Tobacco Documents Online

0 I , Final Years of Service vera e Pa 10 20 30 40 $ 250,000 41,800 83,600 125,400 137,900 500,000 85,550 171,100 256,650 281,650 750,000 129,300 258,600 387,900 425,400 1,000,000 173,050 346,100 519,150 569,150 1,250,000 216,800 433,600 650,400 712,900 1,500,000 260,550 521,100 781,650 856,650 1,750,000 304,300 608,600 912,900 1,000,400 2,000,000 348,050 696,100 1,044,150 1,144,150 I •. V At February 1, 1990, Mr. Miles had 7 years of service. Kraft Thrift Plan. Mr. Miles and one other executive officer are eligible to participate in the Kraft Thrift Plan. This Plan permits participants to contribute on a tax-deferred basis from 1% to 16% (subject, in the case of highly compensated employees, including the two executive officers mentioned above, to lower limits imposed by the Tax Reform Act of 1986) of "covered compensation." Employer contributions under the Plan were 75% of each participant's contributions up to 6% of covered compensation for 1989. The vesting schedule for employer contributions provides for vesting at the rate of 25% after two years of service, increasing by 25% per year thereafter until participants are 100% vested after five years of service. Participant contributions are always 100% vested. Distri- bution of participant contributions and vested employer contributions, together with all accruals thereon, normally is made upon termination of employment in the form of a lump sum payment or, if the •articipant elects, an annuity. The Kraft Retirement Plan and the Kraft Thrift Plan have limitations on contributions and benefits complying with the restrictions contained in the Internal Revenue Code. Supplemental payments will be made in certain instances to provide the benefits that would be payable under such plans but for such limitations. SELECTION OF AUDITORS (Proposal 2) The Audit Committee has recommended to the Board that Coopers & Lybrand, which firm has been the independent accountants of the Company since 1933, be continued as auditors for the Company. The stockholders are being asked to approve the Board's decision to retain Coopers & Lybrand for the fiscal year ending December 31, 1990. A representative of Coopers & Lybrand will be present at the 21 2tt`#c3~c~~~~~

meeting. The representative will be given an opportunity to make a statement if he desires to do ~ and will be available to answer questions. , The Board recommends a vote FOR Proposal 2. STOCKHOLDER PROPOSALS (Proposals 3 and 4) I The Company has been advised that two stockholder proposals will be presented at the annual meet- ing. The proposals contain certain assertions that the Board believes are inaccurate, if not false and misleading. Rather than refuting each of these assertions, however, your Board has strongly recom- mended a vote AGAINST each of these two proposals for the broader policy reasons set forth following each proposal. The affirmative vote of a majority of the shares voted is required to adopt each proposal. The names and addresses of the stockholders submitting these proposals and information concerning their share ownership will be furnished by the Company to any person requesting such information. (Proposal 3) WHEREAS, an estimated 38% of high school seniors have smoked in the last month, thus making them "regular smokers" (National Institute for Drug Abuse); . half of these children regularly smoke Marlboros; • of all children alive in the U.S.A. in 1989, 5,000,000 are predicted to be killed prematurely by cigarette smoking, with at least 39% of these deaths attributable to Philip Morris products; . according to NIDA more children are more addicted to cigarettes than to heroin, cocaine, ancj PCP 1; - children have been found not to know that cigarette smoking is addictive or to underestimate health-hazards caused by smoking; . studies show the imagery used with Marlboro advertising appeals to children; . Federal and State legislation is pending restricting tobacco products to minors; . our Company is being sued in the Commonwealth of Massachusetts for illegally selling tobacco products to children; - it is estimated that our Company realizes about $45,000,000 in annual profits from illegal sales of Marlboros to U.S. children; - our Company has aggressively tried to keep children from using our Marlboro lighters; RESOLVED, that a Review Committee composed of no more than twelve members (one half selected by the Board and one half by the U.S. Surgeon General and this resolution's proponents) be in place 22 2048131045

