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Excerpts from Reynolds Opposes Shareholder Proposals To Curb Youth Smoking

Dow Jones News Service, 03/14/00]

R.J. Reynolds Tobacco Holdings Inc. indicated that it will consider at its annual meeting in April two shareholder proposals designed to distance the company from underage tobacco users.

The company, which disclosed the two proposals in proxy materials filed with the Securities and Exchange Commission, is recommending that shareholders reject both.

The first proposal asks the company to subject any promotional, marketing or advertising campaign to independent testing before it can be launched. If focus- group tests indicate that the campaign in question is equally or more effective in appealing to consumers under 18 as it is to those over 18, Reynolds (RJR) would have to drop the campaign. The proposal suggests that the test be conducted by an entity that is independent of the company and the tobacco industry.

A second shareholder proposal asks R.J. Reynolds' board to create a committee of outside directors to investigate placement of tobacco products in retail outlets, The panel then would make recommendations to shareholders to ensure that products aren't accessible in stores to people who aren't legally allowed to smoke. The proposal said R.J. Reynolds has product-placement provisions with retailers, making these products easily accessible to all consumers. It added that the "average convenience store can easily make $10,000 yearly in placement fees."