1968 Tobacco Institute

The TobacQp Ln,stitute,` Tric :'was formed i n
January, ."n58 :
.~~
Mr . Bbvvxrj o'ia-~Gray served as ; Chairman of th e
Executiy.e 'Gt~mmi;~tee si4ce its inception on
Apri1 10, 1958 uniiI his resignation on Decem-
ber 2, 1,965 .
Mr . Edwin P . Finch was eiected Chairman a t
the Dec .ember=2, 1965 meeting and served unti l

, .r- .
~ ?I his resignation on May 17, 1968-at which tim e
Mr . Jojeph F . Cull.man 3rd became Chairman .
L
II
Roster-Membership`,_Wlvfvos~;
Board of Directors, Committees
4uo-GO5657
THE TOBFICCO INSTITUTE, INC .
C
Membership
Brown 8 Williamson : Tobacco Corporation

1600 West Hill Street
Louisville, Kentucky 4020 1
Conwood Corporation
813 Ridge Lake Boulevard
Memphis, Tennessee 3811 7
General Cigar 8 Tobacco Co ., A Division of Culbro Corporation

60&Third~ Avenu e
New~York, New York 1001 6
G . A. Georgopulo 8 Company, Inc .

48 Stone Street
New~ York, New York 1000 4
Larus 8 Brother, Inc .

8551 Mayland Drive
Richmond, Virginia 2322 9
Liggett 8 Myers Tobacco Company, Inc .

4100,Roxboro Road
Durham, North Carolina 2770 2
Lorillard, A Division of Loews Theatres, Inc .

200 East 42nd Stree t
New~York, New York 1001 7
Philip Morris Incorporated

100 Park Avenue
New York, New York 1001 7
R . J . Reynolds Tobacco Company

401 North Main Street
Winston-Salem, North~Carolina 2710 2
Scotten, Dillon Tobacco Co ., Inc .

700 First Avenue
Gallipolis, Ohio 45631
United States Tobacco Company

100 West Putnam Avenue
Greenwich, Connecticut 0683 0
December 9, 1976
a 7
12/9/76
THE TOBACCO INSTITUTE', INC .
Membership
Brown 8 Williamson Tobacco Corporation

1600 West Hill Street
Louisville, Kentucky 4020 1
Charles I . MeCarty, President & Chief Operating Officer
Conwood Corporation
813 Ridge Lake Boulevard
Memphis, Tennessee 38117
W. M. Rosson, President
General Cigar & Tbbacco Co ., A Division of Culbro Corporation

605 Third Avenue
Joseph D . Whitwell, President & Chief Operating Officer
G . A. Georgopulo & Company, Inc .

48 Stone Street
Basil P . Georgopulo, Presiden t
Larus & Brother, Inc .

8551 Mayland Drive
C Richnond, Virginia 23229
Robert S . Pless, President
Liggett & Myers Tobacco Ccsnpany, Inc .

4100 Roxboro Road
Durhaan, North Carolina 27702
Arthur E . Sloat, President

200 East 42nd Street
New York, New York 10017
Curtis H . Judge, President

100 Park Avenue
Ross R . Milihiser, President
R. J. Reynolds Tobacco Company

401 North Main Street
Winston-Salem, North Carolina 2710 2
William D . Hobbs, President 8 Chief Executive Officer
Scotten, Dillon Tobacco Co ., Inc .

7001First Avenu e
Gallipolis, Ohio 45631
Timothy M . Cornell, President

100 West Putnam Avenue
Greenwich . Connecticut 06830
THE TOBACCO INSTITUTE, INC .
BOARD OF DIRECTOR S
Louis F . Bantle
Stuart F . Bloch
Timothy M . Cornell
Joseph F . Cullman, 3rd
Joseph E . Eden s
W . Brooks George
G . B . Georgopulo
William D . Hobbs
Curtis H . Judge
Charles I . McCarty
Ross R . Millhiser
( Robert A . R echholtz
W . D . Rosson
Arthur E . Sloat
Colin Stokes
Preston R . Tisch
December 9, 1976
EXECUTIVE COMMITTE E
Joseph E . Edens, Chairman

Charles I . McCarty, Vice Chairman
Louis F . Bantl e
Joseph F . Cuilmarn, 3rd
W . Brooks George
William D . Hobbs
Curtis H . Judge
Ross R . Millhiser
Robert A . Rechholtz
W . D . Rosson
Arthur E . Sloat
Colin Stokes
Preston R . Tisch
December 9, 1976
C THE TOBACCO INSTITUTE, INC .
OFFICERS
Horace R . Kornegay President and Executive Directo r
Franklin B . Dryden Senior Vice President
J .C .B . Ehringhaus, Jr . Senior Vice President
William Kloepfer, Jr . Senior Vice President
John F . Mill s Senior Vice President
Anne H . Duffin Vice Presiden t
William Hecht Vice President
Roger L . Moz i'ngo Vice President
Frederick Panzer Vice President
Marvin A . Kastenbaum Director of Statistic s
Charles L . Wait e Medical Director
B . D . Cummins Treasurer
B . E . Bacon Assistant Treasurer
Kathryn R . Golden Secretary
Donna Hilderle y Assistant Secretar y
December 9, 1976
~
c
COMMITTEE OF COUNSE L
Ernest Pepples, Chairman

Thomas F . Ahrensfel' d
H . Thomas Austern
James Chapi n
Max H . Crohn, Jr .
Joseph H . Greer
William W . Shinn
Arthur J . Steven s
December 9, 1976
COMMUNICATIONS COMMITTE E
James C . Bowling, Chairman

J . R . Ave
John V . Blalock
C . Dennis Durden
William Kloepfer, Jr .
Thomas D . Pickett
Dan E . Provos t
H . Copland Robinson
William W . Shinn
December 9, 1976
C
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THE TOBACCO~INSTITUTE, INC .
BUDGET COMMITTE E
B . D . Cummins, Chairman
John V . Blaloc k
James C . Bowling
M . Alfred Peterson
Ralph L . Ross i
.
T . Zachary Smith
David M . Welsh
December 9, 1976
-i 1
C
Pension Committee
DeBaun Bryant, Chairman

Franklin B . Dryde n
W . Brooks George
Robert D . Rickert
December 9, 1976
By-Laws
Cert'rfication of lncorporation
0002G o 5 ss 7
IN, /It, As revised by the Board of Directors - 12/9/7 6
BY-LAWS
C OF
ARTICLE I
OFFICES
Section 1 . The Institute shall maintain an office in the City of

New York, State of New York . The Institute may also have an office in the
City of Washington, District of Columbia, andalso offices in such other
places as the Board~of Directors may from time to time determine .
ARTICLE I I
MEIMBERSH'IP
Section l . Any person, firm or corporation engaged in the busines s

of manufacturing and~marketing of cigarettes, smoking tobacco, chewing tobacco
or snuff shall be eligible to become a member of the Institute upon such terms
C and conditions as are prescribed herein . A corporation which is not engaged
in such business but which owns all or substantially all of the outstanding
stock of a corporation which is so engaged and which is a member shall als o
be eligible for membership as a "parent corporation member" subject to the
additional terms and~conditions applicable to such members as provided for in
Section 2 of this Article and elsewhere herein .
Section 2 . A parent corporation and the member of which it is the

parent shall be treated as a single member jointly entitled to one vote on
all matters including the election of directors .
Section 3 . Any person, firm or corporation eligible for membership

shall present to the President a written application, which application shall
contain an agreement signed by the applicant to the effect that said appli-
cant, if elected to membership, will fulfill and perform all of the obligations
and requirements contained in the By-Laws of the Institute and any amendments
which may be made thereto . Such application shall state the basis for the
eligibility of the applicant .
Section 4 . Upon receipt of any application for membership the

Secretary shall present such application for determination of the applicant's
eligibility by vote at the next regular meeting of the Board of Directors .
The determination of the applicant's eligibility, which shall be based~upon
the definition of eligibility containedherein to be applied on a uniform
basis, and the effective date of such member's election, shall be determined
by a majority vote of all the directors at the time being of the Institute .
If the vote is favorable, the Institute shall notify the applicant that the
application has been approved .
1k WTI-% &
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Section5 . Membership in the Institute may be terminated by

resignation or as otherwise provided in these By-Laws . All rights of
C
membership shall cease upon termination of membership, but a member shal l
thereafter remain liable for dues and assessments to the extent provided
in Article III . Any member may, by giving written notice of such intention
to the Board of Directors, withdraw from membership effective upon receipt
of such notice or at any later time specified therein . A parent corporation
member shall be terminated as a member at the same time the membership of
the corporation of which it is the parent is terminated for any reason .
Section6 . Any member who shall fail to pay his dues and assess-
ments within 30 days after the same become due shall be notified in writing
by the Treasurer of the Institute . If payment is not made within 30 days
after receipt of such notification of nonpayment, the Secretary shall re-
port such nonpayment to the Board of Directors . The Board of Directors may,
without further notice and hearing, expel such member from membership . Such
a member shall forfeit all rights and privileges of membership without preju-
dice to the right of the Institute to collect from him all his financial
oblligat ions .
Section7 . The members who as of the date of any election of

directors would be subject to assessment for Additional Dues, as provided
in Section 1 of Article III of these By-Laws (whether or not any suc h
.assessment is actually made)!, shall as a group constitute a separate
membership class (the "Class A Members") for the purpose of electing
directors . The Class A members, together with their parent corporation
members, shall be entitled to elect twice the number of directors as there
are Class A members . The members not subject to such assessment other than
parent corporation members shall as a group constitute a separate member-
ship class (the "Class B Members") for the purpose of electing directors .
The Class B members, together with their parent corporation members, shal l
be entitled to elect the same number of directors as there are Class B members .
ARTICLE II I
DUES
Section 1 . Each member elected pursuant to Article II shall pay annual C

dues (a) in the amount of $100 or '(b) at the rate of (i) one twentieth of a
cent for every thousand tax-paid cigarettes plus (ii) ten cents for every
thousand pounds of manufactured tobacco produced by it during the preceding
calendar year, whichever of (a) or (b) shall be larger . Annual dues shall be
payable in equal semi-annual installments withimthe first thirty days of each
half-yearly period .
ei
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If a member's estimated production of tax-paid cigarettes has been

more than two billion for the preceding calendar year, it shall also be liable
for Additional Dues, as hereinafter provided .
Additional Dues may be assessed from time to time for any calendar
year after 195T by the Board of Directors after determining the difference
between the Institute's budget for such year and the estimated income of the
Institute for such year from sources other than Additional Dues . Any deficit
in such budget as made and revised from time to time may be assessed'ass -
Additional Dues against each member liable for Additional Dues in the amount
of a percentage of its annual dues for the calendar year in which the assess-
ment of Additional Dues is made, said percentage to be set by the Board of
Directors and to apply in determining the amount of Additional Dues due from
each member liable therefor . Upon assessment of Additional Dues, each member
shall be promptly notified of the percentage of its annual dues which is
assessed as Additional Dues and payment thereof shall be due within thirty
days after notice but not before January 1 of the calendar year for which
assessed .
No member or former member of the corporation shall have any obli-

gation except for dues fixed or assessed as provided in this Article .
Section 2 . The Institute's budget for each calendar year shall be

determined, and may be revisedfrom time to time before or during such calendar
year, by the Board of Directors of the Institute .
( Neither the Board of Directors nor any officer, agent or employee of
the Institute shall have any authority to create obligations beyond thos
eprovide forinaybudget, xcepthateBoardofDirectorsbyresoluti n
may authorize the creation of specific obligations . Each member shall be
promptly notified of the budget when so made or revised and of any resolution
authorizing the creation of any obligations . .
Section 3 . Upon termination of membership, a former member shall re-

main liable for dues and assessments thereafter to the extent necessary to
cover any obligation created or expense incurred prior to the effective date
of such termination ; provided, however, that any member may, within ten days
after notice of said original or revised budget or resolution, file in writing
with the Secretary of the Institute its dissent therefrom and its resignation
from the Institute, in which~case such member shall not be liable for any new
obligation or expense so authorized and shall only be liable for such portion
of dues and assessments thereafter as shall represent its proportionate par t
of other obligations and expenses of the Institute duly authorized or incurred '$
prior to the adoption of such budget or resolution . C
C
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CA
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ARTICLE IV
NEETINGS OF MEMBERS
Section 1 . The annual meeting of the members for the election of

directors and for the transaction of such other business as may properly
come before such meeting shall be held at 10 :00 A .M . on the second Thursday
in December each year beginning with the year 1977, or if that day shall be
a legal holiday, then on the next succeeding business day .
Section 2 . Special meetings of the members of the Institute may be

called by the Board of Directors or the President or upon written request
to the Secretary of three members . Uponsuch .cal71 or request the Secretary
shall issue a notice of a special meeting to consider the business specified
in such call or written request . All special meetings of the members shall
be held at such places withinor without the State of New York as the Board
of Directors may from time to time fix .
Section 3 . Notice of annual meeting or special meeting shall be

mailed by the Secretary to each member at its last recorded address at least
10 days before the time appointed for the meeting and shall contain a state-
ment of the time and place and the business to be considered at such meeting .
Section 4 . One third~of the members of the Institute shall consti-

tute a quorum at any meeting, and in case there be less than such number
present, the meeting shall be adjourned from time to time unless a quorum
is present . -
Section 5 . The President of the Institute shall preside at each

meeting of the members . If the President is absent from any meeting of the
members, such~other person who shall be chosen by the members :shall preside
thereat . The Secretary, or in his absence such person as shall be designated
by the chairman of the meeting, shall act as secretary at each meeting of the
members and keep the minutes thereof .
Section 6 . The order of business of all meetings of the members

shall be, insofar as applicable, as follows :
1. Call to order .
2. Proof of notice of meeting .
3. Determination of quorum .
4. Approval of the minutes of the previous meeting .
5. Reports .
6. Election of Directors .
7. Other business .
e
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Section 7 . At each meeting of the members of the Institute, each~

member shall be entitled to one vote in person or by proxy . Any member may,
by instrument in writing filed with the Secretary, appoint one or more persons
to vote for or on behalf of such member as and to the extent therein provided .
Such instrument may constitute the person or persons named as the proxy or
proxies of such member for a specified meeting or for an indefinite period,
not to exceed eleven months from the date of the execution thereof . All
matters, except those specified herein to the contrary, shall be decided by
the vote of a majority of the members present in person or represented by
proxy and~entitled to vote, a quorum being present . Unless demanded by a
member or directed by the chairman of the meeting, no vote need be by
ballot . On a vote by ballot each ballot shall be signed~by the member voting
or by his proxy .
ARTICLE V
BOARD OF DIRECTORS
Section 1 . The management of the business and~affairs of the Institute

shall be in the Board of Directors .
Section 2 . The Board of Directors shall, subject to the provision of

paragraph 5 of the Certificate of Incorporation, consist of twice the number
of directors as there are Class A members of the Institute plus the same
number of directors as there are Class B members of the Institute . Directors
shall hold office until the annual meeting of the members next ensuing after
their election, and until their respective successors are elected and~shall
have qualified . Seven directors shall constitute a quorum for the transaction
of business, but if at any meeting of the Board there shall be less than a
quorum present, a majority of those present may adjourn the meeting from time
to time .
Section 3 . Vacancies in the Board of Directors, including vacancies

arising from an increase in the number of directors, shall be filled~by the
Board of Directors and the directors so chosen shall hold office until the next
annual election or until their successors shall be duly elected and qualified .
Section 4 . Meetings of the Board~of Directors shall be held at such jd.

