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Minutes of a meeting of the Board of Directors of Philip Morris Incorporated held at the offices of the Company, 100 Park Avenue, New York, New York at ten thirty o'clock in the forenoon on January 30,1963 pursuant to notice mailed to all the directors: Present, the following: Messrs.: J. E. Cookman J. F. Cullman, 3rd R. W. Dammann J. H. Davis R. N. DuPuis W. H. Hatcher C. H. Kibbee E. Lasker T. N. Lawler R. P. Roper P. D. Smith A. Snapper G. Weissman J. H. Wilkinson, Jr. H. S. Cullman, Director Emeritus H. E. Riddell, Director Emeritus K. H. Rockey, Director Emeritus Absent: S. Weil A. E. Lyon, Honorary Chairman L. G. Hanson, Director Emeritus Upon motion duly made and seconded, the following resolution was unanimously adopted: RESOLVED, That the minutes of the meeting of this Board held on December 26, 1962, copies of which were furnished the members of the Board, be and the same hereby are adopted as and for the minutes of the said meeting. I : There was then presented to the meeting the consolidated balance ~ sheet of the Company and its consolidated subsidiaries as of December 31, 1962 42, aa i q , and December 31, 1961, and the related consolidated statements of earnings and - os ~ ~ ~

surplus for the years then ended, all as certified to by Messrs. Lybrand, Ross Bros. and Montgomery, and copies were furnished to each director. Upon motion duly made and seconded, the following resolution was unanimously adopted: RESOLVED, That the consolidated balance sheet of the Company and its consolidated subsidiaries as of December 31, 1962 and 1961 and the related consolidated statements of earnings and surplus for the years then ended, all as certified to by Lybrand, Ross Bros. and Montgomery, certified public accountants, be and the same hereby are accepted and filed. It was pointed out that it was appropriate at this time to provide for current sinking fund requirements of the Company's preferred stock. Thereupon, on motion duly made and seconded, the following resolutions were unanimously adopted: RESOLVED, That pursuant to the Articles of Incorporation, this Company credit against the sinking fund requirements for its preferred stock for the fiscal year commencing January 1, 1962, 1,999 shares of the Cumulative Preferred Stock, 47. Series, and 1,307 shares of the Cumulative Preferred Stock, 3.90% Series, all of which shares were purchased other than through the sinking funds at prices not exceeding the redemption prices thereof on the respective dates of purchase; and further RESOLVED, That the officers of this Company be and they hereby are authorized, empowered and directed to deliver to Morgan Guaranty Trust Company of New York, certificates for 1,999 shares of Cumulative Preferred Stock, 47. Series, and certificates for 1,307 shares of Cumulative Preferred Stock, 3.90% Series, and Morgan Guaranty Trust Company of New York, as Transfer Agent, and the Chemical Bank New York Trust Company, as R•egistrar, be and they hereby are authorized, empowered and directed to retire the afore- mentioned shares from their respective records and not to reissue any certificates for said shares.

The Board was advised of a recommendation for the election of Messrs. John E. Cookman, vice president and treasurer of the Company, and Paul D. Smith, vice president and general counsel of the Company, to the Board of Directors. It was pointed out that such election at this time would necessitate the amendment of the By-Laws of the Company to increase the number of directors from thirteen to fifteen. Thereupon, on motion duly made and seconded, the following resolutions were unanimously adopted: RESOLVED, That Section 2 of ARTICLE II of the By-Laws be amended to read as follows: "Section 2. Number. - The number of directors shall be fifteen."; and be it further RESOLVED, That John E. Cookman and Paul D. Smith be and they hereby are elected members of the Board of Directors of the Company, each to hold office until the next annual meeting of stockholders and until his successor shall have been duly elected. Thereupon, Messrs. Cookman and Smith joined the meeting. Mr. Hatcher then reviewed the Company's leaf tobacco purchases during the year 1962 and discussed generally the Company's operations and policies in the leaf area. The Board was advised that the Retirement Board and the management of the Company recommended amendment of the Philip Morris Retirement Plan and Trust Agreement to provide for payment of retirement allowances to eligible employees who become permanently disabled while in the active service of the Company. Thereupon, on motion duly made and seconded, the following resolutions were unanimously adopted, to become effective February 1, 1963:

