Resolutions presented, all of which are opposed by the Altria Board of Directors
Proposal 1 -- Independent Board Chairman

Proposal 2 -- Global Human Rights Standards

Proposal 3 -- Address Health Hazards for African Americans Associated with Smoking Menthol Cigarettes

Proposal 4 -- Extend New York Fire-Safe Products Globally

Proposal 5 -- Animal Welfare Policy

Proposal 6 -- Support for Laws at All Levels Combating Use of Tobacco

Proposal 7 -- Facilitating Medical Efforts to Dissuade Secondhand Smoke

 

... RESOLVED:  Stockholders request that our Board of Directors change our governing documents to require that the Chairman of our Board serve in that capacity only and have no management duties, titles, or responsibilities.  This proposal gives our company an opportunity to cure our Chairman's loss of independence should it occur after this proposal is adopted. ...

PM opposed this.

... RESOLVED ... that the shareholders request that the company commit itself to the implementation of a code of conduct based on the aforementioned ILO[International Labor Organization] human rights standards and United Nations' Norms on the Responsibilities of Transnational Corporations with Regard to Human Rights, by its international suppliers and in its own international production facilities, and commit to a program of outside, independent monitoring of compliance with these standards.

PM opposes this.

Altria (Marlboro), Loews (Newport), Reynolds American (Kool and Salem)

WHEREAS, most African Americans who smoke have become addicted to menthol cigarettes.  Approximately three of every four who smoke prefer menthols; among Black youth who smoke, as many as nine of every ten prefer menthol brands.

Noting findings in Nicotine and Tobacco Research (07.01.05) on "the influence of gender, race, and menthol content on tobacco exposure measures," Business Week reported (09.05.05):

The Business Week article commented:  "That helps explain earlier studies showing smoking-cessation programs are least successful for black menthol smokers;  They may draw in more addictive substances along with menthol."  One of the authors of the study noted that while "smokers may believe the term 'light'  implies a reduction in the disease risk, this is not true, and menthol may be playing an important role in this misperception."

An abstract of the original study noted that "more than 25% of cigarettes sold in the United States are branded as mentholated, and these cigarettes are smoked disproportionately among populations with disparate tobacco-related health outcomes. ...  Results [of the study] showed menthol per cigarette and menthol per tobacco [SIC] to be significantly greater in cigarettes labeled with industry descriptors of ultra light or light, belying the common consumer perception that "light" means less.  Menthol per cigarette and tobacco per cigarette were significantly greater in 100-mm compared with 85-mm cigarettes.  The study results are consistent with prior research that suggests menthol may be used to offset reductions in smoke delivery or impact and to facilitate compensatory smoke inhalation behaviors in smokers of cigarettes with reduced machine-measured smoke delivery."

The Harvard study recommends that "tobacco manufacturers should be required by federal or other regulatory agencies to report the amount of menthol added to cigarettes."

RESOLVED, within six months of this annual meeting, this Company shall voluntarily undertake a campaign aimed at African Americans apprising them of the unique health hazards to them associated with smoking menthol cigarettes, including data showing the industry descriptors such as "light" and "ultra light" do not mean those who smoke such brands will be any less likely to incur diseases than those who smoke regular brands.

PM opposed this proposal:

On June 28, 2004, a New York state law compelled major tobacco companies to replace their cigarettes with new "fire safe" versions designed to extinguish themselves more quickly than conventional cigarettes.  The Wall Street Journal noted that this legislation might create an environment wherein "cigarette companies could become more vulnerable to cigarette-fire lawsuits filed in other states" if they did not enact similar laws (06/23/04).

The article noted that most "tobacco companies have no intention of changing the cigarettes they sell in other parts of the country to match New York's standards."  It also stated:  "legal experts note that having two distinct classes of cigarettes could expose their makers to a huge legal risk.  With self-extinguishing cigarettes required only in New York, anti-tobacco lawyers may find it easier to argue in court that manufacturers know how to make a safer cigarette -- something the companies had largely denied until recently" (WSJ 06/23/04).

Even before the New York law took effect, groups, including the American Cancer Society, the American Lung Association and other New York-based groups wrote (06/24/04) the Chief Executive Officer of this Company "on behalf of consumer, public safety, public health and firefighter organizations."  They asked our CEO to "commit at once to voluntarily establish New York's cigarette fire safety regulatory criteria as the standard for all the cigarettes that you produce for sale in the United States, Puerto Rico and U.S. protectorates."