place within or without the State of New York as may from time to time b e
fixed by resolution of the Board . Regular meetings of the Board of Directors
shall be held at such times as may from time to time be fixed by resolution ~
of the Board ; and special meetings may be held at any time upon the call o f
the President or of any two directors, by oral, telegraphic or written notice
duly servedon or sent or mailed to each director not less than 2 days before
the meeting . The notice of any regular meeting need not specify the purposes
thereof . A meeting of the Boaramay be held without notice immediately after
the annual meeting of the members at the same place at which such meeting is
held . Notice need not be given of regular meetings of the Board held at times
fixed~by resolution of the Board . Notice of any meeting of the Boardof Directors
shall not be required to be given to any director who shall attend the meeting
or who shall, either before or after such meeting, waive notice thereof in writing
or by telegraph .
Section 5 . The Directors of the Institute shall serve without compen-

sation except as to any Director who shall also be an officer or employee o r
counsel of the Institute .
ARTICLE'VI
EXECUTIVE CONIMITTEE
The Board of Directors, by resolution adopted by a majority of the

entire Board, may designate from among its members an Executive Committee
consisting of three or more directors, which to the extent provided in such
resoluti=shall have all the authority of the Board except as otherwise re-
quired by law . Vacancies in the Executive Committee may be filled by the
Board~of Directors at any meeting of the Board . The Executive Committee shall
keep regular minutes of its proceedings and report the same to the Board of
Directors when requested by the Board . The Executive Committee shall meet C
uponthe call of its Chairman or the President of the Institute . The presence
of a majority of the members of the Executive Committee shall constitute a
quorum for the transaction of business unless the Executive Committee shall
consist of any even number of members, in which case a quorum shall be one-
half of the members .
ARTICLE VI I
OFFICERS, AGENTS AND EMPLOYEE S
Section 1 . The officers of the Institute shall be a President, on e

or more Vice Presidents, a Secretary and a Treasurer, all of whom shall be $
elected by the Board~of Directors and~who may or may not be members of the ~
Boar&of .Directors . The Board of Directors may from time to time appoint one
or more Assistant Secretaries and one or more Assistant Treasurers and such ~ .)
other officers, agents and employees as it may deem proper . Any two or more
offices mabr be held by the same person, except the offices of President and
Secretary or Assistant Secretary . U t
G3
t
-7-
Each of such officers shall serve for a term ending with the next
annual meeting of the members of the Institute and until his successor shall
have been chosen andshall have qualified . Any vacancy in any office shall
be filled for the unexpired portion of the term of the Board of Directors .
All officers, managers, Assistant managers and~ agents elected or appointed
by the Board of Directors shall be subject to removal with or without cause
at any time by the Board of Directors . All other agents and employees of
the Institute may be removed at any time by vote of the Board of Directors,
or by the officer appointing them .
Section 2 . The Board of Directors may employ legal counsel who shall
be responsible for the conduct of the legal affairs of the Institute, in-
cluding all legal matters arising at or in connection with meetings of the
members or the Board of Directors and all legal advice required by the officers
of the Institute .
Section 3 . Subject to such limitations as the Board of Director s

may from time to time prescribe, the President may appoint or remove such other
employees and agents as the business of the Institute may require, who shall
have such duties as the President or the Board of Directors may from time to
time determine .
Section 4 . Subject to such limitations as the Board may from time

to time prescribe, each of the officers of the Institute shall have such
c powers and duties as shall pertain~to his respective office, as well as such
additional powers and duties as may from time to time be conferred~or imposed
by the Board of Directors . The Secretary shall be responsible for issuing
agenda for all meetings and for keeping full and accurate minutes thereof,
copies of which shall be distributed to all members or to all directors, as
the case may be . The Treasurer and any Assistant Treasurer may be required to
give bond for the faithful discharge of their duties, in such sums and wit]i
such surety or sureties as the Board of Directors from time to time may
prescribe .
Section 5 . The Board of Directors is authorized to determine the

compensation of all officers, counsel, employees and agents of the Institute,
notwithstanding the fact that any such person may also be a director .
ARTICLE VII I
INDEMNIFICATIO N
Any personmade a party to any action, suit or proceeding by reason

of the fact that he, his testator or intestate, is or was a director, officer
or employee of the Institute or of any corporation which he served as such at
the request of the Institute, shall be indemnified by the Institute against
-8+-
the reasonable expenses, including attorneys' fees, actually and necessarily

incurred by him in connection with the defense of such action, suit or pro-
ceeding, or in connection with any appeal therein, except in relation to
(
matters as to which it shall be adjudged in such action, suit or proceeding
that such officer, director or employee is liable for negligence or misconduct
in the performance of his duties . The foregoing right of indemnification shall
not be deemed exclusive of any other rights to which such director, officer or
employee may be entitled apart therefrom . Any amount payable by way of in-
demnity shall be determined~and paid in such manner as the Board'of Directors
of the Institute shall direct by resolution .
CHECKS, NOTES', ETC .
All notes, drafts, checks, acceptances, orders for the payment of

money, and all negotiable instruments obligating the Institute for the payment
of money shall, unless otherwise provided by the Board of Directors, be signed
by the President or a Vice President and by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary .
ARTICLE' X
CORPORATE SEAL
The corporate seal shall be in circular form and shall have inscribed
thereon the name of the Institute and the words "Incorporated New York 1958' . "
ARTICLE XI
ANENDMENTS
The By-Laws of the Institute may be amended, added to, rescinded or

repealed at any meeting of the members, provid'ed notice of the proposed change
is given in the notice of the meeting . Subject to the power of the members to
alter, amend or repeal any By-Laws made by the Board of Directors, the Board
may make By-Laws for the Institute and may from time to time alter, amend and
repeal any of these By-Laws . If any by-law regulating an impending election
of directors is adopted, amended or repealed_by the Board of Directors, there
shall be set forth in the notice of the next meeting of the members of the
Institute for the election of the directors, the by-law so adopted, amende d
or repealed together with a concise statement of the changes made .
F
CERTIFICATE OF INCORPORATION
OF
PURSUANT TO THE MEMBERSHIP CORPORATIONS LA W
-------
00000-------
'We, the undersigned, desiring to form a membership

corporation, pursuant to the Membership Corporations Law,
.do hereby certify as follows :
1 . The name of the proposed corporation is THE

TOBACCO INSTITUTE, INC .
2 . The purposes for which it is formed are not for

pecuniary profit and are : to promote a better understand-
ing by the public of the tobacco industry and its place in
the national_economy ; to cooperate with governmental agen-
cies and public officials with reference to the tobacco in-
dustry ; to collect and disseminate information relating to
the use of tobacco ; to collect and disseminate scientific
and medical material relating to tobacco ; to collect and
disseminate information relating to the tobacco industry
published or released by any governmental agency, federal
or state, or derived from other sources independent of the
industry ; to collect and disseminate information relating
to legislative and administrative developments, federal or
state, affecting the tobacco industry ; to promote public
good will ; to carry on all or any of its activities and to
acquire, hold and dispose of such property (real, personal
and mixed) as may be requisite for the conduct of its affairs,
in any of the states, districts, territories or possessions
of the United States, and in any and all foreign countries,
subject to the laws of such state, district, territory, pos-
session or country and otherwise to do everything necessary,
proper, advisable or convenient to carry out the purposes
hereinbefore set forth ; provided, however, that the corpora-
tion shall have no power to participate in any activity or
give consideration to any matters relating to the management
or control of any of its members or to the operations by any
of its members of their respective businesses, including,
without limitation, matters relating to the purchase, manu-
facture, transpo,rtation, advertising, pricing or marketin g
of tobacco or tobacco products .
2
3 . The territory in which the operations of the

corporation will principally be conducted is the City of
New York and the District of Columbia .
4 . The principal office of the corporation in New

York shall be located in the City of New York, County of
New York and State of New York .
5 . The number of directors shall be not less than

3 nor more than 25 .
6 . The names and residence addresses of the persons

constituting the Board of Directors until the first annual
meeting of the corporation are :
Names Residence s
Martin J . Condon 806 Sweetbrier Road

Memphis, Tenn .
Joseph F . Cullman III Sleepy Hollow Road

Briarcliff Manor, N . Y .
Benjamin F . Few 665 Sasco Hill Road

Southport, Conn .
Panos B . Georgopulo 360 Riverside Drive

New York 25, N . Y .
Bowman Gray Brookberry Farm

R. F . D . 8
Winston-Salem, N . C .
$'
Lewis Gruber 670 West End Avenue 0
New York 25, N . Y . N
ell,
Paul M . Hahn 14 East 75th Street © U7
New York 21, N . Y .
Emery M . Lewis . 5004 Dunvegan Road

Louisville, Ky .
Joseph P . McCauley 222 Munro Boulevar d

Valley Stream, Li . I ., N . Y .
3
Names Residences
J . Whitney Peterson Zaccheus Mead Lane

Greenwich, Conn .
William T . Reed, Jr . Sabot Hill Farm

Sabot, Va .
Stephan C . Stephano 7305 North 12th Street

Melrose Park
Philadelphia 26, Pa .
7 . All of the subscribers to this certificate are

of full age ; at least two-thirds of them are citizens of the
United States ; at least one of them is a resident of the State
of New York ; and at least one of the persons named as direc-
tors is a citizen of the United States and a resident of the
State of New York .
IN WITNESS WHEREOF, we have made, signed and ac-

knowledged this certificate .
Dated this 27th day of January, 1958 .
s/ Gordon W . Bicker t
Gordon W . Bicker t
1 Janet C . Brown
Janet C . Brown
s Richard W . Collin s
Richard'W . Collin s
sl Melvin D . Goodman
Melvin D . Goodman
s/ John P . Stearn s
John P . Stearns
Ci STATE OF NEW YORK )
CITY OF NEW YORK : ss . :
COUNTY OF NEW YORK )
On this 27th day of January, 1958, before me per-

sonally appeared Gordon W . Bickert, Janet C . Brown, Richard W .
Collins, Melvin D . Goodman and John P . Stearns, the sub-
scribers, to me known and known to me to be the persons who
executed the foregoing Certificate of Incorporation, an d
they severally acknowledged to me that they executed the
same .
s/ John Browninq
Notary Public
JOHN BROWNING
NOTARY PUBLIC, State of New York
No . 24-0462000
Qualified in Kings Count y
Cert . filed with New York County Clerk
Commission expires March 30, 1959
(Seal )
L
STATE OF NEW YORK )
COUNTY OF NEW YORK )
HORACE G . HITCHCOCK, being duly sworn', depose s

and says :
That he is attorney for Gordon W . Bickert, Janet C .

Brown, Richard W . Collins, Melvin D . Goodman and John P .
Stearns, the parties who have signed the foregoing Certifi-
cate of Incorporation ; that to the best of his knowledg e
and belief, no previous application for incorporation of
The Tobacco Institute, Inc . has heretofore been made by
said incorporators or any of them .
s/ Horace G . Hitchcoc k
Subscribed and sworn to before

me this 27th day of January, 195 8
s/ John Browning
Notary Public
JOHN BROWNING
NOTARY PUBLIC, State of New York
No . 24-0462000
Qualified in Kings County
Cert . filed with New York County Clerk
Commission expires March 30, 195 9
(Seal)
I, ARON STEUER , a Justice of the
'Supreme Court of the First Judicial District, hereb y
approve the foregoing Certificate of Incorporation of
The Tobacco Institute, Inc . and consent that the same
be filed .
Dated : New York, N . Y .

January 28, 1958
s/ Aron Steue r
Justice of the Supreme :Court
of the State of New York
Y 1 .~
As revised by the Board of Dir.ectqrs - 5/15/7 6
BY-LA:-I S
or
TtiE. TOBACCO INSTITUTE, INC .
C
ARTICLE I .
OFFICES
Section 1 . The Institu~ e shall maintain an. office in the City •

of New York, State of New York . The Institute may also have an office .
in the City of Washington, District of Columbia, and also offices in
such other places .as the Board of Directors may from time to time
determine .
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ARTICLE I I
2IDIBE%SHIP
Section 1 . Any person, firn or corporation engaged in the

business of manufacturing and marketing .of cibarzttes, smoking tobacco,
chewing tobacco or snuff shall be eligible to become a member of the
I►stitute upon such terms and conditions as are prescribed herein .
Such person, firm or corporation shall present to the President a
written application, which application shall contain an agreement-
sibned by the applicant to the effect that said applicant, if elected
to membership, will fulfill and perforn all of the obligations and
requirements contained in the By-Laws of the Institute and any
aciendnents which may be made thereto . Such application shall state
the .basis for the eligibility of the applicant .
Sectioz~2 . Upon receipt of any application for membership the

Secretary shall present such application for dztermination of the
applicant's eligibility by vote at the next regular meeting of'the
Board of Directors . The determination of the applicant's eligibility s
which shall be based upon the definition of eligibility contained .
herein to be applied on a uniform basis, and the effective date of
such member's election, shall be determined by a majority vote of all
the directors at the time being of the Institute . If the vote is
favorable, the Institute shall notify the applicant that the applica-
tion has been approved . '
. Section 3 . ..•iembership in the *Institute may be terminated by *

resignation or as otherwise . provided in these By-Lziws . All rights of
membership shall cease upon termination of membership, but amember
shall thereafter remain liable for dues and assessments to the extent
provided in Article III . Any member may, by giving written notice of
such intention to the Board of Directors, withdraw fror,i membership
effective upon receipt of such notice or at any la :ter time specifie
. dtherin
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Section 4 . Any member who shall fail tc

within 30 days after the same become due sha :
Treasurer of the Institute . If payment is nc
receipt of such notification of nonpayment, ~,
nonpayment to the Board of Directors . The Bc
further notice and hearing, expel such membe C
:sha1foreitlgndpvsofm(
right of the Institute to collect from him~aa
Section 5 . The members who as of the d, ;

would be subject to assessment for Additiona:
of Article III of these By-Laws (whether or r
actually made), shall as a .group constitute
"Class A members") for the purpose of electii
shall be entitled to elect twice the number i
members . The members not subject to such as,
constitute a separate membership class (the
of electing directors . The Class B members
same number of directors as there are Clas s
ARTICLE II:
DUE S
Section l . Each member elected pursum

dues (a) in the amount of $100 or (b) at the
cent for every thousand tax-paid cigarettes
thousand poi .ands of manufactured tobacco prod-
calendar year, whichever of (a) or (b) shall be larger . Annual dues shall
be payable in equal semi-annual installments within the first thirty days of
each half-yearly period .
If a member's estimated production of tax-paid cigarettes has been more

than two billion for the preceding calendar year ., it shall also be liable for
Additional Dues, as hereinafter provided . $
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Additional. Dues may be assessed from time to time for any calendar year
after 1957 by the Board of Directors after determining the difference between
the Institute's budget for such year and the estima,ted income of the Institut e
for such year from sources other thm Adclitional . Dues . Any deficit in such C
rs
budget as made and revised from time to time may be assessed as Additional Dues 0 :
against each member liable for Additional Dues in the amount of a ; percentage of -(]~
its annual dues for the calendar year in which the assessment of Additional r,J
Dues is made, said percentage to be set by •the Board of Directors and to appl y
in determining the amount of Ad'ditiona] . Dues due from each member liable therefor .
Upon assessment of Additional Dues, each~ member sha71, be promptly notified of the
percentage of its annual dues which is assessed as Additional Dues and payment
thereof shall be due within thirty days after notice but not before January 1
of the calendar year for which assessed .
No member or former member of the corporation shall have any obligation

except for dues fixed or assessed as provided in this Article .
ei
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Section 2 . The Institute's budget for each calendar year shall be

determined, and may be revised from time to time .before or .during such
calendar year, by the Board of Directors of the Institute .
Neither the Board of Directors nor any officer, agent or employee of the
Institute shall have any authority to create obligations beyond :those provided
for in any budget, except that the Board of Directors'by resolution ma y
authorize the creation of specific obligations . Each member shall be promptly
notified of the budget when so made or revised and of any resolution authorizing
the creation of any obligation .
Section 3 . Upon termination~of membership, a former member shall remain

liable for dues and assessments thereafter to the extent necessary to cover
any obligation created or expense incurred prior to the effective date of
such termination ; provided, however, that any member may, within ten days
after notice of said original or revised budget or resolution, file in
writing with the Secretary of the Institute its dissent therefrom and its
resignation from the Institute, in which case such member shall not be liable
for any new obligation or expense so authorized and shall only be liable for
such portion of dues and assessments thereafter as shall represent its
proportionate part of other obligations and expenses of the Institute duly
authorized or incurred prior to the adoption~of such budget or resolution .
ARTICLE IV
MEETINGS OF MEMBER S
Section 1 . The annual meeting of the members for the election~of directors
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and for the transaction of such other business as may properly come before such
meeting shall be held at 10 :00 A . M . on the first Thursday in December each year
beginning with the year 1976, or if that day shall be a legal holiday then on
the next succeeding business day .
Section 2 . Special meetings of the members of the Institute may be called

by the Board of Directors or the President or upon written request to•the
Secretary of three members . Upon such call or request the Secretary shall issue
a notice of a special meeting to consider the business specified in such call or
written request . All special meetings of the members shall be held at such
places within or without the State of New York as the Board of Directors may
from time to time fix .
Secti~on 3 . Notice of annual meeting or special meeting shall be mailed

by the Secretary to each member at its last recorded address at least 10
days before the time appointed for the meeting and shall contain a statement
of the time and place and the business to be considered at such meeting .
Section 4 . One third of the members of the Institute shall constitut e

a quorum at any meeting, and in case there be less than such number present , r:)
the meeting shall be adjourned from time to time unless a quorum is present .
Section 5 . The President of the Institute shall preside at each ~ ►n

meeting of the members . If the President is absent from any meeting of the
members, such other person who shall be chosen by the members shall preside
thereat . The Secretary, or in his absence such person as shall be designated
by the chairman of the meeting, shall act as secretaxy at each meetin~; of
the members and keep the minutes thereof .
Section 6 . The order of business of all meetings of the members

shall be, insofar as applicable, as follows :
1. Call to order .
2. Proof of notice of meeting .
3. Determination of quorun .
4. Approval of the minutes of the previous meeting .
5. Reports .
6. Flectionof Directors .
7. Other business .
Section 7 . At eachimeeting of the members of the Institute, each

member shall be entitled to one vote in person or by proxy . Any member
may, by instrument in writing filed with the Secretary, appoint on e
or more persons to vote for or on behalf of such member as and to the
extent therein provided . Such instrument may constitute the person
or persons named as the proxy or proxies of such member for a
;,pecified meeting or for an indefinite period'y not to exceed eleven
months from the date of the execution .thereof ; All matters, except
those specified herein~ to the contrary, shall be decided by th e
vote of a majority of the members present in person or represented by
proxy and entitled to vote, a quorum being present . Unl:ess demanded
by a member or directed by the chairman of the meeting, no vote need
be by ballot . On a vote by ballot eachlba7,lot shall be signed b y
the member voting or by his prox;y .
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ARTICLE V
BOARD OF DIRECTOR S
Section 1 . The management of the business and affairs of the

