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CONTACT: SINIKKA SARRO (212)880-3454 FAX No. (212) 907-5502 I I MONDAY, JUNE 20, 1994 TODAY'S TOPICS CORPORATE/FINANCIAL (Pgs. 2-18) • Management/Investing •International Markets TOBACCO (Pgs. 19-40) •B&W/Litigation/FDA/War on Tobacco • ETS/EPA/Smoking/Health/Taxes •Smoking Restrictions FOOD (Pgs. 41-43) •Marketing/Competitor News BEER (Pgs. 44-48) •InternationaUCompetitor News •Labeling I AT FRIDAY'S CLOSE I I Philip Morris 50 3/8 - 1/8 Anheuser-Busch 53 1/8 - 5/8 ConAgra 29 1/8 - 1/2 General Mills 55 1/2 +1/2 Kellogg 55 + 1/4 Procter & Gamble 55 5/8 + 1/4 RJR Nabisco 5 3/4 - 1/8 DJIA 3776.78 - 34.56 This publication is recyclable. Please remove mailing label prior to recycling.

-2- PHILIP MORRIS COMPANIES INC. uiness sDay hc Neltr pork eZimes MONDAY, JUNE 20, 1994 JUN 2 0 1994 Philip Morris Chairman Unexpectedly Resigns By DIANA B. HENRIQUES Michael A. Miles, the chairman and chief executive of the Philip Morris Companies, resigned unexpectedly over the weekend, the company an- nounced yesterday. Mr. Miles, in a statement released by the company, simply said that he felt it was time for the $50 billion consumer products giant to be led by a career Philip Morris executive with a background in tobacco. Mr. Miles was chairman and chief executive of Kraft General Foods, when Philip Morris acquired it in 1988. He was named chairman and chief executive of Philip Morris in August 1991, the first leader of the company from out- side the tobacco industry. The unexpected move comes less than a month after the Philip Morris board wrangled over and rejected a proposal to divide, the corporation into separate food and tobacco com- panies, as a way of enhancing its attractiveness to investors. Although he has not addressed the issue publicly, Mr. Miles was widely seen on Wall Street as an advocate of the plan, which called for separating the company's Kraft food brand and Miller Brewing business from its to- bacco company, built on such strong brands as Marlboro and Virginia Slims. His departure, therefore, is being interpreted by some analysts as a victory for the status quo - and a challenge to institutional investors frustrated by the company's failure to arrest a steep two-year decline in its stock price. "When a person takes that strong a stand in a highly visible arena and loses the battle and possibly the confi- dence of the board, a resignation often follows," Frederic Dickson, an analyst with D. A. Davidson & Com- pany in Great Falls, Mont., told Bloomberg Business News last night. It is possible the departure of Mr. Miles will increase the level of frus- tration and unrest among such large institutional investors - a develop- ment the Philip Morris board could not ignore, given the increasing will- ingness of such investors to flex their muscle on important issues of corpo- rate strategy. But it is less certain what impact the weekend's developments will have in the stock market, where Phil- ip Morris's stock has already sus- tained significant damage in the weeks since the two-company plan was rejected. S. Leigh Ferst, who monitors the company for Prudential Securities, said Philip Morris might benefit from having "a strong tobacco person to lead it through the maelstrom of pub- lic debate" that has been triggered by congressional hearings on the indus- try's handling of research into the health risks of smoking. "The break- Continued on Page D4

-3- Philip Morris _Chairrnan Unexpectedly Resigns Continued From First Business Page up is a sexy topic,'but a stronger tobacco-industry voice could be more important in the long run, because of the political context," she said. A Philip Morris spokesman, Nicho- las Rolli, said Mr. Miles, who is 54, had "decided to leave on his own, for his own personal reasons." He said the board first learned of Mr. Miles's plan to leave late Friday afternoon. Another spokesman, Barry Holt, said board members had convened by telephone on Saturday morning and voted to have John Reed, the chairman of the board's compensa- tion committee and the chairman of Citicorp, accept Mr. Miles's resigna- tion on behalf of the board. The resig- nation was effective immediately upon its acceptance by the board, Mr. Holt said. Two men who previously reported to Mr. Miles will now divide his du- ties, Mr. Holt said. During the confer- ence call on Saturday, the board vot- ed to appoint R. William Murray, who is 58, as its chairman, and named Geoffrey C. Bible, 56, as the president and chief executive. Both men had just been given new assignments at the rancorous meet- ing of the board of directors on May 25, when the restructuring plan for the company was debated. At that time, Mr. Murray was put in charge of the company's worldwide food op- eration, and Mr. Bible was named to run the tobacco business, with both men reporting to Mr. Miles. The corporation's six operating companies will now report to Mr. Bible, who reports to Mr. Murray, Mr. Holt said. The net effect of the weekend's developments is that all the operating companies now report to an executive who is seen as a veteran of Philip Morris's tobacco operations, al- though Mr. Holt noted that Mr. Bi- ble's tenure at