Tobacco Documents Online

~U, : M i f ~r5 Mt-IS ;-y,~,it/Z.~._., STATE OF WISCONSIN INVESTMENT BOARD ' MAILING ADDRESS: 121 EAST WILSON ST. P.O. BOX 7842 MADISON, WI 53702 MADISON. WI 53707 (608) 266=2381 May 20, 1991 Michael A. Miles Chairman and CEO Philip Morris Companies 120 Park Avenue New York, NY 10017 Dear Mr. Miles: RECEIVED i191 ';;+` M tCHAEl. A. +v; f hES iu; MURRAY H. BRING The State of Wisconsin Investment Board (SWIB) owns 757,800 shares of stock in Philip Morris Companies. SWIB is the independent investment manager for the Wisconsin Retirement System. As the fiduciary for these funds, SWIB has responsibilities not only for overall investment policy and investment returns, but also as a shareholder. We have purchased shares in your company because we believe that Philip Morris will generate superior long-run results. The Wisconsin Investment Board invests with the expectation that a company will maximize long-run performance. SWIB believes that a company that is unresponsive to the public's concerns will in the long-run suffer in its economic performance. For this reason, SWIB takes an interest not only in your immediate financial performance, but also in the firm's long run performance as affected by both economic and social forces. The frame of reference that we use in evaluating such issues is two-fold: First, what is the viewpoint of our constituents on issues that affect corporations and SWIB's investment returns? Second, is there a long run impact from an issue that is underemphasized in a corporation because of the responsibility felt for short-term profits. All this bears directly on the issues surrounding the production and distribution of tobacco. In SWIB's opinion, the evidence on tobacco consumption is reasonably clear -- long-run injurious effects result from the consumption of tobacco. This opinion is shared by the U.S. Surgeon General, the American Cancer Society, the American Lung Association, the American Medical Association, the World Health Organization, and the Federal Center

for Disease Control. We recognize that this opinion is challenged by the tobacco industry generally which argues that statistical findings do not provide proof that smoking alone causes illness and disease. SWIB's policy toward tobacco manufacture and distribution is premised on allowing individuals to decide for themselves the merits of the health risk arguments. It also recognizes, however, that the ability of an individual to evaluate these sophisticated arguments, varies widely with age, education and background. Furthermore, most people in Third World or Eastern Bloc countries may be unaware of the arguments entirely. Taking all this into account, SWIB recommends that companies we invest in make every possible effort to (a) cease all advertising and promotion of tobacco products which might sway individuals unable to decide carefully for themselves; (b) limit distribution to those persons who are clearly able to evaluate the conflicting information and choose for themselves whether or not to consume tobacco products. This would suggest not making tobacco available to minors and not undertaking distribution in foreign countries where full information on health risks is not available. In keeping with this, SWIB will vote in favor of shareholder resolution that request Philip Morris to report on the impact that advertising has on minors. At a minimum, we expect strict adherence to the industry's Cigarette Advertising Code. Indeed, SWIB would hope that you would assume a leadership effort in this program. We appreciate your cooperation on this very important issue. SWIB continues to support free choice for those who are able to make an informed decision. Consistent with this position, however, we request that you make every effort to insure that the unknowledgeable are not drawn unwittingly into tobacco consumption which may injure their long-term health. Sincerely, I Cncu, Patricia Lipton Executive Director f:luscr~scwardc\scf\doclcr\tab2.ltr t ~ O .p Cp Q1 C..7 H ~ r.. l