Institute shall be in the Board of Directors .
Section 2 . The Board of Directors shall, subject to the provision

of paragraph 5 of the Certificate of Incorporation, consist of twice
I
the number of directors as there are Class A inembers of the Institute
plus the same number of directors as there are Class B members of the
Institute . Directors shall hold office until the .annual meeting o f
the members next ensuing after their election, and'until their respective
successors are elected and shall have qualified . Seven directors sha .ll
constitute a quorum for the transaction of business, but if at any
meeting of the Board there shall be less than a quorum present, a
majority of those present may adjourn the meeting from time to time .
e
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C Section 3 . Vacancies in the Board of Directors, . including

vacancies arisxng from an increase in the number of directors,
shall be filled by the Board of-Di-rectors and the directois so
choscn shall hold office until the nex.t annual election or until
their successors shall be duly elected and qualified .
Section 4 . :4eetings of the Board of Directors shall be held

at such place within or without the State of New York as may from
time to time be fixed by resolution of the Board . Ite-ular meetings
of the Boar6of Directors shall be held at -such times as may from
time to time be fixed by resolution of the Board' ; and special
mectings may be held at any time upon the call of the Presiden t
or of any two directors, by oral, telegraphic or written notice
duly served on or sent or mailed to each director not less than 2
days before the meeting . The notice of any regular meeting r.eed
not specify the purposes thereof . A meeting of the Board may be
held without notice immediately after the annual meeting of members
at the same place at which~ such meeting is heldi . : :otice need not be
given of regular meetings of the fioard held at times fixe&by
resolution of the Board . 't;otice of any meeting of the Board of
Directors shall not be required to be given to any director who
shall attend the meeting or ia:-co sI':,all, either before or after such
n{•eting, x,:ai;-e notice tiiercof in writing or by telegraph .
c Section 5 . tac -Directors of the Institute shall serve without

compensation except as to any Director who shall also be an officer
or employee or counsel of the Institute .
I:P.TICLE V I
EXECUTIVE CO:BIITTL.E
The Board of Directors, by resolution adopted by a majority

of the entire Board, may designate from among its members an
Executive Committee consisting of three or more directors, which
to the extent provid'ed in such resolution shall have all th e
authority of the Board except as othen•Jise required by law . Vacancies
in the Executive Committee may be filled by the Board of Director s
. at any meeting of the Board . The I:xecutive Com :nittec sitall keep
regular minutes of 'its proceedings and report the same to the Board
of Directors when requested by the Board . The Executive Committe
e e-shalmtuponcfisCarmothePdnf
Institute . The presence of a majority of the members of the L..
Executive Committee shall constitute a quorum for the transactio n
of business unless the Executive Committee shall consist of an cven
number of members, in which case a quorum shall be one-halfof the
members .
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ARTICLE VI I
OFFICERS, AGIi:dTS NO Bi7P7AYEB S
Section 1 . The officers of the Institute shall be a President,

one or more Vice Presidents, a Secretary andia Treasurer, all of
whom siiall be clected by the Board of Directors and who may or may
not be memhers of the Board of Directors . 'i'tae Board of Directors
may from time to time appoint one or more Azasistant Secretarie s
and one or more Assistant Treasurers and•such other officers,
agents and employees as it may de--r,i proper . Any two or more
offices may be held by the same par.son, except the offices of
President and Secretary or Assistant Secretary .
Each of such officers shall serve for a term ending with the
next annual meeting of the members of the Institute and until his
successor shall have been chosen and sb1l1 have qualifie& . Any
vacancy in any office shall be filled for the unexpired portion of
the term~ b}* the Board of Directors . All officers, rana ;ers,
Assistant managers and agents elected or appointed by the B'oard of
Directors shall be sr.bject to removal with or x-:ithout cause at any
tir :ie by the Board of P.ir.ectors . All oti,er agents and employees of
the Institute may be removed at any time by vote of the Board of
Directors, or by the officer appointino them .
Section 2 . The Board of Directors may cmplo ;t leGal counsel

who sl :all be responsible for the conduct of the legal a f fairs of {
the Institute, includin ; all legal matters arising at or i n
connection with r:ieetinbs of the members or the Board of Directors
and all legal advice requirediby the officers of the Institute .
Section 3 . Subject to such limitations as the Board of

Directors may from time to time prescribe, the President may appoint
or remove such other employees and ; agents as the business of the
Institute may require, who shall have such duties as the President
or the Board of Directors may from time to time determine .
Section 4 . Subject to such limitations as the Board may from

time to time prescribe, each of the officers of the Institut e
.shall have such powers and duties as shall pertainto his respective
office, as ~ :ell as such additional poiYers and, duties as may froim
time to time be conferred or imposed by the };oar&of Directors .
The Secretary shall be responsible for issuing agenda for all
meetin-s and for l :eeping full and accurate minutes thereof, copies
of which shall be distributed to all members or to all directors,
as the case i-.iay be . The 'lrcazurcr and any Assistant Treasurer may
be required to Sive bond!for the faithful discharge of their duties,
in such sums ~.nd with such surety or suretics as the *Board of
Directors f ro!,i timo. to time may prescribe .
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Section 5 . The Board of Directors is authorized to determine

the cof :lpen .riltion of '11:1 officers, couns,.cl, employees and agent s
of the Institute, notwithstanding the fact that any such person
may also be a!dircctor .
Al'+TICLF: VII I
.
IlNDL?~24IrICATI0i1 '
Any person made a party to any action, suit or proceeding by

reason of the fact that he, his testator or intestate, is or wa s
a director, officer'or employee of the Institute or of any corpora-
tion which he served~as such at the request of the Institute, shall
be indemnified by the Institute against the reasonable expenses,
including attorneys' fees, actually and necessarily incurredby him
in connection with the defense of such action, suit or proceeding,
or in connection with any appeal therein, except in relation to
mutters as to which it shall be adjudged in such action, suit or
proceeding that such officer, director or e~:ployee is liable for
negligence or risconuuct in the i?erfornance of hi:s duties . 'Phe
foregoing right of indemnification shall not be deemed exclusive of
of any other ri-ats to %hich such c'.irector, officer or employee may
be entitled apart t : erefro :n . Any amount payable by way of indemnity
s :tall be determined and paid in such waliner as the i ;oard of
Directors of the Institute shall direct by resolution .
ARTICLE I X
CHECKS, ::OTES, ETC .
All notes, d-rafts, checks, acceptances, orders for the pa ;-ment

of r.ioney, and all ncgotiable instrur:ients obligating the Institute
for the payment of money shall, unless othern4ise provided by the
Board of Directors, be signed by the President or a Vice President
and by the Treasurer or an Assistant Treasurer or the Secretary
or an Assistant Secretary .
Ar,TICLE' X
CORPORATE SEAL
The corporate seal shall be in circular form and shall have

inscribed thereon the naine of the Institute and the words
"Incorporated! i :cw York 1958 ."
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AI:TICLI . XI
C
M -d;idl3:TI:T S
The By-Laws of the Institute may be amended, added to,

rescinded or repealed at any jneetinC of the nembers, provided-
notice of the proposed change is ;iven in the notice of the
meetint, . ' Subject to the power of the members to alter, amend or
repeal any By-Laws made by the Board of l:irectors, the Board may
make By-Laws for the Institute and may from time to time alter,
amend and repeal any, of tiftese By-Lw,7s . If any by-lala regulating an
impending election of directors is adopted, amended or repeale d
by the Board of Directors, there s : ;all be set forth in the notice
of the next rzeetinc, of the members of the Institute for th e
election of the directors, the by-law so adopted, amended or repealed
to~ether with a concise statement of the chanSes made .
i Board of Directors
Q~~~~q~vonq
'IHE TOBACC& INSTITUTE, INC .
MI=S OF THE THIRTY-EIGH'IH MEET11IG OF THE

BOARD' OF D~~IRECTOR S
The Thirty-eighth Meeting of the Board'of Directors of The
Tobacco Institute, Inc ., was held at the Warwick Hotel, New York City,
on December 9, 1976, at 10 :15 A .M .
The following members of the Board of Directors were present :
Messrs . Louis F . Bantle

Stuart F . Bloch
Joseph E. Edens
W . Brooks George
George B . Georgopulo
William D . Hobbs
Charles I . McCarty
Ross R . Mi.llhiser
Colin Stokes
Preston R . Tisch
There were also present Messrs . DeBaun Bryant and Ernest Pepples of
Brown & Williamson Tobacco Corporation ; Joseph Greer of Liggett & Myers
Tobacco Company, Inc . ; Arthur J . Stevens of Lorillard, A Division of
Loews Theatres, Inc . ; Thomas F . Ahrensfeld, James C . Bowling and Alexander
Holtzmanof Philip Morris Incorporated ; Max H . Crohn, Jr ., C . Dennis
Durden, James R . Peterson and H . C'. Roemer of R . J . Reynolds Tobacco
Company ; James Chapin and'Ralph Rossi of United States Tobacco Company ;
Marlow W . Cook and David~Hendersonof Cook and Henderson ; Donald Hoel
and William W . Shinn of Shook, Hardy & Bacon; William A . 0'Flaherty of
3bbacco Tax Council ; Horace R . Kornegay, President of The Institute ;
B . D . Cunins, 'Ireasurer of The Institute ; Kathryn R . Golden :, Secretary

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of The Institute ; Earle C . Clements, Frankllin B . Dryden, Anne H .
Duffin~, J .C .B . Ehringhaus, Jr ., William H . Hecht, Donna Hild'erley,
Marvin~ A . Kastenbatun, William Kloepfer, Jr ., John F . Mills, Frederick
Panzer and Charles L . Waite, M .D ., of The Inttitute ; and Stanley L .
Temko, of counsel to The Institute .
Mr . Kornegay acted as Chairman of the meeting and~Mrs . Golden
acted as secretary and recorded the minutes .
Mr . Kornegay stated that the minutes of the Thirty-seventh
Meeting of the Board of Directors, heid May 15, 1976 in White Sulphur
Springs, West Virginia, had been mailed to all members . There being
no additions or corrections, andwithout objection, the reading of the
minutes was dispensed~with and the minutes were approved .
The Chairman announced!that the first order of business was
the election of officers of The Institute . Thereupon~, upon motion duly
made and seconded, it was unanimously C

RESOLVED ; That the following persons be, and they hereby
are, elected to the offices of the Corporation set forth after
their respective names to serve until the next annual meeting
of the members of the Corporation and~until their successor s
have been chosen and shall have qualified :
Horace R . 1<ornegay President and Executive Director

Franklin B . Dryde n Senior Vice President
J .C .B .Ehringhaus, Jr . Senior Vice President and~Counsel $
William 1Qoepfer, Jr . Senior Vice President C
John F . Mills Senior Vice President G
Anne H . Duffin Vice President
William H . Hecht Vice President
Roger L . Mozingo ~
Vice President
Frederick Panzer Vice President G'')
Marvin A . Kas tenbatun Director of Statistic s
Charles L . Waite, M .D . Medical Director
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B . D . Ctmmiins Treasurer
Kathryn R . C'o].den Secretary
Ibnna Hilderley Assistant Secretary
FURTHER RESOLVED ; That the Treasurer shall not be
requiredto give bond for the faithful discharge of his
duties and that the Assistant Treasurer may at the discre-
tion of the Treasurer be required to give bond for the
faithful discharge of his duties in such stun and with such
security as the Treasurer may fr=time to time prescribe .
The next order of business was the election of the members o f
the Executive Connittee . Thereupon, upon motion duly made and seconded,
it was unanimousl y
RESOLVED, That the following members of the Board
shall constitute the Executive Conunittee of the Board until
the next Annual Meeting of the Board and until their
successors have been chosen and shall have qualified :
Joseph E . Edens, Chairman

Charles I . McCarty, Vice Chairman
Louis F . Bantl e
Joseph~ F . Cullman 3rd
W . Brooks George
William D . Hobbs
Curtis H . Judge
Ross R . 'llhiser
W . D . Rosson
Arthur E . Sloat
Colin Stokes
Preston R . Tisch
President Kornegay announced that Mr . Judge, the Chairman
of the Executive Committee, was recuperating from surgery and was unable
to be at the meeting . Mr . Kornegay said that Mr . Judge had asked that
his best wishes be extended to those at the meeting and that he had
personally written~a message for the group, to be delivered by Mr .
Stevens, Mr . Kornegay thereupon called on Mr . Stevens, who reported on
Mr . Judge's surgery and the progress of his recovery, and then delivered~
Mr . Judge's message, which eloquently thanked all of the members and the
staff for their cooperation duming the year, and slurunarized the year's
accomplishments and the tasks that still lay ahead . Mr . Judge' s
statement was receivedlwith~applause, and Mr . Kornegay expressed gratitude
to Mr . Stevens for bringing the message to the group ,
The group expressed satisfaction at hearing of the rapid
recovery of Mr . Judge, and suggested that it would be desirable to convey
greetings to Mr . Judge from the Board, both to wish hnm well and to
express appreciation for the significant con .tribution that he had made as
Chai,man of the Executive Committee during the past two years . Thereupon,
C upon motion duly made and seconded, it was unanimously
RESOLVED, That the members of the BoaYd~ extend greetings c

from the Annual Meeting to Curt Judge, admonishing hi2n to
take care of himself, and wishing him a continued speedy
recovery ;
FURT HER RESOLVED, That the Boardexpress its appreciatio n
to Curt Judge for his wise guidance and intensive service as
Chairznan of the Executive Committee during the most busy and
productive period, and, in particular, its thanks for the
personal dedication and selflessness with which he devoted
so much of his effort and wisdom to the affairs of The
Institute .
President Kornegay was directed to convey the sentiments of the meeting
to Mr . Judge .
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Mr . Kornegay introduced to the meeting David Henderson,
who is retiring from Congress at the endof this year, after a long
and'distinguished tenure in the House . Mr . Henderson is remaining in
Washington in a partnership with Marlow Cook .
The President gave his report on Institute activities and
governmental and other developments during the year . He observed
that this would~be the first Annual Meeting of The Institute to b e
held just prior to the inauguration of a new Federal Adrninistration, and
commented on the election returns, including various changes that
occurred in the Congress . Mr . Kornegay then discussed the legislative
outlook, including the types of bills that might be introduced in the
coming Congress and developments in the state legislative area . He
emphasized~the continuing efforts to enact laws or regulations dis-
criminating against and infringing upon the rights of smokers . In
dealing with this general area, Mr . Kornegay also :comnented on the
present status of the current proceeding before the Civil Aeronautics
Boardinvolving additional proposals to~restrict or prohibit smoking .
Mr . Kornegay discussed the activities during the year by the Institute
staff, including work in~the areas of science and statistics, the increase d
activities of the Communications staff, and the efforts in the state
relations area .
Followirg Mr . Kornegay's report, there were questions from
the group :relating to the matters covered, which were responded to by
Mr . Kornegay and the Institute staff .
The President called upon Mr . Ctmmins for the report of the
Treasurer andof the Budget Committee . The Treasurer summarized cash

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balances, receipts and~disbursements through~November 30, 1976, with
estimates for the monthof December . He then presented the proposed
1977 budget for the Institute, as amended andapprovedby the Budget

c
Conanittee, and recommended by the Budget Committee to the Board for
approval . Thereupon, upon rmtion duly made and seconded, it was
unanimously
RESOLVED, That the proposed Institute Budget for 1977,
consisting of "Administration," "General" and "Public Relations"
sections, be and hereby is adopted .
FURTHER RESOLVED, That the President, with the concurrence
of the Trea~.surer, is authorized to approve any expenditure in -
excess of any individual budgeted item~in the "Adninistration,"
"General" or "Public Relations" sections of the budget, with or
without the approval of the Executive ConIInittee ; provided : That
the President or Treasurer shall request the approval of the c

Executive Committee before allowing any expenditure which would
result in total expenditures in any of the "Administration,"
"General" or "Public Relations" sections in excess of the total
amount budgeted under the particular section .
RESOLVED, That there should be, and there hereb y
is, authorized an~assessment of Additional Dues in the amount of
1,335 per cent of the annual dues of inembers liable for addi-
tional assessment, with payment to be made in such installments
and~on such d'ates as are determined by the Treasurer .
Mr . Kornegay called for reports from the Institute Committees .
The only Comnittee which had a matter to report to the group was the
Pension: Coriunittee . Mr . Bryant, Chairman of the Pension Committee,

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reported that it recorrunended~Board approval of various amendments to
the Institute's Pension Plan and related Trust Agreement that should be
made in order to comply withIERISA requirements . Thereupon, upon
rmtion duly made and seconded, it was unanimousl y
RESOLVED, That the 'Ibbacco Institute's Employees' Pension
Plan and related Trust Agreement is hereby amended and restated
effective January 1, 1976, as set forth in the attached restate-
ment of the Plan and Trust Agreement, subject to the issuance of
a deterrrnination by the Internal Revenue Service that such amend-
ments would not adversely affect the quali ;fication of the Plan
under the provisions of Section 401(a) of the Internal Revenue
Code of 1954 or the exemption from taxation of the Trust under
Section 501(a) of the Internal Revenue Code of 1954, and subject
to such further amendments as may be required by the Internal
Revenue Service as a condition to the issuance of the determina-

C tion described above ; and
FURTfiLR RESOLVED, That the President is authorized to take
such actions as may be necessary or appropriate to implement the
foregoing resolution .
Mr . Kornegay announced the appointment of the following
members to~ constitute Institute committees :
Budget Committee
B . D . Cu7unins, Chairman
John V . Blalock
James C . Bowling
M . Alfred Peterson
Ralph L,. Ross i
T . Zachary Smith
David M . Welsh
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Committee of Counsel
Ernest Pepples, Chairman

Thomas F . Ahrensfel d
H . Thomas Austern C
James Chapin
Max H1. Crohn, Jr .
Joseph H . Greer
William W. Shinn~
Arthur J . Stevens
Communications Committe e
James C . Bowling, Chaisman~

J'.R .Ave
John V . Blalock
C . Dennis Durden
William 1Qoepfer, Jr .
Thomas D . Pickett
Dan E. Provos t
H . Copland Robinson
William W . S'h' nn :
The Board appointed the following members to~the Pensio n
Committee :
Pension Comnittee

Franklin B . Dryden
W. Brooks George
Robert D . Rickert
Mr . Temko reported that a change was in order in the authori-
zation relating to :the Tobacco Institute Testing Laboratory bank
account . Thereupon, upon motion duly made and seconded, it was unani-
mously
RESOLVED, That until otherwise ordered the National Savings
and Trust Company of Washington, D . C . is hereby authorized and
directed to pay checks and other orders for the payment of money
drawn in~the name of this corporation when signed by any one of
the following : Horace R . Kornegay, Earle C . Clements, Franklin B .

