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/~'~ 7 0439844"/ ~. NS~' 2, NEW ~E~ M~RKETS -1- N[W HA~ET YOUNGER OFFEI~SIVE STRATEGIES A YEAR AGO wE UNV]ELED A N~W LO~G-RA~GE PLAN FOR KENT, IT TAREETZD SHARPLY AGAIRS1 THE NEW MARKET OF YOUNGer' SMOEERS AND ~AS 3ASED OR HEW, TOTALLY OFF~NS|VE MARKETING STRAtEGieS, r:,, BEYON3 PLANN I NC~ 7,. ACTION EVERY ELEMENT I,N T~E BRANB'$ ~AR:K~TING MIX HA5 NO~ BEE~ FINE TU~EO. IN WE WILL MOVE BEYON~ ~HE PLANN[NG ~HASE, W~ ARE I~TO IMPLEMENTATEON, WE~E IHE ACTION, TODAY'S' PRESENTATIOQ ~ILL DETAIL E.AC~ ELEMENT IN OUR. PROGRAM A~ FIT THEM, [NT,~ A SPECIFIC ACTION PLAN, KENT FAMILY. FIRST, LET ME TOUCH OK PACKA~[N3. YOU ALREADY KNO~ WE'VE COEPLE~ELY RE~ES:GNED OUR PACKAGING GRAPHICS. WE NOW HAVE A ~RAN) LINE-UP THAT IS MORE M~DE~N, MORE DRAMATIC A~D FAR MORE APPEALING TO THE YOUNGE~ SMOKER SESMENT, http://www.lorillarddocs.com/getallimg.asp?DOCID=04398447/8468 6/12/98

04398447 Page 3 of 31 -2- YOU ALSO KNOW. THAT KITH OUR ~N~USTR~ UNDER PRZSSWRE AND THE COMPET!TIVZ CLIMATE INTENSIFYING,, A~Y CONS-~AI~T TO NEW. USER TRIAL IS UNACCEPTABLE. KENT BOX WHEN BOX PACK]NG~ ARE GR@~IN~, WHEN 100 MM. SEGMENT IS ~XPANDING, WHeN WOKEN ARE ~ECQMING MORE ~MPORTANT, W~ MUSI MEET TH~ DEMAND, THAT WAS THE RA-IONALE ~OR THE SUCCESSFUL IBTRODUCTIDN OF KENT Ill DELUXE BOX I00'S. IT IS T~E SAME RATIONALE. THAT W':LL M~NDATE ~ IN;RCDUCTION OF A DELUXE BOX PACKI~G FOR KENT GOLDEN LIGHTS, T~AT ~ROSR~ IS BODKED, CONSU~E~, WIL_ AN EXPAN~E~ CHOIC~ BY TmE SECDND ~ALF 19~5, (_ I~TRODUCTORY sPREA~ IN THE CREATIVE AREA. OUR C~MM~NICATIOrIE STRAtEgY WILL REMAIN CONSTANT, RESEARCH COWTINUE~ TO CON~IR~ THAI THE LOCKER ROOM CAMPAIGN REMA]NS EXCEPTIONALLY INTRUSIVE, SCORING NELL ABOVE EATEGDRY ~DRM$, WIT~: EQUAL IM~A~T AMONG MALE AND FEMALE SMOKERS'. THIS STRENGTH G~VE$ US THE CREATIVE VEHICLE ~EE~ED TO EXPLDIT EVER.Y POTENTIAL I~DUSTRY GROWTH: SEGMENt, http://www.lorillarddocs.com/getallimg.asp?DOCID=04398447/8468 6/12/98

