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Minutes of a meeting of the Board of Directors of Philio 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 February 27, 1963 pursuant to notice mailed to all. the directors. Present, the following: Messrs.: J. E. Cookman R. W. Dammann J. H. Davis W. H. Hatcher C. H. Kibbee T. N. Lawler R. P. Roper P. D. Smi th A. Snapper S. Weil G. Weissman J. H. Wilkinson, Jr. H. S. Cullman, Director Emeritus Absent: J. F. Cullman, 3rd R. N. DuPuis E. Lasker A. E. Lyon, Honorary Chairman L. G. Hanson, Director Emeritus H. E. Riddell, Director Emeritus K. H. Rockey, Director Emeritus In the absence of Mr. J. F. Cullman, 3rd, Mr. Hatcher presided. Upon motion duly made and seconded, the following resolution was unanimously adopted: RESOLVED, That the minutes of the meeting of this Board held on January 30, 1963, 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. Thereafter, on motion duly made and seconded, the following resolu- tions were unanimously adopted, the Board having been advised that the amount

required for dividends thereunder was substantiallv less than the amount available therefor under the pertinent provisions of Virginia law, the Company's Articles of Incorporation and its Indentures with Morgan Guaranty Trust Company of New York and The First National City Bank of New York: RESOLVED, That the regular quarterly dividend of $1.00 per share on the cumulative preferred stock, 4% series, and the regular quarterly dividend of $0.975 per share on the cumulative preferred stock, 3.90% series, be and the same hereby are declared payable May 1, 1963 to holders of preferred stock of the respective series of record at the close of business on April 15, 1963; and be it further RESOLVED, That a regular quarterly dividend of $0.90 per share on the common stock of the Company be and it hereby is declared payable April 15, 1963 to holders of m mmon stock of record at the close of business on March 19, 1963. The attention of the Board was invited to the necessity for the selection of auditors for the fiscal year ending December 31, 1963 and, on motion duly made and seconded, the following resolution was unanimously adopted: RESOLVED, That subject to the approval of a majority of the shares of common stock, $5 par value, represented and voting at the annual meeting of stockholders of the Company to be held April 9, 1963, Messrs. Lybrand, Ross Bros. & Montgomery be and they hereby are selected to audit the accounts of the Company for the fiscal year ending December 31, 1963. The Board was informed that Dr. DuPuis had advised the management of the Company that he would in allprobability be unavailable to stand for reelection as a director at the annual meeting of stockholders. Thereafter, on motion duly made and seconded, the following resolution was unanimously adopted: RESOLVED, That, effective upon the expiration of the ns ~ .t. t7a ~ ~ term of office of the present Board of Directors, I.- Section 2 of ARTICLE II of the By-Laws of the Company -~ be amended to read as follows: ~ "Number. - The number of directors shall be fourteen."

fThe attention of the Board was invited to other matters pertaining to the annual meeting of stockholders of the Company. On motion duly made and seconded, the following resclutions were then unanimously adopted: RESOLVED, That the Jefferson Hotel, Jefferson and Main Streets, Richmond, Virginia, be and it hereby is designated as the place at which the annual meeting of stockholders scheduled for April 9, 1963 at 10 o'clock in the forenoon is to be held; and further RESOLVED, That March 11, 1963 be and it hereby is fixed as the record date for the determination of holders of common stock, par value $5, who shall be entitled to vote at the annual meeting of stockholders of this Company to be held on April 9, 1963 at 10 o'clock in the forenoon, and only holders of common stock, $5 par value, of record at the close of business on that date shall be entitled to vote at the said meeting; and further RESOLVED, That Messrs. J. F. Cullman, 3rd, C. H. Kibbee, R. P. Roper and P. D. Smith be and they hereby are designated by this Board as proxies under the management proxy; and further RESOLVED, That the notice of annual meeting of stockholders, proxy statement and management proxy, as presented to this meeting, be and the same hereby are approved, subject to such additions, amendments and modifications as counsel may deem necessary or desirable; and further RESOLVED, That the Secretary of the Company be and he hereby is directed to mail or cause to be mailed at least ten days before the said annual meeting, first-class postage prepaid, a copy of the notice of annual meeting of stockholders and proxy statement to all record holders of cumulative pre- ferred stock, common stock, $5 par value, and common stock, $10 par value, at the close of business on March 11, 1963, and that there also be enclosed in the envelopes to holders of common stock, $5 par value, a copy of the management proxy and a business reply envelope. Mr. Roper advised the Board of management's recommendation for the acquisition by Supreme Products Corporation of two Acme-Gridley automatic screw machines at a cost of $50,000 each and it was the consensus of the meeting that Supreme Products Corporation be authorized to incur such expenditure.

