) and competitive smokers (three-to-one} over the pack design we tested in Florida." Winston's authentic attitude and true tobacco taste are also the founda- tion for out-of-home and retail programs that bolster the reposition- ing campaign. (See related stories, Pages 3 and 5.} In addition, the no- bull repositioning will be integrated into the brand's programs at NASCAR]Winston Cup events nationwide. {See related story, Page 7.} According to Leary, the Winston business unit has left no stone unturned in their effort to reposition the brand. "Our motto is 'a relentless pursuit of greatness at breakneck speed,' and every member of the Winston team has adopted this attitude," Lear,] says. "1 have never seen such determination and persis- tence ~ coupled with endless flexibility -- from any team I have worked with since joining RJR. I am very proud to be a part of this group." Leafy notes that the Winston business unit's efforts have been supported by the dedication of a company-wide team of RJR employ- ees, who he credits for helping to take the no-bull idea from the drawing board to the national marketplace. "Undertaking a total repositioning of one of RJR's flagship brands is, to say the least, a daunting task," Leafy says. "The Winston business unit took the lead on this effort and employees throughout the company -- from operations to field sales ~ worked by our sides to ensure its success in Florida. "And now that we are moving forward on a national launch, we will continue to need the support of RJR employees throughout the company," he says. "I encourage everyone to take ownership of this project, and help us revitalize one of this country's greatest brands." • 2 TI56730136

No ifs, ands or bull about it mston's back Thirty years after Winston's introduction into the market- place, 1LJ. Reynolds Tobacco Co.'s flagship brand is currently being relaunched nationally with a no-bull attitude and lO0-percent tobacco product. "It's a new product with a new look, but we haven't walked away from the traditional aspects of the Winston brand," says Joe Michalek, marketing manager - Winston. The brand's original image m no frills, no glizt, all American... no bull -- is incorporated into every aspect of the new "No Bull" campaign, from the blend, to the advertising, to the packaging. "The no-bull attitude and no- additive product are for real people who are true to themselves and who want true tobacco taste in their cigarettes," says Michalek. "And, our marketing campaign is based on that philosophy." "Consumers have become unim- pressed by glamorous advertising campaigns," says Winton Jennette, assistant marketing manager - Winston. "Our marketing team realized it needed to develop executions that speak to the adult smoker in a different manner versus typical tobacco advertising." The result has been a variety of ads that use the traditional Winston color scheme of red-white-red combined with bold, black text. The messages are straightforward and confident. Photos are black and white. One execution reads, "My blues are real. Just like my smokes," and features a man picking the strings of a guitar which rests on his knee. Eyes closed, he appears to feel Eye-catching billboards will communicate Communicating Winston's no-bull attitude and product point-of- difference to adult franchise and competitive smokers is the goal of Winston brand-unit members (from loft] Assistant Marketing Manager Winton Jennette. Marketing Assistant Cressida Lozano and Marketing Manager Joe Miehalek. each note of the blues song he plays. Other ads maintain this same straightforward concept, but throw in a twist of humor. The execution, "Until I find a real man, I'll settle for a real smoke," pictures a woman looking confidently over her shoul- der. The expression on her face lets the reader 1mow that she is a woman who means exactly what she says. "The people in the ads are real, and the messages are relevant to everyday life," Michalek explains. "And smokers can certainly relate to the no-bull attitude." To maintain adult smoker interest and excitement, the brand unit will run multiple advertising executions in the marketplace, constantly changing the ads to refresh the campaign. "We have created a deep pool of ads that stretch across a wide spec- trum of topics and interests," Jennette says. Like the print ads, the brand's billboards work to connect the no- bull attitude with the no-additive product point-of-difference. The ads drive home the product point-of- difference by asking questions such as, "What part of 100 percent don't you understand?" Using the red-white-red background with bold, black text, the messages • • • Winston's no-bull a~'tude and product point-of-difference. 100% tobacco, Ti56730137