Their letter was followed by another letter from a representative of the filers of this resolution asking for the same standards to apply beyond New York to the rest of the United States.  In response, our Company's CEO did not make such a commitment.  Instead, Altria stated that "the prudent thing to do, at this time, is to stay focused on compliance with New York State requirements, and to support a reasonable national ignition propensity standard while we all try to understand the real world implications of the New York regulation."  Given the fact that our competitors question the New York State law, such a position will take a long time before it can be effectuated.  Thus this request to the shareholders for immediate action.

RESOLVED:  that the Altria Board commit the Company within six months of the annual meeting to voluntarily establish New York's cigarette fire safety regulatory criteria as the standard for all the cigarettes that are produced for sale throughout the world, unless local legislation prohibits this.

Supporting Statement [from the Province of Saint Joseph of the Capuchin Order]


PM opposed this proposal, with the following statement:

... RESOLVED, that the shareholders request that the Board adopt and post an Animal Welfare Policy online which addresses the Company's commitment to (a) reducing, refining and replacing its use of animals in research and testing, and (b) ensuring superior standards of care for animals who continue to be used for these purposes, both by the Company itself and by all independently retained laboratories, including provisions to ensure that animals' psychological, social and behavioral needs are met.  Further, the shareholders request that the Board issue an annual report to shareholders on the extent to which in-house and contract laboratories are adhering to this policy, including the implementation of the psychological enrichment measures. ...

Whereas, this Company has publicly said that using its tobacco products is a danger to peoples' health;

According to Market Wire (August 25, 2005), the American Lung Association (ALA) has noted an increasing number of states are taking aggressive action to reduce tobacco use.  For instance, "during the first half of 2005, several states went completely smokefree, others moved to strengthen existing restrictions on smoking in public places, and new increase in state tobacco taxes are bringing the national average to nearly $1.00 a pack."

The report noted:  "While states are making it harder for people to smoke in public places, higher cigarette taxes are also making smoking more expensive.  Since January 1, 2005, tobacco taxes have increased in 11 states, including the tobacco-growing states of North Carolina and Kentucky.  As of August 15, the average state cigarette tax was $0.89 cents per pack.  It will increase to $0.92 cents per pack when tax increases in Maine and North Carolina take effect.  Texas is considering a $1.00 increase in its cigarette tax, which would push the nationwide average even higher."

According to John L. Kirkwood, President and CEO of the ALA, "Higher cigarette taxes mean significant drops in smoking rates.  Studies show that a 10 percent increase in the price of cigarettes reduces consumption by 7 percent for youth and 4 percent for adults.  Raising the cigarette tax is one of the most effective ways to reduce adult smoking and stop kids from ever starting."

The Company has publicly said it does not want youth to start smoking.  It has been running ads to help people to stop smoking.  However, it has not demonstrated that such efforts have reduced smoking for young people and/or adults.

The report took note of preemption of smokefree laws:  "Illinois became only the second state (after Delaware) to repeal preemption of local smokefree air ordinances.  This action will allow any local community in Illinois to adopt smokefree air ordinances that are stronger than state law.  Once the Illinois law goes into effect on January 1, 2006, 19 states will have total or partial preemption.  Preemption is a major priority for th tobacco industry and its front groups because they have less influence at the local level and prefer to lobby for weak statewide smokefree air laws that cannot be replaced by stronger local ordinances."

RESOLVED that, since a combination of laws against smoking in public places as well as tax increases has been shown to demonstrably reduce smoking, especially among young people, the Company make as public policy a commitment to support legislation at all levels of local, regional, state and federal government which is geared to that end.  Furthermore, the Company shall also support all efforts to repeal existing preemption laws limiting local smokefree air ordinances.

Supporting Statement  [from The Sisters of St. Joseph of Carondelet]
This Company needs to clearly and publicly support efforts that will reduce, if not eliminate, the nation's number one cause of preventable disease  smoking.  If you agree, please vote "yes" for this proposal.

PM USA and PMI support strong and effective regulation of cigarettes, including measures to reduce smoking by young people.  PM USA and PMI recognize that certain public health groups and others support taxation policies and public place smoking restrictions as measures that lead to a reduction in the incidence of smoking.

Taxation of tobacco products is one of many tools that governments can use to advance public health objectives, including increasing quitting and helping to prevent youth smoking.  However, PM USA and PMI oppose excessive increases in cigarette excise taxes.  Fiscal measures should not be viewed in isolation.  In making fiscal policy and considering tax increases, governments must consider the unintended consequences associated with excessive taxation, such as an increase in illegal cigarette trafficking and counterfeiting or encouraging consumers to switch to cheaper forms of tobacco or to low price cigarettes.  In addition to tax increases, therefore, governments should consider complementary measures to achieve the objectives of their tobacco control policies.