_ by September 1, 1990. This Review Committee shall report to the Board by September 1, 1991 its ' findings regardjng: 0 1'rthe impact promotional practices and sampling has on children's decisions to smoke our Company's brands; 2. a specific evaluation of how promotional techniques such as advertisements and sponsorships of sporting and music events, paid product placements in movies viewed by children, as well as free sampling affect children's purchase of our Company's cigarette products; 3. what policies/practices our Company might implement to insure that minors not be targeted with the above, inducing them to buy our cigarette products; 4. the possibility of our Company considering the adoption of a policy that profits realized by the illegal sale of our cigarette products to minors be transferred to public health organizations (such as state health departments) for anti-smoking campaigns geared to under-age children and enforcement of laws to insure the non-sale of our cigarette products to children. FURTHER RESOLVED, that by January 1, 1992 this Review Committee's recommendations, together with such plans, if any, as management may have to implement those recommendations, be made available to all requesting shareholders. Supporting Statement Our Company doesn't condone illegal sales of its products; yet millions of underage children regularly and illegally smoke our Company's cigarettes. The profit realized is "blood money" which should not . benefit the board, management, or shareholders. A sign of our Company's commitment to stop this illegal activity at its source would be a serious consideration of this proposal. If you agree please vote "yes." The Board recommends a vote AGAINST Proposal 3. The Board believes that this proposal is contrary to the business interests of the Company and urges the stockholders to vote against it. The purpose of the Company's cigarette advertising and promotional activities is to persuade smokers to purchase our brands rather than those marketed by our competitors. These activities are not directed to minors; nor are they intended to induce anyone to smoke. The Company does not believe, as the proposal assumes, that its advertising for Marlboro cigarettes induces minors to smoke. There is no definitive evidence to support that proposition. 20 fS ~~ 1 O A~ 23

1~z The Board believes that the Committee called for by the proposal would serve no useful purpose, and` would tend to usurp areas of business judgment properly reserved to the Board und~ar appiicabl -e corporate law. Moreover, the proposed expenditure of Company profits for anti-smoking campaigns would be a waste of the stockholders' money. Therefore, your Board urges that you vote AGAINST the proposal. (Proposal 4) WHEREAS In the U.S.A. cigarette smoking kills more people than heroin, cocaine, alcohol, AIDS, fires, homicide, suicide, and automobile accidents combined; -Cigarette-smoking is an air pollutant more cancer-causing than many widely-banned toxic chemicals; -Children of smokers more readily suffer bronchitis, pneumonia, and other respiratory problems than non-smokers' children; -In the U.S.A. alone, health care costs attributed to smoking-caused disease has been estimated at $22 billion, with loss of work-years and productivity estimated at $43 billion; -While the tobacco industry has proclaimed concern for the economic fate of small tobacco farmers, their economic interests have been consistently subverted when cheaper imported tobacco could be purchased;` -An estimated 2,500,000 tobacco-related deaths occur world-wide annually, with 250,000 of these attributable to our Company, due to its global market share; -An increasing amount of Third World income pays for cigarettes. In the Philippines, where Marlboro • is the second most popular brand, 12% of family income goes for cigarettes; -The expropriation of tobacco profits by our Company and others in the global tobacco industry contributes to the deficit balance of payments of most developing nations; -63% of the world's tobacco is grown in developing countries. WHO estimates 5% of all trees felled are used in tobacco curing. This contributes to global warming; -The suffering and death-toll rising from tobacco use is expected to reach 4,000,000 people by 2000. -The Director General of WHO called for a 21 st century "free of tobacco-related diseases," while the U.S. Surgeon General proposed the U.S.A. become smoke-free by 2000; -Our Company is diversifying from concentration on tobacco products into financial services and real estate, beverages and food (including its recent purchases of General Foods [$5.7 billion] and Kraft [$12.7 billion]); °` 2C4813104'7 24

