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THE STATE OF FLORIDA, et. al., THE AMERICAN TOBACCO COMPANY, et. al., CIVIL ACTION NO. CL95-1466 Plaintiffs, Defendants. DEPOSITION OF RICHARD W. MIZERSKI, PH.D ('COL I) April 30, 1997 TRAVELING TRANSCRIPT" PROFESSIONALS SERVING PROFESSIONALS A. WILLIAM ROBERTS, JR. & ASSOCIATES CIIARLESTON 722-8414 COLUMBIA 731-$224 1-800-743-D EPO

.... • ~,-.,~ o~ r,ol-,u.~ V. RICILARD W. MIZERSKI, Ph Tim American Tobacco Company VGI. a, ~I~.ril 3'0. 15 It] CIRCUIT COURT OF THE 15TH DISTRICT PALM BEACH. FLORIDA THE STATE OF FLORIDA. el ~,, v~. ClV1L ACTION NO. CL95-146~ THE AMERfCAN TOBACCO COMPANY. e~c,, {~l et aL. |to1 DEPOSfflON OF: RICHARD W. [ttJ DATE: Ar~ 30. 1997 [1el TIME: 11:00 AM ~ulll 1700 Page I APPEARANCES OF COUNSEL: ATTORNEYS FOR THE PLAINTIFF STATE OF MISSISSIPPI: SCRUGGS, MILLEI'TE, LAWSON, BOZEMAN & DENT BY: JF~NNIFF.R A, ~ 734 Detma~ Averse Pasca~ou~a, Mbs~sslppl 395~8 (S0f) 672-6068 A1T'ORNEYS FOR THE PLAINTIFF STATE OF FLORIDA: YERRID, ~IOP~K & MUDANO BY: C. STEV~N YERRID 101 ~ Kenneo~ Boulevard Su#e 2160 Tcq~p~ F~ld~ 33602 ATTORNEYS FOR ~ DF.FF..NDANT R. J. ~ TOBAC,~C), CO.: JONES, DAY', REAVI~ & POGUE BY: ROBERT F, Mc~EP, MOTT, 14S0 G, S~¢e~t, N.W. Washa~ton. D.C. [2*2 (INDEX AT REAR OF TRANSCRIPT~ A. WIIJJAMROBERTS, JI~ & ASSOCIATES Mtn-U-Script~ (3) Pagel-Page2

............ • ~.~, r~. The State of Florida v. VoL 1, April 30, 1997 The American Tobacco Company, STIPULATION ~ It is stipulated by and among Counsel ,at this deposition is being taken in accordance .,4th the Federal Rules of Civil Procedure; that ali objecdous as to Notice of this deposition arc hereby waived;that all objections except as to form are reserved until the time of trial; and that the wimess does not waive reading and signing of this deposition. EXAMINATION BY MR.YERRID: Q: Good morulnl~ sir. A: Good morning.. Q: My name is Srevc Ycrrld. I have had the benefit of sitdng here yesterday and also the morning session while my learned colleague fiom Mississippi has directly examined you wi~h regard to your testimony and I assume at the upcoming Mississippi u-tal that's cnsrenfly scheduled for July. I'm here representing the Governor of Florida, the Attorney General of Florida, and the Page 3 Page 4 reoplc of Florida in a case which ~ presc~dy sohcdulcd be.fore His Honor, Judge ~hcn, ~ C~t Co~ for ~ B~ ~W and set for ~c berg ofAu~ of~b ~me y~. Q: ~ ~u ~de~nd ~e~ a~ ~o se~=re ~b, one a nonj~ ~I ~ eq~w ~ M~ippl, ano~cr berg a j~ ~I ~ ~ ~w and ~p¢~ of eq~w ~ Ho~ ~ you a~ of A: Yes, I am. Q: ~d as I ~de~nd it' does ~ur a~ess a~ ~close to you ~a¢ you u~g ~ fo~ as an e~e~ ~me~? A: ~at b my ~dc~n~g. ~: ~d ~u ~ed, I ~, ~ defe~nce to one for Mbsissippi, one for Flod~ A: ~a~ is co~. Q: ~ey'~ ~mcwhat s~r but not idend~l, and I ~ ~at one ~ one ~re ~y be mo~ Wo~d you a~e ~ ~au7 A: ~at's CO~. Q: ~at wo~d be ~e Ho~ ~closu~ s=tement berg ~e mo~ Page 5 A: That is correct." Q: All right, sir, without duplicating your questioning from yesterday and, more particularly, your responses, as I understand it, you did have some direct input in the disclosure statement, you're aware of its content~, and you may have consulted with counsel, bm your disclosure stateroom was authored primarily by you.; A: That's correct. Q: So you're aware of the areas you're scheduled to testify in, and ff I s~ay flora those areas or ff I missile what your expertise is, please correct me because it's not intentional. A: Ail dgh~. Q: If for some rea~ona my quesdona aren't clear or in some way col~nain~ even to me, in some way con~asing, just stop ma, and I'll be glad to rephrase it and reask yea the qaesdon; othezwbe, I'll assume the responses that you 8ire are accu~rely and direcdy in response to the questions asked. A: I understand, yes. ~ O: - pretty much a fair understanding before we commence? Paga 6 A: It is. Q: Let mc stop here and ask, hav~ng given that preamble, how many times have