(continued from page 31 maintain a confident and direct, no- bull attitude. "The unique billboards use high- impact colors and copy," says Jennette. "The boards are based on messages from the brand, not just pictures of models." Packaging ... a brand's identity l" ncreased awareness of Winston will come not only through the . brand's advertising, but also through its packaging. "The ultimate face of a brand is its packaging," Michalek says. "The packaging is a badge ... a brand's identity." The new Winston packaging can be attributed to a marketing-team effort headed by Dang Shouse, vice presi- dent of marketing for Salem. Before being promoted to his current post, Shouse headed a marketing team charged with developing additional ideas to reposition Winston. This effort ran concurrently with the brand's No Bull test market in Florida. "We wanted to retain the classic nature of Winston, but shake it up and rejuvenate the packaging," Shouse says. "And, that's what we got -- the heritage of Winston is still there." The new packaging style carries the traditional Winston family fonts and red-white-red color scheme, but takes on a contemporary feel with a wraparound pack. The no-bull image comes through in the simple, clean lines of the pack. The product point- of-difference -- true taste, leo- percent tobacco, no additives -- is written directly on the pack. Duffy Design, a subsidiary of Fallen McGelligot advertising agency, worked with the team to create the final result. "Duffy Design not only helped ~s to innovate the pack, but also gave us the opportunity for longevity in the marketplace. The new style is not a trendy, flash in the pan m it is a 25-year solution," Shouse says. Also instrumental in the development of the pack was Debbie Crotts, design manager - RJR pac "l~ging, who worked to ensure that the new design could ba suc- cessfully manufactured by RJR. The new packaging has drawn positive remarks from both adult Joe Michulek (seated, head of table) of the Winston brand unit m~ews the first printed versions of new Winston packaging graphics with (from left) Paul Corcomn - RJR Packaging; ~nk Waggoner- operations; and Wade Shumate. Karen Causey, Bill Smith and Debbie Crotts- all of RJR Packaging. franchise and competitive smokers. Smokers say they like the innovative pack and think that it reflects the traditional aspects of the Winston brand with a contemporary flair. Marketing communicates no-bull attitude Communicating what is new about Winston m it's no-bull attitude, packaging and product -- to individual adult franchise and competitive smokers is the focus of the brand's direct- marketing program. "We need to generate product trial and awareness," says Cressida Lozano, marketing assistant - Winston. "D/rect marketing allows the brand to introduce the no-bull attitude to adult franchise and • competitive smokers, and inform them about our new, 100-percent tobacco blend." The first wave of the direct-market- ing effort included a mailing to more than a million adult franchise smokers that announced Winston's new pack graphics and included coupons for the new Winston product. "It is important to keep the estab- lished Winston smoker informed," Lozano says. "Some of our franchise smokers have been with Winston for more than t~venty years. Making sure these adult smokers hear about brand changes from us first, reinforces the fact that Winston values their business." The second wave of the program will target adult smokers of competi- tive brands. "The competitive program is designed to generate trial of our no- additive product and seed the posi- tioning by showcasing our new advert/sing and stick-to-stick graphics that compare competitive cigarettes to the new Winston," Lozano says. From advertising to packaging to direct marketing, rejuvenating an American classic is the goal of the No Bull campaign -- no ifs, ands or bull about it. • Winston's new packaging incorporates the tra&'tional aspecL~ of the brand by using the red-win'to-red color scheme, while the ~:~aparound pack reflects Winston's no-buff attitude. T156730138