THEREFORE BE IT RESOLVED that shareholders request the Board to initiate the process of amend- ing ing Article II of the Company's Articles of Incorporation by adding the italicized words set forth below: , . The purpose for which the Corporation is organized is to transact any lawful business not required to be specifically stated in the Articles of Incorporation, except that, after December 3>, 1999, the Corporation shall not conduct any business in tobacco or tobacco products. BE IT FURTHER RESOLVED that the Board take the necessary steps between now and then to implement this change. Supporting Statement Consistent data that cigarette-smoking causes serious health hazards hasn't been refuted by our Company and the tobacco industry despite their repeated efforts. There is nothing unprecedented about regulating production of hazardous products. Cigarettes, if used as intended, cause addiction, illness, misery, and death. Cigarettes are unique because there is no way to prevent addiction and eliminate smoking risks except to stop cigarette production. It would be criminal for society to fail to protect non-smokers and prevent recruiting a new generation of smokers (American Cancer Society). If you agree and want to make our world healthier for the next generation, please vote in favor of this resolution and make Philip Morris smoke-free by 2000. • The Board recommends a vote AGAINST Proposal 4. The proposal would require the Company to withdraw from its domestic and international cigarette business within 10 years. The cigarette business is the Company's original core business. It has been and remains an important and lawful business. It is a major contributor to the Company's profitability. The Board believes that the proposal is ill-conceived and would be highly detrimental to the Company. Decisions relating to the nature of the Company's businesses, including whether to continue its opera- tions in the tobacco business, must be based on detailed and complex financial, economic, technical, proprietary and legal information. The determination whether to acquire, maintain, or divest a particular business should be made by the Board and management, which have the necessary capability and knowledge to evaluate all of the relevant information and data. The proposal ignores all of these important considerations. Therefore, your Board urges that you vote AGAINST the propo t~I , ~8 133 10 43, 25

OTHER MATTERS Management knows of no other business which will be presented to the meeting, except that it has• been advised that a stockholder proposal not included herein may be presented. If other matters properly come before the meeting, including the proposal omitted from this proxy statement and ac- companying proxy pursuant to the rules of the Securities and Exchange Commission, the persons named as proxies will vote on them in accordance with their best judgment. The cost of this solicitation of proxies will be borne by the Company. In addition to the use of the mails, some of the officers and regular employees of the Company may solicit proxies by telephone and telegraph, will request brokerage houses, banks and other custodians, nominees and fiduciaries to forward soliciting material to the beneficial owners of Common Stock held of record by such persons and may also verify the accuracy of marked proxies by contacting record and beneficial owners of Common Stock. The Company will reimburse such persons for expenses incurred in forwarding such soliciting material. It is contemplated that additional solicitation of proxies will be made in the same manner under the engagement and direction of D.F. King & Co., Inc., 77 Water Street, New York, N.Y. 10005, at an anticipated cost to the Company of $20,000 plus reimbursement of out-of-pocket ex- penses. 