1998-99 Shareholder Resolutions
1998-99 Shareholder Resolutions
All the below shareholder resolutions are being filed with the various companies as listed.
SHAREHOLDERS FILING:
P = primary filer (group ultimately responsible)
C = co-filer.
The abbreviations are:
TOBACCO ISSUE, INTERNATIONAL HEALTH PROGRAM
Shareholder Resolutions for 1998-1999
The following pages include the shareholder resolutions for the coming season as of December 9, 1998
1. Link tobacco company executives' compensation with reduction in teen smoking
___ Loews (P: CBIS; C: CCVI)
___ Philip Morris (P: CBIS; C: RPE; DUB/OSF)
___ RJR Nabisco (P: SSND/MKE; C: CSJ/StP?)
___ UST/Adapt (P: CCVI; C: SOP)
2. Non-support of executives found guilty of fraud or lying under oath regarding the company's tobacco business
___ Loews (P: )
___ Philip Morris (P: SOP)
___ RJR Nabisco (P: RPE)
___ UST (P: OSF/MKE)
3. Establish a review committee to investigate company's involvement in smuggling
___ Philip Morris (P: MWCaps)
___ RJR Nabisco (P: MWCaps)
4. Apply to developing nations same criteria for ad-controls as in the U.S.
___Philip Morris (P: CCVI; C: SCNY; Dominicans/St.Albert Prov.; MMS; MN)
5. Pre-test all advertising campaigns via independent group to determine they are not impacting youth in greater significance than adults
___ Loews (P: SCH)
___ Philip Morris (P: MHS; C: SCH)
___ RJR Nabisco (RSM/StL; CICM)
___ UST (P: Connolly; C: MN)
6. Address health misperceptions regarding "Light" and "Ultra-Light" cigarettes
___ Loews (P: Connolly)
___ Philip Morris (P: Connolly)
___RJR Nabisco (P: Connolly; C: MN)
7. Report on smoking and pregnancy
___ Loews (P: MHS; C: MN
8. Divest from tobacco involvement
___ H. B. Fuller (Domini)
9. Staggered Board
___ Loews (CICM)
10. Policy for managed health system not to make further purchase in tobacco equities until it can be shown cigarettes do not cause illnesses and deaths attributed to them
___ ABR Information Services ( )
___ Humana ( )
___ Maxicare Health Plans ( )
___ MedPartners ( )
___ Oxford Health Plans (Domini?)
___ United Dental Care ( )
___ Safeguard Heath Enterprises ( )
___ United Healthcare ( )
11. Policy for insurance companies not to make further purchase in tobacco equities until it can be shown cigarettes do not cause illnesses and deaths attributed to them
___ AFLAC ( )
___ American Annuity Group ( )
___ AON? (EPUSA?)
___ American General (P: CHW)
___ Atlantic American ( )
___ CIGNA? (P: )
___ Conseco ( )
___ Hartford Financial Services Group ( )
___ Horace Mann Educators? ( )
___ Jefferson-Pilot ( )
___ John Alden ( )
___ Lincoln National (P: CHW)
___ Protective Life ( )
___ ReliaStar Financial (P: CHW)
___ SunAmerica ( )
___ Torchmark ( )
___ Transamerica ( )
___ Unitrin ( )
___ Westbridge ( )
___ Western National ( )
12. Policy ensuring billboard companies that all ad campaigns are not more friendly re: youth than adults
___ Clear Channel Communications/Eller (P: Aquinas; C: MN)
___ Lamar Advertising (P: SCH)
___ Outdoor Systems (Aquinas)
___ Universal Outdoor Holdings ( )
INVESTIGATING IMPLICATIONS OF CLASS ACTION SUIT RELATED TO NICOTINE ADDICTION
___ Philip Morris
NAME OF GROUP (CO)FILING: _______________________________________
CONTACT PERSON: ________________________
PHONE: ____________
If you are filing and are not listed as such, please return this commitment form to Michael Crosby ASAP: Fax: 414-271-0637.
Thanks much.
1. TOBACCO EXECUTIVES' COMPENSATION AND REDUCTION OF TEEN TOBACCO
UST
WHEREAS our Company's executives consistently state they adamantly oppose tobacco-use by minors. To this end they gave initial agreement to a set of goals to achieve that end as outlined in the now-abandoned National Tobacco Settlement Proposal ("settlement").