Philip Morris does include "some food experience." Beginning in January 1990, Mr. Bi- ble served for about 16 months as president and chief administrative of- ficer of Kraft General Foods, and ' from April 1991 until 1993 he was vice president in charge of international operations for both the tobacco and food units, Mr. Holt said. In a statement released by the company, Mr. Reed of Citicorp said the chairman's decision to resign "was Mr. Miles's." Keith MeyersiThe New York Times Michael A. Miles 'Difficult Pricing Decisions' He praised the work Mr. Miles had done in building the company's food operations, and in seeing the compa- ny through "some difficult pricing decisions" - a reference, most likely, to the company's controversial move to cut the price of its Marlboro ciga- rettes in April 1993 in an effort to rebuild its market share. Slashing the price of one of the top brand names in cigarettes was wide- ly blamed for starting a price war that depleted earnings at Philip Mor- ris and throughout the tobacco indus- try. In a statement released by the company, Mr. Miles said he was leav- ing "in the full confidence that the difficult decisions made over the past two years will be proven right by our results in 1994 and beyond." Citing the "resurgence" of the company's domestic tobacco business and con- tinued growth in overseas tobacco sales, he continued, "it makes sense to again have a career Philip Morris executive in the top job." Philip Morris said Mr. Miles was not available for comment. Both Mr. Murray and Mr. Bible were careful to stress that they were JUN ? 3 1994 , committed to a strong oerformance by_ "all thre_e_ lines of busin_ess__''_ - foods, beer and tobacco. But w'all Street analysts who commented on the move last night said the markets would see Mr. Miles's departure as a victory for board-level supporters of the status quo, including Hamish Maxwell, the former chairman of Philip Morris, who retired in Septem- ber 1991 but still wields considerable influence among the company's 19 directors. Last month, when the board con- firmed that it had decided against splitting the company, several public pension fund managers - whose funds control substantial blocks of Philip Morris stock - stated that they were displeased that Mr. Max- well's influence was still strong enough to dictate company strategy. The company's shares. which closed at $50.75 on the eve of the May 25 board meeting, did not trade at all as that protracted six-hour meeting continued. The next morning, May 26, the shares opened at $50.25. The stock fell as low as $48.25 over the next few days, before recovering to close on Friday at $50.375. Significant Slump These recent stock price levels rep- resent a significant slump for a com- pany whose shares traded at more than $85 in the fall of 1992. Since then, the stock has been battered amid investor fears about increases in Government cigarette taxes, price wars and the threat of liabilities aris- ing from consumer health concerns. One analyst argued yesterday that those who favor a split of the compa- ny's tobacco and food businesses have already been disappotnted,and Mr. Miles did not have a strong per- sonal following among institutional investors. He predicted little addition- al damage to the shares, Ms. Ferst of Prudential said she would not be surprised if the stock gained in today's trading, if the mar- ket concludes that Philip Morris is stronger with its new leadership in the face of pubic debate over smok- ing. But other analysts said that since the departure of Mr. Miles eliminates any hopes that he might ultimately have prevailed with a divided-compa- ny strategy, the move might cause a further decline of at least several dollars a share. P

-4- What's News Business and Finance MICHAEL MILES quit as head of Philip Morris. The company tapped two veterans of its tobacco business to succeed him, naming R. William Murray chairman and Geof- frey Bible president and chief execu- tive. A split of Philip Morris's food and tobacco operations into two separate companies is considered less likely un- der the new management team. (Article on Page A3) Philip Morris CEO Resigns Under Pressure Board Names Two Veterans Of Tobacco Business As Successors to Miles By EBEN SHAPIRO Staff Rcporter of Tn[-: WAi.L STnrrr JuUR`A>. Michael A. Miles, the embattled chair- man and chief executive officer of Philip Morris Cos., resigned after months of mounting pressure. The Philip Morris board appointed R. William Murray, 58 years old, as chair- man, and Geoffrey C. Bible, 56, as presi- dent and chief executive, to succeed Mr. 