The Philip Morris Board of Directors recommended a vote against all six stockholder proposals:
    Environmental Tobacco Smoke
    Ensure that Tobacco Ads are Not Youth-Friendly
    Phase Out Genetically Engineered Food
    Stop Funding Smoking Related Research Using Live Animals
    Inform Consumers About the Risks of Smoking
    Global Human Rights Standards

            Also, please see,
             Speeches in support of the shareholder proposals;
             Geoffrey Bible's "Image" Speech;
             Bible's introductory remarks as printed;
             Bible gives up smoking
             News Reactions to 2001 meeting

Philip Morris Stockholder booklet:

PROPOSAL 1- Environmental Tobacco Smoke

The Sisters of Charity of Saint Elizabeth, P.O. Box 476, Convent Station, New Jersey 07961, claiming beneficial ownership of 300 shares of Common Stock, together with two co-proponents, submitted the proposal set forth below. The names, addresses and shareholdings of the co-proponents will be furnished upon written request made to the Secretary of the Company.

"WHEREAS-in the most rigorous study to date researchers discovered breathing in other people's cigarette smoke makes non-smokers 82% more likely to suffer a stroke. It also increases the risk of heart disease, heart attack, lung and breast cancer, and breathing-related diseases (Tobacco Control, August, 1999; The Milwaukee Journal Sentinel, August 18, 1999).

- A December, 1999 study by The Journal of the National Cancer Institute showed women who lived with smokers were 2.6 to 6 times as likely to develop lung cancer as those who did not live with smokers.

- In May, 2000 the National Institute of Environmental Health Sciences formally added to its list of "known human carcinogens" directly inhaled tobacco smoke;

- The Wall Street Journal (April, 1998) noted: in its effort "to keep reports about secondhand smoke from mushrooming, the tobacco industry mobilized a counterattack in the mid-1980s to systematically discredit any researcher claiming perils from passive smoke." This included a 1994 massive ad campaign geared to show "that the statistical techniques used by the EPA are suspect and that the studies aren't statistically powerful enough to reveal any risk of tobacco smoke at the levels encountered by nonsmokers" (WSJ, June 29, 1994).

- The Washington Post reported (May 9, 1997): "Tobacco giant Philip Morris systematically wooed scientists who might help the company counter the growing consensus on the health risks of secondhand tobacco smoke and "keep the controversy alive,' according to a 1988 internal tobacco company document."

- After a massive challenge by the tobacco industry to discredit the 1993 EPA study linking environmental smoke to tobacco, Business Week noted: "On July 17, in the heart of tobacco country, U.S. District Court Judge William L. Osteen Sr. threw out" the study. Philip Moris [sic] said the ruling "supports our view that. . . . the enactment of severe smoking restrictions is not justified." This was declared despite the fact that the company's own director of applied research from 1976-1984 said that carcinogens called nitrosamines "were the most significant risk in lung cancer both among smokers and among nonsmokers."

RESOLVED:  shareholders request the Company find appropriate mechanisms to develop and implement a continuing program to warn persons who smoke, who are exposed to ETS and who are responsible for minors who are exposed to ETS from the Company's products, that tobacco smoke is hazardous to nonsmokers and specify the nature of the hazards.

Supporting Statement
In the Master Settlement Agreement reached with 46 State Attorneys General, our Company agreed to tell the truth about dangers arising from use of our products. If you agree the time to do this regarding ETS is now, please vote "yes" for this resolution."

The Board recommends a vote AGAINST this proposal.

The policy of both Philip Morris U.S.A., our domestic tobacco company, and Philip Morris International, our international tobacco company, is to defer to the judgment of public health authorities as to the text of health warning messages that will best serve the public interest, including messages about exposure to environmental tobacco smoke (ETS). We support the dissemination of information from public health authorities regarding the reported health risks of ETS and have taken steps to provide such information to the public.

For example, the web sites of Philip Morris U.S.A. and Philip Morris International state:

 Government agencies have concluded that ETS causes disease-including lung cancer and heart disease-in nonsmokers. We recognize and accept that many people have health concerns regarding ETS. In addition, because of concerns relating to conditions such as asthma and respiratory infections, we believe that particular care should be exercised where children are concerned, and that smokers who have children-particularly young ones-should seek to minimize their exposure to ETS.