The Board was informed of a management recommendation of capital appropriations totaling $3,455,000 for expansion of the Company's manufacturing facilities in Richmond, Virginia, to provide for a gum manufacturing operation in the McFadden Warehouse at a cost of $1,670,000, a consolidated shipping department at the McFadden Warehouse at a cost of $535,000, air conditioning 4.n a section of the McFadden Warehouse at a cost of $300,000 and the conversion of the Company's Everett Street building for Project Roper manufacturing operations at a cost of $950,000. On motion duly made and seconded, the follow- ing resolution was thereafter unanimously adopted: RESOLVED, That the proper officers of the Company be and they hereby are authorized to expend approximately $1,670,000 to provide for a gum manufacturing operation in the McFadden Warehouse, approximately $535,000 to provide for a consolidated shipping department in the McFadden Warehouse, approximately $300,000 to provide air conditioning in a section of the McFadden Warehouse and approximately $950,000 to convert the Company's Everett Street building for Project Roper manufacturing operations. Mr. Roper pointed out that the management of the Company recommended the grant of options, under the Company's Stock Option~Plan, to two key employees of the Company's Burma-Vita division and on motion duly made and seconded, the following resolution was unanimously adopted: RESOLVED, That the Company enter into option agreements this day, in the form presented to this meeting, in accordance with Exhibit A attached hereto, and that the purchase price under each such option agreement be the last price at which the common stock of the Company is traded on the New York Stock Exchange today, or if the stock is not so traded today, the last price at which it was theretofore traded. Thereafter, Mr. Kibbee presented to the Board a letter from Messrs. Lybrand, Ross Brothers & Montgomery, dated February 26, 1963 confirming that the methods and procedures followed by the Company's Internal Auditing Department

i.n testing quantities and prices resulted in a fair -resentation of inventory valuations at December 31, 1962. The Board was advised that in connection with the Company's acquisition of the assets of the Burma-Vita Company certain Board action was necessary and on motion duly made and seconded, the following resolutions were unanimously adopted: RESOLVED, That the President and the Treasurer of Philip Morris Incorporated (hereinafter referred to as the "Company") be and each of them is hereby authorized to open bank accounts in the name of BURMA-VITA COMPANY, a division of the Company, with banks selected by them or either of them; and be it further RESOLVED, That funds maintained in such accounts shall be subject to withdrawal only by means of checks, drafts or other instruments for the payment or transfer of money when bearing the manual signature of any two of the following: the President, a Vice President, the Treasurer, or the Assistant Treasurer of the Company or any person designated by the President or the Treasurer; PROVIDED, HOWEVER, that funds not in excess of Five Thousand ($5,000) Dollars may be withdrawn by such instruments bearing, or purporting to bear, a facsimile signature of an authorized signer and in addition thereto are manually countersigned by the President, a Vice President, the Treasurer, or the Assistant Treasurer or any person designated by the President or the Treasurer; PROVIDED FURTHER, that funds not in excess of Five Hundred ($500) Dollars may be withdrawn by such instruments bearing or purporting to bear only a facsimile signature of an authorized signer; PROVIDED FURTHER, that any such facsimile signature shall have been certified to by the President or the Treasurer, and that any such manual or facsimile signature shall appear on a signature card filed with the bank carrying such account, and that in any case in which two signatures are required on any such instrument, such signatures, whether manual or facsimile, shall be those of different persons; and be it further RESOLVED, That a bank carrying one of the foregoing accounts shall be entitled to honor and charge this Company for all such checks, drafts, or other instruments for the payment or transfer of money when bearing, or purporting to bear, in accordance with the foregoing resolutions, an authorized facsimile signature as certified to the bank by the President or the Treasurer, regardless of by whom or by what means the