'Miles. Both men had been vice chairmen. The change puts smokers back in charge of the nation's largest tobacco company. While the new leaders of Philip Morris are expected to be more open with Wall Street than Mr. Miles had been, the company's pressing problems remain. Large shareholders are frustrated that, under Mr. Miles, the company has lost more than S30 billion in stock-mar- ket value since 1992. And in Washington, the company faces the threat of higher tobacco taxes and Michael A. Miles I ~ ~- ~(- °fer regulation. A .,ew round of congressional hearings, :which have depressed tobacco stocks, is set °f^s this week. "The pressure isn't going away. We ai n't happy," said Richard Koppes, gen- eT Il counsel of the California Public Em- tiloyees' Retirement System, one of the large institutional shareholders pressing the company to split the company into separate food and tobacco business. Such an action, which Mr. Miles had advocated, is considered less likely under the new management team. Mr. Miles, 54, has come under increas- ing criticism from large shareholders, the Industry Whistleblower Merrell Williams Jr. is the tobacco indus- try's worst nightmare: an informed in- sider who has turned against the secre- tive industry. Article on page B1. board and employees in recent months. He was the first nonsmoker to run the company and never fully gained the confi- dence or loyalty of the company's tobacco executives, according to analysts and em- ployees. Questions about his leadership have haunted Mr. Miles since last year, when his abrupt decision to cut the price of Marlboro cigarettes rocked the industry. Never Quite Comfortable Mr. Miles joined Philip Morris in 1988 when it acquired Kraft Inc., and he never become completely comfortable with the swashbuckling culture of the tobacco busi- ness, some of the company's- tobacco executives say. At a six-and-a-half hour board meeting last month, the company's powerful for- mer chairman, Hamish Maxwell, resisted Mr. Miles's proposal to split the company into separate tobacco and food businesses. The board ultimately decided to take no action on the proposal, but named Mr. Murray and Mr. Bible vice chairmen. At that meeting, the board openly aired its doubts about Mr. Miles. People close to the company say the board discussed whether Mr. Miles was the right executive to be running the company. During that discussion, Mr. Miles and the other Philip Morris executives on the board were asked to leave the room. Philip Morris declined to comment, but John J. Tucker, a senior vice president at Philip Morris and perhaps Mr. Miles's closest associate at the company, said Mr. Miles retained the full confidence of the board. 'Nobody Ever Saw the Guy' But Mr. Miles's aloof style has been criticized by people inside and outside the company at a time when the industry is facing an unprecedented series of attacks. "He was invisible," says Gary Black, an analyst with Sanford C. Bernstein. "No- body ever saw the guy." Mr. Black said the changes were pQsi- tive for the company. "The board is realiz- JUN 2 0 1N4 ing this has always been a tobacco com- pany and that it makes sense to have tobacco guys in charge." Mr. Black added that it's likely that Mr. Bible, a hugely popular and well-respected tobacco execu- tive, will eventually run the entire com- pany. In a company statement, Mr. Miles said that, with the company's tobacco business gaining strength, "it makes sense to again have a career Philip Morris executive in the top job." He couldn't be reached for further comment. Philip Morris generates annual sales of 560 billion, selling such household brand names as Marlboro cigarettes, Velveeta cheese, Cheez Whiz and Miller beer. In 1993, 55% of its $9.2 billion in operating profit came from tobacco. Philip Morris had net income of S3 billion. The new team is expected to be far more open than Mr. Miles, who hasn'tbriefed Wall Street analysts or the media in more than ;i year. Messrs. Murray and Bible plan to meet with analysts and the media this week. Mr. Miles's problems escalated in re- cent months as he advocated splitting the company into separate food and tobacco businesses and old-line board members resisted. In recent months, Mr. Maxwell had been reinserting himself in company affairs and showing up at Philip Morris budget meetings. As chairman of the compensation com- mittee, CitiCorp chairman John Reed was the Philip Morris board member that han- dled Mr. Miles's resignation. Mr. Miles resigned Friday afternoon. A board meeting was conducted by telephone Saturday morning and the resignation was accepted with "regret," the company said in a statement. Mr. Reed said the decision to resign was Mr. Miles's. In announcing his resignation, the com- pany quoted Mr. Miles as defending his controversial decision to cut the price of premium cigarettes last year, a move that bolstered the company's volume but hurt its stock price and profits, "I leave with full confidence that the difficult decisions made over the past two years will be proven right by our results in 1994 and beyond," he said. Mr. Tucker, the friend of Mr. Miles, says that Mr. Miles plans to take the summer off and "play golf, go to [taly." While the tobacco business is faring better, the performance of the food busi- ness continues to be a frustration to ana- lysts. Cutbacks and perpetual restructur- ing at Kraft General Foods has resulted in a decline in service, says Ned Meara, a buyer for Grand Union Supermarkets in New Jersey, who says fewer Kraft General Foods salespeople now call on his store. The cost-cutting, he adds, became evident last year after Philip Morris's earnings plunged, following Mr. Miles's decision to cut cigarette prices. Says Mr. Meara, " 'Marlboro Friday' has had a tremendous residual effect throughout the whole company."