The web sites also provide direct links to studies by the U.S. Environmental Protection Agency, the International Agency for Research on Cancer and other public health authorities, all of which conclude that ETS exposure poses health risks to nonsmokers. More information on ETS can be found on Philip Morris U.S.A.'s web site at www.philipmorrisusa.com, and Philip Morris International's web site at www.pmintl.com.

Philip Morris U.S.A. has set up a toll-free telephone number and distributes to callers brochures containing the health issues portions of its web site.

Consistent with its policy of deference regarding health warning messages, Philip Morris U.S.A. also supports legislation establishing a broad regulatory framework that includes authorizing the Food and Drug Administration to revise the text of the existing warning labels on cigarette packages and in advertisements. Philip Morris International supports similar proposals in markets around the world.

Accordingly, the Company does not believe that the proponent's request is necessary or appropriate.

Therefore, your Board urges stockholders to vote AGAINST this proposal.

PROPOSAL 2- A Proposal to Ensure that Tobacco Ads are Not Youth-Friendly

Province of St. Joseph of the Capuchin Order, 1015 North Ninth Street, Milwaukee, Wisconsin 53233, claiming beneficial ownership of 300 shares of Common Stock, together with four co-proponents, submitted the proposal set forth below. The names, addresses and shareholdings of the co-proponents will be furnished upon written request made to the Secretary of the Company.

"WHEREAS our Company insists its tobacco ads and ad campaigns are not geared to underage youth and has even taken some actions that might indicate its seriousness about ensuring that youth do not use our tobacco products;

- Furthermore various studies independent of our company's own research have shown that teens have not been influenced not to buy our company's cigarettes by ad campaigns that have been run and/or supported by our company.

- As concerned shareholders we are aware that the future viability of our company's tobacco divisions is based on ensuring new users, most of who will continue to use our brands because they began as underage youth;

- A 1996 University of British Columbia study found that teenagers are three times as likely as adults to respond to cigarette ads and, on average, whenever a cigarette brand increased its advertising budget by 10%, its share of the adult smoking market grew only 3% but its share of teen smokers grew 9%.

- Cigarettes are the most heavily advertised product in the U.S.A. However, although the consumption patterns of adults do not reflect advertising dollars, the three-most advertised cigarettes in the U.S. are the three used most by underage youth.

- Further evidence presented in the New England Journal of Medicine, American Journal of Public Health, and the Journal of Pediatrics, among other publications, had demonstrated that tobacco advertising plays a significant role in stimulating illegal consumption of tobacco by minors.

- Such data seem to undermine the stated stance of our company that it is not advertising in ways that influence young people to use our products verses[sic]. This leaves some shareholders confused as to how to be sure they are not invested in a company whose activities may possibly be illegal at the worst and immoral at the least.

RESOLVED:  shareholders request the Board to implement the following, or similar policy for our Company: That, within six months of this annual meeting, before any promotional, marketing, and/ or advertising campaign presently running is allowed to continue or is inaugurated in the future, it must be submitted to independent and certifiable testing to ensure that it is not equally or more appealing to the 12-to-17 age group than groups 18 and over.

        Supporting Statement

We suggest that, in creating this approach to testing, that the testing entity be independent of the company and the tobacco industry, eliminating any possible conflict of interest. Its task will be to determine the effectiveness of the advertising campaign in making a positive impression on two age groups: those under 18 and those spread evenly between 18 and 45. If the test results on the young focus group show the campaign is equal to or exceeds the effectiveness on the older group the (proposed) campaign shall be terminated.

If you agree for the need of independent data to show our company does not advertise in ways that overly-impact underage minors vs. adults, please vote "yes" for this resolution."

The Board recommends a vote AGAINST this proposal.

Your Board does not believe that it is necessary or appropriate to take the actions requested by the proponent. Both Philip Morris U.S.A. and Philip Morris International have programs and policies in place, and are subject to legal restrictions, that help ensure that marketing and advertising activities be directed only to adults who choose to smoke.