- Despite the non-agreement, in the negotiations our company agreed to link economic penalties for the company if teen tobacco use did not decrease. In acceding to this dimension of the "settlement" our Company agreed to the payment of fines if tobacco use by teenagers would not drop drastically by specific dates. Under the penalty section of the proposed "settlement", tobacco use by people 18 or younger must fall 25% by the fifth year, 35% by the seventh year and 45% by the tenth year. For each percentage point representing failure to meet these targets, tobacco companies agreed as a group to pay an $80 million fine, up to a maximum of $2 billion annually.
- Our company's management agreed to the now-defunct proposed "settlement," including these penalties, knowing the evidence that has shown that the majority of those addicted to the nicotine in tobacco began tobacco use as minors. This would mean any consequent decline in youth consumption could, in the long term, have serious economic implications on future domestic sales of our company's tobacco products. Consequently, such an agreement could adversely affect shareholder returns.
- While fines may adversely affect stock price and stockholder dividends the agreement in the now-defunct settlement seemingly did not negatively affect executive compensation.
- We believe that managers, as those responsible for developing strategies to achieve these goals, should share in the success or failure of their strategies.
- We also believe that, even though the "settlement" failed, the penalties agreed-upon should be voluntarily embraced by our Company for itself at all levels, including its executives, if our stated goal of reducing consumption by minors is not met.
RESOLVED: shareholders request that the Board voluntarily create a formula linking future executive compensation packages with achievement of specific decreases in teen consumption of our company's brands, using the terms of the now-defunct "settlement" as a guide. Included in the formula should be penalties for executives when the company is not in compliance with the goals determined as well as rewards for meeting these goals.
Supporting Statement
Since our company has already indicated agreement with youth reduction goals as outlined in the National Settlement, this request is not contingent on approval of the "settlement". If you agree that all parties should bear responsibility for reducing teen tobacco use, including the executives who agree to and must oversee implementation of plans geared to insure such reductions, please vote "yes" for this resolution.
2. NON-SUPPORT OF EXECUTIVES FOUND GUILTY OF FRAUD OR LYING UNDER OATH RE: COMPANY'S TOBACCO BUSINESS
Loews and UST
On February 12, 1998, USAToday editorialized ("If Tobacco Executives Lied under Oath, Prosecute Them"):
- With all the Washington talk about perjury of late, it is time to focus on some of the most dangerous statements told under oaththose by tobacco executives.
- four years ago, Big Tobacco's seven top CEOs appeared before a congressional subcommittee and swore that cigarettes are no more addictive than Twinkies.
- A slew of secret industry documents released in recent weeks shows those statements weren't true. And evidence is mounting that the CEOs knew it.
- Lying under oath and knowing it are the elements required to prove perjurya crime carrying the threat of five years in prison and $2,000 fines. More than three years after the Justice Department quietly began a criminal investigation of tobacco companies, investigators now have thousands of industry documents contradicting the CEO's testimony.
- Possible criminal charges involving tobacco representatives include contempt of court or congress, antitrust violations, and drug laws (if they knew cigarettes were addictive, affected the nicotine content to addictive levels, and thus sold a drug that had not been approved).
- The Wall Street Journal reported (03/09/98) that the U.S. Justice Department is investigating some of our competitors to determine whether these "companies lied to the Food and Drug Administration about the content and marketing of cigarettes." It notes that the "investigation began with allegations that tobacco executives perjured themselves in 1994 congressional testimony by denying that nicotine was addictive. But investigators are understood now to be pursuing false-statement cases that are easier to prove because, unlike perjury, those charges don't require specific evidence of an intent to deceive and can be applied to companies and individuals."
- While our company was not listed as one being investigated by The Journal report, recently-released internal tobacco company documents present compelling evidence that tobacco company executives may have perjured themselves before Congress and have conspired to fraudulently suppress the truth on several issues, including the health hazards of cigarettes, the addictiveness of nicotine, and the fire-safety of cigarettes;
RESOLVED that shareholders request the Board to adopt a policy that no Company representative convicted of lying under oath (and whose appeals have been exhausted) and/or found guilty of fraud regarding the operations or products of our Company that may be injurious to peoples' health shall receive any financial support for his/her defense and/or fines and shall be immediately terminated without pay from the Company.