the actual or purported facsimile signature may have been affixed thereto; PROVIDED ALWAYS that the purported facsimile signature resembles the facsimile specimen so certified to bv the President or the Treasurer; and be it further RESOLVED, That the President and the Treasurer of Philip Morris Incorporated (hereinafter referred to as the "Company") be and each of them is hereby authorized to enter into a lease with the Northwestern National Bank of Minneapolis, Minneapolis, Minnesota, for a safe deposit box, in the name of BURMA-VITA COMPANY, a division of the Company; and be it further RESOLVED, That any two of the following persons in the presence of each other, to wit: the President, any Vice President, the Treasurer, or the Secretary of the Company, or any person designated by the President or the Treasurer, shalt from time to time have access to the said safe deposit box; and be it further RESOLVED, That Philip Morris Incorporated does hereby adopt the Burma-Vita Company Employees' Pension Trust Agreement, dated August 29, 1944, by and between Burma-Vita Company, a Minnesota corporation, and Northwestern National Bank of Minneapolis, a national banking association having trust powers, as Trustee, and the Employees' Pension Plan therein embodied for and on behalf of the employees of Burma-Vita Company, a division of Philip Morris Incorporated; and be it further RESOLVED, That the Agreement presented to this meeting and entitled "Burma-Vita Company Fifth Amendment of Employees' Pension Trust Agreement" is hereby approved and the Employees' Pension Plan of Burma-Vita Company is hereby amended in the respects contained and set forth in the aforesaid agreement of amendment; and be it further RESOLVED, That the proper officers of this Company be and they hereby are authorized to execute and deliver the aforesaid agreement of amendment, on behalf of the Company, with such alterations, modifications and amendments, as they, with the advice of counsel, may deem necessary or desirable, and to take all actions and to do all things necessary and proper to carry out the aforesaid resolutions. It was then pointed out that Board action was desirable in connection with the operations of the-Company, and its various divisions, in dealing with the Alcohol and Tobacco Tax Division of the Internal Revenue Service, and on motion duly made and seconded, the following resolutions were unanimously adopted:

RESOLVED, That this Company hereby constitutes and appoints any of its officers, any person designated in writing by any of its officers, and any of the following other persons, namely R. N. Beane S. T. Jones M. A. Seidelman E. R. Broaddus A. J. Kay, Jr. E. M. Schaaf M. E. Conklin, Jr. W. G. Longest, Jr. C. B. Shade J. A. Dammann B. L. Marks A. F. Shennan C. H. DeVos R. R. Mumm B. A. Soyars R. W. Getchman C. W. Noren J. Spina G. H. Hentschel L. C. Odell J. E. Sprigler J. E. Heuser A. M. Parker G. S. Wray as the true and lawful attorney of the Company, for and in the name of the Company, to execute all applications, notices, bonds, and other instruments, claims, offers in compromise, letters, writings, and papers, and to do all acts for the Company in dealings with the Internal Revenue Service in connection with matters relating to the laws and regulations issued pursuant thereto and administered by the Alcohol and Tobacco Tax Division of the Internal Revenue Service; and the Company hereby authorizes the said officers and other persons to receive on behalf of the Company any and all notices, papers, and letters from the said Internal Revenue Service in connection with all such matters, hereby giving and granting to the said officers and other persons full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, and hereby ratifying and confirming all that the said officers and other persons shall lawfully do or cause to be done by virtue hereof; and be it further RESOLVED, That all prior resolutions affecting the appointment and authority of all persons to conduct such dealings with the Internal Revenue Service be and the same are hereby rescinded. Mr. Kibbee reported on the purchases made by the Company of its common stock since the January 30, 1963 meeting of the Board of Directors. The Board was advised that after considerable study and discussion the management of the Company recommended discontinuance of the policy of payment of fees to regular full-time employees of the Company, its subsidiaries and divisions, for service on the Board of Directors of the Company or any committees of the Company or the Board. Thereafter, on motion duly made and seconded, the following resolutions-were unanimously adopted: t.j ' 0 ~ 0 ~ ~ Q ~

RESOLVED, That effective April 1, 1963, each director of this Company and each director emeritus, except directors who are regular full-time employees of the Company, its divisions or subsidiaries shall receive as compensation for his services, the sum of $3,600 per annum, payable quarterly, and, in addition, $150 per meeting of the Board which he attends; and further RESOLVED, That effective April 1, 1963, unless hereafter expressly authorized by the Board of Directors, regular full-time employees of the Company, its divisions or subsidiaries shall not be entitled to nor shall they receive compensation for service on any committee, board, subcommittee or similar organization acting for or on behalf of the Company or the Board of Directors. A discussion of Company business ensued and at the conclusion thereof Mr. Kibbee gave an illustrated presentation of the Company's financial position. There being no further business to come before the meeting, the same adjourned. Secretary