-5- jUN2o 1994 e By JONATHAN AUERBACH Philip Morris boss ',f ichael Miles resigned from the nation's largest to- bucco company yesterday following widespread criti- cism for lack of leadership. Big Mo said the 54-year old Miles decided to quit as chairman and chief execu- tivc officer and that' his rt•signation was "accepted w:th regret." Thr company split the t•,_ pvsts. namtng R. Wil- Itam Murrav chairman and Geoffrey Bible presi- drnt and chief executive otticer. Botti were named vice- cha:rmen in May when Pniiip 'vicrrts opted not to split its food and tobacco business. Murray, 58, was heading up the company's world- wide food operations, which include Miller Beer, Kraft and General Foods. Bible. 56. ran tobacco oper- ations. which include the Marlboro and Benson & Hedges brands w'all Street is expected to applaud Miles' departure th s morning, sending Philip Morris snares up. The consum er products gi- ar.t on Friday closed down •x at 50i~, - "I leave with the full confi- dence that the difficult deci- si,ns mace over the past two t•ears will be proverf right by our results in 1994 MICHAEL MILES Resigned, and beyond," Miles said in a statement, "Now, however, with the resurgence of the U.S.to- bacco business and the continued strong growth in international tobacco, it makes sense to again have a career Philip Morris ex- ecutive in the top job," he said. The resignation was ac- cepted by Citicorp Chair- man John Reed, who heads up Big Mo's compensation committee. Reed said: "We are fortu- nate to be able to turn to Bill Murray and Geoff Bible, who have long demon- strated their skills in guid- ing our food, tobacco and R. WILLIAM MURRAY Named chairman, brewing businesses around the world, "Between them, they have nearly 50 years of experi- ence with the company." Since taking the helm in 1991, Miles' inaccessibility to the investment commu- nity has irked analysts, while Bible has already garnered praise for his openness. Analysts were dismayed last year when he disap- peared after announcing what became known as Marlboro Friday. On April 2, 1993, the company stunned the financial com- munity by slashing ciga- rette prices by 40 cents a pack. GEOFFREY BIBLE President and CEO. Tobacco has been hit hard by price wars and growing government scrutiny of the industry. Last year, the cut-throat competition among cigarette makers re- sulted in a $2 billion drop in domestic tobacco profits. Since Marlboro Friday, Philip Morris stock has dropped more than 20 per- cent. Its share of the do- mestic tobacco -business hasinereasedto27percent from 22 percent before the pricecuts. In the first quarter of 1994, operating income in the company's domestic to- bacco business fell 25 per- cent to $769 million. Concern over Miles' lead- ershtp was also a key point at last month's marathon board meeting. At that meeting, Philip Morris decided not to break up its food and tobacco op. eration into separate busi. nesses. Some senior execu- tives of the company had lobbied for the split, saying the anti-tobacco sentiment was hurting its shares. They also pressed for the separation in order to pro- tect food operations from possible liability lawsuits, increased government reg- ulation and higher taxes facing the tobacco business. Miles' appointment three years ago was considered a surprise because he was viewed as an outsider com- ing from Kraft, with no to- bacco background. The fact that he had quit smoking also drew skepti- cism. The promotion was seen as an indication that Philip Morris was moving away from its tobacco roots. Food and beer now account for 56 percent of the company's $50.6 billion in sales, but to- bacco is still the profit cen- ter. Miles replaced Hamish Maxwell, who retired. Max- well recently has been spot- ted visiting the company's Park Avenue headquarters, a scene casting more doubt on Miles' leadership.