In the United States, PM USA supports comprehensive Food and Drug Administration regulation of tobacco products.  More specifically, PM USA fully supports legislation introduced in the United States Congress by Senators DeWine and Kennedy and Representatives Davis and Waxman.  Internationally, PMI supports strong and effective regulation of cigarettes by all competent authorities, both national and regional, and is an advocate of uniform international science-based standards to guide regulation.  PMI believes that such regulation should be comprehensive, addressing all aspects of the manufacture, sale, marketing and use of tobacco products, and has communicated its views on this subject to many governments and public health officials around the world.  Specifically, PMI has supported legislation that would give national health authorities the ability to regulate advertising, public smoking. and many other aspects of tobacco product manufacturing, sale, use, and marketing.

With respect to restrictions on public place smoking, PM USA and PMI believe that the conclusions of public health officials regarding the risks of second-hand smoke to non-smokers are sufficient to warrant certain government measures to regulated public place smoking.  Government, businesses and the public should be guided by these views in making decisions about public smoking.

There are places where smoking should not be permitted at all, such as elevators, places where a specific fire hazard already exists, or areas occupied primarily by children, such as playgrounds, schools and daycare facilities.

Complete bans on smoking go too far.  Governments should strike a balance between the desire to protect non-smokers from exposure to second-hand smoke and allowing the millions of people who continue to smoke to do so in certain circumstances.  Smoking should be permitted outdoors except in very particular circumstances, such as outdoor play areas primarily designed for children.

In many indoor places, reasonable ways exist to allow smokers a place to smoke but provide non-smokers with the ability to avoid second-hand smoke.  PM USA and PMI believe that business owners -- particularly owners of restaurants, bars and nightclubs -- are most familiar with how to accommodate the needs of their patrons and should be allowed the flexibility to determine the smoking policy for their establishment, including whether to ban, restrict or allow smoking.

Where smoking is permitted, the government should require the posting of warning notices that communicate public health officials' conclusions that secondhand [SIC] smoke causes disease in non-smokers.

The Company believes that these public policy positions appropriately address public health interests, as well as the interests of adult consumers who want to smoke.

Therefore. your Board urges stockholders to vote AGAINST this proposal, and proxies received by the Company will be so voted unless stockholders specify a contrary choice in their proxies.

WHEREAS, Philip Morris' website, acknowledging the health dangers from secondhand smoking (SHS), states:

Despite acknowledging the health hazards connected to SHS, a recent study ("Health Affairs" of Tobacco Control 24.4, July/August, 2005) revealed that, in tandem with the creation of a code (ICD-9-CM) to determine SHS exposure in patients, PM USA's internal documents show the Company aggressively worked to prevent the creation and adoption of an appropriate medical diagnostic code related to SHS for use on Medicare and other medical forms.  A memo from the group (Multinational Business Services [MBS]) it hired to obstruct the inclusion of SHS data told PM that including such an "E-code:"  "would provide an incentive for people to claim illnesses related to second-hand smoke," and, the memo adds, "it would directly link second-hand smoke to national health costs."

The study noted that, soon after the new SHS exposure diagnostic code became available in 1994, Philip Morris hired MBS to influence the governmental process for creating and using medical codes.  It budgeted more than $2 million for this "ICD-9 Project" and sought to keep its actions secret.  It utilized third-party lobbying, Paperwork Reduction Act challenges, and backed alternative coding arrangements.  PM and MBS also challenged the use of such a code as an entry on one of the most common billing forms, the Medicare Form 1500.  As of the writing of this shareholder resolution, the use of this diagnostic tool by medical personnel has remained "an invalid entry on a common medical form."

RESOLVED, that having now acknowledged hazards due to SHS, until the present CODE is changed, that Altria/Philip Morris refrain from any action that would maintain the existing law (expecting to have expired 03.31.06) and voluntarily make available on its website and to all requesting physicians, nurse, dentists, and other medical personnel, questionnaires for their patients that include their past and present exposure to SHS.


PM opposed this proposal, with the following very short statement:

The Company has no intention of engaging in any advocacy regarding the existing U.S. law referred to in the resolution.

With respect to the voluntary action requested by the resolution, the Company believes that the need for, and proper form of, the diagnostic tool suggested by the resolution are best provided by public health agencies or health-care personnel.

Therefore. your Board urges stockholders to vote AGAINST this proposal, and proxies received by the Company will be so voted unless stockholders specify a contrary choice in their proxies.