N
Dryden, John F . Mills, B . D. Cummins or B . E . Bacon, andthe said
bank shall not be required, in any case, to make inquiry

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respecting the application of any instrunent executed in~virtue
of this resolution, or of the proceeds therefrom, nor be under
any obligation to see to the application of such instruunent or
proceeds .
Mr . Temko also reported to the meeting that the Helme
Products, Inc . membership in the Institute will now be carried in the
name of General Cigar 6 Tobacco Company, A Division of o~n
Corporation .
Mr . Temko stated that various new employment contracts and
amendments to existing contracts had been entered into pursuant to the
reconmr-ndations of the Executive Committee since the last meeting of
the Board . He suggested that it would be desirable for the Board to
ratify these contracts and amendments . Thereupon, upon rmtion duly
m3de and seconded, it was unanimousl y

k
RESOLVED, That the Amendment dated November 29, 1976, to
the Agreement between The Tobacco Institute, Inc . and William H .
Hecht, dated December 22, 197&, be, and hereby is, approved and
ratified ; -
P'URTHER RESOLVED, That the Amendment dated November 29, 1976,
to the Agreement between The Tobacco Institute, Inc . and J . C . B.
Ehringhaus, Jr ., dated December 20, 1972, be, and hereby is ,
approved and ratif ied :
FURIHER RESOLVED, That the Amendment dated December 8, 1976,
to the Agreement between The Tobacco Institute, Inc . and
Franklin B . Drryden, dated Debruary 5, 1975, be, and hereby is,
approved and ratified ;

-10-
FURTHER RESOLVED, That the Amendment dated December 8, 1976,
to the Agreement between The Tobacco Institute, Inc . and Marvin
A. Kastenbatun, Ph .D ., dated~October 11, 1974, be, and hereby is,

C
approved and ratified ;
FURTHER RESOLVED, That the Amendment dated December 8,
1976, to the Agreement between The Tobacco Institute, Inc . and
John F . Mills, dated November 15, 1974, be, and hereby is,
approved and ratified ; -
1976, to the Agreement between The Tobacco Institirte, Inc . and
Frederick Panzer, dated July 29, 1974, be, and hereby is,
approved and ratified! ;
FURT= RESOLVED, That the Agreement dated December 8,
C 1976, between The Tobacco Institute, Inc . and Charles Waite,
M .D ., be, and hereby is, approved and~ ratified ;
1976, to the Agreement between The Tobacco Institute, Inc . and
Horace R . Kornegay, dated November 13, 1974, be, and hereby is,
approved and ratified ; and
FURTHER RESOLVED, That a copy of each of the Agreements and
Amendinents hereby approved and ratified be annexed to these minutes
and be made a part thereof .
Mr . Kornegay in Er-10C uced William A . 0'Flaherty, President of
the Tobacco Tax Council . Mr . 0'Flaherty commented on state tax develop-
ments, with particular emphasis on the problem of the bootlegging of
cigarettes . He also referred to some of the plans being considered by

-11-
the Tobacco Tax Council for the coming year .
Mr . Edens brought to the attention of the meeting that
David R' . Hardy, who hadbeen so intimately involved inthe affairs of
the industry for many years, had passedaway in September . Mr . Edens
mentioned the deep affection and high respect all had for Davi d
Hardy, not only in terms of his many contributions to the well-being of
the industry, but also because of his warmand deep personal relation s
with so many in the Institute and in the member companies . The m.:~EIID:Z I
of the Institute and the industry had been well representedat the
memorial services for Mr . Hardy in Kansas City, where the pastor o f
his church had truly recognized the worth of the man in a most sensitiv e
and fitting eulogy . Thereupon, upon motion duly made and seconded, it
was unanimousl y
RESOLVED, That The Tobacco Institute mourns the loss of
David R . Hardy, who was truly a man for all seasons -- a giant
at the bar, with an outstanding local and national reputation,
a strong force for good in the life of his own city and state,
and a universally recognized expert in many areas of the law ;
F[JRIHE2 RESOLVED, That all those associatedwith the
Institute express their appreciation for the invaluable and :
mature judgment that David Hardy brought to its deliberations,
and the singular contributions that he made to the Committee of -$'

C
Counsel and other Institute activities, and those in the C
ra
Institute and its members, together with his legion of friends C
in the tobacco industry, will sorely miss his continued good .,~
C
fellowship and human understanding ; and 0-+►
-12- ce
FUR7HER RESOLVED, That the President of the Institut e
convey to the family of Mr . Hardy and to his oa ers the senti-
ments and condolences of the members of the Institute . c

The meeting then stoodlin silent tribute to the merrory of David
Hardy .
In the same spirit, Mr . Millhiser observed that this was the
first meeting of the Board of Directors since the death of Edwin P .
Finch earlier this year . He mentioned the debt owed by the Institute
and'the in3ustry to Mr . Finch, who had beenso positive a force in the
activities of the Institute and in representing the industry . There-
upon, upon motionduly made and seconded, it was unanimousl y
RESOLVED, That the Boardlof Directors of the Institute moimns
the loss of their colleague and longtime friend, Edwin-P . Finch,
who made such valuable contributions to the vxmk of the Institute
and to the iriterests of the tobacco industry ;
FURTHER RESOLVED, That the Board express its appreciation
for the important services rendered by Mr . Finch to the
Institute in so many capacities, culminating in his service as
Chairman of the Executive Comanittee of the Institute ; and
FUP.'IIHER RESOLVED, That the President of the Institute be
directed~to convey the sentiments of the group to Mrs . Finch .
The group rose in tribute to the memory of Mr . Finch . C

C
The dates for the meetings of the Executive Comnittee in~
1977 then were discussed . The dates approved for the meetings were : C
L~
April 19', 1977 Washington, D . C .
June 23, 1977 New York City
September 29, 1977 Washington, D . C .
December 8, 1977 New York City
~
-13-
President Kornegay observed .that Jack Roemer and DeBaun
Bryant had resigned from the Committee of Counsel after long periods
of most valuable and dedicated service . On behalf of the staff and
all of the Institute's members, he extended to them the appreciation
of all for their significant contributions . Mr . Kornegay also
welcomed to the Committee of Counsel its newly appointed members, Max
Crohn, Ernest Pepples and James Chapin .
On~behalf of the staff, Mr . Kornegay expressed deep apprecia-
tion to the members of the Institute, to the Board, and to the Executive
Committee for their unswerving support during the past year, and said
that the Institute looked forward to another year filled with much
constructive activity . He reemphasized the dedication of the Institute
to render service for the industry . The President expressed his
personal appreciation for the attendance at the meetings of the
Institute of a group of extremely busy executives and said that the
support of the members was a source of inspiration to the staff .
Mr . Kornegay then welcomed Mr . Edens as the new Chairman
of the Executive Committee . Mr . Edens respondedthat he looked
forward to working with the Board'and with the Institute staff .
He welcamed any suggestions as to operations, and solicitedthe
continuing cooperation and assistance of all .
Plans for the February meeting at Inniisbrook were
discussed, with Mr . Dryden speaking briefly on the program
for the meeting .

-14-
President Kornegay closed the meeting by wishing all the
most happy of Holiday Seasons .
There being no further :business, the meeting was adjptmned .

C
~ ~~t~~~ ✓
C
MINUTES OF THE THIRTY-SEVENTH MEETING OF THE

BOARD OF DIRECTOR S
The Thirty-seventh Meeting of the Board of Directors of
The Tobacco Institute, Inc ., was held at The Greenbrier, White
Sulphur Springs, West Virginia, on May 15, 1976 at 10 :00 A .M .
The following members of the Board of Directors wer e
present :
Messrs . Curtis H . Judge, Chairman

Joseph E . Eden s
W . Brooks George
William D . Hobbs
Charles I . McCarty
Ross R . Millhiser
W . M . Rosson
Arthur E . Sloat
Colin Stoke s
There were also present Messrs . DeBaun Bryant of Brown & Williamson
Tobacco Corporation ; Robert S . Pless of Larus ~ Brother Company, Inc . ;
Joseph H . Greer, H . C . Robinson and David M . Welsh of Liggett & Myers
Tobacco Co ., Inc . ; Arthur J . Stevens of Lorillard, A Division of
Loews Corporation ; Thomas F . Ahrensfeld, James C . Bowling and
Alexander Holtzman of Philip Morris Incorporated ; Max H . Crohn, Jr .
and H . C . Roemer of R . J . Reynolds Tobacco Company ; Marlow W . Cook,
Donald K. Hoel and William W . Shinn of Shook, Hardy and Bacon ;
Horace R . Kornegay, President of The Institute ; B . D . Cummins,
Treasurer of The Institute ; Kathryn R . Golden, Secretary of The
Institute ; Anne Browder, Earle C . Clements, Franklin B . Dryden,

- 2-
J .C .B . Ehringhaus, Jr ., Donna Hilderley, Larry P . Horist, Marvin A .
Kastenbaum, William Kloepfer, Jr ., . Paul Knopick, Walker Merryman,
Raymond A . Oliverio and Frederick Panzer of The Institute ; and
H . Thomas Austern and Stanley L . Temko, of counsel to The Institute .
Mr . Kornegay acted as Chairman of the meeting and Ms .
Golden acted as secretary and recorded the minutes .
Mr . Kornegay stated that copies of the minutes of the
Thirty-sixth meeting of the Board of Directors, held in New York
City on January 29, 1976, had'been sent to each member of the
Board . There being no additions or corrections, the reading of
the minutes was dispensed with and the minutes were approved .
President Kornegay reported on developments of interest
since the January meeting of the Board . He indicated that there
were three areas to be covered : federal congressional and agency

C
activities, state matters, and activities in the communication s
area . Mr . Kornegay discussed the federal- governmental area, reporting
on the scheduled hearings on S . 2902, the Hart/Kennedy measure to
increase tobacco taxes, at which Mr . Judge was to present a state-
bent on behalf of.the industry . He also referred to the passag e
of the Consumer Product Safety Commission Improvements Act of 1976,
which expressly excludes "tobacco and tobacco products" from th e
Commission's jurisdiction .
42^ ,
Mr . Ehringhaus then discussed state and local government
developments . He emphasized the proliferation of anti-smoking
proposals at these levels, particularly those seeking to limit or ~
outlaw smoking in various places .

-3- -
Mr . Kloepfer summarized the Institute's communication
activities . He reported on films and industry publications and
the current status of the proposed new publication, The Tobacco
Observer .
Mr . Judge, Chairman of the Executive Committee, reported
briefly, stating that the matters which he would have summarized~
had been covered in Mr . Kornegay's report . Chairman Judge thanked
members of the Institute staff who had been responsible for the
arrangements for the Spring Meeting . On behalf of all the Institute
members, he also expressed appreciation to the entire staff of the
Institute for continuing to perform in an outstanding manner . .
Chairman Judge referred'.to the preparation of the industry statement
on S . 2902, and voiced his thanks for the willing and generous
C cooperation of all those in the industry .
Mr . Cummins was called upon for the report of the Treasurer
and of the Budget Committee . He stated that the Budget Committe e
had met during the week, had reviewed the budget and expenditures
since the start of the year, and had made certain revisions calling
for modest increases in a few items . The Treasurer also reported
that, although the Board had approved at the January meeting an
assessment of additional dues in the amount of 1,285 per cent, the $
current review by the Budget Committee indicated that the assessment 0
of additional dues for tye year should not exceed 1,200 per cent .
He further reported that the Budget Committee recommended approval
of the budget as so revised .

-4-
Thereupon, upon motion duly made and seconded, it wa s
unanimously
RESOLVED, That the proposed amended Institute
budget for 1976 be, and hereby is, adopted and that
the remainder of the resolution relating to the
1976 budget, adopted at the meeting of the Board on
January 29, 1976, continue in full force and effect .
There was no report from the Communications Committee,
since its activities had been covered in Mr . Kloepfer's statement
earlier in the meeting .
Mr . Stevens, as Chairman of the Committee of Counsel,
reported that the group's principal concern had been with the
Federal Trade Commission proceedings .
The Chairman stated that the next order of business was
consideration of the proposed amendment to the By-Laws of the
Institute, as set forth in the memorandum and notice of April 2,
1976, sent to the members of the Board . The proposed amendment
changes the date of the annual meeting of the members of the
Institute from 10 :30 A .M . on the last Thursday of January of each
year to 10 :00 A .M . on the first Thursday in December of each year .
Thereupon, upon motion duly made and seconded, it was unanimousl y
RESOLVED, That the by-Laws of the Institute be,
and hereby are, amended by amending Section I of
Article IV to read as follows :
"Section 1 . The annual meeting of the members
.for the election of directors and for the trans-
action of such other business as may properly come

-5-
before such meeting shall be held at 10 :00 A .M .
on the first Thursday in December in each year
beginning with the year 1976, or if that day
shall be a legal holiday then on the next
succeeding business day . "
Mr . Kornegay then introduced to the meeting new
Institute staff members Paul Knopick, editor of the new publica-
tion, Anne Browder and Walker Merryman, speakers, and Larry Horist
and Ray Oliverio, field area representatives . Mr . Kornegay also
announced that next year's Spring Meeting is scheduled for The
Greenbrier, with the tentative starting date being Wednesday ,
May 18 . It was suggested that consideration be given to the
desirability of possibly changing what has been the Spring Meeting
to sometime earlier in the year, possibly in February .
In closing the meeting, Mr . Kornegay, on behalf of all
members of the staff, expressed his sincere appreciation for the
continued support which the members of the Executive Committee,
the Board, and the member companies had given to the Institut e
staff .
There being no further business, and without objection ,
the meeting was thereupon adjourned .
4Q-
Secret'ary
9
MINUTES OF THE THIRTY-SIXTH MEETING OF THE

BOARD OF DIRECTOR S
The Thirty-sixth Meeting of the Board of Directors of The Tobacco
Institute, Inc ., was held at the Regency Hotel, New York City, on
January 29, 1976, at 110 :45 A .M .
Messrs . Stuart F . Bloch

Joseph F . Cu!llman 3rd
Joseph E . Ed'en s
W . Brooks George
c
G . B . Georgopulo
.Curtis H . Judge
Ross R . Miillhiser
Arthur E . Sloa t
Industries, Inc . ; B . D . Cummins and Ernest Pepples of Brown & Williamson
Tobacco Corporation ; Raymond Mulligan of Liggett & Myers Incorporated ;
Joseph Greer of Liggett & Myers Tobacco Company, Inc . ; Arthur J~ . Stevens
of Lorillard, A Division of Loews Theatres, Inc . ; Thomas F . Ahrensfeld,
James C . Bowliing,and Alexander Holtzman of Philip Morris Incorporated ;
H . C . Roemer, Jr ., and~ Charles B . Wade, Jr ., of R . J . Reynolds
Industries, Ilnc . ; Thomas O'Grady of United States Tobacco Company ;
William W . Shiinn of Shook, Hardy & Bacon ; Horace R . Kornegay, President
of The Instiitute ; Kathryn R . Golden, Secretary of The Institute ; Earle C .
Clements, Franklin B . Dryd'en, J . C . B . Ehringhaus, Jr ., Donna Hlilderley,
Wi l l iam Klocpfcr, Jr ., and John F . Mi lil s of The Iinsti tute ; and Richard F .
-2-
Brady and Stanley L . Temko, of counsel to The Institute .
Mr . Kornegay acte&as Chairman of the meeting and Mrs . Golden acted
as secretary and recorded the Minutes .
Mr . Kornegay statedthat the minutes of the Thirty-fifth meeting of
the Board of Di~rectors, held May 21, 1975, in Whiite Sulphur Springs, West
Virginia, had been maited to all members . There being no additions or
corrections, andiwithout objection, the reading of the minutes was
dispensed with and the minutes were approved .
The Chairman announced that the first order of business was the
election of officers of The Institute . Thereupon, upon motion duly made
and seconded, it was unanimousl y
RESOLVED, That the following persons be, and they hereby

are, elected to the offices of the Corporation set forth
after their respective names to serve until the next annual
meeting of the members of the Corporation and until their
successors have been chosen and' shalll have qualified :
Horace R . Kornegay President and Executive Director

c
Frankl!in B . Dryden Senior Vice Presiden t
J .C .B .Ehringhaus, Jr . Senior Vice President and Counsel
William Kloepfer, Jr . Senior Vice Presiden t
John F . Mi l 1 s Senior Vice President
Anne H' . Duffin Vice Presiden t
Marvin A . Kastenbaum Director of Statistics
B . D . Cummin s Treasure r
Kathryn R . Golden Secretar y
Donna Hilderle y Assistant Secretary
FURTHER RESOLVED, That the Treasurer shalll not be required '~-

to giive bond for the faithful discharge of his duties and tha t ~
the Assistant Treasurer may at the discretion of the Treasu!rer
be req ;uired to give bond for the faithful diischarge of his duties
in such sum and with .such security as the T-easurer may fro m
time to time prescri!be .
The next order of business was the election of the members of th e
Executive Committee . Thereupon, upon motion duly made and seconded!, i t
was unanimousl'y t-
r
-3-
RESOLVED, That the following members of the Boardshall

cons t i tute the Execut i ve Committee of the Boardl unt iil the
next Annual Meeting of the Board and until their successors
C have been chosen and shall have qual!ifie& :
Curtis H . Judge, Chaiirma n