Supporting Statement
The USAToday editorialized: "The simple truth is that secrets the executives held and lies they told encouraged people to smoke and ultimately to die. Since their first congressional appearance alone, more than 4 million Americans have started smoking. . . . If the executives committed perjury, they should be prosecuted."
If you agree that no company assets should be expended in support of any proven criminal behavior by our executives, please vote "yes" for this resolution.
3. ESTABLISH A REVIEW COMMITTEE TO INVESTIGATE AND RECOMMEND ACTIONS RELATED TO SMUGGLED CIGARETTES OF THE COMPANY
Philip Morris Companies Inc.
WHEREAS from one-quarter to one-third of all cigarettes exported by our company end up being smuggled.
- A 1997 front-page expose in The New York Times, headlined "Cigarette Makers Are Seen As Aiding Rise in Smuggling," noted that "tobacco giants deny" any "role in illegal trade," but that "inquiries show there may be one."
- The article states: "The largest tobacco companies are selling billions of dollars of cigarettes each year to traders and dealers who funnel them into black markets in many countries, say law enforcement officials and participants in the trade. In the last decade, the volume of cigarette smuggling around the world has nearly tripled, according to a leading tobacco research organization. This reflects a general surge in cigarette sales abroad, especially for American brands."
- The article noted "the companies say they do nothing to encourage the smuggling and do not condone it. But recent criminal investigations in several countries show that people in the tobacco industry have played a significant role at times in stimulating and fueling it."
- It specifically mentioned "two organized crime groups in Italy [who] take in $500 million a year by smuggling in Marlboros they buy from Swiss dealers selling products made by the Philip Morris Companies, America's largest cigarette maker." It continued, "If the companies say they do not, It's a lie,' said Corrado Bianchi, who said he had sold Philip Morris cigarettes as a dealer in Switzerland before retiring two years ago. Of course they know.'"
- The proponents of this resolution believe our Company's and the Industry's full-page ads warning against a "black market" if taxes on cigarettes will be increased fall flat, given the data that shows the alleged involvement of our company in such a market.
RESOLVED: shareholders request the Board to establish a committee of independent directors to determine the extent of our Company's involvement directly or indirectly in smuggling its cigarettes throughout the world and to make appropriate recommendations to ensure that our Company is not involved in any way in selling cigarettes in ways that assist smuggling. This Committee shall report its findings and recommendations to the shareholders prior to the 2000 annual meeting.
Supporting Statement
The proponents of this resolution do not believe the Board's defense of the Company's anti-smuggling efforts is sufficient. In urging shareholders to vote against this resolution last year, the company argued: 1. That it has mechanisms in place to keep this from happening. However, the fact that these "mechanisms" seem ineffective is evidenced by the fact that the European Union has called upon the U.S. government to aid it in investigating U.S. tobacco companies for their involvement in the smuggling. 2. That it abides by all laws in the companies where it operates. However, the African, Middle East and European centers of operation for Philip Morris are in Switzerland which does not consider such smuggling to be illegal. Therefore, our company can be involved in smuggling without it being illegal, if Switzerland is considered the corporate source.
4. PROTECTING YOUTH FROM SMOKING IN DEVELOPING COUNTRIES
Philip Morris
WHEREAS, The New York Times editorialized (09110197): "Today American tobacco companies win profits and build addiction throughout Asia, where tobacco consumption is growing at the fastest rate in the world. Indeed, American cigarette companies have agreed to the proposed domestic tobacco settlement in part because it does not touch them overseas, where profits are soaring and they can boldly target teen-agers without fear of lawsuits or powerful critics."
- The editorial also noted that, in Hong Kong, hip clothing stores pass out American cigarettes free to their customers and sell Marlboro caps, watches and binoculars.
