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THE COUNCIL FOR TOBACCO RESEARCH-U.S.A., INC. MINUTES OF THE TWENTY-FIRST ANNUAL MEETING OF MEMBERS DECE,VFBER 14, 1990 L The twenty-first annual meeting of members of The Council for Tobacco Research-U.S.A.. Inc. was held pursuant to Article IV of the By-Laws of The Council at The Council's office, 900 Third Avenue, New York, New York 10022 on the fourteenth day of December 1990 at 10:00 A.M_ The following members were present in person or by proxy: Class A Members The American Tobacco Company Brown & Williamson Tobacco Corporation Lorillard Tobacco Company Philip Morris Inc. R. J. Reynolds Tobacco Company Class B Memberl; Bright Belt Warehouse Association, Inc. Bortey Auction Warehouse Association Tobacco Associates, Ine. United States Tobacco Company The following officers were present: William D. Hobbs, Chairman Robert F. Gertenbaoh, President Lorraine Pollice, Secretary and Assistant Treasurer The following individuals were present: Charles H. Mullen, The American Tobacco Company Thomas E. Bczanson, Chadbourne & Park¢ Ernest Poppies, Brown & Williamson Tobacco Corporation Alexander W. Spears, Lorillard Tobacco Company Arthur J. Stevens, Lorillard Tobacco Company Murray H. Bring. Philip Morris Companies Inc. CTR MIN-MOM 000281 01R 9B 00N6 00122

James W. Johnston, R. J. Reynolds Tobacco Company G. Robert Di Marco, R. J. Reynolds Tobacco Company James W. Chapin, United States Tobacco Company Robert H. Lawrence, Jr., United States Tobacco Company Andrew C. Hartzcll, Jr., Dcbevois¢ & Plimpton Leonard Zahn, Leonard Zahn & Associates, Inc. Pctcr K. Vogt, Scicnlific Advisory Board, The Council for Tobacco Rescarch-U.S.A., Inc. Donald H. Ford, The Council for Tobacco Research-U.S.A., Inc. James F. Glenn, The Council for Tobacco Research-U.S.A., Inc. Harmon C. McAllistcr, The Council for Tobacco Research-U.S.A., Inc. Mr. Hobbs, the Chairman, opened the meeting and asked the Secretary to present the Affidavit of Mailing of Noticcof meeting and proxies. He announced that proxlcs had been received from four Class A members and four Class B members, thus constituting a quorum for the meeting. The Chairman stated that the minutes of the meeting of The Council for Tobacco Research-U.S.A., Inc. held on December 15, 1989, had been sent to the members under date of January 31, 1990. Upon motion duly madeand seconded, the minutes were unanimously approved. The Chairman welcomed the group and advised the members that there would be a need to fill vacancies on the Scientific Advisory Board, primarily due to the retirement of certain members. He also reported on the increase in volume of grant applications being received for consideration at the April, 1991 Scientific Advisory Board meeting. He then introduccd Dr. Glenn, Scientific Director, who reported on grant funding by The Council in 1990, and other matters. The members approved a name change for The Council for Tobacco Research-U.S.A., Inc. in principle and the lcgal aspects of this arc to be explored with counsel. The Chairman then introduced Dr. Peter K. Vogt, a member of The Council's Scientific Advisory Board. Dr. Vogt discussed his rescarchln the field of oncogencs. The Chairman presented the certified financial report of The Council for 1990 which was discussed by Mr. Gertenbach. Thereafter, upon motion dull,, made and seconded, it was unanimously RESOLVED, that the report presented to this meeting pursuant to Section g of Article IV of the By-Laws and certified by Coopers & Lybrand be, and the same hereby is, approved and ordered filed with the records of the Corporation and a copy entered in the minutes of this meeting. -2- CTR MIN-MOM 0(10282 ETR 98 1701'16 001'

The Chairman stated that the next order of business was the eieetion of directors of the Corporation to serve until the next Annual Meeting of the Members and until their respective successors are elected and qualificd. He pointed out that pursuant to Article IV, Section 6 of the By-Laws only Class A members are entitled to vote in the election of Directors. Upon motion madennd seconded, the following wereduly elected Directors: Murray H. Bring G. Robert Di Marco James W. Johnston Charles H. Mullen R. William Murray Ernest Pepples Raymond J. Pritchard Alexander W. Spears Arthur J. Stevens The Chairman reported that the next Annual Meeting of the Members would be December 13, 1991. t The Chairman advised the group that Janet C. Brown had retired as a member of the Board. He recognized the valued services she had provided to The Council, whereupon the following resolution was duly moved, seconded and unanimously adopted: Be it resolved: The members of The Council for Tobacco Research-U.S.A., Inc. being advised of the retirement of Janet C. Brown as a member of its Board of Directors, express to her, on behalf of the Members, Board of Directors and officers and staff of The Council, deep appreciation and gratitude for her many services to and interest in The Council during her years of association with it. We wish for her good health and a long and happy life. Mr. Stevens then noted that in view of the retirement of Mr. Hobbs as Chairman of The Council, appropriate note should be taken for his long and faithful service, whereupon the following resolution was duly moved, seconded and unanimously adopted: WHEREAS William D. Hobbs has served with distinction and dedication as Chairman and Chief Executive Officer of The Council for Tobacco Research-U.S.A., Inc. since January 1, 1981, and previously served with equal distinction and dedication on The Council's Board of Directors, Therefore, be it / -3- CTR MIN-MOM 000283 E:]+R 98 COHG 00124