NEW YORK POST, MONDAY, JUNE 20, 1994 ~ / ~ ® e~ ~~~ e®ae charge of ® M ICHAEL Miles failed to show the leader- ship that would overcome the culture clash within Philip Morris between the tobacco and food opera- tions. He paid the price with his resignation yesterday. The stunningly efficient leadership coup, at Ameri- ca's seventh biggest compa- ny, came just weeks after Miles fought off an increas- ingly hostile board. The board knew Big Mo's stock price was languishing after last year's tobacco price war. It was also hurt by anti-tobacco sentiment across the country. The board also knew its tobacco people were confi- dent they would defeat the tobacco liability claims. Protits were bouncing back and its decision to slash cig- arette prices last year was vindicated. Marlboro, its top brand was regaining market power. What the board wanted was effective leadership to bring these positives to the attention of the shattered morale within the company and the doubters on Wall Street. Miles did neither. Instead the board decided to go with the so-called Kan- garoo mafia of fellow Austra- lians, Bill Murray and Geof- frey Bible. The two veterans - one from tobacco and the other from food side - would lead the fight. The appointment of these two seasoned insiders, with over 50 years combined ex- perience across the cultural divide at Big Mo, should serve as a rallying point within the company. The shake-up should be reflected in a higher stock price today, because both men are also better known among analysts than their publicity-shy predecessor. To help the cause, Big Mo is also expected shortly to announce an extended stock buyback program to return more value to stockholders. Big Mo is presently spend- ing the last of the $1 billion authorized for stock pur- chases earlier this year. Yesterday's action also represents a complete re- versal of the decision just three years ago that put Miles in charge. Miles came to Philip Mor- ris in 1988 when it pur- chased Kraft Inc. for $12.9 billion. Big Mo paid too much for Kraft. In a highly-competi- tive industry where all the participants are struggling, its performance has been just average. International tobacco sales will emerge as the profit leader in the company. Meanwhile, the domestic in- dustry is being hit with a wave of liability claims, which Philip Morris is confi- dent can be beaten. Big Mo's stock price is languishing. Friday it closed at 50%, off ','d. That is 28 percent below the 70-a- share level the stock traded at when Miles took over in September 1991. As reported last week, board-level concern over Miles' lack of leadership came to a peak at its June 25 board meeting. After seven hours it was decided to give Miles another chance. The market mistakenly thought the fight was over splitting up the company between food and tobacco. But this issue was settled before the June 25 meeting. It was decided the split was not legally possible. Murray Bring, the compa- ny's top lawyer advised a split could not safely pro- tect the food operations from tobacco liability claims without an outright sale of one of the divisions. It was Miles who first pro- posed the split some nine months ago, when the com- pany was fighting to re- store its tobacco profits in the wake of the Marlboro Friday price cuts. The move was rejected at the time as being a little premature. The board knew that the struggling food di- vision could only benefit from the steady cash flow from tobacco. With only begrudging board support Miles chose to stay on. But when word leaked out early last week about the real contents of last month's meeting he handed in his resignation. He rightly decided it was in the best interests of the company to leave quickly. This would avoid a poten- tially destabilizing public fight at a time when the company desperately needs unity. $£1T'flS.TL3 :t?4

