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CORPORATE AFFAIRS EUROPE WORKING OBJECTIVES I. GOVERNMENT AFFAIRS A. TAXES - EUROPEAN COAI!'NNITY , . . . . 1 B. TAXES - NATIONS . . , , , , . . . 2 C. CONTRABAND . . . . . . . . . 4 D. MONOPOLIES/COMPETITION . . . . . . . 5 E. ADVERTISING/MARKETING . . . . . , . . 6 F. ETS . . . . . . . . . . , . . 8 G. ENVtRONMENTIPACKAG_ ING . . .. . . . .. 10 H. FOOD REGULATION . . . , . . .11 I. AGRICULTURE/TRADE . . , . , . . . .14 J. LABOR POLICY . . . , . . , . . .16 II. CORPORATE COMMUNICATIONS A. CORPORATE IMAGE . . . . . , . , . , 17 B. SOCIAL ACCEp'I'ABILITY . . , . . , . , , , . . . . . . , 19 C. PHILANTHROPY . . . . , , . , , . . . , . . . . . . 21 D. INTERNAL COMMUNICATIONS . . . . . . . . . . . . . . . . 22 E. ACQUISITIONS, DIVESTITLTRES, PLANT CLOSINGS . . . . . . .. . .. . . 24 ~ III. ORGANIZATIONAL ISSUES A. LINKS TO BUSINESS UNITS . . . . . . , . 25 B. EC ENLARGEMENT . . . . . , . . . . , . . . .. 25 C. OVERALL LEVERAGE . . . . . . . . . . , . . . . . . . . 26 4Sz46tszoz W

CORPORATE AFFAIRS EUROPE WORKING OBJECTIVES m N ISs UE OB.1E=MrASUREMENT TI1VtETABLE 1. GOVERNMENT AFFAIRS a A, TAXES - EUROPEAN COMMUNITY 0 N LEVEL - -- 1. ECOFIN' N N ~ ~ 0 ~ ~ ENACTbtEN'f - IMPLEA4F.Ni'A'I`ION/REV18W/SiJNSET Delay, defeat, drop rates directive or adopt EP formula Shorten review period to 1 year Obtain favorable review methodology Propose realistic new harmonization scheme 4th Quarter 92 4th Quarter 92 2nd Quarter 93 4th Quarter 93 b ~ 2. CO1VI1MMITY WIDE CIGARETTE. _ Assure favorable transposition into national law Prepare contingency strategy Ongoing 93 1st Quarter 93 EXCISE TAX 3. "HEALTH" TAXES DIRECTED AT CIGARETTES Defeat Prepare contingency strategy Defeat Ongoing Lst Quarfer 93 Ongoing ~-~ 4. CIRCULATION/STRUCTURAL DIRECTIVES Enact definition of rolls as cigarettes Enad provision maintaining ability to set prices Transpose into national laws without losing any significant feature protecting us 4th Quarter 92 4th Quarter 92 Ongoing 93 dP gSjZ6tSZOz 0 0 w ~ .

CORPORATE AFFAIRS EUROPE WORKING OBJECTIVES r ISSUE OB.TECTIVEIMEASUREA'~ 1~ T~~TABL~ W ~ ~ 0 0 W B. TAXES - NATIONA.L L EVEL ~ N N ~ V OD O 1. ECOFIN - DRIVE[Y I NCREASES ~ - 1TALY Derogation 4th Quarter 92 . If no derogation, cut IFO damage by 50% in a"°e Ongoing 93 ~ - 5PAM implementation process Additional 2 year derogation End 93 7 G!;UGtSzoz ~~

CORPORATE AFFAIRS EUROPE WORKING OBJECTIVES ISSUE X;. I TW1 Q aIl_~ 2. TAX RFSTRUCTUR AI'G GEwaimy Sunset favorable treatment of rolls as of 12131193 End 93 - ITALY 20% specific lst Quarter 93 Cigarettes back inio CPI 4th Quarter 93 - FRANCE 10% specitlc End 93 - SPAIN Additional specific component Ongoing 93 20% specific End 94 - BELGIUM 20% specific End 93 Government agreement to move to 50% specific End 94 over 3 years - GREECE 10% specific Isl Quarter 93 Government agreement to move to 25% specific isf Quarter 93 over 3 years - NETWRLANDS Narrow RYO tax disparity End 93 - ISRAEL Defeat discrimination against international brands Ongoing 93 Develop strateEy/aclion plant to lift price controls lst Quarter 93 O9T4GtSzoz 3 ~4