RESOLVED, 'chat on behalf of the members, the Board of Directors, officers and staff of The Council sincere appreciation is expressed to "Bill" Hobbs for hi'- valued service as a Board member and during the last ten years, for his inspired leadership as The Councirs Chairman. The Council is held in high regard by the scientific community whose research The Council helps support, and by the broad community of which benefits from that research, That respect is due in no small part to the dedication of Bill Hobbs. The members wish him a long, happy and healthy retirement. Thereupon, on motion duly made, the meeting was adjourned. Lorra/'ne Pollic¢..Secretary L -4- CTR ~I1r N-MOM 000284 E:]R 9B GONG 00125

THE COUNCIL for TOBACCO RESEARCH - U.S.A., INC. Financial SEaremen~s for ~he year ended October 31. 1990 000285 C]"~ 98 EOHG 00"]26

INDEPENDENT AUDITOR'S REPORT The Council for Tobacco Research - U.S.A., Inc. New York, New York: We have audited the accompanying balance sheet of THE COUNCIL for TOBACCO RESEARCH - U.S.A., INC. (the "Council") as of October ~i, 1990, and the related statements of changes in general fund, special projects fund, unexpended appropriations for authorized grants and contracts, and unexpended appropriations for authorized special projects for the year then ended. These financial statements are the responsibility of the Council's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Council for Tobacco Research - U.S.A., Inc. at October 31, 1990, and the changes in its fund balances for the year then ended, in confornity with generally accepted accounting principles. CTR MIN-MUM 1 000286 98 CON5 00127

As discussed in Note 7 to the financial statements, the Council, together with other defendants, including cigarette manufacturers, is a defendant in certain lawsuits alleging wrongful death and seeking compensatory and punitive damages, in some cases in unspecified amounts and, in other cases, in substantial specified amounts. The ultimate outcome of the lawsuits cannot presently be determined. Accordingly, no provision for any liability that may result upon adjudication has been made in the accompanying financial statements. New York, New York November 15, 1990. CTR MIN-MOM 000287 EI-R 88 00H6 0012B

THE COUNCIL for TOBACCO RESEARCH - U.S.A., INC. BALANCE SHEET, October 31, 1990 ASSETS: General fund: Cash Dues receivable Other receivables Prepaid expenses and other assets Special projects fund: Cash $ 1,305,397 12,702,660 1,525 139.970 $14,149,552 $ 5,886 LIABILITIES and FUI~DS: General fund: Accounts payable and accrued expenses Deferred compensation payable (Notes 3 and 5) Unexpended appropriations for authorized grants and contracts, as annexed Fund balance, as annexed Special projects fund: Unexpended appropriations for authorized special projects, as annexed Fund balance, as annexed (Note 2) $ 57,772 184,930 12,395,305 $14.149.552 5,886 $ 5,886 See accompanying notes. CT~ MIN-MOM 000288 E:TR 90 COI'45 00129

STATEMENT of CHANGES in GENERAL FUND for the year ended October 31, 1990 Fund balance, October 31, 1989 Income: Dues from members for current year (Note 2) Less, Decrease in dues assessed for 1989 Interest General, administrative and other operating expenses: Salary, Chairman Salaries, President and Secretary Expenses, Chairman Expenses, President Salaries, Scientific Director and assistants Expenses, Scientific Director and assistants Per diem allowances and expenses relating to activities of Scientific Advisory Board Retirement plan contributions (Note i) Research and analysis Public relations Prlntlne, booklets, reprints, subscriptions and miscellaneous publications Administrative salaries and other services Provision for deferred compensation (Noues 3 and 5) Rent and malntenance Professional fees Insurance, group health and other (Note 4) Telephone Payroll taxes Postage, express and messenger service Stationery and office supplies Bank service charges Sundry expenses Appropriations for authorized research grants and contracts Less, Refunds of grants previously appropriated and pald Fund balance, October 31, 1990 $20,908,000 . Ci.992.907) 18,915,093 _ 114.978 116,667 192.161 31,044 15,622 522,668 145,838 433,386 125,441 18,414 142,572 154,946 176,124 45,803 405,619 769,739 181,618 t4,880 54,547 24,493 10.273 13,204 $ 1,992,907 19.030.071 21,022,978 See accompanying notes. CT~ MI~-MOM 000289 LITR 98 CONG 00130

STATEMENT of CHANGES in SPECIAL PROJECTS FUND for the year ended October 31, 1990 Fund deficit, October 31, 1989 Income: Contributions (Note 2) $413,000 Interest 5_/_Q Appropriations for authorized special projects Fund balance, October 31, 1990 ($197,433) 216,077 See accompanying notes. CTR M£~-MOM 000290 E:IR 98 COt'i5 00131