1991 ANNUAL MEETING Stockholders wishing to suggest candidates to the Nominating Committee for consideration as directors may submit names and biographical data to the Secretary of the Company. Proposals of stockholders intended to be presented at the Annual Meeting scheduled to be held April 25, 1991 must be received on or before November 15, 1990 to be included in the Company's proxy statement and proxy for that meeting. The Company's By-Laws prescribe the procedures a stockholder must follow to nominate directors or• to bring other business before stockholders meetings. For a stockholder to nominate a candidate for director at the 1991 Annual Meeting, notice of the nomination must be given to the Company between October 16 and November 15, 1990. The notice must describe various matters regarding the nominee, including the name, address, occupation and shares held. For a stockholder to bring other business before the 1991 Annual Meeting, notice must be given to the Company within the time limits described above. The notice must include a description of the proposed business, the reasons therefor, and other specified matters. In each case the notice must be given to the Secretary of the Company, whose address is 120 Park Avenue, New York, New York 10017. Any stockholder desiring a copy of the Company's By-Laws will be furnished one without charge upon written request to the Secretary. ~ Donald Fried © ~ March 15, 1990 Vice President and Secretary Ob F-~ 26 OJ F-i O ~ C,C

PHILIP MORRIS COMPANIES INC. P a proxy St~iicitad on Behalf of the Board of Dfr~~tfit~ ° Anntin! Nlww/inn snril 2R. 'fo90 , $ 1, t=t^-16-90 1ir : is3 T-DF K I NG SOL I C, I.T #442 .F0,1, .. ~ Harnlsh Maxwell, John A. Murphy and Murray H, Bring, and each of them, mre sppQintad attor. neys with power of substitution ta vbte,''as indicated on the reverse side hereof on proposals 1, ~ 2, 3 a.nd 4 and In their disCretion upon such other business as may properly Ci~me t7+rfGre the rneeting, all shares of the undersi netf in Philip Morris Companies Inc. ithe r'Corrrpan y"~ at the ~ ~ annual meetin of stockholders toe held at the Philip Morris Manufacturing Q0rst*r, Ripftmond, ~r Virpinia, April ~8, 1990, at 9:30 A.M„ and at all adlournmertt$ thor.9of,. .. ,. . Election of Direr:•tors. Nominees: Elizabeth E. Bailey, Murray H. Bring, Alfred Brittain iil, Harold Brown, J, A. iWordido•Frsytes, William H_ ponaldson, Paul W. Dougias, JrRt'ts Evans, Robert E.. R, Huntley, Hamish Maxwell, Elizabeth J, McCormack, Michael A, Miles, T, Justin Moore, Jr„ Rupert Murdoch, John A, Murphy, William Murray, Richard 0. Parsons, John John M. f;ichman, Hsns G. Storr and Jvlargarot B, Young. This card also serves to instruct the administrator of the Company's dividend roinveoxi7tbtrtt and voluntary cash payment plan and the trustae of any defined contrtbutlort plgttt sp47fit~Qr#d by the Company or any of its subsidiaries how to vote shares held by it for astoCkhofr~r pt:+lr'tployise participating in any such plan. s f SEE REVERSE SfiaE, If you wlsh to vote in accordance with the Board of Ofrec e4f aeveR$€ r'roommor~dations, )ust aistn on the reverse aide. You need not mark env boxes. glpE This proxy when properly executed will be voted In the manner directed herein. ff no direction Is made, this proxy wlii be voted FOR the election of directors, FOia the selection of auditors and AGAINST proposals 3 and 4. The 9oard of Direetors recommends a vote FOR Proposels t and 2, The Board of Direotors recommends a vote ~18CtI0n '" -rnr,c- rvrt nu.. noi aapia,n t I r+untnv t rrv}wswls o ana %, i . of Directors ts8e 2. $elect on of r€tvArea) AuditC)rS F*r, exaept vote wkhAal~ rrom(N toflowbrg <,pminaots): 3, 5tockhoider Pro osat ragardinp advertising 4. $tockholdar Pro ,osal regardln ceseaiit n of t 6 croo usinsAs FOR ...-..~,.. r AQAIN6T A64TAIN .-.,r..~ Tna aignar hereby revokotf all proxies heretofore given by tha sign4r to vote at aaid mastirrg or any adjotrrnmonts iheraaf. SIGNATURE(S) ..- - ' tSATE_ NOTE: Please sign exactly as name appears hereon, Jofnt owners should each iifln. When signing as attorney, executor, adminlstrator, trustee or guardian, (714aee give fUN flif4 As iu0h, 2048131.050..