In 1998, Philip Morris U.S.A. and certain other domestic tobacco manufacturers entered into a Master Settlement Agreement with 46 states, the District of Columbia and several U.S. commonwealths and territories, having already reached separate agreements with four other states. Among other provisions, the Master Settlement Agreement forbids the participating manufacturers from targeting youth in the advertising, promotion or marketing of tobacco products and from taking action whose primary purpose is to initiate, maintain or increase the incidence of youth smoking. The Master Settlement Agreement also bans most forms of outdoor advertising, including billboards and tobacco advertising in transportation facilities, vehicles, enclosed stadia and shopping malls; bans the use of cartoon characters in all tobacco advertising and promotions; and requires participating manufacturers to affirm corporate principles to comply with the agreement and to reduce underage usage of tobacco products.  In the event a state believes a participating manufacturer has violated the Master Settlement Agreement by targeting youth, the state's attorney general has full authority to seek a court injunction to stop the violating activity.

Philip Morris U.S.A. is committed to complying with both the letter and the spirit of the Master Settlement Agreement, and is voluntarily taking additional actions beyond those required by the Master Settlement Agreement. For example, during 2000, Philip Morris U.S.A. became the first major domestic tobacco manufacturer to voluntarily remove cigarette advertising from the back covers of magazines and to cease advertising altogether in more than 50 magazines that met FDA proposed criteria for youth readership.

Philip Morris U.S.A. has created a Youth Smoking Prevention Department, with an annual budget in excess of $100 million, dedicated solely to helping reduce the incidence of youth smoking.  This Department is committed to a positive youth development approach that is comprehensive, collaborative and measurable. Its goal is to build resolve and resilience in young people by supporting programs that reduce risk factors while enhancing protective factors. By surrounding kids with positive messages and positive influences, we hope to reduce youth smoking and other risky behaviors and ultimately improve the quality of their lives. The department's efforts are focused on communication, education, community action and access prevention. The communication strategy is designed to convince kids that it's not cool to smoke and to persuade parents to talk to their kids about not smoking. In addition to broadly viewed television advertising campaigns, Philip Morris U.S.A. launched print advertising programs for both youth and parents in 2000. As part of the Education strategy, Philip Morris U.S.A. has made grant commitments of more than $11 million to teach Life Skills Training to more than 300,000 students in school districts in 18 states. Life Skills Training has been identified by the Centers for Disease Control and Prevention as a program that works to reduce youth smoking. In the area of Community Action, Philip Morris U.S.A. is supporting National 4-H Council's Health Rocks! program which is offered in 23 communities in 14 states as well as Puerto Rico and the District of Columbia. It is also supporting the expansion of The Parent Connection program through the Work in America Institute to help parents connect and communicate with their kids about not smoking. In the area of Access Prevention, Philip Morris U.S.A. supports the "We Card" retailer training and signage programs in addition to implementing its own advertising and point of sale campaigns to reduce youth access in the home and through third-party purchasing. Philip Morris U.S.A.'s commitment to access prevention predates the Master Settlement Agreement. In 1995, Philip Morris U.S.A. launched its "Action Against Access" initiative, with the objective of helping to prevent youth access to cigarettes at the retail level by fostering an environment in which minimum-age laws were enforced and cigarettes could only be purchased at the retail level through a face-to-face transaction with proof of age. Finally, Philip Morris U.S.A. is working diligently to support youth smoking prevention legislation in the states and to promote government funding of youth programs using tobacco settlement funds.

Thus, Philip Morris U.S.A. has a long-standing commitment to help ensure that its marketing efforts are directed only at adults who choose to smoke; is subject to comprehensive advertising restrictions and monitoring provisions of the Master Settlement Agreement and other agreements that prohibit the targeting of youth in the advertising, promotion or marketing of tobacco products; and has launched its own comprehensive youth smoking prevention effort, including advertising specifically designed to help prevent youth smoking.

Around the world, Philip Morris International is actively involved in more than 130 youth-smoking prevention programs in nearly 70 countries-in many cases by forming alliances with respected organizations that work with and understand minors. Initiatives include support for minimum age laws in every country; support of youth access prevention and youth anti-smoking advertising; placing the message "Underage Sale Prohibited" or its equivalent on every cigarette package where legally feasible; and working proactively with governments and competitors to achieve the reforms necessary to reduce youth smoking in each country in which it operates.

Philip Morris International actively advocates and supports laws that establish a minimum age of at least 18 for the lawful sale of tobacco products. These laws provide an important foundation for industry-supported coalitions working to prevent minors' access to tobacco products. Today, approximately 90 countries outside the United States have such laws.