Retail displays creatively reflect bold attitude " n a cluttered marketplace, R.J. Reynolds Tobacco Co. is worldng . to ensure that new Winston stands out in the crowd. Research studies indicate that during the first three months of a product launch or repositioning, the majority of consumers' learning about the brand comes from retail commun/cation. According to Mike Shaw, senior marketing manager for Winston, the brand team takes this fact very seriously. "Prominent retail presence is a critical factor in purchasing deci- sions made by adult smokers," says Shaw, who coordinates Winston's reposition/ng at the retail level. "And, therefore, cutting through the clutter at retail is a top priority if we are going to meet -- and hopefully exceed -- our overall objectives in repositioning Winston for growth." Shaw, who has 20 years experience in RJR's sales department, "knows well the challenges of cutting through retail clutter. "By working together during the Florida test market, field sales and the Winston brand team streamlined and rede- fined key elements in the Winston "No Bull" campaign," he says. "And, during the national launch, we will continue to build on this foundatiou to effectively position and raise adult smokers' awareness of new Winston at retail." According to Shaw, the brand's The Winston no-bull message will be boldly communicated at retail through- out the United States. The point-of-purchase displays cut through market- place clutter to communicate the brand's attitude and product-point-of- difference and try the new lO0-percent tobacco blend of Winston. Mike Shm~; senior marketing manager for Winston, and Lucinda Sheer, assistant market- ing manager for Winston, hold examples of point-of-purchase materials, which were developed with the help of RJR's sales force with the goal of gaining trial and repurchase of Winston among competitive-adult smokers. primary retail objectives are: • Introduce the No Bull campaign to consumers at retail outlets nation- wide, based on learning garnered in Winston no-bull's year-long test market in Florida. • Make consumers aware that Win- ston is the only leading brand that offers a leO-percent tobacco blend that delivers true tobacco taste. New Winston advertising speaks to adult smokers in a straightforward manner. ~th a t~dst of humor. • Gain trial and repurchase of Winston among competitive-adult smokers. To meet these objectives, field sales will play a major role in the reposi- tioning of Winston. "From the outset of the test market, the Winston brand team took the time to educate us on what the repositioning was all about and to brief us on the goals for Winston," says Dave Turner, Florida regional sales manager. "Because we got a good foundation and were brought in early, each o~ us in field sales took ownership of the project. We will continue to work closely with the brand team during the national launch. "We know well that counter space is always a premium at retail, " Turner says. "As we worked the streets in Florida, we saw what worked, and what did not work. And when we told the brand team, they listened." Jim Best, area vice president - southern sales area, says, "There's a simple reason for the success Win- ston saw in the Florida test market -- teamwork between the Winston brand group and the Florida field sales team. "Every, one took th/s project to ~ ~ • T156730139

(continued.from page '3) heart, believed in it and worked to make it happen," adds Best, who notes that the No Bull campaign is one of the most outstanding reposition/ngs he has seen on an RJR brand in his 29 years with the com- pany. "We feel the new Winston is the right product, with the right message, at the right time." Lucinda Sheer, assistant marketing manager for Winston, works with Shaw on Winston's retail programs. "Guided by the recommendations of the field sales team in Florida, the No Bull campaign is supported with creative counter displays that work," she says. "Each of the no-bull counter-support materials is designed to be small, but eye-catching. Many are in unusual shapes, such as a cigarette rod or a cigarette lighter and the bold red-white-red color scheme is the unifying theme on all point-of- sale materials. The bottom line is that we want our retail displays to be as bold as the no-bull attitude." Shaw believes that the enormous amount of time, thought and care that went into the no-bull retail materials will pay off with the national roll-out of the new campaign. "Our point-of- sale materials are designed to get the attention of adult smokers in the retail setting," Shaw says. "For some, it may be the new packaging or the direct, TI e ra¢ing, So are the smokes. "My smokes are real. So is the trouble I'm in." The no-bull executions move away from typical tobacco advertising by capturing people in everyday lifestyles and situations, such