Louis F . Bantl e
Joseph F . Cullmanl3r d
Joseph E . Eden s
W . Brooks Georg e
W i 111 iiam D . Hobbs
Charles I . McCarty
Ross R . Millhiser
W . M . Rosson
Arthur E . Sloat
Collin Stoke s
Preston Robert Tisc h
Mr . Judge reported briefly as Chairman,of the Executive Committee .
After complimenting, the staff on its work during 1975, Mr . Judge stated
that the one matter he wished to call to the attention of the group was
the status of American Brands . He reported''lthat Mr . Kornegay and he had
ca l 1 ed on, Amer i can Brands and aga i n renewedl an invi tat i on to re jo iin the
C Institute . The AmericaniBrands decision, however, was that it desiired
to cont i'nue on the same bas iis as it had during 1975 ; tha t iis, as a non-
member contriibuting a set amount in support of Institute activities .
Mr . Kornegaythenigave theRres,ident's report onilnstitute activities
and governmental and other developments during the past year . He discussed
various federal anti-tobacco bills which had been imtroduced and legilslation
in the environmental! and other fi~elds whiich were of interest to the industry .
The President gave a run-down of state legisl!ative developments during 1975 ,
discussed the various types of efforts being made by anti-smoking groups 4D .
on the state and local levels, and mentioned court suits seekiing to ban ~
smoking in such places as enclosed stadiums . Mr . Kornegiay also summarized' !
the Institute's communications activity, including the work of th e
Institute spokespersons who made numerous appearances throughout the N

-4-
country d'uring the year, the use of Institute films, and plans to
introduce an additional publicationiduring,1976 . The President then
mentioned some of the statistical questions with which the Institut e
had been concerned . In concluding, Mr . Kornegay expressed the appreciation
of the staff for the support and assistance of the members, and said that
the entire staff looked forward with enthusiasm to its work in the coming
year .
The President introduced B . D . Cummins, the newly electediTreasure r
of the Institute, and called upon Mr . Cummins for the report of the Treasurer
and of the Budget Committee . The Treasurer, in his report, summarized cash
balances, receipts and disbursements during 1975 . He then presented the
proposed 1976 budget for the Institute, as approved by the Budget Committee
and recommend'ed by the Budget Committee to the Board for its approval .
Thereupon, upon motion dul'y made and seconded~, it was unanimousll y
RESOLVED, That the proposed Institute Budg,et for 1976,

C
consisti'ng of "Administration," "General" and "Public
Relations" sections, be and hereby is ad'optedi.
FURTHER RESOLVED, That the President, with the con-

currence of the Treasurer, is authorized tolapprove any
expenditure in excess of any ind1vidual budgeted i'tem in
the "Administration," "General" or "'Public R'elations"
sections of the budget, with or without the approv .:l of
the Executive Committee ; provided : That the Presid ;nt or
Treasurer shall request the approval of the Executive
Committee before allowing any expcndliture which woul d
result in totali expenditures in any of the "Administration,"
"Generall" or "'Public Relations" sections in excess of the
total amount budgeted'under the particular section .
FURTHER RESOLVED, That there should be, and there hereby

is, authorized'an assessment of Additional Dues in the amount
of 1,285 per cent of the annual dues of members liable for
additional assessment, with payment to be made in such
installlmcnts and on such dates as are determined by the
Treasurer .
Mr . Kornegay thcn called upon Mr . Stevens, as Chairman of the
Committee of Counsel . Mr . Stevens reported that the Committee had,been

Corrected 8/10/76
-5-
primarily concerned with the pending Federal Trade Commission matters
( involving the major cigarette companies, including discussions with
the FTC and consideration of the litigation with the FTC . He reported
that at the moment the major litigative developments appeared likely
to take place in the Federal Courts in New York . There then ensue d
some discussion of the various developments, including the attitude which
had been taken by the staff of the FTC .
Chairman Wade stated that there was no report to be made for the
Communications Committee, and that the developments in the communications
area had been adequately covered in the President's report .
Chairman Bryant, together with Mr . Brady, reporting f.or the Pension
Committee, stated that the Committee recommended to the Board for adoption
certain action with respect to the Institute pension plans . The
recommended action would provide for (i) a new vesting schedule, and (ii )
C a joint and survivor annuity benefit with a related election for a pre-
retirement spouse's annuity benefit . Mr . Brady stated that at this time
the Pension Committee is recommending that participants electing the pre-
retirement spouse's annuity benefit be required to bear its cost . The
Pension Committee will further consider this preliminary decision after
receiving the actuary's cost estimate for this item and may recommend that
the Institute absorb the additional cost .
These two changes are among several required to .be made effective
January 1, 1976, for the Plan to comply with ERISA, but they are the only
changes which need to be made at this time in order to assure orderly
administration of the Plan .
The adoption of the additional changes which will be required in
order to comply with ERISA is being deferred until later in 1976, at
which time it is expected that more regulations will have been published
by the Department of Labor and the Intcrnal Revenue Service . Thcilr
publication should faeilitate preharation of'dcfinitivc ERIS/1 amcndments C
whereas amcnclments adopted and drafted at this time would very likely
have to be revised again next year .
In view of the deferral of these additional amendinents until later
this year, it was further recommended that'thc: Board d'elegate to the
Executive Committee authority to approve such, anicndmcnts . The delegation
of authority would be limited to amendments which the actuary estimates
will not significantly increase the Institute's cost of maintaining the
Plan . Thereupon, upon motion duwl'y made andi secondcd, it was unanimousl y
RESOLVED, That The Tobacco Insti!tute Empl'oyees' Pension

Plan is amendedleffective January 1, 1976, to provide that
Members shall be entitled to full and immediate vesting after
completing teni years of service and attaining age 32 .
FURTHER RESOLVED, That The Tobacco Institute Employe,_s'

Pension Plan is amended effective January 1, 19iAS, to pro-
vide that the joint and survivor aninuity is the ordinary
form of benefit, with Members having the option of al'terna-
c
tive forms of benefit ; and further that Members shall be
offered the opportu ;ity to elect a prc-retirement spouse's
annu i ty bene i-i t to be pa i d iin, the event of the i r doa th
between carly retirement agc an6 normal retirement age
unrJcr the Plan, the amount of such benefit to be the same
as %- :ouldl have been payable to the spouse i f the Member had
reti red' immediatcly prior to his death and ci!ain,ed[ a joint
and survivor benefit ; provided : That Meinbers who elect
this sPousC's benefit shalil be requiired to bear its cos t
by a reduced benefit in the event the Member lives to normal
retircment age .
FURTHER RESOLVED, That tFe authority to amend The Tobacco

( ns t i tu te Emp l oyecs' Pens i on P 1 an and rel ated T r us t/lgrccmen t
in order to comply with ERISA is hereby de11e0Oted to th e
Instilute's Executive Con, :nittee ; proviclk,cd, hok.,ever : That this
dcleqkition is 1 inrited to amendments which are rcconuirended by
the f'ension Coaimiittce aftor consultation with the I'lan's
actuary and lc•yal eotrnsel and which the aecuary e:stimate s
will not siynificantly increzise the Institute's cost of
main,tainincJ the Plan .
The a t ten t i on of the mec t i ng was ea l l ed to the tragedy that had
taken the l i f e th i s pas t December of E3ufo rd' Tyires, who had' been serv i ng
146~ ;, -.% -7-
as treasurer of the Institute . Thereupon, upon motion duly made an d
seconde&, it was unanimousl y
RESOLVED, That The Tobacco Institute expresses its

grief and shock at the tragilc loss of Buford'Tynes, who
was taken from us at the height of his powers and in, the
full course of his career as an executive of Phili p
Morris Incorporated .
FURTHER RESOLVED~, That all those who had the good

fortune to work with Bo Tynes in his capacity as Assistant
Treasurer of the Institute will miss his friendship and the
clear talents which he brought to financial! matters .
FURTHER RESOLVED, That the President of the Institute

convey to the famiily of Mr . Tynes the condolences of the
Members of the Institute and a copy of this resolution .
Mr . Temko reported that various new employment contracts and
amendinents to existing contracts have been entered into, following
discussion with the Executive Committee, since the last meeting of th e
Board . He suggested that it woulld be desirable for the Board to ratify
these contracts and amendments . Thereupon, upon motion duly made and
seconded, it was unanimousl y
RESOLVED, That the Amendment dated December 22, 1975,

to the Agreement between The Tobacco Institute, Inc ., and
Frankl'.in, B . Dryden, dated February 5, 1'975, be, and hereby
is, approved and ratified .

1975, to the Agreement between The Tobacco Institute, Inc .,
and J . C . B . Ehringhaus, Jr ., dated December 20, 1972, be,
and hereby is, approved and' ratified .
FURTHER RESOLVED, That the Agreement dated December 22,

1975, betweeni The Tobacco Institute, Inc . and Wiilliam i
H . Hecht, be, and hereby is, approved and ratified .
FURTHER! RESOLVED, That the Agreement dated, December 22,

1975, between The Tobacco Institute, Inc . and W'illiam
Klocpfer, Jr ., be, and hereby is, approved and ratified .
FURTHER RESOLVED, That a copy of each of the agreements

and~ amendments hercby approved'and ratified be annexed to
these minu!tcs and be made a part thereof .
Mr . Temko also reported that some changes were in order in th e
authorizations relating to various of the Institute bank accounts in view

-8-
of the election of a new Treasurer an6Assilstant Treasurer of the
Institute . Thereupon, upon motion duly made and seconded, it was C

unanimously
RESOLVED, That the Riggs National Bank of Wash!ington,

D . C ., is hereby designated a depositary for the funds of
this corporation and~the said bank is hereby authorized
and directed to pay checks and other orders for the payment
of money drawn in the name of thiis corporation whenisigned
by any one of the following : Horace R . Korneg ;ay, Earl e
C . Clements, Frankllin B . Dryden, John F . Mi llls and counter-
signed by any one of the following : Kathryn .R . Golden,
Donna Hilderley, B . D . Cummins or B . E . Bacon, and~the said
bank shall not be required,in any case, to make inquiry
respecting the appilicationiof any instrument executed in
virtue of this resolution, or of the proceeds therefrom,
nor be under any obligation to see to the application of
such instrument or proceed s
RESOLVED, That on and'lafter February 1, 1976, and

until otherwise ordered , the Un,ion-Fiirst National Bank of
Weshingtom, D . C ., be and it hereb y is authorize d to mak e
payments from the accounts of thi s corporation o n deposi t
with it only by check signed inith e name of thi s organiiza -
tion by : H'orace R . Kornegay, Earle C . Clements, Frankl!in .
Dryden, B . D . Cummins and~B . E . Bacon, or any of them, until
further notice in writi!ng to the Union-Fiirst National Bank
of Washington, D . C ., and the said Union-First Ndtional
Bank of Washington shall not be required in any case to
make inquiry respecting the application of any instrument
executedli n v iirtue of th i s resol ut iion or of the proceeds
therefrom, nor be under any obligation to see to the applica-
tion of such instrument or proceeds .
Mr . Kornegay announced the appointment of the following members
to constitute Institute committees :
Budqet Commi tte e
B . D . Cummins, Chaiirman
John V . Blaloc k
James C . Bowl ing
M' . Alfred Peterson
Ralph Rossi
Zachary T . Smith
David Welsh
-9-
Committee of Counse l
Arthur J~ . Stevens, Chairman

H . Thomas Austern
DeBaurn B'ryan,t
Joseph Greer
David'R' . Hardy
H . C . Roemer, Jr .
Charles B . Wade, Jr ., Chairman,

J . R . Av e
JohmU . Blalock
James C . Bowling
Dav i dl R . Hardy
Thomas D . Picket t
H . Copl andl Rob iinso n
The Board appointed! the following members to the Pension Commiittee :
Pension Committe e
DeBaun Bryant, Chaiirman

Frankl ilni B' . Dryde n
W . Brooks George
Robert D . Ricker t
Mr . Kornegay then briefly discussed the suggested! dates for 1976
meeti!ngs, which had been ciirculated to the Board . He also mentioned
that the suggestion had been made that the date of the Annual Meeting
of the Members of the Institute be changed from the last Thursday of
January, as currently provided by the By-Laws, to 1'0 :00 A .M . on the
first Thursday in Decem6er . This suggested change met with the approval
of the group, and counsel was directed to take the necessary action to
implement the change .
Mr . Shinn repoiTted on plans for the site visit for the Harvard~
Project . H'e requested a prompt report from those invollved of the persons
who would be attending . Mr . Shinn also brought to the meeting the
greetings of Daviid Hardy, who was missing his first mecting of the Board .
-10- y ;t. 0; ,
Mr . Shinn was asked to extend to Mr . Hardy the best wishes of the
group .
C
Mr . Kornegay then took the occasion to express the happiness of al l
at having,Senator Clements back with us, and Mr . Clements in turn expressed
his dellight at being at the meeting, .
In response to a :question from Mr . George, the staff reported that
no definite d'ate had~yet been establishedlfor the delivery of the replica
of the 18th Century tobacco ship Brillilanit to the Smithsoniian or for the
date for the reception to be given at the Smithsonian, . It was thought that
tentatively the reception might be held in early June . Mir . Kornegay
indicated that the date for the reception would be communiicated to the
group as soon as it was established .
Chairman Judge, speaking for himself andlfor all Members of the
Institute, expressed the appreciation,of the membership :to the staff for
its efforts, courtesiies and complete dedication during 1975 . He offered
the thanks of the membershilp to the staff for a year of committed har d
work, and saidihe looked forward to a good 1976 .
President Kornegay thanked Mr . Judge for his generous comments, and,
on behalf of the entire staff, thanked the Members for their continued
support and cooperation .
There being no further business, and without objection, the meeting
was thereupon adjourned .
~, .
•/L ."~--'~'
Secretary
e
MINUTES OF THE THIRTY-FIFTH MEETING OF THE

BOARD OF DIRECTOR S
The Thirty-fifth Meeting of the Board of Directors of The
Tobacco Institute, Inc ., was held at The Greenbrier, White Sul'phur
Springs, West Virginia, on .May 21, 1975, at 10 :00 A .M .
The following members of the Board of Directors wer e
present :

Martin J . Condon,, I I I
Joseph E . Eden s
W . Brooks George
William D . Hobbs
Curtis H . Judge
Charles I . McCarty
Ross R . MiTlhiser
Arthur E . Sloat
Colin Stoke s
There were also present Messrs . Thomas M~. Bloch of Bloch Bros . Tobacco
Company ; John V . Blalock, DeBaun Bryant and Ernest Pepples of Brown &
Williamson Tobacco Corporation ; Joseph Greer, Frederick P . Haas and
David M . Welsh of Liggett & Myers Incorporated ; Arthur J . Stevens of
Lorillard~, A Division of Loews Corporation ; Thomas F . Ahrensfeld, James C .
Bowling and Alexander Holtzman of Philip Morris Incorporated ; James S .
Dowd!ell, H' . C . Roemer and Charles B . Wade, Jr ., of R . J . Reynold s
Industries, Inc . ; David R . Hardy, Donald K . Hoel and William W . Shinn
of Shook, Hardy & Bacon ; John D . Kelly of California Association of
Tobacco & Candy Distributors ; William A . O'Flaherty of Tobacco Tax
Council ; Leonard S . Zahn of Leonard Zahn & Associates, Inc . ; Horace R .