04398447 Page 4 of 31 P~ODUC3 ~E~$ 15. ~2. G~I~ ONE i~, G~I~ TBREE -3- ~UT TOD~Y'5 ~IIC. NEWS L]ZS ]N THE ARE~ OF PRODUCT, IF YOU REMEMBER DUR LAST MARKZTIN~ MANAGEr'S CCNFERSNCE, W~ LA~ OUT THt CIGARETTE MARKET ON A T~O DI~N$I;O~AL GRID, 0N THE VERTICAL AX15, BE ~EGMERTE~ T~E MARKET ON TME BASIS OF PRO~DC? TASTE CMARAC?EEISTIC~, ~CVE~ENT AL~KG T~IS AXIS :$ A FUNCTIO~ OF P~ODUCT B'LEN3:N~, THE HORIZONTAL AXIS REFLECTS SMOKER AKD MCVEME~T ON THIS AXIS REFLECTS THE ~MINA~4T ~ABTE CHA~ACTERI,$TI£S, O~POBITE ~' ON THE TASTE S@~CTRUM WMICM WE DE$;RIBE AS RATURAL~ TQ~ACCO OR SPICY, http://www.lorillarddocs.com/getallimg.asp?DOCiD=04398447/8468 6/12/98

04398447 Page 6 of 31 ~ i~, &RID FIVE i~, GRI~ SIX GRAVITATE~ ~0 T~E ~DRE ARTIFICIAL~ SMOOTHER~ ~ULLE~ ~LAVO~.ED BRAK25. ~S ~ ~$ULT, THE ENTIRE MARKET I$ S~IFT]BO UPPER LE~T QUAbRA~T. ~ I~, 6RIQ EIGHT ~ ]~85, KENT ~ILL MAKE I~$ HOVE TO MEET HAVE EVERY E~EMENT IN PLACE, WE HAVE TARG{TED A~VER?]SING AND PEOMOTIONAL PROGRA~S TO PULL ~S YOUNGEr, ~OST IMPORT~N'LY, NOW HAVE THE PRODUCT MODIFICATION THaT CAN PULL US ~P ~[.T~ NG ~ISRUPT!ON TO OUR CUrREnT UsER BASE, COMBINED, THE ¥OTALLY IN¥~GRATED E~F~R? WILL ~RIV~ KENT INT~ A MARKET GROWTH PO$1T;O~ BY MI~-~985, BY YEAR'S {ND~ WE $~DUL~ B~ STRATEGICALLY POSITIONE~ TO ~XPLOIT MAXIMUM:$ALE~ AND PRO~I,T O~PORT~M{TIES, L_ THE BLERD MODIFICATIONS THAT WILL ACCOMPLI~ THIS GOAL ARE ~O~ CODED M2 A~ ~I, lISTING TO DATE IS INCREDI~kY ENCOURAGING, http://www.lorillarddocs.com/getallimg.asp?DOCiD=04398447/8468 6/12/98

04398447 Page 7 of 31 :F WE :E3CR]~ ?HE UPFFR LEFT-HA%D ~U~.£A~NT AS THE A~EA. OF GROWING CONSL:I:EK TASTE PRE:ERENCE, OR TOOAY'S MARCET TRE~D, T~AN M2 CLEARLY REPRESENTS THE LDNG-TER~ IDEAL KE~T ~RC~U~T, RESEARCH REBULT$, BOTH FROM OUR NAT]OKkL SMOKER PANEL~ W~!CH ED F~RRELL W;~L BE 9~ODUCT ~ST COMPARISONS AGAINST ~ARLBORO LIGHTS ;N~ICATE ~E ARE RI~H? 0~ IN T~E~E PRO~CT TESTS, WE ASKED COMPETITIVE L~-TAR S~CKERS ~N~ KE~? SMOKERS TO COMPARE OUR. CURRENT KENT @RO~CT, ~2 AND,~ARLBO~O LIGHTS - ALL IHESE ~VALUAT{DNS REFLECTE0 A DISAP?OI~TI~G LOSS ~CR CURRENt K~T WHEN PAIRED AGAINST MARLBORO LIGHTS AMONG ~OMP~TITIVE LO-TAR SMOKERS,: E~CO~RAGINB N~W5 ~AS TH~ AMDNG THE GROUP~ M~ TESTED EQUAL TO ~ARL~ORO http://www,lorillarddocs.com/getallimg.asp?DOCID=04398447/8468 6/12/98