you given any type of sworn testimony, albeit in commktec proceedings, on behalf of the Frc, or in from of regulatury P~ m [9] ~o] (121 rz~j bodies, or in ~ron~ of congressional committees, subcommittees, deposition testimony in civil cases or enforcement cases? Just in general. I'm not going m hold you to the number. I'm nee n-ylng to pm you in stone on that. A: In excess of 10, pethaps 20. Q: Let's jnsz use the range, Between 10 and 20 times you've resdfied before and you've gone under oath and you understand the meaning of the transcript - A: That is currect. MR.YERRID: For the record, I don't believe that we have sworn the wimess for this proceeding, so we need to do that. Page 5 - Page 6 (4) a~h~-u-script~ A. WILLIAM ROBERTS, JR. & .ASSOCIATES

T~,e &m.efic:m Tobacco Company VoL 1, April tLICHARD W. MIZERSKI, Ph.D., being fir~ duly sworn, testified as follows: EXAMINATION (CONTINUING) BY MR,YERRtD: Q: ReaLizing you arc not a stranger to me, Dr. Mizersld. since your vitae was made ava/lablc to ~ in advance of today's proceedings and your deposition in the Mississippi case has already proceeded.what I'm about to engage in, could you s~e, please, kindly, your name for the record and, if )~u will, bale.fly your expertise and what you are going to ge~e=liy cover in terms of your exper~ testimony. A: My mine is Richard William Mlze~ski, and I am an expt~ wimess concerning the issue overall of marketing and i~ ~ on - ~ ~ea or ~e~ on ~ ~ a b~d m~e of pmdu~ ~, ~u~g ~es. My e~e and ~e ~ I ~ ~s ~ pe~aps b~ ~id out ~ ~e ~e~m I ~ve pm~. ~: Yes, ~. I don't ~nt ~u m go ~cr ~t a~, ff gene~y ~u ~ desire - and I Page 7 bound by the specific description, generally describe Page in terms that I can understand what you intend to testify about in the State of Florlda on bcha~ of • c D~en~. • : We~, ~ I ~id b~o~, I ~ it's be~ ~d out ~ ~e e~e~ ~mess ~tement - M~. Me DE~MO~:~t me ~ve ~e ~me~ a copy of ~ you go~g to ~e a copy of~ an .',,! MR. YERRID: You might as well, and it will save :.z~ rime. :,a~ Let's put a clean copy in as F.xhlbh 1. ~,~ O: Let's ju~ assume you've got an :.~ extfibit- MR. MC DERMOI'I':We'II get a clean copy at innch. MR.¥ERRID: Right. O: ! can le~d you, because that's the way it • ..~ ~rks. I~t me try to ask you some leading questions ~0~ and see if we can move the thing along a little bit. ~j As I understand it, Dr. Mizcrski, you have a Ph.D. in ~ economics and business adminJsr~tion from the ~ Ucdversity of Florida? 7=i A: That is correct. ~ O: And .,,'ou have extensive background both in Page writing and in lecturing on advertising and marketing comrauuleafion research and, ! assume, seminars, things such as that? A: That's correct. Q: You also have handson teaching responsibilities both at your present position in Austra/is and, I believe, m clarify it, your other academic situses prior to amtving in Australia? A: That is correct. Q: I understand, sir, that you've also been employed by the federal government in working with the FederalTrade Commission in the iste 1970's up until, I believe you said, '81,into '827 A: That would be with the headquarters in Washington. I also worked with the Adanta regional o~ce in, I bollcve, a period 1990, 1991, perhaps part into 1992. Q: Let's Just say '90 to '92, to be safe, and realizing that that's an estimate. What did you do for the regional office in Atlanta of the FI'C during that time period? A: I was asked to review advertising in terms of an issue concerning telL'marketing fraud. O: It would be totally tmrelated m cigarette manufacturing or dgarette advertising? Page 10 A: It did deal with marketing. In advertising, it did not deal with anything pertaining m cigateRcs. O: Telemarkednf~ I understand that in a generic sense, but not telettutrketittg services that focused on the cigarette indi~xy? A: That is correct, the telemarketing that I dealt with did not deal at all with any tobacco product. G: Taking that work experience