Philip Morris International participates in more than 70 youth access prevention programs in countries ranging from Brazil and Turkey to Kazakhstan and Singapore. These programs forcefully communicate to our customers and trade partners that we do not want cigarettes sold to minors. Philip Morris International is also participating in more than 50 youth anti-smoking programs, including advertising, school-based, community and other campaigns similar in many ways to those conducted by Philip Morris U.S.A. These programs are running in various countries, including the Dominican Republic, New Zealand, Slovakia and the Philippines, and we are continually searching for opportunities to expand the reach of these programs. Governments in nearly 40 countries support many of our youth smoking prevention initiatives. For example, the "Yo Tengo P.O.D.E.R." education program has the support of a number of federal and local government authorities throughout Latin America.

Philip Morris International is committed to working with governments and our competitors to reform cigarette marketing practices in line with societal expectations. Philip Morris International adheres to worldwide standards to ensure that our marketing efforts are directed solely toward adults who choose to smoke. These standards are part of the Philip Morris International Cigarette Marketing Code and are obligatory for all employees worldwide. We also seek the cooperation of competitors to adopt voluntary cigarette marketing codes, and to date, approximately 80 countries have adopted such codes.

A similar proposal was defeated by stockholders at each of the last two Annual Meetings.

Therefore, your Board urges stockholders to vote AGAINST this proposal.

PROPOSAL 3-Phase Out Genetically Engineered Food

The Sisters of St. Dominic of Caldwell, New Jersey, 52 Old Swartswood Station Road, Newton, New Jersey 07860, claiming beneficial ownership of 100 shares of Common Stock, together with two co-proponents, submitted the proposal set forth below. The names, addresses and shareholdings of the co-proponents will be furnished upon written request made to the Secretary of the Company.

"WHEREAS:  International markets for genetically engineered (GE) foods are threatened by extensive resistance:

- Philip Morris' Kraft Foods had to recall 2.5 million taco shells discovered to contain genetically engineered corn not approved for human consumption (9/2000);

- Europe's larger food retailers, including Tesco, Sainsbury Group, Carrefour, and Rewe, have committed to removing GE ingredients from their store-brand products, as have U.S. retailers Whole Foods Market, Wild Oats Markets, and Genuardi's Family Markets;

- In the UK, three fast-food giants-McDonald's, Burger King, and Kentucky Fried Chicken-exclude GE soy and corn ingredients from their menus;

- McCain Foods of Canada, the world's largest potato and frozen French fry processor, announced it would no longer accept GE Bt potatoes for their brand-name products (11/99);

- Gerber Products announced it would not allow GE corn or soybeans in any of their baby foods (7/99);

- PepsiCo's Frito Lay asked farmers that supply corn for their chips to provide only non-GE corn (1/2000);

- Once in effect, the Biosafety Protocol, approved by representatives of more than 130 countries (1,2000), will require that genetically engineered organisms (GEOs) intended for food, feed and processing must be labeled "may contain" GEOs, and countries can decide whether to import those commodities based on a scientific risk assessment.

There is scientific concern that genetically engineered agricultural products may be harmful to humans, animals, or the environment:

- The USDA has acknowledged (7/13/1999) the need to develop a comprehensive approach to evaluating long-term and secondary effects of GE products;

- Some GE crops have been engineered to have higher levels of toxins, such as Bacillus thuringiensis (Bt), to make them insect-resistant;

- Research has shown that Bt crops are building up Bt toxins in the soil, thereby disturbing soil ecology and impacting beneficial organisms and insects (12/1999, 5/2000);

- The National Academy of Sciences report, Genetically Modified Pest-Protected Plants, recommends development of improved methods for identifying potential allergens in genetically engineered pest-protected plants. The report found the potential for gaps in regulatory coverage. (4/2000)

The long U.S. tradition of citizens' "right to know" is expressed in laws requiring nutritional labeling of foods:

- Nineteen polls in the U.S. show that 75-95% of people surveyed want GE food to be labeled as such.

- GE crops may incorporate genes from animal species.  Individuals wishing to avoid them for religious or ethical reasons cannot unless they are labeled;

- The European Union requires labeling of GE foods, and labeling has been proposed by governmental authorities in Japan, New Zealand, South Korea and Australia.

RESOLVED:  Shareholders request that the Board of Directors adopt a policy to phase out genetically engineered crops, organisms, or products thereof from all products sold or manufactured by the company, as quickly as feasible, unless long-term safety testing shows that they are not harmful to humans, animals, and the environment; and provide the interim step of labeling and identifying products that may contain these ingredients, and reporting to the shareholders by August 2001."