- In the U.S.A., our Company's "Action Against Access" calls for the company not to offer free samples of cigarettes or send cigarettes through the mail, place warnings of packages indicating that sales to minors is prohibited, support laws prohibiting tobacco sales to minors, and train retailers not to sell to minors. We see this as an important step;
- Due, in great part to our company's major marketing thrust, Philip Morris' sale of cigarettes have soared in international markets, particularly in the developing countries of Asia and Eastern Europe; -- A recent study among school children (average age 10) in Hong Kong found that 95% of the children recognize the band name Marlboro;
- At the same time, a 1992, Bush Administration, U.S. Government Accounting Office report on "International Trade: Advertising and Promoting U.S. Cigarettes in Selected Asian Countries," indicated extensive violation of host country codes by U.S. cigarette companies;
- A New York Times article (05115194) noted that, despite local Asian governments' efforts to launch anti-smoking campaigns, "but the tobacco companies often find ways around the bans through indirect promotions that skirt the law--sports events, glossy advertisements for clothing brands or travel agencies that bear that name and logo of a cigarette brand;"
- Our company has used movie stars popular with U.S. teens, such as Roger Moore and Tom Berringer, to advertise its cigarettes in Asia;
- Our company was sued in the Philippines in 1987 for allegedly advertising and marketing cigarettes to Filipino children using methods that are prohibited in the United States. Successful litigation in the Philippines or other developing countries could adversely effect the value of our stock;
- Lawsuits in the United States have alleged that, decades ago, our company conducted advertising and marketing practices that enticed children to smoke. If these lawsuits are successful the value of our stock could be effected and used by people in other nations where similar actions may be demonstrated;
RESOLVED that shareholders request management to implement the same programs that the Company has voluntarily proposed and adopted in the United States to prevent youth from smoking and buying our cigarettes in developing countries.
Supporting Statement
Much of the recent growth in cigarette sales has taken place in developing countries. We think this proposal takes a fair and reasonable approach. To protect children from developing countries from smoking and protect our company in future litigation, we urge shareholders to vote for this proposal.
6. ADDRESSING MISPERCEPTIONS RELATED TO "LIGHT" AND "ULTRA-LIGHT" CIGARETTES
Loews, Philip Morris Companies Inc., RJR Nabisco
WHEREAS since the introduction of light and ultra-light cigarettes diseases associated with cigarettes have not been diminished.
- A recent study commissioned by the Commonwealth of Massachusetts has shown that smokers receive far higher doses of tar, nicotine and carbon monoxide from cigarettes than tobacco companies have heretofore acknowledged. The study showed that this proves true of even "light" versions of the most popular cigarettes.
- Despite the fact that our company alleges that it uses the machinery to test the tar level of cigarettes required by the Federal Trade Commission, other studies show that such machinery does not allow for the normal way many smokers smoke our "light" and "ultra-light" brands.
- An unacknowledged problem exists among many smokers who use "light" and "ultra-light" brands insofar as they take deeper and more frequent puffs. The study showed that, among such smokers, tar, nicotine and carbon monoxide levels were higher.
- The National Cancer Institute has noted the tendency of smokers to inhale more deeply and more frequently and to cover the ventilation holes found in some cigarette filters with their lips and fingers: "Smokers who switch to lower-yield cigarettes frequently change their smoking behavior, which may negate potential health benefits from reduced-yield cigarette brands," the National Cancer Institute study concluded.
- The study, according to The Wall Street Journal (01/30/97) might "imperil" claims by tobacco companies related to their "research" on the content levels.
- Research shows smokers perceive terms such as "light" and "ultra-light" as indicating the cigarette is less dangerous to their health when smoked.
- Our company is being sued for promoting such brands with the implications that they are safer and/or less dangerous for health when smoked.
RESOLVED that, to preclude further litigation on this matter, the company stop use of the terms "light" and "ultra-light" until shareholders can be assured with independent data that at least the majority of people smoking our brands promoting themselves under such nomenclature do not think these are less dangerous and/or safer for their health.
Supporting Statement
According to David A. Myerson, a national spokesperson for the American Heart Association: "If you are one of those people who believe that you're limiting the amount of tar and nicotine that you are ingesting to the amount that you think is safe for you, then its likely your risk of heart disease and cancer is higher than you thought it was," he says, referring to the Massachusetts study noted above. He adds: "For that person who's trying to cut down or switch to lighter brands. . . they're being misled" through the use of less- stringent testing standards.
If you agree that smokers should be better informed as to the health hazards connected to the use of "light" and "ultra-light" cigarettes that are not presently being realized by our company's "testing" and promotion of these, please support this resolution.
7. CIGARETTE USE BY PREGNANT WOMEN
Loews, Inc.