aside and going back to your '80s and before, your early '80s and before exposure, how long were you with the FTC in the Washington office? A: I was in the Washington office headquarters from approximately September of 1980 through the end of December of 19-- excuse me, September of 1979 through the end of 1980, In addition, I did continue to do some work when I moved to my position at Florida State University on some projects. Q: And 1 believe you told us that rook you whaL a year or even two years past '80? A: Yes.There would be occasional projects that would come up in which I was constdted and provided guidance, suggestions, comments. A. WILLIAM ROBERTS, JR. & ASSOCIATES MlnoU-ScrlptO¢ (5) Page7-Pagel0

............. , - "~'-'. The State ofFloridz v VoL 1, April 30, 1997 The American Tobacco Compar~y Page 11 0: AB fight, sir.And with regard to - I'll return to that experience, but with regard to tal.,~ case and this hwsuit brought by the State of ida against a number of Defendants, when were you - ~. contacted to render any sergices in cormcction with this case, the Florida case? A: It would be late 1996. Sometime in either late October, early November. ¢t: Give mc an estimate as to the number of hours, days, weeks, or however you wish to express that quantum of time, you have devoted to that task. A: Oh - this is just sort of a guess - somewhere around 200 hours. Q: Would those hours, those 200 hours, include or exclude the commencement of this journey here to the LosAngnles court reporter's ofgtc¢ for phi'posen of giving your tcst~toay? A: I'm sost of including" I'm looking up through today. I may be in error one way or the other, but I was thinking up through this period. {~: Would I be correct in assuming you go portal to portal? In other words, you have to fly back also to Australia in the next few days, you're going to bKI them till you get back to Australia? A: To the extent I'm working on this. I bill just sitting in a seat. Page 12 Q: Approximately at the conclusion of your testimony, which we will hopefully conclude before the scheduled time frame - let's assura¢ tomorrow aRcmooa, tomorrow ¢vculng - and you travel back to .*.ustralia, wiR that be the extent of the activities that you needed to conduct to arrive at your expert ophaious and deliver them to us in the State of Florida in advance - MR. MC DERMOXq':Arc you asking whether he will be doing any work after he arrives back in Australia in the next two or three days? MR.YERRID: In essence. I probably could ask that, and I'll ask that as a follow-up. Q: If you don't understand that question, I'll ask that follow-up question right after you answer my question. A: I understand your questlon. I'm not sure I can estimate how much more time, if any. It would obviously depend on the extent with which I will continue to be an expert wimess, the areas that I wi11 address. ~: If you weren't an expert wimess at an and you stopped and you arrived back inAust~tia, approximately how many hours, in addition to the 200 Page 13 ~l you hat¢ ~Iready spent, would you spend that would bc e] billable ~me.? Ol A: ~11, probably talking about another 20 ~ hours l~ff~aps. ~ Q: A~uming you couttnue in your rolc as an ~ expert witness retained by the defense, have you fq calculated out or projected out your time is! requlreamms out of Australia and away f*om your tz professiat and your family for the Mississippi u'ial pC and theFlodda uial? [1t! Q: ye, aM¢ not made an}" such calculations - A: N~. Q: -tHthregardtoyourtrueJ? A: (~ltlmeas shaken huad f~om ride to side.) Q: ~ you blocked out an}" time, your p~] acadet~c obligations or your pcrsoml ohlisadons, to ~t contet~ate usage o~ your lXeSe.ncc in either og those Im proceeaaga? tm A:N~ ~! Q: As~ou sit here today, can yea give me an t~ eadmatgof what addidottal time you will need to t~ expend on behalf of the tasks you've be-~n assigned t~! betwe~now and the time of trial if yoii