as the man (above) who is apologizing for a ~nistake by offering his companion a bouquet of flowers. The heritage of Winston appears in the red-white-red color scheme of the brand's new advertising, while the no-bull attitude is reflected in the brand's straightfoinvard, confident message. no-bull attitude, while for others, it may the brand's emphasis on box styles. "And, once we have adult smokers' attention, we offer the brand's lo0- percent tobacco blend for true tobacco taste as a compelling reason for them to give Winston a try -- or a re-try," he says. Advertisements, such as the one above, is just one way the No Bull campaign leverages the brand~ involvement with NASCAR/Winston Cup. Best agrees with Shaw and adds, "Winston's lO0-percent-tobacco product point-of-difference gives the sales force a real opportunity to do personal-brand conversions with consumers. We were able to tell consumers that this really is a new Winston with a new taste and a new attitude." According to Turner, RJR's retail and sales representatives believe in the new Winston product. He reports that they covered 7,000 stores in his region to convert to the new Winston product and positioning almost overn/ght. "And since then, we've never looked back," Turner adds. "After years of steady decline in Winston's business in Florida, market share has increased virtually every month since we began selling the new Winston last To help drive the product point-of- difference home to adult smokers, one of the available items at point-of- purchase will he free match books, which will be housed in a red-white- red counter caddie. The match books vAli carry the no-bull message and a side-by-s/de cigarette comparison betwean Winston and other brands. "We're excited about new ~Vmston," says Best. "I la~ow we have a winner." • TI56730140

With repositioning, Winston is off to the rac.e ! I" n a blaze of red-white-red, the Winston "No Bull" campaign is • roaring down the hack at three types of motor sports events: NASCAR Winston Cup, National Hot Rod Association (NHRA)Winston Drag and the NASCAR Winston Racing Series. "For the first time, RJR's long- standing heritage with Winston Motor Sports has played a key role in repositioning a brand," says Mike Fagan, senior marketing manager for Winston. "Winston's no-bull reposi- tioning takes advantage of the heritage of both RJR's flagship brand and the jewal that the company's involvemant with motor sports has become over the past 27 years. "Our common objective at these events is to celebrate our No Bull positioning and to bring it to life for adult smokers," Fagan says. "And, we've been able to do that because of the broad-based teamwork on this project." Huge Attendance Statistics show motor-sports events are not only the largest spectator sport in America, but also the fastest growing spectator sport in the United States, says Greg Littell, director - operations in sports marketing. "Motor sports have been called the hottest sport in town. And, no won- der. It's a growing sport. We've recently added tracks to the circuit, and new cities are requesting NASCAR Winston Cup races every month. "These events are attended by millions of Americans," Littell continues. "NASCAR Winston Cup alone draws about 6 million fans and the NASCAR Winston Racing Series is attended by 8 million people over the course of the season. John Powell, director - event promotion in sports marketing, says, "The No Bull repositioning is what racing is all about -- and ahvays has been. Racing fans reflect that attitude m they are people who believe in hard work and honesty. They have a genuine thirst for winning. Fagan adds, "From our research, we also know that the vast majority of people who attend these races are adults 21 years of age or older, and many are smokers. So, making the most of these events is a sound marketing practice." Lindsay Snyder, manager of con- sumer event marketing in sports marketing, says, "At the tracks, we talk to many adult competitive-brand smokers and Winston f~anchise smokers. We provide race-related Winston's new No Bull positioning takes advantage of RIR's long heritage B~th Winston Motor Sports. The Rill team coordinating Winston's presence at motor sports events include: (from left) John Powel] and Grog Littell qf sports marketing, and Louise Turner, Todd Holbrook. and Mike Fagan of Winston brand marketing. entertainment prior to the event that reinforces the brand's no-bull message. The engaging track exh.ibits and a~actions include: the Winston No Bull Track House, a tractor-trailer