Whereas
--Geoffrey C. Bible, Chairman and CEO of Philip Morris Companies, said at its annual meeting, April 27, 1995, "It would be sensible for mothers who are pregnant not to smoke," and "I think it would be sensible for pregnant women not to smoke":
- In making these declarations, Bible explicitly acknowledged the harm that cigarettes cause the fetus when he indicated his comments paralleled the Surgeon General's Warning: "Smoking by Pregnant Women May Result in Fetal Injury, Premature Birth, and Low Birth Weight";
- A recent analysis of the harm to fetuses and to newborns caused by cigarettes indicates that cigarettes cause up to 141,000 abortions, 61,000 cases of low birth weight, 4,800 perinatal deaths, and 2,200 deaths from Sudden infant Death Syndrome [SIDS] each year in this country;
- Smoking kills at least 100 times as many babies every year as partial- birth abortions";
- A 996 Emory University study showed that pregnant women smokers are 50 percent more likely to have mentally retarded children; those smoking a pack a day were 85 percent more likely to give birth to a retarded child;
- A report in the British Medical Journal [1996], encompassing more than 350,000 births over a two year period, found that exposure to tobacco smoke is a much bigger risk factor for SIDS than was previously suspected. Keeping newborns away from tobacco smoke should reduce the death rate from SIDS by nearly two-thirds;
- Cigarettes impair fertility and reduce a woman's capacity to nurse;
- In issuing the recall of 8 billion cigarettes in May 1995 because of suspected contamination, Philip Morris expressed particular concern that pregnant women avoid the undesired toxin it had identified in its cigarette filters; and
- Concerned about protecting the unborn from harm, the manufacturer of Accutane, another product known to be toxic to the fetus, conducted an extensive educational campaign designed to inform both physicians and potential consumers about the importance of women not using Accutane if they are or might become pregnant;
RESOLVED: Shareholders request management to prepare a report on the steps that Loews will take [beyond present periodic inclusion of warnings on cigarette packages] to warn women of child-bearing age of the harm caused by their tobacco use both before and after birth to infants. The report should be produced at reasonable expense and be provided to requesting shareholders by no later than January 1, 2000
SUPPORTING STATEMENT
Study after study shows that the cigarette is a major cause of fetal and neonatal harm, Cigarettes continue to cause serious injury in pregnancy and in the neonatal period despite a warning on cigarette packs and in some advertising. If you believe Loews should explore ways it can reduce the harm its products cause to infants, please vote YES.
10. MANAGED HEALTH-SYSTEMS' TIES TO TOBACCO
Possibles: ABR Information Services, Humana, Maxicare Health Plans, MedPartners, Oxford Health Plans, Safeguard Health Enterprises, United Dental Care, United Healthcare, Others?
WHEREAS a July 7-9, 1995 editorial in USA Today declared: Here's a grubby little health-care news item: according to a commentary in the upcoming edition of the British medical journal Lancet, major U.S. health insurers are large investors in major U.S. tobacco companies. In other words, the nation's merchants of care are partners with the nation's merchants of death. . .these investments grate and gall. Every year, tobacco use is fatal for hundreds of thousands of Americans. For insurers to provide health care for those suffering smokers with one hand while investing in the source of their misery with the other is unconscionable. And hypocritical.
- As shareholders, we are deeply concerned about the ethical implications of investing in the tobacco industry by any health care institution, especially when the negative health effects of smoking are so clearly experienced and understood by health care providers.
- In 1994, the Centers for Disease Control and Prevention released an article "Medical-Care Expenditures Attributable to Cigarette Smoking, United States -- 1993." The study found that smoking-related disease in the United States has an enormous economic impact. In 1993, it is estimated that the direct medical costs associated with smoking totaled $30 billion.
- In 1996 the AMA called for mutual funds and health-conscious investors to refuse to own stock in tobacco companies, and for those same investors to divest from stocks and bonds in tobacco companies.
- We believe it is inconsistent for a health care company to invest in tobacco equities and yet proclaim a commitment to quality healthcare. This seems to be sending mixed messages related to smoking. We believe our Company should seriously review its stand related to its apparently contradictory positions on tobacco and determine future options;
RESOLVED that shareholders request the Board to initiate a policy mandating no further purchases of tobacco equities in any of our portfolios unless it can be proven that tobacco use does not cause the illnesses and deaths attributed to it. Furthermore, the company shall divest itself of all tobacco-related stock by January 1, 2000.