ISS ERRMAILINI~G~oNFIARPtA ~ 0 DETACH THIS PORTION. --f' PROXY VOTE AUTHORIZATIO~( FOR PHILIP MORRIS COMPANIES INC ~ 193598 W ANNUAL MEETING AW 26, 1990 CUSIP 718154107 340,614,612 PHILIP MORRIS COMPAtAWINC PHILIP MORRIS COMPANIES INC PO BOX 8000 LAKE SUCCESS, N.Y. 11042 Dear Client: We have been requested to forward to you the enclosed proxy materials relative to shares carried by us in your account but not registered in your name. Such securities can be voted only by the holder of record. He wish to inform you that under the rules of the New York Stock Exchange, we CANNOT vote your securities on one or more of the matters to be acted upon at the meeting without your specific j instructions. ..30. ; i Accordingly, in order for your securities to be m' voted on all matters, please give your instruc- -0 ' tions above your signature on the attached proxy 0 i form and return it promptly in the enclosed D1 business reply envelope. It is understood that, m if you sign without otherwise marking the form, K I you wish to vote the securities as recommended by y ~ the Board of Directors on ALL matters to be actedr= i upon at the meeting. Z, ~ If we do not have your instruction by the tenth P ~ i day before the meeting, we may vote your securi- DIRECTORS RECOMMENDz FOR THE ELECTION OF DIRECTORS, FOR THE SELECTION OF AUDITORS AND AGAINST PROPOSALS 3 APID 4 1) ELECTION OF DIRECTORS 11 FOR all nominees listed below (except as marked to the contrary below) F1 WITHHOLD AUTHORITY To vote for all nominees listed below E E BAILEY, MURRAY H BRING, A BRIITAIN III, HAROLD BROWN, J CORDIDO-FREYTES, W H DONALDSON, PAUL W DOUGLAS, JANE EVANS, R E R HUNTLEY, HAMISH MAXWELL, E J McCORMACK, MICHAEL A MILES, T JUSTIN MOORE JR, RUPERT MURDOCH, JOHN A MURPHY, WILLIAM MURRAY, RICHARD D PARSONS, JOHN S REED, JOHN M RICHMAN, HANS G STORR, MARGARET B YOUNG ** To withhold authority to vote for any individual nominee, write that name on the line below. *~ FOR AGNST ABSTN MARK AN 'X' IN THE APPROPRIATE BOX. 11 ~ n 1-1 1-1 F1 F1 n 2) SELECTION OF AUDITORS 3) STOCKHOLDER PROPOSAL REGARDING ADVERTISING F1 4) STOCKHOLDER PROPOSAL REGARDING CESSATION OF TOBACCO BUSINESS ties in our discretion to the extent permitted by ' ~ *NOTE* SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING the rules of the Exchange. If you are unable to ~` OR ANY ADJOURNMENT THEREOF communicate with us by such date, we will, rn nevertheless follow your voting instructions, even if the discretionary vote has already been 0 i given, provided your instructions are received prior to the stockholders' meeting. D i n~ Should you wish to have a proxy for your securi- I ties issued -to yourself or others, we shall be -1 [ pleased to issue the same. Please indicate by = I checking the box for this purpose in the lower ~5 i part of the form. Use reverse of form if a legal .U E proxy is to be issued and sent to other than 0 i yourself. ~ [ If your address as shown is incorrect, please 0 ~ contact your account representative. Z I Yours truly, -~ ~ PHILIP MORRIS COMPANIES INC WISH TO ATTEND AND VOTE SHARES AT MEETING U C P 1 82E544 ISS Eft O Y ******** 91 PHILIP MORRIS COMPANIES INC ATTN PATRICIA A MALZACHER ~ PHILIP MORRIS COMPANIES INC ATTN PATRICIA A MALZACHER CLIENTS / POSITIONS 120 PARK AVE , 120 PARK AVE NEW YORK NY 10017 HEW YORK NY 10017 BANK 313 11,496 BROKER 193 55,117 T~'J TUMh S FOLD ON ARROWS TOP AND BOTTOM A Please dsts, sign and return th4s form bn the eno4os®d envslope. tlv