were asked ~ to do natldag tar!her? Paga14 A: I baw.n't estimated that, no. Q: As we sit here today, bare you been asked to do nabbing in the next two or three days that would naltdre expenditures of time, once you arrive back in am~alia? A: Notthat I can recall Q: Andwith regard to the expert disclosure statemem, does it fully and completely and, most importm~t}', accuratel}' depict and disclose all of the opi~ns you expect to render at triaR Q: Do!mu anticipate you will alter in any way, chmge, modify or revise any of the opinions or positiom~ou've expressed in your expert disclosure statememwhich was filed here in this proceeding, your d¢l~sition? A: No. MR. MC:DERMOTT:Let me interject here that obviously the statement, to some extent, speaks for itself, and it talks, f(xexample, about Dr. Mizerski commenting about the opinions expressed b}' other exp~rt.s.Tbat is not a settde2ming term.And the descriptions of the opinians are stated in very gene~l terms.While I'm not s~g that Dr. Mizerski is attempting to conceal awthing or the Defendants are attempting to ge 11 - Page 14 (6) Min-U-s¢~ipto A.Ng~.LIAM ROBERTS, JR. & ASSOCIATES

The state of Florida v. The American Tobacco Company RICHARD W. MIZERSKI, PiLl VoL 1, April 50, 195 conceal anything, the testimony at trial which we anticipate he will deliver will be considerably longer than the two pages of this statement. MR. YERRID: And I respect that, Counsel, and I certaiuly appreciate it, but what I'm doing is trying to convey a sense that I have, at least with regard to our Florida judges, that you will pretty much be Page THE WITNESS: There were several work efforts. BY MR.YERRID: Q: I didn't mean to limit those. Please describe in some detail what you did in the '80s and for whom. A: Sometime during the '805 at one period I evaluated a promotion of a brand - I don't remember bound by the disclosure statement and the confines it may or may not represent. Q: So I want to make sure that the statement adequately apprises cmmsel on this side of the table of what areas you are going to delve into and what your intended expert opinions will generally cover, realizing they may be more specific, they may be more ehborate, they may be more detailed. But these are the general confines. Am I safe in assuming that the confines as disclosed in your expert statement are the confines you will retain dwoughout the course of your involvement in this case? ~: Yes, that is correct. Let me note that I'm not sure what your wimesses will say. I~e certainly read their depositions, and I need to see what they say on the stand in the trial. So obviously that's the one area It! where I - Page 16 ~ Q: YOu can't anticipate what hasn't happened t~ yet, so I understand that.But with that t~ exccpdon - and that is, I would suggest a rather R constant exception - with that exception, am I t~ accurate in assuming that you've disclosed adequately r~ to your satisfaction each and every opinion you ~ intend to give in a generalized form? t~ ~: Yes, I have. 0ul {2: With regard to - again, more t11~ background - your prior experience with the I:TC, t~ that ended, let's approximate, 1982. Correct? A: Correct. {2: inthe '80s, as I recollect, you were t1~ retained by a tobacco entity for some purpose or some tl~ work effort? t1~ ~: Correct. t1~ {2: What was that work ¢ffott.~ ~ Off]be record. (Discussion off the record.) M~.YERRID: Please read back the question. (The last question was read by the ~4| reporter as follows: t~ "Q.What was that work effort?") the brand. I don't recall the brand right now - that dealt with a lottery campaign. Q: That dealt with? I'm sorry? A: A lottery eampaign of some son. Q: When you say "brand," what ate you referring to, what type of product? :,~| A: A cigarette brand. I(1~ Q: And do you generally recail what you were !tl~ asked to do? I really don't need you m be that :tl~ specific. 