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Winston-Salem, North Carolina June 20, 1968 Minutes of regular monthly meeting of the Board of Directors of D. T. The following Directors were present: R. J. Reynolds Tobacco Company, held at the offices of the Company at Winston-Salem, North Carolina, Thursday, June 20, 1968, at 11:00 a.m., W. M. Bright Charles F. Myers, Jr. A. H. Galloway F. D. Royster Bowman Gray J. H. Sherrill Gordon Gray W. S. Smith, Jr. William R. Lybrook Colin Stokes Chas. B. Wade, Jr. Bowman Gray, the Chairman, presided and William R. Lybrook, a ! Secretary, acted in his capacity. ~ 9 The presiding officer announced that a quorum was present and that i the meeting was open for business. William R. Lybrook, Secretary, read the following letter: -- June 17, 1968 I Dear Bowman and Alex: I firmly believe that when one gets to be 70 he should practice the old adage: "The old order changeth**." And as Mr. Davis said on the occasion of his 70th birthday: "I think I can do everything I could_ do when I was 50, but I know there are some things I cannot do as we1l." We have discussed this together and you have graciously accepted my point of view that I feel I can best serve the Company by making way for a younger man. I therefore tender my resignation as a director of R. J. Reynolds Tobacco Company to take effect at the pleasure of the Board. I regret very much my inability to be able to present my resignation in person but I wish you would express to all the members my very real appreciation of the honor of having served with them over the last several years. Some of these years have been trying ones for the Tobacco industry but I never have heard in meetings in Winston-Salem an inharmonious note nor a raised voice. 7-j 4

, I I have seen in action a highly efficient team with no friction or jealousy anywhere. No wonder the Company has achieved first place and is widening the margin every year. I feel sad at leaving the family where I was made to feel at home the very first day. Sincerely, (Signed) Pate I Bowman Gray, Esq., Chairman A. H. Galloway, Esq., President R. J. Reynolds Tobacco Company Winston-Salem, North Carolina Upon motion duly made and seconded, Mr. Coleman's resignation as a member of the Board of Directors was accepted with expressions of deep regret and of high commendation for the outstanding contribution he has made to the Company's success through his wise and able counsel. The Chairman then stated that there existed a vacancy on the Board of Directors and asked for nominations to fill that vacancy. A. H. Galloway nominated Mr. J. Paul Sticht as a Director of the Company to fill the vacancy on the Board created by the resignation of --- --=-- - - -- - _ - Mr. Leighton H. Coleman, and the nomination was seconded by Mr. Gordon Gray. There being no further nominations, J. Paul Sticht was unani- mously elected a Director of the Company. Mr. Sticht was invited to the meeting and was warmly welcomed as a member of the Board. The Secretary read the following minutes of a meeting of the Executive Committee: A meeting of the Executive Committee was held in the Company's offices on Friday, June 7, 1968, at 10:30 a.m. Present were Messrs. Bowman Gray, D. S. Peoples, W. S. Smith, Jr., H. H. Ramm and A. H. Galloway. Mr. W. S. Smith presented a recommendation on the part of the Personnel Committee that Curtis H. Judge be promoted from Vice President - Sales to Vice President - Marketing, effective June 13, 1968. Unanimous approval was given to this recommendation. (Signed) A. H. Galloway, Chairman Upon motion duly made and seconded, the action of the Executive Committee was unanimously approved and confirmed.

9 C. 8. dfade, a member of the Group Insurance Committee, presented a recos..endation of thst committee that the Non-Contributory GLoup Life Znsurance Plan for Seasonal fsnployees of the Creen Leaf Division of the Leaf lrocessinq Department of the Company be amended to extend group life insurance coverage to all eligible seasonal employees of the Leaf Process- ing Department, and that the name of the plan be changed accordingly. He stated that this would make eligibls some thirty-seven employees of the department who are presently classified as temporary workers and who are to be reclassified as seasonal employees, and that the additional annual premduai would be approximately $410. After discussion, upon motion duly made and seconded, it was unani- mously FiESGLVED, tlut the ::on-Contri.`.SStOrr Craug Li~a 3nrsssr.ca Plan Z:.r Zcascnal Employees of the Green Leaf Divieion of the Leaf Processing Department of the Company be and it hereby is amended, effective July 1.'1968, to extend coverage to all eligible seasonal employees of the+ Leaf Proces`ing Department and to redesignate the plan as the "Non-Contributory Group Life Insurance Plan for Seasonal Employees of the Leaf Processing Department." Further RESOLVL'D; that the President, any Executive Vice President or any Vice President be and he hereby i,s authorized to execute on behalf of the Company appropriate riders to the Company's group life insurance policy with The Equitable Life Assurance Society of the United States to carry out the foregoing amendment. Mr. Wade also reported that the Group insurance Committee recommended that'the Company adopt a non-contributory hospital and surgical service plan for seasonal employees of the Leaf Processing Department, the employe s eligible to be those eligible for the Non-Contributory Group Life insuranc Plan for Seasonal Enployers of the Leal Proceaaing Department. lie outline the su jor provisions of the plan as followss room and board rate at $15.0 per day for a maximum of 70 days per confinement; in-patient hospital services payable at 100% for maximum of 70 days p.r confinementj out- patient services including X-ray and laboratory tests payable at 80%; in bospital charges for emergency first aid rendered within 72 hours after the occurrence of an accident payable at 100%; surgical benefits payable under the PSI "J" schedule; maternity benefits to provide for the follow- ing limits: - . : r. . ..-.. n ^ .