The Board recommends a vote AGAINST this proposal.

Your Company produces and markets food products principally through its subsidiary, Kraft Foods North America ("Kraft"). Kraft believes that questions about genetically modified foods should be-and are being-addressed by the United States Food and Drug Administration (the "FDA"), the Environmental Protection Agency (the "EPA") and the United States Department of Agriculture ("USDA"), which have the knowledge, expertise, and legal authority to resolve any issues uniformly on the basis of sound science and sound regulatory principles.

Kraft's highest priority is the safety of its food products. The FDA-the primary federal agency responsible for ensuring the safety of commercial food-has stated that "it is not aware of any information showing that foods derived by these new methods differ from other foods in any meaningful or uniform way, or that, as a class, foods developed by the new techniques present any different or greater safety concerns than foods developed by traditional plant breeding."   In January 2001, the EPA similarly stated that the materials used to genetically modify crops "are ubiquitous in all forms of life, have always been present in human and domestic animal food and are not known to cause any adverse health effects when consumed as part of food."

The FDA requires that food be appropriately labeled where ingredients have been modified so that the composition of the final product differs significantly from what is expected for that food, or where the final product contains potential allergens. In recent "Guidance" on food labeling, the FDA repeated that it still knows of no "basis for concluding that the fact that a food or its ingredients was produced using bioengineering is a material fact. . . . FDA is therefore reaffirming its decision to not require special labeling of all bioengineered foods." The American Medical Association has also concluded that "there is no scientific justification for special labeling of genetically modified foods, as a class. . . ."

In addition, Kraft believes that piecemeal labeling by individual companies, as called for by the proponents, would result in inconsistency and confusion, to the detriment of the Company and its consumers.

The FDA has expressed similar concerns about the confusion that could result from labeling concerning the presence or absence of ingredients derived from genetically modified sources, since "essentially all food crops have been genetically modified" through a variety of methods. The AMA has stated that even "voluntary labeling is without value unless it is accompanied by focused consumer education."

Federal agencies have also studied relevant environmental issues. The EPA "conducted a rigorous assessment of" crops modified to produce their own plant-incorporated protectants such as Bt, and found that they "do not cause unreasonable adverse effects." The EPA and the USDA jointly stated that Bt sprays "have long been safely used by organic, agronomic, vegetable, fruit farmers and foresters to control pests," and that genetically modified Bt crops "can and have reduced the use of more hazardous insecticides. . . ."

Kraft does not believe it is or will soon become feasible to remove genetically modified crops from the ingredients it purchases. The food supply chain in the United States and Canada, from the farmer forward, has not established discrete streams to separate conventionally grown from genetically modified crops on a large scale. While certain companies may be able to obtain limited quantities of selective ingredients derived exclusively from conventional crops, it would be unachievable at present for any large multi-category food company to do so across its product line.

Kraft continues to believe that issues relating to biotechnology should be and are being resolved uniformly by the FDA, EPA and USDA, which can evaluate all aspects of the issue in a balanced and fully informed manner, on the basis of sound science. Officials at these agencies have carefully and thoroughly considered issues relating to the safety, labeling and environmental effects of genetically modified crops. They continue to improve government's understanding and approval processes.

The recall of taco shells by Kraft demonstrates our commitment to food safety. Kraft voluntarily recalled the taco shells not because of evidence the product presented risks to human health, but because they contained ingredients from a variety of corn that had been approved for consumption by animals but not by humans. Following the recall, Kraft made recommendations and government agencies have taken action to prevent a recurrence. The FDA has proposed a more rigorous and transparent approval process for bioengineered crops, which Kraft supports. Kraft has also recommended that government agencies should approve bioengineered crops only if they are approved for consumption by humans as well as animals. The food and agriculture industry as well as biotechnology companies have widely accepted this recommendation, and we believe that it will be followed.

A similar proposal was defeated by stockholders at last year's Annual Meeting.

Therefore, your Board urges stockholders to vote AGAINST this proposal.

PROPOSAL 4- Stop Funding Smoking Related Research Using Live Animals

People for the Ethical Treatment of Animals, 501 Front Street, Norfolk, Virginia 23510, claiming beneficial ownership of 1,036 shares of Common Stock, submitted the proposal set forth below.