0~ A: I don't - I don't recall really very tl~ much about it. It was- I was - I reviewed the t~l ~tivc and- that would be the advertising, or t2~l perhaps the potential advertising.._. I'm unsttre at ~ Q: Right. "~ i~*l A: - as to whether it was appropriare, ~ given restrictions of that type ofa pn3gram. Page 18 More specifically, various states have different restrictions on how one can do a lottery, whether it's a game of chance or a game of luck. I guess that's u'uc - a game of skill as compared to a game of chance. Q: And you were hired by the dgarettc company to look into what was required or what was prohibited with regard to this game of skiil slash chance? A: I think more so looking at the campaign and did it have an), - would it have been any problems in training with states that had certain restrictions, Q: In other words, was what they intended to do legal or compatible with the state statutes? A: Again, I'm not an attorney, but - {2: From an advertising, marketing aspect. I'm not suggesting you looked at it from a legal aspect. A: Yes, from an advertising viewpoint, from ~,l what was stared in the ad from somebody who had some m expertise and potential in deceptive advertising, ~tr~ et cetera. t2~ Q: As I understand it, you were hired by a m~ cigarette manufacturer? A. XVIIJJ~U~ ROBERTS, JR. & ASSOCIATES

RICtLM~D W. MIZF_.RSI~, Ph.D. The S/ate of Florida v. : eeL 1, April 50, 1997 The American Tobacco Company That's correct. O: Do you recall the name of the ~,'~tanufacturer? RJ. Reynolds. Was !_his your first experience since receiving, let's say, your college degree, not your Page prk~tc enterprise relating to the tobacco industry, the cigarette industry? A: I don't remember the exact next dmc, I can give you some idea about some activities. I don't remember which preceded which. Q: That would be fine. Some activities and Ph.D., that you had been retained or received funding from a private industry group that manufactured tobacco p~oducts? A: Yes. Q: And do you recall the terms of that retention? What did they ask you to do? What was the understanding of your compensation? A: Well I said what I was asked to do, In terms of my compensation - and I don't know what the rate was back at that period. Q: That's kind of what I was asldng. In other words.were you asked to do "XTM fora flat fee, "Y," or wer~ you asked to do'X~ and then bm at an applicable hilling rate? A: Yes. I wns asked to review the campaign, and I simply charged on the hourly basis. Q: And to regress for just a moment, you charge, I believe, $250 an hour at the present O! A: That's correct. g'l Q: - 1997. Pa~ ~0 And have you charged that throughout the course of this latest engagement by the defendant cot]~oration? In other wogd~, in OctobeA', November of '96 was that your hourly rare? A: That's correct. ~: And your hourly rate, ! can assume, was d~fereut in the '80s than this pat~cular A: That's correct. Q: Do you recali the number of hours or the hourly rate? A: No. Q: When was the next ~e that was the first insrance in the '80s you wo~ed for Approximately what year would that he? A: Oh, I could say R was after 1985, ! Q: 9o you know how yon were ~pp~oacbed as opposed to anyone else in the arena of ~ffot~ed persons? A: No. Q: ,~ ~ght, sir.when was the incident when you were retained to do something for a without regard to which procedure, but just gcoexally. A: I was asked to make a presenration, or at [¢~t give a statement and respond f~out of several committees, two committees, congressional committees. Q: In that particular regard, would you be acting as the spokespenon for a Imrdcular entity in appeasing ~ a wime~ for a Imrtinular group? A: I don't remember right offiumd. I ttmember I worked for a law firm. and I don't rememlmr who one would attribute the client to. Q: Do you remember the name of the law firm? A: Womble. Castyle. ~: That', inWashington? A: The)" have an office in O: Did you appear on any patdeula, entity's A: I don't