SUPPORTING STATEMENT
Our Company exists to help people keep their health. We support people not using tobacco products, yet we have no policy against investing in companies which produce them. Institutions like Harvard and Johns Hopkins, The Maryland Retirement and Pension Systems and Acacia Mutual Life have divested from all tobacco stocks. We believe adoption of this proposed policy will put our company's money where its mouth is. If you agree that our Company, as a health-care provider should not contribute to their illness and death by tobacco investments, please vote "yes" for this resolution.
11. INSURANCE COMPANY'S INVESTMENTS IN TOBACCO COMPANIES
Possibles: AFLAC, Aetna, American Annuity Group, American General, AON, Atlantic American, CIGNA, Conseco, Hartford Financial Services Group, Horace Mann Educators, Jefferson-Pilot, John Alden, Lincoln National, Protective Life, ReliaStar Financial, SunAmerica, Torchmark, Transamerica, UNUM, Unitrin, Westbridge, Western National
WHEREAS a July 7-9, 1995 editorial in USA Today declared; Here's a grubby little health-care new item: According to a commentary in the upcoming edition of the British medical journal Lancet, major U.S. health insurers are large investors in major U.S. tobacco companies. In other words, the nation's merchants of care are partners with the nation's merchants of death. . . . These investments grate and gall. Every year, tobacco use is fatal for thousands of Americans. For insurers to provide health care for those suffering smokers on the one hand while investing in the source of their misery on the other is unconscionable. And hypocritical.
- As shareholders, we are concerned about the ethical implications of investments in the tobacco industry by companies that sell life insurance, especially when they are paying out hundreds of millions of dollars to patients who are sick and dying as a result of tobacco use.
- In 1994, the Centers of Disease Control and Prevention released an article entitled, "Medical-Care Expenditures Attributable to Cigarette Smoking, United States - 1993." The study found that smoking-related disease in the U.S.A. has an enormous economic impact. In 1993, it is estimated that the direct medical costs associated with smoking totaled $30 billion. Such findings have led the State of Louisiana to add insurers to its Medicaid reimbursement litigation against the tobacco industry.
- In 1996 the AMA called for mutual funds and health-conscious investors to refuse to own stock in tobacco companies, and for those same investors to divest from stocks and bonds in tobacco companies.
- We believe it is inconsistent for an insurance company that sells life insurance to invest in tobacco equities and yet give preferential rates to non-smokers. Therefore we believe that the company should seriously review its stand related to these apparently contradictory positions on tobacco.
RESOLVED: that shareholders request the Board to initiate a policy mandating no further purchases of tobacco equities in any of our portfolios unless it can be proven that tobacco use does not cause the illnesses and deaths that have been attributed to it. Furthermore, the company shall divest itself of all tobacco stocks by January 1, 2000.
Supporting Statement
Our Company exists to help people keep healthy. We support people not using tobacco, yet have no policy against investing in companies producing its products. Allstate, Chubb, UNUM, and other companies that sell life insurance have policies and/or practices that have resulted in prohibitions or limitations on their various investments in tobacco companies. Institutions like Harvard and Johns Hopkins, as well as The Maryland Retirement and Pension Systems have divested from all tobacco stocks. As the editorial noted above concludes: "Insurers have a responsibility to maximize returns. But they have a responsibility to hold down costs too. Investing in tobacco while charging premiums based in part on the cost of treating tobacco-related illness mocks that obligation. If you agree that our Company should not contribute to peoples' illness and death by investing in tobacco, please vote YES for this resolution.
12. ENSURING THAT TOBACCO ADS ON BILLBOARDS ARE NOT YOUTH-FRIENDLY
Clear Channel Communications, Lamar Advertising, Outdoor Systems, Universal Outdoor Holdings
WHEREAS cigarettes are the most heavily advertised product in the U.S.A. The tobacco industry spends more than $421 million annually for outdoor advertising of cigarettes,
- According to an April, 1998 "Heard on the Street" column, The Wall Street Journal stated: "Billboard companies get a whopping 10% of revenue from cigarette ads. Those tobacco dollars might be tough to replace if the ad market turns down, bears say." In fact, Dan Simon, CEO of Universal Outdoor Holdings told the Journal that, if cigarette ads were not allowed on various kinds of billboards, profit growth might be cut in half.
