Tobacco Documents Online

The following are the minutes of a meeting of the Board of Directors of Philip Morris Companies Inc. held at the Company's headquarters at 120 Park Avenue, New York, New York, at 9:30 a.m. on October 26, 1994. The following were present: Elizabeth E. Bailey Geoffrey C. Bible Murray H. Bring Harold Brown William H. Donaldson Paul W. Douglas Jane Evans - Robert E. R. Huntley Hamish Maxwell Rupert Murdoch William Murray John D. Nichols Richard D. Parsons Roger S. Penske John S. Reed Hans G. Storr Joseph F. Cullman 3rd (Director Emeritus) Mr. William Murray, Chairman of the Board of Directors, presided, and Mrs. Dede Thompson Bartlett, Secretary of the Company, recorded. Mr. Murray noted that the first order of business was the review of the minutes of the meeting of the Board of Directors held on September 28, 1994. Upon motion duly made and seconded, the following resolution was adopted: RESOLVED, That the minutes of the meeting of the Board of Directors held on September 28, 1994 be, and the same hereby are, adopted as the minutes of the meeting. Mr. Reed, Chairman of the Compensation Committee, reported that the Committee had met prior to the Board of Directors meeting and had heard a presentation from Mr. Murray regarding succession planning. Mr. Reed said that the Committee was comfortable with the succession planning process and noted that the Committee will meet again on this before making a formal presentation at the January 25, 1995 Board meeting. Mr. Reed said that there will be an Executive Session to discuss succession

planning at the regularly scheduled meeting of the Board on November 23, 1994. Dr. Brown, Chairman of the Nominating Committee, reported that at its meeting on October 25th, the Committee had decided to step up its director search activities in view of the planned retirements of several directors over the next few years. He said that the Committee intends to recommend a candidate to the directors at the January 25, 1995 Board meeting. He noted that the Committee had reviewed the qualifications of nine potential candidates of Hispanic origin and had asked Management to get detailed information on six. He also reported that the Committee will be looking for potential director/candidates from among the members of the outgoing cabinet of President Carlos Salinas of Mexico. Dr. Brown added that the Committee had reviewed the qualifications of one write-in candidate and had declined to recommend the candidate to the full Board. Dr. Brown concluded his report by noting that the Committee had decided to change its name and to expand its charter to reflect the Company's activities in the area of corporate governance. Henceforth, the Committee will be known as the Nominating and Corporate Governance Committee, and its responsibilities will include advising the Board on all matters concerning corporate governance, assessing the performance of the Board and making recommendations to the Board on such matters as the retirement policies for non-employee directors, the composition, function and duties of the committees of the Board, general Board practices and the Company's relations with its various stakeholders. Mr. Storr discussed the Company's third quarter earnings and reviewed the outlook for the fourth quarter as well as the financial analysts' year-end projections. Mr. Bible presented an overview of the Company's tobacco, food and beer operations in the United States and overseas. He reported that all these businesses are currently on plan and will achieve their 1994 targets. Mr. Bring reviewed recent smoking and health and other litigation. He noted that the window for receiving shareholder proposals has opened, and that the Company has -2-

received two shareholder proposals for action at the 1995 Annual Meeting. He said that he would present a full report on all shareholder proposals at the November 23, 1994 Board Meeting. Mr. Murray advised the directors that the Council of Institutional Investors had sent a letter complaining about the meeting the Company hosted on September 21, 1994 for investors and that Management had retained Mr. Dale Hanson, the former president of CaIPERS, to offer advice in developing an on-going strategy to deal with certain public pension funds. He said that Management is currently cementing good relationships with a number of public pension funds, but that there may be problems in dealing with institutions having a political agenda. Mr. Murray commented on the draft Philip Morris Corporate Governance Principles that were discussed at the Board of Directors Meeting held on September 28, 1994, and pointed out that they had been modified in order to make them more general in nature. He advised the Board that limited distribution of the document would not begin for another three weeks and invited the directors to call him if they had any further thoughts. Mr. Murray reported on the status of two asset sales, All American Gourmet and Kraft Food Service. With respect to Kraft Food Service, he reported that Kraft General Foods had entered negotiations with another potential purchaser, International Multifoods Corporation, and that if definitive agreements were to be reached, the purchase price could possibly exceed book value. It was the consensus of the Board that the transaction would be appropriate. Following a brief recess, Mr. John N. MacDonough, Chairman and Chief Executive Officer of the Miller Brewing Company, introduced members of his management team and described Miller's strategies for future growth. There being no further business to come before the m D 9 3 0 \