"WHEREAS our Company continues to fund smoking-related research using live animals;

- We acknowledge on our Web site, philipmorrisusa.com, "We agree with the overwhelming medical and scientific consensus that cigarette smoking causes lung cancer, heart disease, emphysema and other serious diseases in smokers";

- U.S. federal law does not require the testing of tobacco products on animals;

The worldwide trend is toward the cessation of the use of animals in testing.

- A September 1999 Market & Opinion Research International (MORI) poll indicated that 78 percent of adults are bothered by the use of animals in experiments;

- Leading consumer products companies in several different business sectors, including Gillette, Revlon, Benetton, Dial, and General Motors, have committed to a policy of not testing their products on animals;

- In 1997, the U.K. government announced that it would not grant licenses for tests that involve animals in the development and testing of alcohol or tobacco products;

There is increasing scientific concern regarding the reliability and relevance to human beings of results obtained from animal research;

- It has been argued in the prestigious journal Scientific American (February 1997) that "animal experiments can mislead researchers or even contribute to illness or deaths by failing to predict the toxic effects of drugs";

- C. Ray Greek, M.D. and board-certified anesthesiologist, explained in May  2000, "Animal experimentation is not necessary. It is expensive. It is inaccurate. It is misleading. It consumes limited resources. And further, it is detrimental to the very species it professes to be working to help- humankind";

- Dr. Arnold D. Welch, Department of Pharmacology, Yale University, states, "In part because of possible major differences in responses to drugs in animals and man, the knowledge gained from studies in animals is often not pertinent to human beings, will almost certainly be inadequate, and may even be misleading";

- Dr. Werner Hartinger, M.D., a German surgeon, asserts, "There are, in fact, only two categories of doctors and scientists who are not opposed to vivisection: those who don't know enough about it, and those who make money from it."

RESOLVED: Shareholders request that the Board of Directors adopt a policy of not sponsoring and/or funding smoking-related research using live animals, that any funds Philip Morris may contribute to the Council for Tobacco Research and/or other research organizations be directed to non-animal research, and that requesting shareholders be notified of the status of the implementation of this policy by September 1, 2001.

        Supporting Statement

We believe that the funding of smoking-related research using live animals is a cruel and pointless mismanagement of company resources.  Such research causes further damage to our company's public reputation in an already-beleaguered industry. Our company should take notice of the successful example set by the many consumer products companies in other sectors and assume a leadership position in the tobacco industry by rejecting live animal research."

The Board recommends a vote AGAINST this proposal.

Philip Morris U.S.A. and Philip Morris International currently conduct or fund a small number of scientific studies using laboratory rats and mice. Philip Morris U.S.A. and Philip Morris International are committed to researching ways to reduce the health risks of cigarette smoking and to evaluating the ingredients used in cigarettes in order not to increase the risks of smoking. These studies are an essential part of these research goals.

In conducting or funding scientific research, Philip Morris U.S.A. and Philip Morris International are committed to using laboratory animals only when necessary, to finding alternative methods of biological testing whenever possible, to using as few laboratory animals as possible, and to conducting any such tests in full compliance with animal welfare laws and guidelines promulgated by the American Association of Laboratory Animal Science, the Society of Toxicologists and other scientific bodies that require all reasonable steps be taken to avoid or minimize discomfort, distress or pain to the laboratory animals.

Over the past 20 years, the use of laboratory animals in tobacco-related research by Philip Morris U.S.A. and Philip Morris International has been reduced substantially. Philip Morris U.S.A. and Philip Morris International will continue to look for ways to further reduce such use. Completely eliminating such research is not feasible at the present time in view of their above-stated research goals and might impair their ability to comply with future government research standards and data requirements.

Therefore, your Board urges stockholders to vote AGAINST this proposal.

PROPOSAL 5- Inform Consumers About the Risks of Smoking

Gregory N. Connolly, D.M.D., M.P.H., 399 Common Street, Belmont, Massachusetts 02478, claiming beneficial ownership of 90 shares of Common Stock, together with a co-proponent, submitted the proposal set forth below. The name, address and shareholdings of the co-proponent will be furnished upon written request made to the Secretary of the Company.