-2-
Kornegay, President of the Institute ; C . Gilbert Collingwood, Treasurer
of the Institute ; Kathryn R . Golden, Secretary of the Institute ; Dan C .
Alverson, Constance M . Drath, Franklin B . Dryden, Anne H . Duffin ,
William F . Dwyer, J .C .B . Ehringhaus, Jr ., Donna Hilderley, Marvin A .
Kastenbaum, William Kloepfer, Jr ., David C . McLean, John F . Mills,
Roger L . Mozingo, Frederick Panzer and George H . Yenowine of the
Institute ; and Stanley L . Temko, of counsel to the Institute .
Mr . Kornegay acted as Chairman of the meeting and Mrs .
Golden acted as secretary and recorded the minutes .
Mr . Kornegay stated'that copies of the minutes of the Thirty-
fourth Meeting of the Board of Directors, held January 30, 1975, i n
New York City, had been sent to each member of the Board . There being
no additions or corrections, the reading of the minutes was dispensed
with and the minutes were approved .
Mr . Judge, Chairman of the Executive Committee, stated that
he had'no report for the meeting since the matters which he would have
discussed would be covered in the President's report .
Mr . Kornegay reported on developments since the January
meeting of the Board . He first summarized federal legislative and
agency developments, including the status of various bills pending in
Congress . Mr . Kornegay then considered state and local governmen t
developments, including the substantial number of punitive or restric-
tive bills, particularly those seeking to prohibit smoking in various
locations . One point emphasized by the President was the extreme

C11
importance of developing more rapidly and effectively the suppor t
system which had been recommended by Martin Ryan Haley . ~•

Mr . Collingwood was called upon for the report of the
Treasurer and of the Budget Committee . He stated that the Budget
Committee had met earlier in the week, had reviewed the budget and
expenditures since the start of the year, and had made certain revi-
sions . He reported that the Budget Committee recommended approval of
the revised budget presented to the Board . Thereupon, upon motion duly
made and seconded, it was unanimousl y

budget for 1975 be, and hereby is, adopted and that the
remainder of the resolution relating~to the 1975 budget,
adopted at the meeting of the Board on January 30, 1975,
continue in full force and effect .
FURTHER RESOLVED, That there should be, and there

hereby is, authorized a revised assessment of Additional
Dues for 1975 in the amount of 1070% of the annual dues
of members liable for add•itional assessment, with payment
to be made in such installments and on such dates as are
determined by the Treasurer . •
Mr .•Stevens, as Chairman of the Committee of Counsel, stated
that it would be desirable for the meeting to receive brief reports on
Federal Trade Commission matters and on the proceedings relating to
Consumer Product Safety Commission jurisdiction over cigarettes . Mr .
Kornegay summarized~Federa] Trade Commissionactivities with respect
to compliance with the orders dealing with cigarette advertising~ .
Mr . Temko reported on matters relating to Consumer Product
Safety Commission jurisdiction over cigarettes, including the deci-
sion of the Federal District Court that the Commissio rn .had jurisdic-
tion to consider the petition by the American Public Healt h
Association and others relating to high "tar" cigarettes . He also
covered the case in the District Court brought by various furniture
manufacturers and their associates, in which motions to dismiss by
the Government and the intervenor cigarette manufacturers were to
be argued on May 29 .
-4-
Mr . Kloepfer reported for the Communications Committee .

,
After discussing the broadened'Institute public information program
now being implemented, Mr . Kloepfer called upon the Institute's
recently added spokespersons, Constance M . Drath and William F . Dwyer .
The meeting was then shown film clips and heard tapes of
various presentations by Ms . Drath and Mr . Dwyer . This was followed
by short talks by the two spokespersons . The presentations were
received with a spontaneous and prolonged round of applause .
Mr . Ehringhaus reported on state activities, expanding on .
the summary presented in the President's report . He re-emphasized
the need for the prompt development of the support system and urged
each Institut,e member to proceed as promptly and diligently a s
possible in assembling and developing its materials .
Mr .'Ehringhaus introduced two Institute field representatives,
Dan C . Alverson and David C . McLean . Mr . Alverson, who is primarily
concerned with the southwest portion of the United States, and Mr .
McLean, whose assignment is the far west, spoke briefly about their
period of indoctrination and their initial experiences in their
assignments .
Mr . Ehringhaus then introduced to the meeting John D . Kelly
of the Association of the Tobacco & Candy Distributors, who had come
from California to attend the Institute's Spring Meeting .
President Kornegay complimented all those who hadparticipated
in the presentation relating to the Institute's programs in the public
information and state activities field . He expressed his appreciation
to the Board for having authorized these expanded programs, and observed
that, as was clear from the presentations during the program, the
t
,. -5-
Institute was fortunate in the caliber of the personnel participating
in the programs .
Mr . Kornegay then introduced another guest, William A .
O'Flaherty of the Tobacco Tax Council . Mr . O'Flaherty, in a brief
presentation, reported on tax legislation .
Mr . Temko presented two administrative matters . He mentioned
that various amendments to the Tobacco Institute pension plan woul d
be called for as a result of the Federal legislation passed in 1974,
and that it would be in order to authorize the President to take
action, particu,larly since certain submissions might be required
prior to the next scheduled meeting of the Board . Thereupon, upon
motion duly made and seconded, it was unanimousl y
RESOLVED, That the authority to amend the

Tobacco Institute Employees' Pension Plan and
other employee benefit plans in order to comply
with the requirements of Part 4 of Title I of the
Employee Retirement Income Security Act of 1974
is hereby delegated to the Institute's President
to be exercised~at his discretion after consulting
with the Institute's counsel .
Mr . Temko stated that the Execut.ive Committee, during
meetings held in March and April, had considered proposals for the
development of various media messages, including those which would
place the rights of smokers and nonsmokers in proper perspective,
and that the Executive Committee had authorized various types of
additional study and testing of possible messages . This additional
work would involve an estimated $80,000 plus additional production
costs . These costs were to come from the "Advertising Contingency"
item of the Intitute budget, and that expenditures from this item
required specific approval . Thereupon, upon motion duly made and

-6-
RESOLVED, That an expenditure of $80,000, plus

an additional amount necessary to cover production
costs, from the item, "Advertising Contingency" in
the 1975 Institute budget be, and hereby is, approved
to cover the cost of further study and testing of
proposed med'lia messages .
Chairman Judge, speaking for the members, commended the
staff for the outstanding work which it had done and reiterated the
view that the presentations during the meeting had been excellent .
His comments were followed by another round of applause .
Mr . Kornegay expressed his appreciation for .the sentiments
expressed'on behalf of the members . He announced that the Spring
Meeting for 1976 would be held at the Greenbrier on May 12-15 .' He
also mentioned that the World Conference on Smoking and Health was
scheduled to be held early this June in New York City .
There being no further business, and without objection, the
meeting was thereupon adjourned .

i)
MINUTES OF THE THIRTY-FOUIRTH MEETING~OF THE

BOARD~OF DIRECTOR S
The Thirty-fourth Meeting of the Board of Directors of The
Tobacco Institute, Inc ., was held at the Hotel- Regency, in New
York City, on January 3&, 1975, at 10 :45 A .M .
Messrs . Joseph F'. Cullman~, 3rd

Joseph E'. Eden s
W : Brooks George
William D . Hobbs
Curtis H . Judge
Charles I . McCarty
Ross R . Millhiser
C Prest=Robert Tisc h
There were also present Messrs . DeBaunlBryant and Ernest Pepples of.
Brown & Williamson Tobacco Corporation ; Joseph Greer, Frederick P .
Haas and James Scott Hill of Liggett Group ; Lester Pollack o f
Loews Corporation ; Arthur J . Stevens of Lorillard, A Division of
Loews Corporation ; Thomas F . Ahrensfeld, James C . Bowling and
Alexander Holtzman of Philip Morris Incorporated' ; H . C . Roemer ,
William S . Smith and Charles B . Wade, Jr ., of R . J . Reynolds Industries,
Inc ., W . E . Springer of United States Tobacco Company ; Marlow Cook,
David R . Hardy and William W . Shinn of Shook, Hardy & Bacon ; Horace R .
Kornegay, President of The Institute ; C . Gilbert Collingwood, Treasurer
of The Institute ; Kathryn R . Golden, Secretary of The Institute ;
Earle C . Clements, Constance M . Drath, Franklin B . Drydeni, Anne H . Duffin,
William F . Dwyer, J .C .B . Ehringhaus, Jr ., Donna Hilderley, Marvin A .

Kastenbaum, William Kloepfer, Jr ., Jbhn F . Mills and Frederick Panzer
of The Institute ; and H . Thomas Austern and Stanley L . Temko, of counsel
to The Institute .
Mr . Kornegay acted as Chairman of the meeting and Mrs . Golden
Mr . Kornegay stated that copies of the minutes of the Thirty-
third Meeting of the Board of Directors, held May 17, 1974, had been
sent to each member of the Board . There being no additions or correc-
tions, the reading of the minutes was dispensed with .
It was announced that the first order of business was the
election of officers of The Institute . Thereupon, upon motion duly
made andsecond'ed, it was unanimousl y
RESOLVED, That the following persons be, and they
hereby are, elected to the offices of the Corporation set
forth after their respective names to serve until the next

c
annual meeting of the members of the Corporation and until
their successors have been chosen and shall have qualified :
Horace R . Kornegay President an&Executive Director

Frankl in B . Dryden Senior Vice President
J .C .B .Ehringhaus, Jr . Senior Vice President and Counse l
William Kloepfer, Jr . Senior Vice President
John F . Mill s Senior Vice President
Anne H . Duffin Vice President
C . Gilbert Collingwood Treasure r
Buford Tyne s Assistant Treasurer
Donna Hilderley Assistant Secretar y
Fi7RTIIER RESOLVED, That the Treasurer shall not be
required to give bond for the faithful discharge of his
duties and that the Assistant Treasurer may at the discretion
of the Treasurer be required to give bondfor the faithful
discharge of his duties in such sum and with such security

-3-
as the Treasurer may from time to time prescribe .
Mr . Kornegay called on Mr . William S . Smith, who announced that he
was resigning as a member of the Executive Committee and as the Chairman
of that Committee . Mr . Smith said that it had~been a pleasure to serve
for close to two years as Chairman and that it had been a most rewarding
experience working with the other members of the Committee and with the
staff of the Institute . He stated that he was confident that the affairs
of the Institute are in the hands of an excellent and dedicated'staff and
that the members should appreciate what an excellent job the Institute
performs for them .
President Kornegay expressed his appreciation to Mr . Smith for his
leadership and dedication, and said he would be sorely missed in the days
ahead . Speaking for the Institute staff, Mr . Kornegay expressed his thanks
to Mr . Smith and hoped that his interest inthe Institute and the industry
would remain and that he would meet with the group from :time to time .
The next order of business was the election of the members .of the
Executive Committee . Thereupon, uponmotionduly made and seconded, it was
unanimously
RESOLVED, That the following members of the Board shall
constitute the Executive Committee of the Board until the
next Annual Meeting of the Board and until their successors
have been chosen and shall have qualified :
Curtis H . Judge, Chairman

Louis F . Bantl e
Martin J . Condon, III
Joseph E . Eden s
W . Brooks George
William D . Hobbs
Charles I . McCarty
Ross R . Millhiser
Arthur E . Sloat
Colin Stokes
Preston Robert Tisch
The newly elected Chairman, Mr . Judge, voiced his appreciatio n
for the confidence which his selection showed in his company and in him
personally . He congratulated Mr . Smith on his work and expressed the
hope that he coulaprovide the same type of leadership for the Institute .
Mr . Judge also thanked the staff for its dedicated performance .
Mr . Cullman also commented briefly, mentioning the gratitude an d
debt which those in the Institute owed to Mr . Smith . Thereupon, upon
motion duly made and seconded, it was unanimousl y
RESOLVED, That the Board of Directors of the
Tobacco Institute expresses its appreciation and
gratitude to Wi,]:liam S . Smith for his invaluable service
to the Institute and to the industry, and particularly
for the skill and'devotion with which he guided the
Institute as the Chairman of the Executive Committee of

C
the Board of Directors .
FURTHER RESOLVED, That all associated with the
Institute treasure their association with Bill Smith ,
as much for his kindness, good humor and good company as
for his important, substantive contributions as Chairman,
and that they hope that he will continue to join them in
at least some of the Institute activities in the years to
come .
Mr . Kornegay then gave the President's report on Institute activities
and governmental and other developments during 1974 .
He first summarized the various staff changes during the year,
emphasizing that the new additions to the staff should further broaden
the Institute's capabilities . He briefly summarized the Congressional C-- 7

r -5-
developments during the 1974session andcovered the outlook for the

r
current year .
The President then turned to developments in the state and local
government areas . He stressed the increasing emphasis on measure s
to abolish or limit smoking in various types of buildings and reported
on the wide variety of bills which had been introduced in state and
local legislative bodies in 1914, and the legislative situation as it is
unfolding in the current year . .
The President also ;discussed other aspects of Institute staff
activities dUring the year, including the various letters and other
communications to correct errors in the media, the publication of pamphlet s
and the status of plans for additional publications, the negotiations
with the Smithsonian Institution with respect to -the project for the
c constructionand display in the Smithsonianof the tobacco ship Brilliant ,
and the scientific addresses and other activities of the Director of
Statistics .
In concluding his report, President Kornegay touched on the activities
of Federal regulatory agencies, particularly the current FTC compliance
investigation and~the work in connection with the investigation on the
part of the Committee of Counsel and~Messrs . Austern and Kornegay .
At this point, the President introduced to the meeting and welcomed
Marlow Cook, who~had recently become the resident Washington partner of
Shook, Hardy & Bacon .

4
Mr . Kornegay announced that the Spring Meeting of the Institute
would be held'at the Greenbrier, White Sulphur Springs, West Virginia,
on May 18-May 21 .
At the President's request, Mr . Temko summarized the present status
of the court proceedings involving attempts to force the Consumer
Product Safety Commission:to entertain jurisdiction over two petitions
relating to cigarettes which the Commission had rejected on jurisdictional
grounds .
Mr . Smith reported for the Executive Committee . He mentioned that
the major matters with which the Executive Committee had~been concerned
had already been covered by Mr . Kornegay, and he therefore devoted his
report principally to a sumtnary of the discussions with American Brands
relating to the invitati=to that company to rejoin the Institute and'
participate fully i~n~its activities . Mr . Smith summarized the present statu s
of the matter, and several members of the Committee expressed their views
on the policy that should be followed by the Institute in the event that
there was not a satisfactory response from American Brands .
In calling on Mr . Coll'ingwood'for the report of the Treasurer and

c
of the Budget Committee, Mr . Kornegay expressed appreciation for the
Treasurer's diligent and excellent performance during the past year . Mr .
Collingwood, in his report, summarized cash-balances, receipts and
disbursements during 1974 . He then presented the proposed 1975 budget
for the Institute, as approved'by the Budget Committee and recommended b y
the Budget Committee to the Board for its approval . Thereupon, upo n
motion duly made and seconded, it was unanimously jv
RESOLVED, That the proposed Institute Budget for 1975, ca

4
consisting of "Administration," "General" and "Public Relations" ~

~A
sections, be and hereby is adopted .
of the Treasurer, is authorized to approve any expenditure

-7-
in excess of any individual budgeted item in the "Administration,"
"General`or "Public Relations" sections of the budget, wit h
or without the approval of the Executive Committee ; provided :
That the President or Treasurer shall request the approval of
the Executive Committee before allowing any expenditure which
would result in total expenditures in any of the "Administration, "
FURTHER RESOLVED, That there should be, and~there hereby
is, authorizedan :assessment of Additional Dues in the amount
of 1020 per cent of the annual dues of members liable for
additional assessment, with payment to be made in such
installments and on such dates as are determine&by the
Treasurer .
Mr . Temko stated that the first payment, in the amount of $50,000,
was to be made on the Smithsoni,anInstitution project involving the con-
struction and display of a replica of an 18th century tobacco ship . This
project had been approved by the Executive Committee at its December 1974
meeting and the Committee had concluded~that the funding of the project
should come from the "Advertising Contingency" item in the Institute
budget . Expenditure from this contingency fund is subject to the specific
recommendation and approval of the Executive Committee . In view of the
fact that the contribution should be made promptly, it would be desirabl e

./
for the Board~at this meeting,to approve the expenditure from the contingency
fund . Thereupon, upon motion duly made and seconded, it was unanimously
RESOLVED, That an expenditure to $50,000 from the ite m
"Advertising Contingency" in the 1975 Institute budget be, and

hereby is, approved to cover the initial payment for the
project, approved by the Executive Committee at its meeting
of December 5, 1974, involving the construction of ascale
model of the tobacco ship Brilliant for display in~the
National Museum of History and Technology in the Smithsonian
Institution .
The President then called for the reports of Institute committees .
Mr . Roemer, reporting for the .Committee of Counsel, thanked the members
of his committee for their interest and support during the year and
expressed his appreciation to Mr . Kornegay and Mr . Austern for their
work in dealing with the Federal Trade Commission in conneetion wit h
the Commission's compliance investigation . There were no further reports
from any of the committees inasmuch as the matters of major interes t
had been covered in~the report of the President .
Mr . Korngay announced the appointment of the following members to

C
constitute Institute commi~ttees :
Budget Committe e
C . Gilbert Collingwood', Chairman~

John V . Blalock
James C . Bowling
Alfred Peterson
Ralph Ross i
Zachary T . Smith
DavUWelsh ~
Committee of Counse l
Arthur J . Stevens, Chairman

H . Thomas Austern
DeBaun Bryant
Frederick P . Haas
--, David R . Hardy
H . C . Roemer
Charles B . Wade, Jr ., Chairman

J . R . Av e
John V . Blalock
James C . Bowling
David R . Hardy
Thomas D . Pickett
H . Copland Robinso n
The Board reappointed the following members to the Pensio n
Committee :
Pension Committe e

W' . Brooks George
H . C . Roemer
Mr . Temko pointed out that some changes were in order in the
authorizations relating to various of the Institute bank accounts .
The principal change involved is the transfer of the account formerly

C carried at the Bankers Trust Company of New York City to the Riggs
National Bank in Washington, D . C . Thereuponi, upon :motion d'al .y made and
seconded, it was una,nimously
RESOLVED, That the Riggs National Bank of Washington,
D . C ., is hereby designated a depositary for the funds of
this corporation and the said bank is hereby authorized and
directed to pay checks and other orders for the payment of
money drawn in the name of this corporation when signed b y
.
any one of the following : Horace R . Kornegay, Earle C . Clements,
Franklin B . Dryden, John F . Mills and countersigned by any one
of the following : Kathryn R'. Golden, Donna Hilderley, C .
Gilbert Collingwood or Buford Tynes, and the said bank shall
not be required, in any case, to make inquiry respecting the
application of any instrument executed in virtue of this

resolution, or of the proceeds therefrom, nor be unde r
any obligation to see to the application of such instrument
.or proceeds .
RESOLVED, That on and after February 1, 1975, an6until
otherwise ordered, The First National Bank of Washington, D . C .,
be and it hereby is authorized to make payments from the
accounts of this Corporation on deposit with it only b y
check signed in the name of this organization by : Horace R .
Kornegay, Earle C . Clements, Franklin B . Dryden, C . Gilbert
Collingwood and Buford Tynes, or any of them, until further
notice in writing to The First National Bank of Washington ,
and the said First National Bank of Washington shall not b e
requiredin any case'to make inquiry respecting the application
of any instrument executed in virtue of this resolution o r
of the proceeds therefrom, nor be under any obligation to

c
see to the application of such instruments or proceeds .
Mr . Temko reported that various new employment contracts and amendments
to existing contracts had been entered into, .following discussion with
the Executive Committee, since the last annual meeting of the Board .
He suggested that it would be desirable for the Board to ratify these
contracts and amendments . Thereupon, upon motion :duly made and seconded,
it was unanimousl y
RESOLVED, That the Agreement dated July 29, 1974,
between The Tobacco Institute, Inc . and Frederick Panzer be,
and hereby is, approved and ratified .
W
FURTHER RESOLVED, That the Agreement, dated October
11, 1974 betweenThe Tobacco Institute, Inc . and Marvin A .