remember what the entity or Page 21 Page 22 entities were. Q: What was the subject matter of your testimony? /u In one instance it was the appropriateness of restrictions placed on domestic tobacco manu~cturen on their marketing in other cotmtrJes. Q: W'ould ~t be fair to say that in summary your testimony w~ that there should not be any tcs~dcdons placed upon those entities in their advertising in for~gn countries? A: Idon't remember ~f I would be that bgoad there should be none, but ! thfi~l~ it would be more in terms of they shoulcin't be any different than what the domestic man~acturets' restrictions were. Q: Certaimy no more stringent than those imposed in America? A: No- MR. MO DERMOTT:That misstates his testimony. THE WITNESS: No.Tbey sho~dn't be any more restrictive than the manufacturers in the foreign BY MR.YERRID: Q: .MI fight.And you were appearing on behatf of the tobacco manufacturer, speaking from •age 19 - Page 22 (8) Min-U-Scrli~t~ A. WILLIAM ROBERTS, JR. & ASSOCIATES

St~zc of Fiori~ta v. RICHARD W. MIZERSKI, Phi American Tobacco Company VoL 1, April 50, 199 Page 23 ~ndpoint. that point of view? ~: I don't reme~er ~e client, whe~er it ~ ~d~ ~up ur- I don't ~me~er ~e ~me ~e cfient;I j~ - to me, ~e c~ent ~s ~e ~: You do ~me~er it ~sn't an an~mok~g ~ and k ~n't a ~m~ur ~up.You ~me~er much, don't yo~ ~ Yes, l do. Q: ~d ~at ~ ~e ~ ~t oft~ony. ~ • Ho~e or Se~te co~ce? ~ Ho~. ~ I don't ~r ~e t~o~.[ ~fi~e it ~ - ~m~g m do ~ ~ ~d Q: ~ ~u mme~ who ~e ~n ~? C~n. ~ me. Q: ~d ~u ~ had any ~mem or d~ ~ ~n~=~ b~om ~ apace at ~t co~ee? ~No. Q: ~d yo~ ~cond ~vo~ement - and I'm ~g now ofyo~ ~ m~ny ep~de - ~ Page 24 ~nd ~vo~cment ~ ~c ~d~, ~ten~i ~d~ of to~c~, w~ ~u ~d by ~e ~w ~ or we~ ~u ~id ~tely ~dcr con~ by ~c cnfi~ ~d ~u to app~ and ~ tc~ony? Page 2~ Page 26 Q: What do you think - A: I think it was the law firm. Q: And they would be paid by the client? A: I presume so. I'm not - but again, that's speculation on my part. Q: [ want to be ~ clear. Q: Do you recall that rate? Realizing you didn't recall the a~ter '85 l~JR ~ episode rote. Do you recall that rate? A: No, I don't. Q: There came a second opportunity for you to appear before a committee, I belinve you testified? A: That's Q: And when was that, approximately? If you can tell me, I would appreciate it. A: This would be the late '80s. Q: Okay, late So the first appearance before Congre~man Waxman's committee would have been between '85 and '90 and the socond appearance would have been sub~quent to that but before 19907 Q: Okay. A: - but I don't Imow flit was- it would be right arotmd 1990,maybe 1989.Maybe earlier. Q: That pa~ is not significant. Excuse me for overtalldng thcrc-(to the reporter). Any~ay, in the late 1980% very early 1990's, can you de,~ribc in general what your second appearance before a committee would be, congressional committee? A: I absolutely don't remember what specifically the i~ue was. It was not international trade, though, h was more in a domestic.And I - I do remember some aspect~ of k.There was a suggestion of changing packaging. I remember that aspect.There may have been some other maflccting activities that were addressed. Q: Now, reallzing we're speaking to a rather clean and young transcript here, so you have to Is it more likely than not it was done tn; engage me when I ask: Suggestion of changing - for compensation as opposed to pro bono or done for t~ packaging what? What product are we talking about? the good of the cansc? [~! A: Cigarettes. gH. MO DE~MOTT:That may be a fair inference, but ttsl ~: I wanted to be clear on-that, that it was you're really asking the wimess to specdiate. He O~I not some other product. I know that you deal with a can tell you what he knows, t~ lot of other products, but we're dealing solely with THE WITNESS: I ~ compensated. 0e! cigarettes in this particular engagement? A: That's right. Q: Tell me a little bit more, if you have any recollection, about the appearance in the late '80s, cady '90s, that you made before Congress. A: As I said, ! don't recollect a great. deal.There was a statement that/s avai/able and a question and answer that has been printed. BY MR.YERRID: Q: Do you recall what the rate of compensation wasp A: No, I don't. O: Would that have been per hour or per appearance? A: Per hour. A. WH.LIAM ROBERTS, JIL & ASSOCIATES Mln-U-Sca'iptO (9) Page 23 - Pa~e 26