MONDAY, JUNE 20, 1994 • USA TODAY Philip Morris CEO quits; stock likely to fall By Eric D. Randall USA TODAY Philip Morris Chairman and Chief Executive Michael Miles, 54, abruptly resigned over the weekend. And industry analysts predict more tough times for the firm in the stock market. "The decision was Mr. Miles'," John Reed, a Philip Morris board member and chairman of Citicorp, said in a news release. The board ac- cepted the resignation "with regret" Saturday. "For shareholders, this is not a good thing," says Tony Vento, stock analyst at Edward D. Jones. He expects the stock to drop today. The company is losing the leading advocate of splitting off its food unit, which produces half of Philip Morris' revenue. Some big shareholders support the idea. They fear anti-tobac- co lawsuits and legislation are hurting the company's stock. Philip Morris' board didn't act on the proposal after a 61/r hour meeting May 25. "That board meeting had to be a lot more bloody than anyone imag- ined," says Frederic Dickson, stock analyst at D.A. Davidson. Not so, says company spokesman Barry Holt. "There was a consensus among the board members, including Mr. Miles, (that) it was not appro- priate to take action at this time to split the company." Still, "you don't often find people walking away from mil- lion-dollar jobs; " Dickson says. In 1993, Miles was paid $1 mil- lion, a $345,000 bonus and stock options worth an estimated $1.2 million. Holt wouldn't comment on Miles' severance package. Miles, a non-smoker, be- came CEO in September 1991 after being CEO of Kraft Gen- eral Foods. (Philip Morris bought Kraft in 1988.) Since then, the company's stock has dropped 32% to close Friday at $50%, down ~/8. "He made the tough decisions," Dickson says, including cutting cigarette prices 40 cents a pack in April 1993. Now power Is shifting back to the tobacco side. Geoffrey Bible, formerly executive vice president of worldwide tobac- co, becomes president and CEO. William Murray, the for- mer president, becomes chair- man. Both were named vice chairmen last month. MILES: Background is in food business, not tobacco. 6€tri7,~ ~~~0Z

-8- J UN 2 0 1994 MONDAY, JUNE 20, 1994 THE W,asHINGTOw PosT P ' ' P Morris Chairman Announces Res' ation ~ 2 Longtime Executives to Fill Posts By Jay Mathews Was}ilngton Post Staff Writer NEW YORK, June 19-Philip Morris Cos., the world's premier tobacco producer, today an- nounced the resignation of its chairman and chief executive, Michael A. Miles. Like other cigarette compa- nies, Philip Morris has been be- sieged this year by threats of in- creased government taxes and lawsuits because of mounting ev- idence that tobacco is a health risk, but many financial analysts have praised the company's man- agement and said its food and in- ternational tobacco divisions showed potential for growth. John C. Maxwell Jr., a manag- ing director of Wheat First Securi- ties in Richmond, speculated that Miles may have quit after losing a fight to split the firm's troubled American tobacco operations away from its healthy food and in- ternational tobacco business. A Philip Morris spokesman, Barry Holt, denied the claim. "There was a consensus, includ- ing Mr. Miles, that such action was not appropriate at this time," Holt said. Miles, 54, a food industry ex- pert who has been with Philip Morris six years, said in a state- ment he thought it was time for a chairman with longer tenure at company, which had revenue last year of $50.6 billion. "With the resurgence of our U.S. tobacco business, and the continued strong growth in international to- bacco, it makes sense to again have a career Philip Morris exec- utive in the top job," he said. Miles joined Kraft General MICHAEL A. MILES ... with compuny for six years Foods Inc. in 1982 as president and chief operating officer and was chairman and chief executive of that company when it was ac- quired by Philip Morris in 1988. In 1991 he became chairman and CEO at Philip Morris. The Philip Morris board said it accepted Miles's resignation Sat- urday. The board elected R. Wil- liam Murray, 58, formerly corpo- rate vice chairman, as chairman. Geoffrey C. Bible, 56, was elect- ed president and chief executive. Murray joined the company in 1970 and Bible in 1968. John Reed, chairman of the board's compensation committee, said it was Miles's decision to re- sign. Reed, chairman of Citicorp, said Miles "helped build and inte- grate our global food business, and led us through some difficult pricing decisions," including a cig- arette price war last year that helped its Marl'noro brand keep its leading market share.