\
Kastenbatiun, Ph .D ., be, and hereby is, approved and ratified .
FURTHER RESOLVED, That the amendment dated'November
4, 1974 to the Agreement between The Tobacco Institute, Inc .
and J . C . B . Ehringhaus, Jr ., be, and hereby is, approved
and ratified .
FURTHER RESOLVED, That the Agreement datedNovember 13,
1974 between The Tobacco Institute, Inc . and Horace R' .
Kornegay be, and hereby is, approved' .and ratified .
FURTHER RESOLVED, That the Agreement dated November 15,
1974 between The Tobacco Institute, Inc . and John F'. Mills be,
and hereby is, approved and ratified .
c FURTHER RESOLVED, That the Agreement dated November 21,
1974 between The Tobacco Institute, Inc . and Anne Duffin be,
and hereby is, approved and ratified~ .
FURTHER RESOLVED, That a copy of each of the Agreements
and Amendments hereby approved and ratified be annexed~to
these minutes and be made a part thereof .
President Kornegay noted that this year had seen the retirement of
two valued employees of the Institute, Vice Presidents Frank L . Sundstrom
and Frank J . Welch . He mentioned that Mr . Slzndstrom had contributed much
to the work of the Institute in the area of Federal Government relations,

4
andhad brought to his work at the Institute extensive experience i n
industry and as a member of Congress . Mr . Kornegay stated that Frank
Welch hadserved the Intitute for more than~a decade, .following a
distinguished career as educator and Government official . He pointed out

that Dr . Welch had organized the Institute state relations program and had .
been in charge of it until turning over the reins last year to Mr . Ehringhaus . C
Thereupon, upon motion duly made and seconded, it was unanimousl y
RESOLVED, That the Tobacco Institute hereby expressed'
its appreciation for the valued'and loyal service of Frank
L . Sundstrom, who served the Institute most effectivel y
and whose sound judgment and ready wit will be missed by
all, an d
FURTHER RESOLVED, That the Institute wishes Mr .
Sundstrom well in the years to come .
Thereupon, upon motion duly made and seconded, it was unanimously
RESOLVED, That the Tobacco Institute expresses its
appreciation and deep gratitude to Frank J . Welch~for his
valued service as a :Vice President of the Institute, a
position in which he served with~resourcefulness and

c
exceptional dedication, in which~he made and continued to
enjoy lasting associations and friendships with those' :in
the tobacco industry throughout the length and breadth of
our land, and~a post in which he has brought distinction
both to himself and to the Institute ; and
FURTHER RESOLVED, That the Institute wishes Dr . Welch
-ma.ny fruitful and enjoyable years in his retirement .
Mr . George stated'that the year had seen the death!of Edward F .
Ragland, who had served as an :officer of the Institute from its organiza-
tion until his retirement at the end of 1972 . Thereupon, upon motion
duly made and seconded~, it was unanimously
ft_7
RESOLVED, That the Tobacco Institute expresses its
grief and sense of loss on the passing of Edward F . Ragland,
who spent his lifetime in the tobacco industry and was one
of its most loyal and d'evoted champions and servants, and
who made important contributions to tobacco as an officer
of the Tobacco Institute from the time of its organization
until his retirement in 1972 :
FURTHER RESOLVED, That all those associated with the
Institute and his legion of friends in the tobacco industry
and in Government will sorely miss Ed Raglan&and hi s
continued good will and good fellowship, an d
FURTHER RESOLVED, That the President of the Institute
convey to the family of Mr . Ragland•the condolences of the
members of the Institute and-a copy of this resolution .
c Mr . Kornegay then called attention to~the suggested dates for
various 1975 meetings of the Institute and its committees, which had
been distributed to the group . After discussion, the suggestedidates
were approved with the following changes : The July 17 meeting of the
Executive Committee was changed to Thursday, July 24, in New York
City, and the September 9 meeting of the Budget Committee was changes
to Tuesday, September 16 .
Mr . Kornegay, in concluding the meeting, expressed sincere appreciatio n
for himself andall of the staff to the Board and the member companies
for the support, understanding and~guidance which they had so generously
given to the staff during the past year .

There being no further business, and without objection~, th e
meeting was thereupon ad'journed~ .
~ 1~.2,c..~,<✓ _ ~-►t /
Secret
(f-
MINUTES OF THE THIRTY-THIRD MEETING OF THE BOARD OF DIRECTOR S
The Thirty-third meeting of the Board of Directors of
The Tobacco Institute, Inc ., was held at 9 :30 A .M ., on May 17,
1974, at The Homestead, Hot Springs, Virginia .
The following members of the Board of Directors
were present :

Joseph E . Edens
Edwin P . Finc h
W . Brooks George
Curtis H . Judge
Ross R . Millhise r
G . Jackson Ratcliffe
Arthur E . Sloat
William S . Smith
Colin Stoke s
There were also present Messrs . Thomas M . Bloch of
The Bloch Brothers Tobacco*Company ; DeBaun Bryant and Charles I .
McCarty of Brown & Williamson Tobacco Corporation ; C . T .
Bingham, Jr ., of Conwood Corporation ; Joseph H . Greer,
Frederick P . Haas and Cope Robinson of Liggett & Myers
Incorporated ; Lester Pollack of Loews Corporation ; J . R . Ave
and Arthur J . Stevens of Lorillard, A Division~of Loews
Corporation ; Thomas F . Ahrensfeld, James C . Bowling, Clifford H .
Goldsmith and Alexander Holtzman of Philip Morris Incorporated ;
James S . Dowdell, H . C . Roemer and Charles B . Wade, Jr ., o f
R . J . Reynolds Industries, Inc ; James Chapin and R . L . Rossi
of United States Tobacco Company ; Cyril F . Hetsko of American

Brands, Inc . ; Rhodes G . Lockwood of Choate, Hall & Stewart ;
Burns W . Roper of Roper Research Associates, Inc . ; David R . C'J
Hardy, Donald K . Hoel and William W . Shinn of Shook, Hardy &
Bacon ; William H . W . Anderson of Tobacco Growers' Information
Committee ; William A . O'Flaherty of Tobacco Tax Council, Inc . ;
Leonard Zahn of Leonard Zahn and Associates, Inc . ; Horace R .
Kornegay, President of The Institute ; C . Gilbert Collingwood,
Treasurer of The Institute ; Kathryn R . Golden, Secretary of
The Institute ; Albert J . Barr, Franklin B . Dryden, Anne H .
Duffin, J . C . B . Ehringhaus, Jr ., Marvin A . Kastenbaum ,
William Kloepfer, Jr ., John F . Mills, Roger L . Mozingo ; Frederick
Panzer, Frank L . Sundstromand Frank J . Welch of The Institute ;
and H . Thomas Austern and Stanley L . Temko, of counsel to The
Institute .
C.J
Mr . Kornegay presided at the meeting and Mrs . Golden
acted as Secretary and recorded the minutes .
Thirty-Second Meeting of the Board of Directors, held January 31,
1974, had'been sent to each member of the Board . Mr . Temk o
reported that the minutes, as circulated, had failed to includ e

4W
reference to the action of the Board in~increasing the numbe r
of members of the Pension Committee from three to four and th e
appointment of the following membership of the Pension Committee : (A

%3
DeBaun Bryant, Chairman rp
W . Brooks George
H . C . Roemer
With this correction~, the minutes of the Thirty-Second Meeting
of the Board were approved .

Chairman Smith then reported for the Executive Com-
mittee . He briefly summarized the work of the Executive
Committee at its periodic meetings . In his summary he alluded
to Congressional matters and various Federal agency d'evelopments,
such as the petition pending before the Consumer Product Safety
Commission . Mr . Smith also referred to the generally accepted
view that further planning was desirable in connection with
research activity sponsored by the industry, and he reported that
an industry committee had been appointed and was scheduled to
meet later in May . Finally, Mr . Smith emphasized the
considerable attention being given in a number of states to
measures designed to separate smokers from non-smokers an d
to prohibit smoking in designatedplaces, and the work whic h
the Institute was undertaking in this area . Mr . Smith concluded
his remarks with the observation that he believed there had
never been a more important time for all segments of the
industry to work together andin harmony .
President Korriegay then reported, for the Institute
staff, on developments since the Board meeting in January . In
his review he covered Federal legislation and Executive Branch
developments, including visits with Executive Branch agencies
which had been made by the Institute . Mr . Kornegay reviewed
briefly the state legislative scene . He emphasized that, with
the increased emphasis on measures to prohibit smoking in
various places and related types of bills, there was need of
additional involvement by all segments of the industry to
E resist unfair measures against tobacco . He summarized some

-4-
of the activities and increased efforts in this area which
the Institute staff was considering . G
Mr . Kornegay then reported that Edwin P . Finch, in
view of his retirement from Brown & Williamson Tobacco
Corporation, was desirous of resigning from the Board of
Directors and the Executive Committee of the Institute . Mr .
Finch's resignation was accepted, with the Board echoing the
sentiments and appreciation for Mr . Finch's service adopted
at the Executive Committee meeting of March 14, 1974 .
Thereupon, upon motion duly made and seconded, it
was unanimously
RESOLVED, That Charles I . McCarty be, and he

hereby is, elected to serve as a Director until
the next Annual Meeting of the members or until
his successor shall have been duly elected and
qualified .
FURTHER RESOLVED, That Charles I . McCarty be,

and he hereby is, elected to serve as a membe r
of the Exeuctive Committee until the next Annual
Meeting of the Board or until his successor shall
have been duly elected and qualified .
Mr . Collingwood was called upon to report as
Treasurer and as Chairman of the Budget .Committee . He reported
that the Budget Committee had met on the preceding~ day and had
reviewed the 1974 budget agains t experience during the firs t
four months of the year and also in light of anticipate d
activity for the remainder of 1974 . Th e review showed that
Institut e operations had been running a t or close to budget
since the start of the year and that th e 1974 budget continue d
to be generally satisfactory . The relatively minor revision s
which were proposed for adoption were set forth in the revised t
-5-
budget which was distributed to the meeting . Mr . Collingwood
stated that the Budget Committee recommended the revised
budget for Board approval .
Thereupon, upon motion duly made and seconded, it
was unanimously

budget for 1974 be, and hereby is, adopted and
that the remainder of the resolution relating to
the 1974 budget, ad'opted at the meeting of the
Board on January 31, 1974, continue in full force
and effect . .
Mr . Kloepfer then reported for the Communications
Committee, which had met on the preceding day . He stated that
the new film, "Leaf", would be shown to the group during the
general meeting on Friday morning, May 17 .
Mr . Roemer reported, as Chairman of the Committee of
Counsel, a committee which had also met on the preceding day .
Mr . Roemer said that the industry appeared again to be involved
with the Federal Trade Commission, which had raised certain
questions with respect to the compliance with the orders
relating to the depiction of the warning notice in cigarette
advertising, and also had expressed interest in the Spanish
translation of the warning used in Spanish language advertisements .
President Kornegay then introduced'William A .
0'Flaherty of the Tobacco Tax Council . Mr . O'Flaherty reported
on the bills for increased cigarette taxes in a substantial
number of states and also on the various state bills which
had proposed reductions in cigarette taxes .

-6-
Mr . Millhiser then mentioned the recent series of
programs dealing with tobacco and health on the "Today Show"
and suggested that the Institute should not miss an opportunit y
to appear on such programs . Messrs . Kornegay and Kloepfer
commented' that the Institute had only been offered a limited
invitiation to appear on only one portion of one of the series
of programs, and that its request for a fair apportionment of
time had been rejected' . In the ensuing discussion the consensus
expressed was that the Institute should develop and refine its
capabilities for participating in television or other discussions
of this type, and that it should be .in a position in the futur e
to accept invitations or opportunities to participate .
There was then a brief discussion of the question of
the fuel oil needs of the tobacco manufacturing industry and

C
the view was strongly advanced that every effort be made to
insure that the industry would have necessary energy supplies .
Mr . Dryden explained the action which the Institute had taken
in this regard and assured the group that the matter would be
followed closely .
Mr . Temko reported that the Institute had exercised
its option for a five-year extension, until May 31, 1979, of
the lease of its offices at 1776 K Street, N . W ., in Washington .
Thereupon, upon motion duly made and seconded, it was
unanimously
RESOLVED, That the lease extension agreement

of January 21, 1974, between 1776 K Street
Associates and The Tobacco Institute, Inc . be and
hereby is approved and ratified .
- 7
Mr . Kornegay then took the opportunity to extend
6 the greetings of the Institute and its members to the many
guests who were present, and'expressed the pleasure of the
Institute in having them at the Spring Meeting . He also
announced that the Spring Meeting for 1975 would be held at
the Greenbrier in White Sulphur Springs, West Virginia on
May 18-21 .
The President also mentioned to the group his dis-
appointment and that of Senator Clements in Senator Clements'
not being able to attend the meeting . The Board requeste d
Mr . Kornegay to wire Senator Clements, expressing its disappoint-
ment at his being unable to attend the meeting and extending to
Senator Clements the regards and'best wishes of all those
present .
There being no further business, and withou t
objection, the meeting was thereupon adjourned .

a
. THE TOBACCO INSTITUTE, INC .
MINUTES OF THE THIRTY-SECOND MEETING

OF THE BOARD OF DIRECTOR S
The Thirty-second meeting of the Board of Directors of Th e
Tobacco Institute, Inc ., was held at 10 :45 A .ti ., on January 31, 1974 ,
at The Regency Hotel, New York City, New York .
The following members of the Board were present :
Messrs . Timothy Cornell

Edwin P . Finch
W . Brooks George
G . B . Georgopulo
Curtis H . Judge
R.nS4 R . Millhiser
Arthur E . Sloat
WillianwS . Smith
There were also present Messrs . DeBaun Bryant of Brown &
Williamson Tobacco Corporation ; James N . Gnall of Helme Products, Inc . ;
Joseph Greer, Frederick Haas and David Welsh of Liggett & Myers Incor-
porated ; A . W . Spears and Arthur J . Stevens of Lorillard, A Division of
Loews Corporation ; Lester Pollack of Loews Corporation~ ; Thomas F .
Ahrensfeld, James C . Bowling, C . Gilbert Collingwood and Alexander
Holtzman of Philip Morris Incorporated ; H . C . Roemer and Charles B .
Wade, Jr ., ofR . J . Reynolds Industries, Inc . ; Ernest Summers of Scotten,
Dillon Company ; Thomas Pickett and Ralph Rossi of United States Tobacco
Company ; David R . Hardy and William W . Shinn of Shook, Hardy & Bacon ;
Jerome Chapman and Abe Krash of Arnold & Porter ; Horace R . Kornegay,
C-i President ofThe Institute ; John J . Murphy, Treasurer of The Institute ;
Kathryn R . Golden, Secretary of The Institute ; Earle C . Clements, J .C .B .
Ehringhaus, Jr ., Donna .Hil!derley, Marvin A Kastenbaum, William
Kloepfer, Jr ., and John F . Mills of The Institute ; and Stanley L . Temko
and Richard L . Brady, of counsel to The Institute .
Mr . Kornegay presided at the meeting and Mrs . Golden acted
as Secretary and~ recorded the minutes .
Thirty-first meeting of the Board of Directors, held May 19, 1973,
had been sent to each member of the Board . There being no additions
or corrections, the reading of the minutes was dispensed with .
It was announced that the first order of business was
the election of officers of The Institute . Thereupon, upon motion
duly made and seconded, it was unanimousl y
RESOLVED, That the following persons be, and they
hereby are, elected to the offices of the Corporation
set forth after their respective names to serve unti l
the next annual meeting of the members of the Corporation
and until their successors have been chosen and shal l
have qualified :
Horace R . Kornegay President and Executive Directo r -~ .