r,?:,) 'IrD`J ~^~~r1E"viBE~R T:::j' ..~nN 7 F TF~.._ ~Tk.;:3 V"Jf-iL.PC-:' 1NDiCATEu? °^ON'- `'c, ` ;~ "~ ` ,.jt~w'1? af; i PLEASE FOLD AS INDICATED ANU RE T URN IN THE ENCLOSED ENVELQP.E

ADP - PROXY SERVICES 42 BROADWAY - 12TH FLOOR NEW YORK, NY 10004 (212) 908-8300 FQLD r ~ • PHILIP MORRIS COMPANIES INC. ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 26, 1990 )EXX ISSUER CONFIRMATION COPY XXX CUSIP 718154107 20727 ITEMS 17861794 SHARES F(1LD r ~ DIRECTORS RECOMMEND: A VOTE FOR ELECTION OF DIRECTRRS AND A VOTE FOR PROPOSAL(S) 2,IAND AGAINST PROPOSAL(S) 3,4 ELECTIO N OF DIRECTORS I- 1-ELIZABETH E. BAILEY,2~MURRAY H. BRING,3-ALFRED BRITTAIN III,4-HAROLD BROWN, 5-J.A. CORDIDO-FREYTES,6-HILLIAM H. DONALDSON,7-PAUL W. DOUGLAS,8-JANE EVANS, 9-ROBERT E.R. HUNTLEY,10-HAMISH MAXHELL,11-ELIZABETH J. MCCORMACK, FOR ALL NO MINEES CI 12-MICHAEL A. MILES,13-1'. JUSTIN MOORE, JR.,14-RUPERT MURDOCH,15-JOHN A. MURPHY, 16-WILLIAM MURRAY,17-RIGHARD D. PARSONS,18-JOHN S. REED,19-JOHN M. RICHMAN, 20-HANS G. STORR,21-MARdARET B. YOUNG ~ WITHHOLDA'LLNOMINEES I INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ~NY INDIVIDUAL NOMINEE,STRIKE A LINE THROUGH THE , NOMINEE'S NAME LISTED ABOVE. FOR AGAINST ABSTAIN I O El 0 2 - SELECTION OF AUDITORS 1 p p p 3 - STOCKHOLDER PROPOSAL REGAI4DING ADVERTISING C7 p p 4 - STOCKHOLDER PROPOSAL REGA4DING CESSATION OF TOBACCO BUSINESS )(NOTE)E SUCH OTHER BUSINESS AiS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT TI HEREOF I i ~ i ~ ~ i PHILIP MORRIS COMPANIES INC. 120 PARK AVENUE NEW YORK, NY 10017 0 AIL FOLD CONTROLNO. ACCOUNTNO. SIGNATURE SIGNATURE IF HELD JOINTLY DATE DATE ~ FO,f.D 610 3 2 w PROXY VOTING INSTRUCTIONS To our Clients: We have been requested to forward to you the enclosed proxy material relative to securities carried by us in your account but not registered in your name. Such securities can be voted only by the holder of record. We wish to call your attention to the fact that, under the rules of the New York Stock Exchange, we cannot vote your securities on one or more of the matters to be acted upon at the meeting without your specific voting instructions. Accordingly, in order for your securities to be voted on all matters, please give your instructions over your signature on the form and return it to us promptly in the business reply envelope, also enclosed. It is understood that, if you sign without otherwise marking the form, you wish us to vote the securities as recommended by The Board of Directors on all matters to be acted upon at the meeting. If we do not hear from you by the tenth day before the meeting, we may vote your securities in our discretion to the extent permitted by the rules of the Exchange.* If you are unable to communicate with us by such date, we will,, nevertheless follow your voting instructions, even if our discretionary vote has already been given, provided your instructions are received prior to the meeting date. Should you wish to attend the meeting and vote in person, please check this box, 0 . A legal proxy covering your securities will be issued to you for this purpose. Very truly yours, x0n the tenth day, if proxy material was mailed at least 15 days prior to meeting date; on the fifteenth day if proxy material was mailed 25 days or more prior to meeting date. I