RESOLVED, That ARTICLE I of the Philip Morris Retirement Plan be and the same hereby is amended by adding thereto the following: "(q) 'Disabled Employee' shall mean a Retired Employee who is receiving a Disability Retirement Allowance."; and be it further RESOLVED, That the third sentence of Paragraph A(l)(a) of ARTICLE II of the Philip Morris Retirement Plan be and the same hereby is amended to read as follows: "Upon the written request of the Company, delivered to the Retirement Board, together with his own written consent endorsed thereon, an Employee eligible to retire on a Full Retirement Allowance may be continued in service after attainment of the age of sixty-five (65) years; provided that, notwithstanding any such extension of an Employee's service, such Employee shall be eligible to retire on a Retirement Allowance, in an amount which shall be the actuarial equivalent of the Full Retirement Allowance (computed in accordance with the provisions of the Plan in effect at the time of his retire- ment) to which such Employee would have been entitled had he retired when he first became eligible to retire on a Full Retirement Allowance, upon application made thereafter at any time by either such Employee or the Company, such retirement to be effective upon the first day of the calendar month designated in such application; and provided further that in computing such actuarial equivalent in the case of any such Employee who has elected an option pursuant to Paragraph (4) hereof, only additions due to interest at rates established pursuant to ARTICLE VIII hereof shall be taken into consideration with respect to his period of continued service; and provided further that during such extension of service, no additional Allowance shall accrue to such Employee with respect thereto, and that the Company shall not make any contributions to the Trust with respect thereto."; and be it further RESOLVED, That Paragraph A(3) of ARTICLE II of the Philip Morris Retirement Plan shall be and the same is hereby redesignated Paragraph (4); and be it further RESOLVED, That the last sentence of Subparagraph (a) of said redesignated Paragraph A(4) of ARTICLE II of the Philip Morris Retirement Plan be and the same hereby is amended to read as follows: "(a) Such election shall be of no force and effect if the Employee retires or dies prior to such specified date or if the Employee retires after such specified date on a Disability Retirement Allowance but otherwise shall be effective either upon the Employee's retirement or upon his death, whichever first occurs."; and be it further It

RESOLVED, That the third sentence of Subparagraph (b) of said redesignated Paragraph A(4) of ARTICLE II of the Philip Morris Retirement Plan be and the same hereby is amended to read as follows: "(b) Such election shall be of no force and effect if (i) the Employee dies prior to retirement unless such Employee has been continued in service as aforesaid, in which event such election shall be of no force and effect if the Employee dies prior to the day on which he first would have become eligible to retire on a full Retirement Allowance; or (ii) the Employee retires on a Disability Retirement Allowance." and be it further RESOLVED, That Paragraph A of ARTICLE II of the Philip Morris Retirement Plan be and the same hereby is amended by adding thereto the following: "(3) Disability Retirement Allowance (a) An Employee who has not attained the age of sixty-five (65) years but who completes fifteen (15) years or more of Accredited Service may be retired for a disability which occurred while he was in the active service of the Company on a Disability Retirement Allowance on the first day of the calendar month designated in the application therefor made by such Employee or the Company, provided that such Employee is eligible for total and permanent disability benefits under the Social Security. Act. (b) The Disability Retirement Allowance shall consist of a Retirement Allowance, commencing on the date of retirement, equal to a Full Retirement Allowance computed in accordance with Paragraph A(l)(c) above on the basis of the Employee's Compensation and Accredited Service to the date of retirement. The Disability Retirement Allowance of a Disabled Employee who has not attained the age of sixty-five (65) years shall terminate upon his ceasing to be eligible for total and permanent disability benefits under the Social Security Act."; and be it further RESOLVED, That the final sentence of Paragraph B of ARTICLE II of the Philip Morris Retirement Plan be and the same hereby is amended to read as follows: "Except as otherwise provided in Paragraphs A(l)(a), A(2)(b) and A(3)(a) above, application for retirement shall be made by the Company.";

and be it further RESOLVED, That Paragraph C of ARTICLE II of the Philip Morris Retirement Plan be and the same hereby is amended to read as follows: "C. Determination of amount of Retirement Allowance and instruction to Trustee Upon receipt of an application for the retirement of an Employee on Retirement Allowance, or upon receipt of notice of the death of an Employee leaving an effective election of an option pursuant to Paragraph A(4), the Retirement Board shall determine the amount of the Allowance payable and, in the event that the Trustee is to make payment thereof directly to the persons entitled thereto, shall instruct the Trustee to make payment thereof in accordance with the terms of the Plan."; and be it further RESOLVED, That Paragraph D of ARTICLE II of the Philip Morris Retirement Plan be and the same hereby is amended to read as follows: "D. Commencement and termination of Retirement Allowances Payment of a Retirement Allowance to a Retired Employee shall commence one (1) month after date of retirement (as determined in the manner herein provided) and shall terminate with the last • payment due prior to his death, except as otherwise provided in Paragraph A(3)(b) above. Payment of an Allowance to a beneficiary named under an effective election of an option in accordance with Paragraph A(4) above shall commence one month after the last payment due the Retired Employee or the first day of the month following the month in which the Employee died, as the case may be, and shall terminate with the last payment due prior to death of such beneficiary."; and be it further RESOLVED, That the second sentence of Paragraph B of ARTICLE III of the Philip Morris Retirement Plan be and the same hereby is amended to read as follows: "A period of lay-off shall be deemed terminated on the date of retirement on a Full, Early or Disability Retirement Allowance, on the date of the commencement of a leave of absence, or on the date specified for return to the active service of the Company in a written notice mailed to the Employee's last-known address."; and be it further