04398447 Page 9 of 31 22, GRIZ, EkEV~N LIGHTS i~. BOTF' KI~G5 ~hD "(~LBORC, LIGHTS'A &DLC STANDARD PR0~UCT ~ow, I ~Now TH!:S I~ THE P~INT W"EN OF YOU ~UT TMERE ARE SAY:N~, "WAIT A MINUTE" KIERNAN! ALL THIS MANAGER - "NEW AND I~?ROVE3 TAST~~ GRA~ ASS SOUNDS FiNE IN A SPeECh, B~T THE~E ARE SO~E 875,000 LOYAL PARENT KEr;- SHOKER~ OUT THERE ~H~K, wE CAN.~T TUR'~ BACKS. ON JUST FOI TH: SAK[ ~F EXPLORING FOR NEN BU$INES~, WELL, WE A~REE, ENTER ~ ~HE REFOR~LATIO~ OBJECTIVE WgICH. PROGEE$SIVELY ~OVES KE~T HALF-WAY TO~ARO~ M2 AND THE PRODUCT MAINSTReAm, WHILE AT THE SAM5 TIME MAI~TAIN~ VIrtUALLY TOTAL PRODUCT ACCE~AB:EIT¥ WITH OUR CURR.ENT FRANCHISE, MORE GOOD NEWS F@OM ~ARKETING ~ESEARCH AND R g O, USING THE SAME TESTI~ P~ASES | DESCRIBED BEFORE; ~HE SMOKER PA~L AkO ~ PRODUCT COMPARISONS - M~ I$ UP TO THE ~ TASK', ~ http://www.lorillarddocs.comJgetallimg.asp?DOCID=04398447/8468 6/12/98

04398447 Page 10 of 31 -7- M2 P~OV])ES THE IMPROVED DEVELOPMENTAL STEP TOWARDS ~2-THAT WE SOUGHT AM(~NGST COMPETITIVE LO-TAR SMOKERS, }~T ~ORE ~MPORTANTLY BY AC~tIEVING PARITY~ OR EQUAL PREFERENCE TO CURRENT KENT AMONGST OUR FRANCHISE, M~ SERVES INTERIM GOAL CF CONDITIOHING TI~E KENT SMOKER ~OR THE LONGER TERM MOVE TO BOTTOMLINE - W~ WILL INCREASE THE COMPETITIVE AP~SAk FOR KENff, WHILE MAINTAINING T~E SATI$~A~T~'ON OF OUR CURREN~ FRANCHIS3, GRID ELEVEN BOTH PRO~gCT$ WILL ~NIER TEST ~ARKET$ IR ~ARL~ ig85 Wl~H ~ SCHEDULED FOR NATIONAL ]NTRODU~TIO~ {N THE SECOND HALF OF TME YEAR, I'LL G~T INTC ~HE DETAILS WHE~ I LAYOUT THE SPZCIF|C 198~ ACTION PLAN, OUR P~ODUCT WORK DOES NOT ~TOP HERE, WE HAV~ TO RECOGNIZE ~HAT WE MUST ATTAC.K THE UPPER LEFT QUADRANT DIRECTLY, A. ~RO~TAL ~SSAUET O~ THOSE YOUNGER WITH MO EXPERIENCE ~E~ON~ P~ TYPE TASTE PRODUETS, http://www.lorillarddocs.con~getallimg.asp?DOCID=04398447/8468 6/12/98

