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PH I LI P MORRI S U S.A. Corporate Affairs 120 Park Avenue New York, New York 10017 (212) 880-5000 FAx (212) 907-5361 FOR RELEASE: Thursday, Feb. 21 NEWS RELEASE Contact: Sheila Banks-McKenzie Philip Morris U.S.A. (212) 878-2812 PHILIP MORRIS U.S.A. FILES LAWSUIT TO STOP TRADEMARK VIOLATION BY VIDEO GAME COMPANY Monetary Damages and Immediate Recall of All Games Sought NEW YORK, Feb. 21 -- Philip Morris U.S.A. today announced it has filed a trademark infringement lawsuit seeking monetary damages and immediate remedial actions against Sega Enterprises because of its continued unauthorized use of the Marlboro cigarette brand logo in its children's video arcade games. Damages could run into millions of dollars. The suit, which was filed in United States District Court for the Southern District of New York, claims that Sega Enterprises of San Jose, Calif., failed to comply with a March 20, 1990, agreement to have the Marlboro trademark removed from its "Super Monaco GP" video game. "Super Monaco GP" is a video racing game that is widely used by children. Damages are expected to be substantial, possibly running into millions of dollars. Philip Morris U.S.A. is seeking an order directing Sega to recall from the market and modify all "Super Monaco GP" games with unauthorized Marlboro trademarks. It is also asking for Sega's officers "to deliver up to Philip Morris for destruction all labels, signs, prints, packages, wrappers, receptacles and advertisements in their possession bearing any Marlboro indicia." -more- MARLBORO BENSON & HEDGES MERIT VIRGINIA SLIMS PARLIAMENT LIGHTS CAMBRIDGE ALPINE PLAYERS SARATOGA

-2- "The failure of Sega Enterprises to comply with the letter and spirit of the agreement is completely unsatisfactory," said Steven C. Parrish, vice president, general counsel, Philip Morris U.S.A. "We are still finding 'Super Monaco GP' games with Marlboro logos in arcades. And this must stop." According to Mr. Parrish, Philip Morris U.S.A. notified Sega in July 1990 about specific games that remain in violation of the agreement. In September, Philip Morris also requested Sega to confirm that these games have either been recalled or modified to eliminate the logo. "To date, no confirmation has been received," he said. Follows 'Get Tough' Ads This suit follows a "get tough" advertising campaign Philip Morris U.S.A. launched eight months ago warning manufacturers against the use of its trademarks on children's products, added John R. Nelsrin. vice president, corporate affairs, Philip Morris U.S.A. In the ads, the company tells manufacturers that they can expect legal action if they do. "Our ads go so far as to tell violators that we'll see them in court, and we mean it," Mr. Nelson said. "The fact is, Philip Morris does not want children to smoke and only markets its pzz krl~;Ab cigarettes to adult smokers." ~ ~ -more- © CJt ~,2

-3- "That's why we developed this campaign," he continued, "and why we have and will continue to aggressively pursue legal action against all trademark infringements -- particularly those where children's products are concerned." Many Companies Com ly Since the advertising campaign first started appearing in various toy, candy, apparel and legal trade media, several manufacturers have agreed to voluntarily remove unlicensed logos from their products. For example, two other California-based video game manufacturers, the Atari Games Corporation of Milpitas and Namco-America Inc. of Santa Clara, have taken steps to remove a facsimile of a Marlboro logo that appeared in a game that the companies jointly manufacture -- the "Final Lap" video arcade game. In doing so, the companies ran advertisements alerting arcade owners of the infringement and notifying them that free conversion kits will be provided that remove the logo from the game. Another company, the Philadelphia Chewing Gum Corporation of Havertown, Pa., has agreed to stop production of its bubble gum cigarettes carrying a facsimile of the Marlboro trademark and destroy the printing plates used to produce the packaging. In ~ O ~ addition, the company agreed to send Philip Morris U.S.A. more ~ ~ than 250,000 of the bubble gum cigarette packages for O ~ destruction. CJ2 -more-

2 -4- History of Actions According to Mr. Nelson, Philip Morris U.S.A. has a long history pursuing logo infringement cases. "We're very serious about trademark infringements," he said. "In fact, during the past 11 years alone, Philip Morris has taken action against 1,200 manufacturers and individuals who have attempted to illegally use our cigarette logos." "About 15 percent of these cases involved items for children," he continued, "and, in at least two cases, individuals who refused to comply were sent to jail." Mr. Nelson pointed out that by filing suit against Sega Enterprises, Philip Morris U.S.A. hopes that other companies infringing its trademarks will get the message and voluntarily remove them from their products -- before legal action is deemed necessary. "We will sue any manufacturer or distributor that continues to use our cigarette brand logos on children's products," Mr. Nelson warned. Philip Morris U.S.A., an operating company of Philip Morris Companies Inc., produces a number of leading cigarette brands: Marlboro, the largest selling cigarette in the world; Benson & Hedges, the largest selling free-standing 100 mm brand in the U.S.; and Virginia Slims, the leading women's cigarette brand. Other brands include Parliament Lights, Cambridge, Bucks, Bristol and Alpine. ###