souvenir store offering NASCAR W'mston Cup memorabilia; a Winston Cup race-car simulator ride; a big- screen video exhibit called "Thunder Theater;" a NASCAR Winston Cup Show Car and a movable scoreboard in Winston's signature colors of red- white-red that carries up-to-the-minute race information and personalized messages for fans. Race programs also contain specially designed racing theme advertisements. Bringing the Program Together "As you can imagine, a lot of people are involved in bringing this program together," Fagan says. "The team includes: sports marketing and marketing staff members, the NASCAR staff, race-track owners and promoters, and RJR suppliers." Todd Holbrook, Winston marketing assistant, says that in addition to events at the tracks, the brand hosts events at major metropolitan cities near the tracks on race weekends. "Although NASCAPJWinston Cup racing is very popular, there are some adult smokers who have never been exposed to the sport and some who have heard about it, but have never been to a race," Holbreok says. "We want to grow with Winston Cup. And by introducing adult smokers to racing through off-track events, we are helping to develop the sport, as well as communicating the brand's no-bull attitude." Another program that extends the reach of NASCAR]Winston Motor Sports is a quarterly publication called Winston Straight Talk, a follow-up piece to adult smokers who sign up for mailings from the Winston brand at the races. "This publication allows us to provide high-quality information about motor sports, drivers and tracks in addition to our advertising and brand-promotion programs," Fagan explains. Winston Straight Talk is sent to both Winston's adult franchise smokers, as well as adult, competitive- brand smokers interested in racing. With the no-bull repositioning and teamwork, ~rmston is off to the races. • T!56730141

Enthusiasm Bob Van Sickle was working in field sales when Winston was originally launched in 1953. Van Sickle is still going strong during the 1997 repositioning of Winston. He will complete 44 years of service with R.J. Reynolds Tobacco Co. in July. for brand spans four decades "Winston has ahvays b~en a winner. The R]R field sales force made Winston a panner once, and with this no-bull repositioning, we can do it again," says Bob Van Sickle, division sales manager in RJR's North Philadelphia region. Van Sickle knows the Winston business well. He ought to -- he was working in field sales when Winston was originally launched in 1953 and Van Sickle is still going strong during the 1997 repositioning of Winston. At the age of 70, Van Sickle will complete 44 years of full-time service with R.J. Reynolds Tobacco Co. in July. He worked for the company for two years as a part-time employee in college before being hired full-time. "The no-bull repositioning will cause adult smokers to stop and look," Van Sickle says. "I believe, the new pack design is the best thing we've done on Winston in many years. Because of the attitude of the "No Bull" campaign and the no- additive blend, I believe that people who have not tried Winston in a long time will do so again to find out what's different about this cigarette. And, promoted by our fine sales people, I believe Winston will soar again. I've no doubt." Van Sickle started his RJR career in Emporia, Kan., in July 1953. After a short, week-long training program, his manager cut him loose with a list of 16 sales clients to call on. At the end of his first day, Van Sickle reported back to his manager. At every call, he sold a five-carton display unit of Cavalier, which pleasantly surprised his boss. "I thought that was iust normal, after all that's what I was hired to do. My boss looked at my sales records and said, 'Well, one thing's for sure -- you can sell So, I'm going to cut you loose and give you a nine-county region all to yourself. "I remember he iust rattled off the list of the counties Q didn't even give me a map. But those early years helped me gain confidence and an ability to make decisions on my own, which is critical in field sales. "Over the years, i've tried to instill in the people I've worked with one simple idea. When you're faced with a decision, say to yourself, 'What would I do if I were chairman of the board?' Then, almost 99 percent of the time, I find people make the right decision. No matter how big or small you feel the decision is, if you ask yourself that question, then your actions will have a positive impact on the company." Dave Wilmesher, area vice presi- dent- north east sales