RESOLVED, That Paragraph D of ARTICLE III of the Philip Morris Retirement Plan be and the same hereby is amended to read as follows: "D. Forfeiture and Restoration of Accredited Service If the service of an Employee not eligible for a Full Retirement Allowance be terminated due to any cause except retirement on an Early or Disability Retirement Allowance, all Accredited Service shall be forfeited. If, however, the termination was not due to resignation and if he again becomes an Employee within two (2) years thereafter, he shall be entitled to restoration of his previously forfeited Accredited Service."; and be it further RESOLVED, That Paragraph (1) of Section 18 of the Trust Agreement under the Philip Morris Retirement Plan be and the same hereby is amended to read as follows: "(1) Any right or claim to any interest in the Fund which any Employee or his beneficiary may have shall terminate (a) when he is no longer an Employee of the Company (except in the event of retirement on a Retirement Allowance or, with respect to such beneficiary, in the event of said Employee's death leaving an effective election of an option pursuant to Paragraph A(4) of ARTICLE II of the Plan); or (b) whenever provision for such Employee or his beneficiary shall have been made in accordance with the provisions of the Plan."; and be it further RESOLVED, That Paragraph (2) of Section 18 of the Trust Agreement under the Philip Morris Retirement Plan be and the same hereby is amended to read as follows: i "(2) Any right or claim to any interest in the Fund which any Retired Employee, the beneficiary of any deceased Employee who died leaving an effective election of an option pursuant to Paragraph A(4) of ARTICLE II of the Plan, or the beneficiary of any Retired Employee or deceased Retired Employee may have, shall terminate (a) upon the death of such Retired Employee or beneficiary, (b) whenever through the purchase of an annuity or otherwise full provision as determined by the Retirement Board shall have been made for the Retirement Allowance payable to such Retired Employee or beneficiary, or (c) whenever the Retirement Board shall decide, in accordance with the Plan, that such Retired Employee or beneficiary is not to receive any benefit thereunder.";

and be it further RESOLVED, That the proper officers of the Company be and they hereby are authorized to execute and deliver said Trust Agreement, as hereby amended, on behalf of the Company, with such alterations, modifications and amendments, as they, with the advice of counsel, may deem necessary and desirable. The Board was thereafter referred to certain material in connection with various proposed changes in the A•S•R Products Company Retirement Trust Agreement. It was pointed out that the Retirement Committee under the Employee's Retirement Plan of A•S•R Products Company and the management of the Company recommended adoption of such changes. Thereupon, on motion duly made and seconded, the following resolutions were unanimously adopted, to become effective February 1, 1963: RESOLVED, That the Trust Agreement under the Employees' Retirement Plan of A•S•R Products Company be and hereby is amended to read as set forth in the Amended Trust Agreement, dated as of February 1, 1963, a copy of which is attached hereto as Exhibit A; and be it further RESOLVED, That the proper officers of the Company be and they hereby are authorized to execute and deliver said Amended Trust Agreement, on behalf of the Company, with such alterations, modifications and amendments, as they, with the advice of counsel, may deem necessary and desirable. The attention of the Board was invited to the actuarial valuation report, as of December 31, 1961, with respect to the A•S•R Employees' Retirement Plan, setting forth current costs for the year ending December 31, 1962 in the amount of $194,976 plus interest in the amount of $65,849 on the unfunded past service liability. It was the consensus of the meeting that the Board approve the payment of th6se amounts and that in addition the Board approve_ the Actuary's recommendations (i) that future contributions be reduced by the NY ~ .~. exclusive of profits and losses, earned in the excess of investment income C* , 0 preceding year over valuation interest requirements of the plan for such year 4* a r C1%

and (ii) that, in view of the adoption of an assumed interest rate of 3k%, the unfunded prior service cost of the plan as of December 31, 1962 be reestablished as the amount required to meet the cost of benefits which will not be met by future current service tontributions together with the assets of the plan as of such date. The Board discussed possible acquisition by the Company of the Clark Brothers Chewing Gum Company of Pittsburgh, Pennsylvania, and, on motion duly made and seconded, the following resolutions were adopted, Dr. DuPuis abstaining: RESOLVED, That the proper officers of the Company be and they hereby are authorized to acquire, on behalf of the Company, the Clark Brothers Chewing Gum Company of Pittsburgh, Pennsylvania, at a price of approximately $2,300,000; and further RESOLVED, That the proper officers of the Company be and they hereby are authorized to do all acts and things and execute and deliver all instruments and documents necessary or desirable to carry out the foregoing resolution. Mr. Roper informed the Board that certain real property had become available recently adjacent to the Company's blended leaf plant in Richmond, Virginia, and that management recommended its acquisition at a cost of approximately $175,000 to $200,000. He pointed out that the land could be utilized to expand the blended leaf plant and to make available warehouse space for manufactured blended leaf. On motion duly made and seconded, the following resolution was RESOLVED, That the proper officers of the Company be and they hereby are authorized to acquire certain parcels of real property, with such improvements that there may be thereon, adjacent to the Company's blended leaf plant in Richmond, Virginia, at a cost of approximately $175,000 to $200,000. It unanimously adopted:

The Board reviewed the annual report of the Contributions Committee. Mr. Kibbee reported on the purchases made by the Company of its common stock since the December 26, 1962 meeting of the Board of Directors. A general discussion of the business of the Company ensued at the conclusion of which the meeting adjourned. Secretary a