-9- CH{CAGO' xFN TiNE.g JUN 2 0 1S94 Chairman" Resigns At Philip Morris Inc. 8y Farrell Kramer .~ 7b As.00ww Prw N`_E.W"~ YORK-•Phili Morria m nies Inc. announcc un• ay the recianation of chairman and chief executive Michael A. Milea, who said It ML time t< "again have a care.r Philip Morris executive in the top job." Miles headed Kraft G.neral Foods, based in Glenview, when it was acquired by the Wbacco gi- ant in 1988. The world's largest tobac- co company taid iu board had named vice chairman R Wiiliam north suburban Murray aa Mkh" A' chairman and Muea vice chairman and board member Geoffrey C. Bible as president and chief executive, amid a Atreamlin- in6 of ita top management "The decision was Mr. Miles'," said Citicorp chairman John Reed, chairman of the Philip Morris boasd's compensation committee. "Mike has done much for Philip Morris since he joined the Philip Morrit family of companies in 1988." The New. York-baeed food and tobacco company said Miles' res- tanation was accepted Saturday by Reed. Barry I-io1t, a spokesman -for Philip Morris. said the reaiQnation waa not due to the company's performance under Milee, nor did it have anything to do with a rumor.d poesible split of the com• pany's food and tobacco businaaa- e., ''At a matter of fact, as we have prrviously announced, that is not ort the tabla anymore," Holt said. At a board meeting last month the company decided not to separate the busineasea, but there was a split reported between board members about that strategy. The tobacco.induitry has been under fire recently IYom Congresa and the publie over, the health haxards of cisarettes: and allega- tions that the industry concealed lnforiaation about potential daa- gen aa far back aa the 1960a. Tobacco companies have main-• tained they have done nothingg wrong. . A realienmeot of Philip Moriis' top management structure follows Miles' resignation, Holt said. There will no lon er be a chief operating officer. ~nsteed,, heads ot the cotnpeny's 6peritin¢ bus'i-• riesses will report directly'to Bi- bte, the new CEO. " ' Also, Holt'said, the two 'vice ` chairman positions will be •timi- nated. "I laaw with th. full cordidenc. t that the difficult declatons raade over • th. past two years will be proven right by our reauSta in 1984 and beyond," aeid Milea, 54. "Now, however, with the reaur- gena of our U.B. tobaoco buai• neaa, and the continued strong growth in iaternationai tobacco, it raakea senae to again have a career Philip Monia executive in the top job." :.:,:... Milu'waa elected chairman and JUN 2 0 1994 chief ezecutlve or Yrulip Morris tn August 1991, aftBr serving as dep- uty chairman. Befere that,, Miles was chairman and chief a=ecutive of Kraft General Foods Inc., which Philip Morris acquired in 1988., Heloltied 1{raft W4982 aa pte:• ic~en ~ qnti,~ chiir~ ~d~brtt~'r~g oft~ices; Of!'1Vfur`rdy, ; EB#'!'ht&•Mib1i'r 58; Reed; 3roted'1 tiiai~ togither ..t}saye have nearly ' 50, yearf ~xpvrt'enca with Philip Morris. Th.,, recent paat has . proven challenging for Philip Morria. In 1.993, Philip Morris surprised analysta with a draitic price cut on premium brand cigarettes. Hurt by the increasing populari- ty of cut-rate cigarettes. Philip Morris last May cut the price of Marlboro, • its beat-known brand, by 40 percant. The company later made similar cutc on other domea- tic branda. Also, Philip Morris announced a major reetructurina last fail that included the elimination of 14,000 jobs over three years. In the first quarter, Philip Mor. ris reported easnings improved 59 percent from a year earlier, when results were hurt by an accountin` 'chanQa:• The•i•company earned. ' t1; i7 . :billion, -or =1.34 ,a ahare, -eompared with $737 milliion;;or 84 •centa:a.sharR; a y.ar. earlier.:.. . , CHICAGO THIBUNE JUN201994 Philip Morris chairman resigns AssociATw PRLss 1 /3 NEW YORK-The chairman and chief ex- ecutive o>;_Philip Morris Cos.-the world's largest to 3cco comoanv- as resigned, saying it is time for a "career Philip Mor• ris executive in the top job." Michael A.,Miles resigned Sattiu'day after three years at the post, the company said in a statement Sunday. Philip Morris' board named two men with a. total of 50 years of experience at the company to take over Miles' job. Vice chairm.vi R. William Murray was named chairaian, und vice chairman and board memher GentTrey C. Bible was named pres• ident and chief executive. The New York-based fcxxf and tobacco company said the changes are effective im- niediately. Miles, a nonsmoker, was the company's first chairman from outside the tobaccn inrtustrv. 'The decision was Mr. Mi1es; " ,^.itico Chairman John Reed, chairman o t e PhSlip Morz-is board's compensatlon com- mittee, said in the statement "Mike haa done much for Philip Morris." Company spokesman Barry Holt said the resignation was not related to the com- pany's performance or to a rZtmored split of its food and tobacco businesses. "I leave with the full confidence that the difficult decisions made over the past two years will be proven right by our results in 1994 and beyond." Miles said in the atate- ment. "Now, however, with the resurgence of our U.S. tobacco business, and the contin- uerd atrong growth ir. interr.ational tobac.;o, it makes sense to again have a career Phil- ip Morris executive In tha top job," he said. Iiurt by the increasing pcpularity of cut• rate ~ci ga~rettes, Phiiip Mon•is in May 1K3 cut et?i price of Marlboro, it-s best-known brand, by 40 percent. The company Iater made similar cuts on other domestic branda.