"WHEREAS:  Lung cancer kills an estimated 140,000 Americans each year, with more than 85% of the cancers caused by cigarette smoking, and more than 80% of persons diagnosed with lung cancer are dead within five years.

WHEREAS:  Our company sells cigarettes, and we have acknowledged on our website "We agree with the overwhelming medical and scientific consensus that cigarette smoking causes lung cancer," and "we agree with the overwhelming medical and scientific evidence that cigarette smoking is addictive."

WHEREAS:  We state that "Smokers and potential smokers should rely on these messages in making all smoking related decisions." But we do not rely on these messages when we advertise and promote cigarettes, which we acknowledge to cause lung cancer and addiction.

WHEREAS:  Our company sells cigarettes in Australia, Thailand and Poland and other countries with large and conspicuous health warning on the front of the packages informing consumers about the risk of lung cancer. These warnings are up to ten times larger than the warnings that appear on the side of our US cigarettes.

WHEREAS:  When the Firestone Company determined that their tires had defects that could lead to lethal accidents, they immediately launched an aggressive consumer education campaign to alert consumers about the defects and the potential for fatal injuries.

WHEREAS:  A growing number of juries found our company committed fraud and misleading consumers about health risks connected to smoking. We therefore believe that the company should make good faith attempts to undo this fraud rather than stop doing more by adequately informing smokers about the dangers of lung cancer associated with use of their product.

WHEREAS:  Failure to adequately warn consumers of our products about the risk of lung cancer could increase our risk to adverse legal decisions.

BE IT RESOLVED:  Shareholders request that management develop a report for shareholders within one year on how we would better inform our consumers about their risk of contracting lung cancer and addiction from use of our products. This report could include recommendations such as voluntary placement of Canadian-like warning on all cigarettes sold in the United States, bold warning on print advertisements that take up a substantial portion of the advertising, 1-800 numbers for consumers to call for more information about lung cancer and addiction and tips on quitting, and a paid television counter-advertising campaign geared towards adult smokers that informs them about the dangers of smoking and lung cancer and addiction.

The Board recommends a vote AGAINST this proposal.

The policy of both Philip Morris U.S.A. and Philip Morris International is to defer to the judgment of public health authorities as to the text of health warning messages that will best serve the public interest, including messages regarding disease causation in smokers and addiction. We support the dissemination of information from public health authorities regarding the health risks of smoking and have taken steps to provide such information to the public.

In the United States, Congress has mandated for decades the specific warnings that must appear on cigarette packages and in advertisements, and we have stated our support for legislation that would authorize the FDA to revise the text of existing warnings. In addition, we are making efforts to communicate to the public that our views regarding disease causation in smokers and addiction are aligned with those of the public health community. For example, Philip Morris U.S.A. has set up a toll-free telephone number and distributes to callers brochures containing portions of the web site messages cited by the proponent.

Also, in October 2000, Philip Morris U.S.A. and Philip Morris International, in connection with the World Health Organization's proposed Framework Convention on Tobacco Control, made specific proposals in this area. These proposals are described in a detailed report (the "Report"), which is available on the Internet at www.pmfctc.com.

The Report describes Philip Morris U.S.A.'s and Philip Morris International's support of WHO's desire to play an active role, in communicating information about the health risks of smoking to consumers. The Report advocates the adoption of a Framework Convention that WHO member states could consider for ratification that would, among many other things:

- direct WHO to recommend the specific text that signatory nations could adopt for their cigarette health warnings, and to periodically re-evaluate those recommendations in light of evolving developments;

- establish uniform formatting requirements for health warning messages that communicate the messages clearly, without dominating cigarette packaging or advertisements, or disparaging smokers for the choices they make;

- encourage signatory nations to utilize WHO to share information about important tobacco issues - such as whether and to what degree low-tar cigarettes or novel products result in any reduced risk of smoking- related diseases and develop consensus around them, so that smokers around the world can benefit from clear, consistent advice regarding important issues;

- ask WHO to sponsor research into various cessation techniques, and recommend those that are found to be effective in assisting smokers who want to quit but are having difficulty; and

- direct WHO to develop and recommend educational programs on smoking and health.

The Report also describes examples of Philip Morris International and Philip Morris U.S.A. adhering to their policy of deference regarding the text of health warning messages, including with regard to current proposals for new health warning messages in the European Union.

Accordingly, the Company does not believe that the report requested by the proponent is necessary or appropriate.