- Outdoor advertisements are an unique and distinguishable medium of advertising. It subjects the general public, including impressionable underage children, to involuntary and unavoidable forms of solicitation, including products that are illegal for them to use;
- 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%.
- Another study showed that, unlike the data for adults, the three most advertised brands of cigarettes were the top three brands smoked by underage children;
- Further evidence in the New England Journal of Medicine, American Journal of Public Health and the Journal of Pediatrics had demonstrated that tobacco advertising plays a significant role in stimulating illegal consumption of cigarettes by minors;
- Against those who would argue for unrestricted advertising of cigarettes on billboards, federal appeals courts have upheld a ban in Baltimore on most cigarette billboard advertising in areas frequented by children;
- In response to shareholder concerns, the Minnesota Mining and Manufacturing Company, in 1996 decided that its 3M Media subsidiary, then the nation's third-largest outdoor billboard advertising company, would no longer accept billboard contracts for tobacco products. Since this decision, 3M has sold the subsidiary to Outdoor Systems.
- Given all this data, as shareholders we feel our company needs to demonstrate to us that its tobacco ads are not overly-seductive to underage children.
RESOLVED: Shareholders request the Board to implement the following, or its equivalent, as policy for our Company: That, before any tobacco ads are accepted for any of our billboards or for any currently-run displays, the tobacco company involved must submit the ad and/or ad campaign to independent and certifiable testing to ensure that it is not equally or more appealing to the 14-to-18 age group than groups over 18. Supporting Statement
We suggest that this testing shall demonstrate the effectiveness of the ad and/or campaign on two age groups: those 18 and under and those spread evenly between 18 and 45. If the test results on the younger focus group show the campaign is equal to or exceeds the effectiveness of the older group, the ad and/or ad campaign shall not be accepted or, if it is currently run, it shall be terminated.
INVESTIGATING IMPLICATIONS OF CLASS ACTION SUIT RELATED TO NICOTINE ADDICTION
Philip Morris
WHEREAS Philip Morris Cos. Agreed in June, 1998 to pay $105 million to settle class action securities litigation, including one suit reinstated in 1997 in which shareholders alleged our company misled its investors by denying that nicotine is addictive.
- The company said in a release that the settlement money would go into a fund for payments to all stockholders who bought common shares between June 11, 1991, through May 6, 1994.
- The suit reinstated in 1997 was originally filed in April 1994 following hearings before the House Subcommittee on Health and the Environment. At that time, the seven top tobacco executives, including Philip Morris' then- president. William Campbell, testified under oath that nicotine isn't addictive. The suit, filed in a Manhattan U.S. District Court, alleged that Philip Morris misrepresented its own internal research indicating that nicotine is addictive because public disclosure would have promoted FDA regulatory action and driven down its stock price.
- While initially dismissed, the suit was reinstated by U.S. District Judge Michael B. Mukasey in 1977 after he reviewed 31 internal Philip Morris documents. Among them was a 1974 document in which two Philip Morris scientists who described physical reactions to quitting smoking as "not unlike those to be observed upon withdrawal from any number of habituating pharmacological agents." Another document from the same year described manipulating tar and nicotine parameters in cigarettes to obtain "optimal cigarette acceptability at differing tar deliveries."
- At past annual general meetings and elsewhere, management has asserted its products have not been proven harmful and/or refused to say directly whether they have been and are detrimental to health.
- Some shareholders are concerned that their stock value may be affected by more revelations that our company's own data showed that its public position on such issues noted above may evidence that it has made misstatements of fact and/or distortions of truth related to health hazards connected to tobacco use.
RESOLVED that the company appoint a select committee of its outside directors to investigate and report on the accuracy of statements made by management since 1990 vis-a-vis the addictiveness of nicotine, the toxicity and harmfulness of our tobacco products and its past and present marketing campaigns related to possible impact on youth to determine if they were, in any way, deceptive. If it shall be shown that deception did take place, the Board shall take appropriate action related to any continued employment of those involved by our Company.
***********************
Go To: Tobacco BBS HomePage / Resources Page / Health Page / Documents Page / Culture Page / Activism Page
***********************
END OF DOCUMENT