area, says, "Bob Van Sickle is a pleasure to work with -- he's always upli~ng and positive. He consistently demon- strates leadership within field sales. He's very involved with his staff, and they look to him as a role model." Wilmesher adds that Van Sickle's enthusiasm about Winston's no-bull repositioning is echoed throughout field sales. "Often, in field sales, we're the ones who are a bit skeptical about changes to a brand or new brand introductions," Wilmesher says. "But with the No Bull cam- paign, we're 100-percent behind it. Everyone in field sales feels this is the right thing to do for Winston, and we're all excited about the national fallout. We can't wait. This time we have not only a great campaign, but a real product point-of-difference with the lO0-percent tobacco blend. We'll make it happen." • Proposed resolution (continued from page I) fundamental objective will remain unchanged -- to ensure a strong~ • prosperous future for Reynolds Tobacco," Scklndler adds. "The way we do this is by focusing our attention on our marketing and sales programs, producing the best. products available, devei~ping innovative brands that offer adult smokers clear product Jmprove~ • ments, controlling our costs at every level of operations, and doing our jobs to the best, of our abilities. "We will keep you posted on any agreement developments~ In the meantime, keep up the good work." • If you are interested in seeing the text of the agreement, it is avail- able on the R]R Intranet under Employee Communications, Legal Updates. • T156730~42

The old lady needs a new dress In April, the technical support department of R.J. Reynolds Tobacco Co. began a three- phase renovation to repair and prevent water damage to the Reynolds Building. According to Allen Brown, manager of facilities - technical support and project manager of the renovation, "the 68-year-old building is like an old lady that needs a new dress." "As the Reynolds Building has aged, methods to prevent water damage have begun to fail. In the past, we have caulked window frames and cracked brick joints to prevent water from entering the building," Brown says. "However, the water has found its way around the seals, allowing it to seep through the windows, brick and limestone." Brown says that the damage to the structure's steel supports, windows and interior walls have been caused by rain water, as well as the accumulation of moisture behind the building's facade. "When the Reynolds Building was completed in 1929, air-conditioning systems were not used," Brown says. "Once air conditioning was installed in 1956, cool air against the buflding's warm wall surface produced conden- sation. Rain water and conden- sation have penetrated portions of the structure -- causing rust and deterioration." In response, technical support has started the first of the three- phase project to renovate the building. Phase One of the renovation will involve the brick areas between the second through ninth floors on the north side of the Reynolds Building. Currently, crews are With the help of contract workers, the technical support department of R.J. Reynolds Tobacco is currently conducting a three-phase renovation process to prevent and repair water damage to the Reynolds Building. Standing at the construc- tion site are (left] Manager of Facilities - Techni- cal Support and Project Manager Alien Brown and Grog Hatfield of Carolina Restoration & Waterproofing, Inc. devices that support the brick-- located in the brick areas between the w/ndows. Engineers estimate that this phase of the project will be completed by September 1997. Carolina Restoration & Waterproofing Inc., based in Raleigh, has been contracted to construct Phase One of the renovation. Sntton-Kennerly & Associates of Greens- boro has engineered the plans and specifications for Phases One and Two of the renovation, and will likely engineer Phase Three. Phase Two, which begins in 1998, involves repairing the deteriorated-limestone joints and structural supports, and replacing windows on floors one through nine on the limestone sides of the Reynolds Building. Though evaluations of the problem and design are still in progress, Brown feels the limestone will require structural-support repairs and waterproofing similar to the brick portions of the building. "Phase Two is highly special- ized. Due to the size and age of the limestone facade, we need to hire contractors with exten- sive experience in renovation and safety procedures," Brown says. "Safety is a top priority, and maintaining the original look of the