RICHARD W. MIZERSKI, Ph.D. The State of Florida v. VoL 1, April 30, 1997 The American Tobacco Compafiy Q: Generally, what does the statement say? A: I - generally - I just don't retail. ~" Q: Do you generally remember what the ,aestion and answer that's been printed or what its use has been over the years? A: I don't remember. I don't recall. Q: Okay. Has your position changed with regard to cigarette labeling since that testimony vras given and the present time? ~: No. Paga 27 Page 29 changed, it would be- it would be hard to comment. I mean, I did send that material to opposing counsel. I suppose if it would be useful for me to gtwtew it. I don't - I haven't changed my position on how advertising works in that particular area - A: - how labeling would work in that patricular area, nor the impact of yearning labels - Q: Let me- A: - so based on that premise, I would say Q: Tell me what your general position is 0tl with regard to cigarette labels and the adequacies of the labels currently in usage in the UMted States of America. [141 MR. MO DERMOTT:Let me interject here. It's a little after noon.Why don't you pick a point sometime in the next few minutes when we can conveniently break for lunch. MR.YERRID: What I'm trying to do is get him to a pq point of background before we break, and if it takes any more than five or ten minutes, I think we just ought to go ahead and break. MR. MC UERMOTT:That will be fine. MR.YERRIO: These are not the most probative questions in the world. Page 28 Q: Go ahead. TRE WITNESS: Would you pltase read the question Imck (to the reporter). BY MR.YERRID: Q: I11 mak¢ it easier. I think I asked - You might want to read the question et back. His position hasn't changed, and then I asked tel what his position is with regard to the present • 1 labeling that's in use in the United States of vol America here in 1997. MR. MC DERMOTF:That's the question? His position on - MR.YERRID: Yes. Why don't you read back the question. ps~ Maybe it would make more sense. tlel MR. MC DERMO'I3": I was actually going to object to 1,71 the form of the question, so why don't you start with ~ MR.YERRID: I'D start fresh. a0t Q: Sir, [ understand your position has not =it changed with regard to the labeling adequacics or ~ terminologies used in the 1990% yourvlew of the ~I terminologies used, and today's date. Ul Is that correctY ~'1 A: Well, to the extent that labeling has I have not changed my opiniom But, of course, packaging has changed and various marketing activities have changed, so I think it would - I'm unsure as to how I could accurately rest~nd to that question. Q: Izt me change the inquiry a little bit. Let's go b~ck to whatever time it was that you gave the congressional testimony with regard to mggesttons of changes in cigarette labeling and wbatevet the state of the world was at that point in ~ne. Did yon have an opinion that whatever the label requlrement~ were they were stffficient? &: Yea. Q: Given that things may have changed Page 30 between that period of time 1989, 1990, whenever that time frame is that we can't quite remember, and today, labeling may have changed, IS it still your opinion that wbatever the labels required on cigarette packages are today, they are nonetheless" adequate? Fil rephrase it. Do today's labels differ from the labels utilized in that first instance we talked about, '89, A: I'm not sure. I'd have to refer back m the labeling- Q: Your best - ~: - that was in - Q: Your best recollection is that ~ome change occur~d? A: I'na nut SgLre. Q: M[ right, sir. In any event, are yo~ sure of what labeling requiremeuts are in force today A: Yes. Q: I'm tagd~g about the United States. I know yon bave worldwide exposure, bat I'm talking about the United States. A: Yes. 'agc 27 - Page 30 (10) Mtn-U-Script~ A. WELLIAMROBERTS, J1L & ASSOCIATES