Therefore, your Board urges stockholders to vote AGAINST this proposal.

PROPOSAL 6- Global Human Rights Standards

The Controller of the City of New York, 1 Centre Street, New York, New York 10007, claiming beneficial ownership of 2,321,330 shares of Common Stock, submitted the proposal set forth below.

Whereas, Philip Morris Companies, Inc. currently has extensive overseas operations, and

Whereas, reports of human rights abuses in the overseas subsidiaries and suppliers of some U.S.-based corporations has led to an increased public awareness of the problems of child labor, "sweatshop" conditions, and the denial of labor rights in U.S. corporate overseas operations, and

Whereas, corporate violations of human rights in these overseas operations can lead to negative publicity, public protests, and a loss of consumer confidence which can have a negative impact on shareholder value, and

Whereas, a number of corporations have implemented independent monitoring pilot programs with respected local human rights and religious organizations to strengthen compliance with international human rights norms in selected supplier factories, and

Whereas, the Council on Economic Priorities has established a program of independent monitoring known as the SA8000 Social Accountability Standards, and

Whereas, these standards incorporate the conventions of the International Labor Organization (ILO) on workplace human rights which include the following principles:

 1)  All workers have the right to form and join trade unions and to bargain collectively. (ILO Conventions 87 and 98)

 2)  Workers representatives shall not be the subject of discrimination and shall have access to all workplaces necessary to enable them to carry out their representation functions. (ILO Convention 135)

 3)  There shall be no discrimination or intimidation in employment. Equality of opportunity and treatment shall be provided regardless of race, color, sex, religion, political opinion, age, nationality, social origin, or other distinguishing characteristics. (ILO Convention 100 and 111)

 4)  Employment shall be freely chosen. There shall be no use of force, including bonded or prison labor. (ILO Conventions 29 and 105)

 5)  There shall be no use of child labor. (ILO Convention 138), and,

Whereas, independent monitoring of corporate adherence to these standards is essential if consumer and investor confidence in our company's commitment to human rights is to be maintained,

Therefore, be it resolved that stockholders request that the company commit itself to the full implementation of the aforementioned human rights standards 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.

The Board recommends a vote AGAINST this proposal.

Our Company and its various subsidiaries are committed to fair and ethical treatment of all employees and respect for human rights in the workplace. Our businesses have long been regarded as culturally diverse and desirable places to work. We provide equal employment opportunity without regard to race, color, religion, national origin, age, sexual orientation, marital status, citizenship status or disability, and we do not tolerate discrimination on the basis of any of these factors. We are opposed to the use of child labor or forced labor, and we support the establishment and enforcement of laws and regulations intended to eradicate human rights abuses and exploitive practices in the workplace. We permit employees to organize in accordance with applicable labor laws. Our Business Conduct Policy requires the highest standards of ethical, moral and lawful conduct from each employee of the Company and its subsidiaries around the world. Employees are expected to conduct business on the basis of fair dealing, consideration for the rights of others and the most stringent principles of good corporate citizenship.

In summary, we concur with the principles on which this proposal is based. However, SA 8000 is but one of many sets of guidelines or codes of conduct that have been created for businesses by governments, non-governmental organizations, faith-based organizations and intergovernmental agencies. A recent inventory conducted by the Organization for Economic Cooperation and Development identified more than 200 codes of corporate conduct promulgated by a multitude of different sponsors. These include the UN Global Charter, the OECD Guidelines for Multinational Enterprises, the Global Reporting Initiative, the Global Sullivan Principles, as well as Social Accountability 8000. Some of these codes enjoy the wide involvement of international organizations and governments.  Others, such as SA 8000 enjoy a narrower basis of support. Some codes are broad in scope, while others like SA 8000 are more narrowly focused. It would be impractical and extremely costly for the Company to support each and every code of corporate conduct that different organizations may sponsor.

The Company and its subsidiaries are committed to conducting themselves in an ethical and responsible manner as good corporate citizens in all aspects of their businesses. As part of this commitment, the Company is conducting a comprehensive review and assessment of the various codes of corporate conduct to determine if it should adopt any of the codes or if appropriate changes should be made in the way it conducts business. Your Company does not believe at the present time that adoption of SA 8000 is appropriate.

Therefore, your Board urges stockholders to vote AGAINST this proposal.

[VAGASP]Added 22 April 2001