CORPORATE AFFAIRS EUROPEWORKIlNG OBJECTIVES OB.TECT.iyEJMEASUREMENT TIMETABLE 2. ITALY 3. SPAIN Prevent Italian solution Ongoing Persuade Finance Ministry to pursue remedies aimed at Ongoing wholesale, retail, consumer Coirect Formica law End 93 Strengthen media contingency plan 1st Quarter 93 Obtain TSA support of industry positioa 1st Quarter 93 Prevent Italian solution Ongoing Develop and propose legislative solution to Finance Ministry 2nd quarter 93 4. EVALUATE EC WIDE SOLUTION N Organize task force of legal, CA, planning, operations and End 92 management of affected countries T9z4Gtiszoz Study EC wide solutions and make recommendations 1st Quarter 93 to W. Thoma/G. Bible, e.g.: - EC directive - Model national legislation - Media campaign - Coalition efforts Agree coordinated strategy/plan for all markets 3rd Quarter 93 4 :~

CORPORATE AFFAIRS EUROPE WORKING OBJECTIVES is OB.TECTIVEIMEASUREMENT TIMETABL~ D. MONOPOLIESICOMPETITION 1. CORPORATE AFFAIRS SUPPORT Organize task force with planning and legal to develop 1st Quarler 93 TO RENEGOTIATION OF corporate affairs objectives and strategies at EC and BUSINESS ARRANGEMENTS national levels WITH MONOPOLIES Recommendation to W. ThomalG. Bible 2nd Quarter 93 2. EC COMPETITION POLICY With legal, determine potential impact of Commission action ist Quarter 93 re Perrier and ICI/Dupont on potential PM acquisitions. Develop legal/corporate affairs recommendations for planning and business units 1 z9j4Gtszoz x

CORPORATE AFFAIRS EUROPE WORKING OBJECTIVES m N r ~ ISSUE OBJECIIVE/1VIEASUREMENT TI111ETABLE ~ W E. ADVERTISING/14ZARhETING FREEDOM 1. EC AD BAN DIRECTIVE 2. NATIONAL THREATS Hold blocking minority through British Presidency End 92 Prepare contingency alternative legislation or code for March 93 new Commission/Danish Presidency Reverse vatelposition of one country from ad ban majority June 93 b Win any votes during Danish, Belgian Presidencies Ongoing 93 c~ ~ -FPANcE Pass legislative exception to Lol Evin for motorsports brand December 93 sponsorship Pass legislation to stop anti's financial gains from private December 93 suits to enforce broadcast/ad ban Prevent Royal Decree December 93 Turn EC vote on ad ban December 93 Prevent total ad ban Royal Decree from being signed by 4th Quarter 92 King 0 ;w

CORPORATE AFFAIRS EUROPE WORKING OBJECTIVES ISSUE OB.lECTIVEIMEASURLMENT TIMETABLE ~ _- ~ ~ 0 0 ~ - NwxLaNms Renegotiate industry code wilh minimal loss of marketing tools April 93 N Maintain EC vote againsl ad ban Ongoing N N ~ ~ ~ 0 ~ - GRE~'.eE Agree advertising code June 93 ~ - ITALY Maintain vote on ad ban Safeguard sponsorship/diversification ads Ongoing Ongoing ro ~ ~ - GEaMAN STATES Defeat local restrictions or prevent via voluntary Ongoing - Isx~ agreements or national preemption Prevent reemergence of ad ban legislation through new Ongoing "Rubenslein" proposal l9 t9T4GtsZoz 7 ~ m m ro r a .V

CORPORATE AFFAIRS EUROPE WORKING OBJECTIVES m N ISSUE OB.iECTIVEIMEASUREMENT F. ETS r a ~ ~ 0 0 0 C4 N N TIMETABLE N 1. POTENTIAL EC SMOKDVG Defeat Ongoing ~ RESTRICTIONS DIRECTIYE ~ Develop €allback strategy to incorporate moderate restrictions April 93 °D in EC directive 2. NATIONAL THREATS - ITALY As contingency, develop national law to preempt local March 93 resirictions . GExnAN STAm Defeat/weaken workplace bans Ongoing s Develop contingency legislation to preempt local restrictions May 93 - SPMN Keep smoking restrictions out of government's workplace Ongoing health and safety legislation - GEUMArt Anu.nm ruvn'[RmNs Prevent legislatedlimposed bans Ongoing - DuTCH TRaQVs Overturn short haul ban before it takes effect on 111/94 December 93 8 SK46tszoz b rh :W."

CORPORATE AFFAIRS EUROPE WORKING OBJECTIVES ISS OBJECTIVE ASUREMENT 1MTABLE 3. DEVELOP MODEL SMOKING Develop moderate smoking restrictions legislation February 93 RESTRICTIONS LEGISLATION Initiate preempEive legislative campaign in 1 country June 93 9 99z46bszoz 1w