6 Surgical: Normal $45, Caesarean $95, Miscarriage $30 Hospital: Limited to $100 for mother, $8.00 per day up to 5 days for nursery (normal delivery); l l I in-hospital private duty nursing payable at 80% for a maximum of 240 hours per confinement; and a co-ordination-of=benefits clause. He stated that the estimated annual cost of the plan was approximately $48,000. After discussion, upon motion duly made and seconded, it was unanimously RESOLVED, that a non-contributory hospital and surgical service plan for seasonal employees of the Leaf Processing Department con- taining the provisions described at this meeting be and it hereby is adopted to become effective July 1, 1968; and further RESOLVED, that the President, any Executive Vice President or any Vice President be and he hereby is authorized to enter into an appropriate agency agreement with North Carolina Blue Cross-Blue Shield, Inc. to provide the benefits of said plan; and further I RESOLVED, that the Group insurance Committee and the officers of the Company be, and they hereby are, authorized and empowered to do all things necessary and expedient in connection with, or incidental to, carrying out the purposes of these resolutions; and further RESOLVED, that the Group Insurance Committee is authorized and empowered to make such rules, regulations, limitations and require- ments as they may deem necessary or proper in connection with said Plan and the administration thereof; and further RESOLVED, that the right is reserved to make at any time here- ~ after amendments, modifications, improvements or adjustments in said Plan as may be deemed necessary or expedient by the Board of Director~ and to terminate or discontinue said Plan. William R. Lybrook, Chairman of the Real Estate, Buildings, committee for approval of a three-year lease 475 El Camino Real, Millbrae, California, beginning July 1, 1968, at a Machinery and Equipment Committee, presented a recommendation from that in the Bay View Building, rental of $1,431.36 per month. Upon motion duly made and seconded, the recommendation of the Real Estate; Buildings, Machinery and Equipment Committee, was unanimously authorized and approved. Mr. Lybrook then presented recommendations from the Real Estate, Buildings, Machinery and Equipment Committee for the following appropria- tions: 1. $548,000 to construct Chemical Pilot Plant facilities on the south side - of 33rd Street_in the Whitaker_Park Area in Winston- __ Salem, N. C.

2. ; 83,500 to purchase (17) Oasoline Pork Lift Trucks. 3. $214,500 for the fleet replacement program for highway trucks and small cars. •4, f134.500 to demolish the north portion of Building No. 43,- and construct a parking lot for 50 cars on the vacated space. - 5. ; 58,000 to purchase and install a 2,000 XVA substation in Building No. 90-1. Upon motion duly made and seconded, the recommendations of the Real Estate, Buildings, Machinery and Equipment Committee were unani- mously authorized and approved. Chas. B. Wade, Jr.. Chairman of the Personnel Committee, presented reconraendations from that committee for the following:• 1.' The addition of New Year's Day as a paid holiday and a determination that seasonal employees will receive 7h hours' pay, eat thr+_r rrtrslar h__r1j ratc 'er ba.iC..-ys c~CCu3 in a week in which they are working. The additional annual coat will be arproximately $19,125. 2.' Bnd-of-Season Bonus'Pav. Formarly known as seasonal vacation pay, is now to be known as "end-of-season bonus pay" and is to be increased from 2% to 3% for the first three consecutive seasons and from 4% to 7% for the fourth and succeeding seasons. Classifications formerly called Laborer, Storage - Temporary and Temporary Workers - Green Leaf Processing, are to be considered as Seasonal Employees for end-of-season bonus pay. The additional annual cost will be approximately,;76,460. 3. Hourly Rates for the 1968-69 Season. An increase of l00 F-r hour for rates of Seasonal Employees for the 1968-69 season. The additional annual cost will be approximately $82,433. The total cost of the proposed changes in seasonai pay policies and procedures will be approximately $226,029. 4. A 5% increase in the ranges for the job classifications Green Leaf Trainee and Apprentice Leaf Buyer. The annual cost of this increasa will be approximately ¢12,468. - Upon motion duly made and seconded, the recommendations of the Parsonnel Comnaittee were unanimously authorized and approved. Upon motion duly made and seconded, the following resolution was unanimously adopteds ' WSERFAS, it has been reported to the Company that Certificate No. NJC0131691 for fifty shares of Common Stock, $5 par, of R. J. Reynolds Tobacco Company, outstanding in the name of John Richard Iiayworth, has been lost, mislaid, stolen or destroyed= and V-1 n... ~,.. . ' , . .