04398447 Page 12 of 31 -B- ~'R~ G3~ING TO DO THIS ~:TH A TOTALLY ~E~ KE~7 DELUXE BOX LINE EXTENSION., ~E'~ TA~KING C~R:K FILTERS A~D TH~ ~ULL FLAVOR TA~T~ CRA~ACT~RISTIC~ O~ OUR .~k~NT, ~G~IN,. WIT~ P~OOUST T~$TING DAT~ IS ~C~URA~IN6, AN~ WE ARE dULY, ~E ~ILL BET :NT~-HE 3ETAILS LATER, BEFOEE I DD, I W~aT TO A)~RE~ OUR ~UR~}~IB THE MS~TI~G O~.E~ T$ PX PART~ER VI~KIE LAMB, VICKI~ 15 WORKIRG O~ AN EXTR~ELY ~XCIT:~G. CONCEPT, AN~ I WA~ AtL O~ YOU TO SHARE IN ~HE ENT;USIASN WE ~AVE FOR ~I$ PROJECT, L_ http://www.lorillarddocs.com/getallimg.asp?DOCID=04398447/8468 6/12/98

04398447 Page 13 of 31 25, ~WE~ LJ~ER 26 GENERICS & COR'~ERSIQN ASI~3~rY HAS ~CINTE2 OUT, T~E WHOLE THRUST OF KE~r'S ~98~ ~RKETIRG EFFORI }~ D=FER~.IV~, WE ~UST ~ENER~E NF~ ~RIAL A~D~ CONVERSION. ESPEC:~LLY AKOHG ~HE ¥OUNSER 5~O~ZR SEG~ZNT~ -HAT REPRESENT LOK~-TE~P GR.3WTH, AT THE SA~E TIME, ~E CANROT ALLO~ O~K CURRENT FRANCHISE TO CO~TIKUE T3 ERODE UNgER THE OK-~O.IK~. PRESSURE OF LOW COST GEKER.IE~ A~D ~HE SRO~ STORK OF Rj~ ~ISCOUN~ COUPONS. 27. INNOVATIVE PROF~OTIONS To ACCOMPLISH THIS SOAL, WE ~IEE2 INNOVATIVE ~OMOTION$ THAT COMFLEV, E{,T A~D REINFORCE OUR TOTAL P, ARKETING PROGRAM. L_ How ~ANY ~ YO~ ~OULD LIKE TO CUT THE COST OF NEXT Y~AR'$ VACkTIOM IN' HALF? IS kKYBODY I~ER~TED IN HA~AII, PARIS., OR ROME ~CR http://www.lorillarddocs.com/getallimg.asp?DOCID=04398447/8468 6/12/98

04398447 Page 14 of 31 OR MAYBE YOU~'B JU3T LIKE TO SMO~E 1HE LET BE EXPLAIN. BiG TRk'¢EL IN THE U,$, LAST YEA~, AMERICAN5 ~PENT $3!~2 BIULIgN: DOLLARB ON TO~R]$~, ?HAT'S TEN PERC~T DF XY.E TOTAL GROSS ~A~IDNAL 30. q7~ U'.S, ADULTS )1. 8 .~ILLID& ~MERICAN~ PER gAY AT ANY P~:INT IN TIM~, ~7~ OF TIiE ADHLT ~OP~LAT~CN B~S SPECIFIC PLA~ TO T~Kr A TRIP IN THE NE,~T SIX MONTHS, ~ ONANY G~VEN ~A¥, MCRE THAN EIGHT MILLION ~MERICANS ARE TRAVELING MORE THAN ~OD MILES FROM WO~E, WORLD'S LARGEST $OUR¢I OF REVEN~ES IT ONLY GETS ~ETTER, NATIONAL AND INTERNATIONAL_TRAVEL IS INCREABING EVERY YEAR, TRAVEL IS EXPECTED TO: BEC~ME THE WORLD'S LARGEST SOURCE DF REVENUE IN THE NEXT TEN YEARS.. AND MOST IMPOR?ANTL¥, A LARGE PORTION OF THIS COUNTRY'S TRAVELER~ ARE SMOKERS. http://www.lorillarddocs.com/getallimg.asp?DOCID--04398447/8468 6/12/98