. ...,.,,. ~,* . .,~,-,-~ V. RICHARD W. M~ZERSI~. PtX i he American Tobacco Company VoL 1, April 30, 19! Q: Do you bellevc those labels are adequate? A: Yes. O: Okay, sir.And that second testimony before Congress, you think it did not involve international trade? A: To the best of my recollection, it did not deal with international wade. Q: Do you recall the committee or the committee chairman? &: It was Waxman. Q: Again, that would be the House of Representatives as opposed to the U.$. Senate? A: That's correct. Page 31 Page 3 Q: Do you recall!he terms of your engagement? Do you remember the first time you told me it was a law firm. you were paid, but you coulcin't reco,cct being paid by the client? A: That is correct. Q: How about the second occasion? A: I would have been paid the same rate and the same procedure, and to the best of my recollectlon, paid by the law firm. Q: Same law firm? A: Yes. Q: ALl right, sir. How long were you with [.~ Page 32 that law firm, if you were ever employed by the law &: I was only employed on an hourly basis. ~: So it would be more or less as a consultaut as opposed to an employee situatinn, a contractor, if you will? A: Right, I did not have a contract with them. Q: But it would be a case-by-ease scenario as opposed to some retention agrecmcut? A: If you mean case - Q: Episode- A: Episode by episode, yes. Q: Did you have a retention agreement with this particular law firm7 Q: Which groups? /~ I've been paid by RJ. Reynolds. Q: For how long? A: On occasional - several episodes. " Q: ~fyou could start with the first one and date it for me, I would appreciate it. A: The first one would have been the mid to late '80s that I reviewed the promotion that involved Q: "that's the one we discussed initially? A: That is correct. Q: Mt right, sir. A: I also rememi~r an tlMsode in which - or a period in which I was asked to review documents subpenaed by the F'fC concerning the Joe Camel campaign, and I- I'm unsure as to what year that would be, but it wotdd be sometime during or after 1988. Q: Again, that would be houri# A: Hourly. G: All right, sir. On a r.mk-by-task basle as opposed to some monOfly ~i'ention? &: Yes. It wouId be iust a table,and I would blil for the number of hours that were requi~ed to complete that task. Page 34 Q: Time, expenses? A: Correct. Q: Okay.That was the ~econd episode. The third? A: Best of my recollection, that would be collecting Infonmtinn - collecting data concerning theJoeCamcl experimem.That was In early 1992 through perhaps July of 1992. Q: Before we go there, because I think, ha fairness to you - and I realize we've droned on a little bit past the lunch point - could it be that you have basically skipped over.things you've already talked to me about, such as the two congressional committee appearances? In other words, you've gone from, I believe, the events or!he mid-'80s into A: No. pe~ 1992, and I think you've already testified in '89, Q: Have you ever been retained by the t1~I '90 you might have appeared before Congressman cigarette Industry or any tobacco manufacturing group [1~ Wa.xman's committee on two occasions? or trade association? A: If you mean a retention agreement? Q: No, I just mean a retention arrangement - A: Paid episodically? Q: Yes. A: Yes, I have. A: Oh, I know I appeared before him. I don't remember the date, MR. MCDERMOTT: I took your question to go m engagements directly by a tobacco company or the tobacco industry rather than by a law firm, the two congressional appearances he previously described. BY MR, YERRID: A.'WHJ.JAMROBERTS, fR. & ASSOCIATES MJn-U-Script~ (113