1 I g WHEREAS, the Company has been requested to issue a duplicate or new certificate covering the shares represented by said original certificate, and an appropriate bond has been filed with the Company, together with affidavit establishing ownership and loss of said original certificate as required by the By-Laws of the Company: RESOLVED, that The Chase Manhattan Bank, Transfer Agent, be, an it hereby is, authorized to issue and_countersign and that Manu- facturers Hanover Trust Company, Registrar, be, and it hereby is, authorized to register and countersign, in the name of said John Richard Hayworth, proper duplicate or new certificate in lieu of said original Certificate No. NJCO131691 provided the said affidavit, together with proper bond and surety thereon, shall have been duly approved by the Law Department of the Company; and that transfer be stopped, if not-already stopped, on said original certificate. Upon motion duly made and seconded, the following resolution was unanimously adopted: WHEREAS, it has been reported to the Company that Certificate No. NYCC523373 for one hundred shares of Common Stock, $5 par, of R. J. Reynolds Tobacco Company, outstanding in the name of Miriam W. Jacobson, has been lost, mislaid, stolen or destroyed; and WHEREAS, the Company has been requested_to issue a duplicate ~ or new certificate covering the shares represented by said original certificate, and an appropriate bond has been filed with the Companyi together with affidavit establishing ownership and loss of said original certificate as required by the By-Laws of the Company: RESOLVED, that The Chase Manhattan Bank, Transfer Agent, be, and it hereby is, authorized to issue and countersign, and that Manufacturers Hanover Trust Company, Registrar, be, and it hereby is, authorized to register and countersign, in the name of said Miriam W. Jacobson, proper duplicate or new certificate in lieu of_ - -- - -- said original Certificate No. NYCC523373 provided the said affidavit together with proper bond and surety thereon, shall have been duly approved by the Law Department'of the Company; and that transfer be stopped, if not already stopped, on said original certificate. Upon motion duly made and seconded, the following resolution was unanimously adopted: WHEREAS, it has been reported to the Company that Certificate No. NJCO137845 for fifty shares of Common Stock, $5 par, of R. J. Reynolds Tobacco Company, outstanding in the name of Mrs. Patricia P. Lanier, has been lost, mislaid, stolen, or destroyed; and WHEREAS, the Company has been requested to issue a duplicate or new certificate covering the shares represented by said original certificate, and an appropriate bond has been filed with the Company, together with affidavit establishing ownership and loss of said original certificate as required by the By-Laws of the Company: RESOLVED, that The Chase Manhattan Bank, Transfer Agent, be an it hereby is, authorized to issue and countersign, and that Manu- facturers Hanover Trust Company, Registrar, be, and it hereby is, authorized to register and countersign, in the name of said Mrs. Patricia P. Lanier, proper duplicate or new certificate in lieu of said original Certificate No. NJCO137845 provided the said .

together with proper bond and surety thereon, shall have been duly approved by the Law Department of the Company; and that transfer be stopped, if not already stopped, on said original certificate. Upon motion duly made and seconded, the following resolution was unanimously adopted: WHEREAS, it has been found to be desirable and in the best interests of the Company that the resolutions adopted by this Board of Directors at its meeting on December 3, 1962, authorizing certain officers of the Company to execute Short Term Notes and authorizing certain named persons to countersign such Notes on behalf of Morgan Guaranty Trust Company of New York, New York, New York, as Agent, be amended so as to authorize countersigning on behalf of such Agent by any of its employees as may be desig- nated by it as having such authority; it is RESOLVED, that the second paragraph of the resolutions adopted by the Board of Directors at its meeting on December 3, 1962, authorizing certain officers of the Company to execute Short Term Notes and authorizing certain named persons to countersign such Notes on behalf of Morgan Guaranty Trust Company of New York, New York, New York, as Agent, be and hereby is amended to read as follows: "FURTHER RESOLVED that Short Term Notes, with the dates of issue and maturity dates left blank, may be executed in the name and on behalf of the Company by any one of its following officers: viz., the Chairman of the Board of Directors, the President, the Chairman of the Executive Committee, any Executive Vice President or Vice President, or the Treasurer, and counter- signed in the name and on behalf of the Agent by any of its employees who have been designated by the Agent as having authority so to do." The Chairman then stated that he was naming Gordon Gray as Chairman of the Salary Committee of the Company, succeeding Mr. Leighton H. Coleman in that capacity, and that he was appointing J. Paul Sticht a member of that committee. Upon motion duly made and seconded, the above appoint- ments were unanimously approved. In the absence of D. S. Peoples, A. H. Galloway, President, reported estimated sales and earnings for the month of May and for the first five 1 months of 1968 in comparison with the same periods in 1967. 9 Other matters not requiring formal action by the Board were dis- cussed, after which, on motion, the meeting was adjourned. t