Reynolds Building is important." Bids from the contractors are due this fall. The third -- and final -- phase of the project will begin in 1999. This part of the renovation will include repair- ing the limestone supports, and waterproofing and replacing windows in the Reynolds Tower, floors 10 through 17. Windows on floors 18 through 20 were replaced in 1987, but will be re-evaluated to ensure removing bricks to make structural repairs, as well as masking or sealing cracks in the brick joints with mortar. Alleviating the problem, however, is not simply a matter of creating a stronger seal around the brick, windows and limestone. Flashings and weep holes -- devices which drain water that enters the building walls -- will be built into the brick facade to ensure the water is removed if it breaks through the seal. Rusted-windows damaged by years of condensation will also be repaired. Starting in August, crews will begin replacing the windows by covering the existing frames. "The original window frames are imbedded in the building and would be both tough and expensive to remove," Brov~n says. A total of 144 windows will he replaced in this phase. The window areas will then be waterproofed and equipped with flashings. Crews also repair deteriorated lIntels -- L-shaped structural they are properly waterproofed. During the renovation, construction workers may require access to some offices to install the new win- dows. Employees affected will be notified about one week in advance. "Unfortunately, a renovation project of this size creates some inconveniences," Brown says. "But, we are trying to ensure that employees will be disturbed as little as possible." Temporary business offices, equipped with a phone and computer, will be available to employees who may be affected by the renovation. Five office spaces will be provided on the third floor of the Reynolds Building. To arrange time to use the office space, call Jim Mackin at 741-6564 or Brenda Gordon at 741-1618. "Once the renovations are completed," Brown says, "The Reynolds Building will look andbe as good as new -- just as though she had put on a brand-new dress." • T!56730143

EL I~c~ard~n - 35 ~ FaBle. 30 E Gordy - 30 J. ltairston - 30 R. Hoxper - 30 B. Live~g~d. 30 SERVICE AWARDS 35 YEARS - MAY Ronald L. Richardson Brook Cove packing 30 YEARS - MAY Billy R. Binkley Tobaccovil}e making and packing James T. Bowman Shorefair coaches~clerical Wendell S. Brown Cigarette manufacturing Charles R. Coley Whitaker Park making and packing James T. DeHart Tobaecoville making and packing Benjamin $. Dunovant Whitaker Park making and packing Robert J. Fix Sr. Product development and assessment John G. Fogle Product quality assessment Willie J. Gamble Cylinder make-ready Bobby W. Gammons Whitaker Park making and packing Franklin M. Gordy Shorefair primary Larry L. Gregory Manufacturing making and packing director general Donald C. Grubbs Tobaccoville facilities~maintenance Jerry L. Hairston Tobaccoville mak/ng and pacldng James H. Hardy Compensation and employee benefits Ronald E. Harper Man ufacturing production planning Wayne C. Holland TobaccovilIe material control/export G.L. Hutcherson III Whitaker Park making and packing Birdie W. Llpscomb Whitaker Park primary Clifford Little Whitaker Park primary Bobby R. Llvengood Tobaccoville making and packing Lester E. Mason Sr. Tobaccoville making and packing J.C. Moses Sales J.B. Nlten Tobaccoville making and packing Ronnie C. Prater Whitaker Park process services Wade H. Pruitt Whitaker Park making and packing Jerry W. Redding Brands R&D R.D. Roberson Sales T.G. Rufledge Sales Ronald E. Sells Brands R&D M.E. Sturm Sales Carl E. Tatum Tobaccoville making an d packing Harold C. Threatt Jr. R&D planning~administration Roy T. Tucker Tobaccoville making and packing Pascal M. Wilkinson Jr. Product quality assessment Luther N. Williams Tobaccovi}le making and packing Michael E. Yokley Tobaccoville making maintenance 25 YEARS - MAY C.D. Adams Sales Donald R. Bryant Product quality assessment V. Gayle Corum Sales Jerry J. Culler No. 604 extruders Donald W. Hobson No. 604 laminators M.R. Holliday Sales William T. Hoots No. 200 sheet production Mark $. Kimel No. 604 extruders E.J. Klein Jr. Sales Bobby R. Laird Mechanical perforating Stanley R. Lineberry No. 200-16foi} production Graver M. Myers Steven G. Stoltz Film press Harry J. Transou Pack opening Henry Valderrama Soles 20 YEARS - MAY Joey L. Abbott Tobaccoville maldng and packing James L. Aldridge Jr. Central shop Bobby D. Allen Tobaccm411e making and packing 10 T156730144