Franklin B . Dryden Senior Vice Presiden t
J .C .B .Ehringhaus, Jr . Senior Vice President & Counsel
William Kloepfer, Jr . Senior Vice Presiden t
John F . Hill s Senior Vice Presiden t
Anne H . Duffin Vice Presiden t
Frank L . Sundstr= Vice President *Qb
Frank J . Welch Vice President (Z
C . Gilbert Collingwood * Treasure r
Buford Tynes Assistant Treasurer
Donna Hilderley Assistant Secretar y
FURTHER RESOLVED, That the Treasurer shall not be
required togive bond for the faithful discharge of his
duties and that the Assistant Treasurer may at th e
discretion of the Treasurer be required to give bond for
the faithful discharge of his duties in such sum and with
such security as the Treasurer may from time to tim e
,prescribe,
The President then proposed that it would be in order to
elect the members of the Executive Committee . Thereupony upon motion
duly made and seconded, it was unanimousl y
RESC?,N.'EB, That the following members of the Board
shall consitute the Executive Committee of the Board until
the next Annual Meeting of the Board and~until their
successors have been chosen and shall have qualified :
.William S . Smith, Chairman

Edwin P . Finch, Vice Chairman
J . M. Arledg e
Louis F . Bantle
Joseph E . Eden s
W . Brooks George
Curtis H . Judge
Ross R . Pfillhiser
Arthur E . Sloat
Colin~ Stoke s
Preston Robert Tisch
Chairman Smith reported for the Executive Committee . H e
expressed his appreciation of the excellent turnout for the initial

-4-
meetings of The Institute for the year 1974 and then reviewed, ,
briefly the activities of the Executive Committee and" :The Institute
during the preceding year . In his report, Mr . Smith commented on work
and programs of The Institute staff and on planned activities for
the current year . He emphasized that he thought it was desirable
that the Executive Committee should continue to meet regularly .
Mr . Kornegay then gave the President's report on Institut e
activities and governmental and other developments of interest to
the industry during'1973 . His presentation also covered briefly the
outlook for 1974 . Among the points mentione6in the President's
report were various Congressional bills of possible interest to the
industry, the activities of anti-tobacco organizations, and the
reported petition of Senator Moss seeking action by the Consumer
PiGdaiC.t Sua ety CC :l'^+i .^., :-' :. .^. :: with respect to c{g2re}fitf?9, The President
also summarized developments in the state and local government area,
pointing out the increase in proposals seeking to limit or abolish
smoking in various types of buildings or places of assemblage . Mr .
Kornegay also discussed staff activities during the year, including
conferences between the Institute staff and various agency officials
and the program in the communications field designed to reply promptly
to inaccurate and misleading articles or .statements relating to the
industry . In concluding his remarks, the President also referred to the
scientific research which has been supported by the industry, and the
value of such programs .
At the conclusion of Mr . Kornegay's report the Board
complinented himon an excellent, well-organizedpresentation .

In calling on Mr . Murphy for the Treasurer's report, President
Korne.gay expressed the appreciatio3a of .the Board,of Directors and of the
Institute staff to Mr . Murphy and the outgoing Assistant Treasurer, Mr .

C.
Kelly, for the remarkably effective and devoted service which they had
rendered in the management of Institute budgetary and financial matters
during the three years which they had served in their posts . The President
also introduced C . Gilbert Collingwood, the newly elected successor t o
Mr . Murphy as Treasurer .
Treasurer Murphy, in his report, summarized cash balances,
receipts and disbursements during 1973 and presented the proposed 1974
budget for The Institute, as approved by the Budget Committee . Thereupon,
upon motion duly made and seconded, it was unanimousl y
RESOLVED, That the proposed Institute budget for 1974,
consisting of "Administration," "General" and "Public Relations"
sections, be and hereby is adopted~ .
of the Treasurer, is authorized to approve any expenditure in
excess of any individual budgeted item in the "Administration,"
"General" or "Public Relations" sections of the budget, with
or without the approval of the Executive Committee ; provided :
That the President or Treasurer shall request the approval of
the Executive Committee before allowing any expenditure whic h
would result in total expenditures in any of the "Adtninistration," Q
FURTHER RESOLVED, That there should be, and there
hereby is, authorized an assessment of Additional Dues in

the amount of 970 per cent o-f' .ttie-annual dues of inembers '
liable for additional assessment, with payment to b e
made in such installments and on such dates as are
determined by the Treasurer .
The President then called for the reports of various
Institute committees . Chairman Wade of the Communications Committe e
reported that the committee had met four times during the year and
summarized its activities . Among the matters he mentioned were the
program headed by Mr . Kloepfer to correct misstatements with respect
to tobacco, the development of a short film dealing with the economics
and the history of the tobacco industry, and various leaflets prepared
by the Institute .
Mr . Roemer, Chairman of the Committee of Counsel, reported
on the agreement upon the Spanish translation of the caution statement
appearing in cigarette advertising, consideration of procedures to
deal with internationa], questions of interest to the industry, and
the petition to the Consumer Product Safety Commission and the
petition relating to billboar&advertising reportedly being filed
with the Federal Trade Commission .
Mr . Hardy then reported on research projects supported
by industry contributions, including the question of further
extension ofthe Washington University project .
2Ir . Kornegay announced the appointment of the membership
of the following Institute committees :
4
Btidc~Lt Coi7initte e
C . Cilbert . CollinM,•rood, Chairman

John V . Blalock
James C . Bowling
Alfred Peterson
Ralph Ross i
Zachary T . Smith
David Wels h
Committee ofCounsel
H . C . Roemer, Chairman
Thomas F . Ahrensfeld
H . Thomas Austern
DeBaun Bryant
Frederick P . Haas
David R . Hardy
Arthur J . Steven s
Charles B . Wade, Jr ., Chairman

J . R . Av e
John V . Blalock
James C . Bowling
David R . Hardy
Thonas D . Picket t
H . Cope Robinso n
Mr . Temko suggeste&that it would be desirable for the
Board to ratify various employment contracts and amendments or
extensions of contracts which had~been entered into since the last
Annual Meeting of the Board . Thereupon, upon motion duly made and
RESOLVED, That the Amendment dated May 2, 1973, to
the Agreement between The Tobacco Institute, Inc . and
Frederick Panzer be, and hereby is, approved and ratified .
FURTIIER RESOLVM, That the Amendment dated July 9,
1973 to the Agreement between The Tobacco Institute, Inc .

-8-
and Anne Duffin be, and hereby is, approved and ratified .
FURTHER' RESOLVED, That the Ameiidment dated October : 16 ,
1973 to the Agreement between The Tobacco Institute, Inc ., and
John F . Mills be, and hereby is, approved and ratified .
FURTHER RESOLVED, That the Agreement dated December 31,
1973 between The Tobacco Institute, Inc . and Dr . Frank J . Welch
be, and hereby is, approved and ratified ; an d
FURTHER RESOLVED, That a copy of each of the Agreements
and Amendments above approved and ratified be annexed -to these
minutes and be made a :part thereof .
It was pointed out that some changes were in order in the
authorizations to sign or countersign checks on various Institute accounts .
Thereupon, upon motion duly made and seconded', it was unanimousl y
RESOLVED, That until otherwise ordered Bankers Trust
Company of New York City be, and it hereby is, authorized to
make payments from the funds of this Corporation on deposit
with it, upon and according to the check of this Corporation,
signed by Horace R . Kornegay, Earle C . Clements, Franklin B .
Dryden, or John F . Mills, and countersigned by Frank J . Welch,
Kathryn R . Golden, Donna Hilderley, C . Gilbert Collingwood ,
or Buford Tynes, or signed and countersigned by any two of
the following Directors : Joseph F . Cullman, 3rd, Louis F .
Bantle an&Preston Robert Tisch .
RESOLVED, That on and after February 1, 1974, and until
otherwise ordered, the National Savings and Trust Company,
Washington, D . C ., be and it hereby is authorized t o
make payments from the accounts of this Corporation

-9-
on deposit with it only by check signed in the nam e

r . :. r . .- .~ . . : . .
of this organization by : Horace R . Kornegay, Earle C .
Clements, Franklin B . Dryden, John F . Mills, Frank J .
Welch, C . Gilbert Collingwood and Buford Tync+s, or any
of them, until further notice in writing to the National
Savings and Trust Company, and the said National Savings
and Trust Company shall not be required in any case to'• '
make inquiry respecting the application of any instrument
executed in virtue of this resolution or of the proceeds
therefrom, nor be under any obligation to see to the
application of such instruments or proceeds .
RESOLVED, That on and after February 1, 1974, an d
until otherwise ordered, The First National Bank of Washing-
ton, Washington, D .C ., be and it hereby is authorized to
make payments from the accounts of this Corporation on
deposit with it only by check signed in~the name of this
organization by : Horace R . Kornegay, Earle C . Clements ,
C . Gilbert Collingwood and Buford Tynes, or any of them,
until further notice in writing to The First National Bank
of Washington, and the said First National Bank of Washing-
ton shall not be required in any case to make inquir y
respecting the application of any instrument executed in
virtue of this resolution or of the proceeds therefrom, nor
be under any obligation to see to the application of such
instruments or proceeds .
Mr . Kornegay then announced the following dates and
locations for meetings of the Executive Committee during 1974 :

-10-
New York City ; October 3, Washington, D . C . ; and''December 5,
New York City .
Mr . Kornegay expressed the appreciation of the staff for
the confidence which the Board had placed in it during 1973 an d
voiced his co.nviction t hat he

z taff
s was well or anized
g and looking
forward to a productive year . He added that all in the Institut e
looked forward to working with the new members of the Board .
He then pointed out that this year saw the terminatio n
of service on the Boardlof Thomas M . Bloch, who had served continuously
on the Board since 1958, the year of the Institute's organization, but
who would no longer be a member following the resignation of Bloch
Brothers Tobacco Company, and the end of the service, also, o f
Milton E . Harrington of Liggett & Myers . Thereupon, upon motion duly
made and seconded', it was unanimousl y
RESOLVED, That the Board of Directors of The Tobacco
Institute expresses its appreciation to Bloch Brothers
Tobacco Company for the contributions which the Company
and its representatives have made to the Institute and
its,activities over the years, and in particular the
Board expresses its gratitude to Thomas Mi . Bloch fo r
his long and valued~service to the Institute as a member
of the Board of Directors of the Institute, an d
FURTHER RESOLVED, That the Board looks forward to
continued association with Thomas M . Bloch and with the
other representatives of Bloch Brothers Tobacco Company .

C
-11-
-It was also, upon motion duly .made and seconded,

. ~ .
Tobacco Institute hereby expresses its appreciation an d
gratitude to Milton~E . Harrington for his valued servic e
to the Institute as a•member of the Board of Directors

• • • • . .. . . . . •
.
of the Institute and'of its Executive•Committee, post s
in which•he has displayed keen understanding of the
Institute and of the industry and in which his good
fellowship has been a source of lasting enjoyment
to his fellow members, and be i t
FURTHER RESOLVED, That the Board wishes Mr .
Harrington well in the years to come .
There being no further business, and without objection ,
the meeting•was -thereu .pon adjourned . :
Secretary
Minutes A
Executive .Committee
-~ _ .. . ~ : _ _. :
i
4 ooz 6 os7s 8
C J. J. .L J.
Minutes of the Sixty-Second Meeting

of the Executive CorrHnittee
The Sixty-Second Meeting of the Executive Conmtittee of
The Tobacco Institute, Inc . was held at Loew's Warwick Hotel, in
New York, New York, on June 23', 1977, at 10 :00 A .M .
The following members of the Executive Conmittee wer e
present :
Messrs . Joseph E . Edens, Chair2n-jn~

Louis F . Bantl e
W . Brooks George
William~D . Hobbs
Charles I . McCarty
Ross R . Millhiiser
Robert A . Rechholt z
Industries, Inc . ; Errnest Pepples of Brown & Williamson Tobacco Corpora-
tion ; Joseph Greer, Raymond J . Mulligan and Dan Provost, III, of
Liggett Group ; K . v . R . Dey, Jr ., of Liggett & Myers Tobacco Company,
Inc . ; Robert Ave and Arthur J . Stevens of Lorillard, A Division of
Loews Theatres, Inc . ; Thomas F . Ahrensfeld, James C . Bowling, Edward
Grefe and Alexander Holtzman of Philip Morris Incorporated ; C . Dennis
Durden, James R . Peterson, H, C . Roemer and Thomas Rucker of R . J .
Reynolds Industries, Inc . ; Ralph L . Rossi of United States Tobacco
Company ; David N . Henderson of Cook, Henderson & Saxbe ; Ibnald K .
Hoel and William W . Shinn of Shook, Hardy & Bacon ; Horace R' . Kornegay,
President of The Institute ; Franklin B . Dryden, Anne H . Duffin, J .C .B .

-2-
Ehringhaus, Jr ., Kathryn R . Golden, Donna Hi]1derley, Marvin A .
Kastenbaum, William Kloepfer, Jr ., DavidMcLean, John F . Mills,
Frederick Panzer and Charles L . Waite of The Institute ; and H . Thomas
Austern and Stanley L. Temko, of counsel to The Institute .
Mr . Kornegay presided at the meeting and Mr . Temko acted
as Secretary and recorded the minutes .
It was stated that copies of the minutes of the Sixty-First
Meeting of the Executive Committee, held on April 19, 1977, in
Washingtoni, D . C ., hadbeen sent to each member of the Committee . There
being no additions or corrections, andwithout objection, the reading of
the minutes was dispensed with .
President Kornegay reported that Arthur E . Sloat, in view of
his resignation~fr=Liggett & Myers Tobacco Company, Inc ., had resigned
from~the Board of Directors and the Executive Committee of the Institute .
Mr . K . v . R . Dey, Jr . was nominated to serve as a Director and a member

C
of the Executive Comm.ittee .
Thereupon:, upon motion duly made and seconded, it was unani-
mously
RESOLVID, That K . v . R . They, Jr . be, and he hereby is,
elected to serve as a Director until the next Annual Meeting
of the members or until his successor shall have been duly
elected and qualified .
FURZHEt RESOLVED, That K . v. R . They, Jr . be, and he
hereby is, elected to serve as a member of the Executive
Corrffnittee until the next Annual Meeting of the Board or unti l
his successor shall have been duly elected and qualified~ .
C
-3-
Mr . Kornegay extended to Mr . Dey a cordial welcome fran the Institute .
The President reported on developments in the last few ,
months . He opened with the welcome news that the amendment which had
been passed in the House to exclude tobacco and tobacco products from ;
P .L . 480 had been rejected by the Senate . He also stated that the objectionable
amendment had been rejected in the Department of Agriculture appropriations
legislation and in another proposal before Congress .
Mr . Koroegay, turnirgto the ACS Target 5 program, stated
that all eight "foruns" conducted by the so-called National Commission
on Smoking and~Public Policy had been covered by the Institute, and he
called on Mrs . Duffin to report on the ACS program . Mrs . Duffin
sumarized the ACS meetings and the type of stateinents made by witnesses
and explained the uurk which was being done by the Institute staff to
analyze the ACS sessions .
The President then called on Dr . Waite to comnent on the
hearirgs on the National Caiancer Programwhich were held recently before
a I+kouse Subcommittee on the program . Dr . Waite touched~on the highlights
of the hearings and mentioned to the group the availability of a d e t a i l e d
analysis .
As the final aspect of the Prresident's report, Mr . Kornegay
called on Mr . Temko to report on the proposed consent arrangement under
which Eastern Airlines had agreed to settlement of the current CAB
enforcement proceedings against Eastern involving alleged violation s
of the proposed~CAB rules . Mr . Temko briefly analyzed the Eastern
proceedings and reported that the Institute had moved for leave to
intervene in the proceedings and to file an opposition to acceptance of
the proposed consent settlement . Mr . Tomko also mentioned the law suit
recently filed against high-ranking goverrnment officials by a group
called Federal Employees for Non-Snokers Rights (FENSR) seeking addi-
tional regulation of smoking in federally-ownedfacilities .
Mr . Edens reported as Chairman of the Executive Corrmittee .
Among the matters he covered were his testimony at the New York State
Committee hearing on cigarette tax legislationand a related inquiry
fran the National Broadcasting Company which was preparing a mini-
docwnentary onunderworld activity in the bootlegging of cigarettes .
There then ensued discussion of the Citizens' Campaign Against Bootleg
Cigarettes in New York State, including developments in the campaign
and editorial and political reaction .
Mr . Edens elaborated on the discussion at the Board of
Directors meeting held in February, 1977, at which the Board had
directed the development of plans to enable the Institute best to
perform~its tasks and to implement both immediate and long-range program s

c
for the Institute . He emphasized that it is necessary to look to the
Institute to meet broader responsibilities, particularly in view of the
continued andincreasing efforts to discriminate against smoking andto
impose restrictions on smoking in various places and localities .
The Chairman said that Mr . Kornegay and his staff had been
developing a plan for presentationito the Executive Commit-tee . Mr .
Edens pointed out that the plan which Mr . Kornegay would present was a
general program, and that it would necessarily be augmented by specific
programs still to be developed . He suggested that the group view the
plan as a foundation for the specific programs to be developed .
Mr . Kornegay then, with the aid of slides, presented the
new "business plan"' designed to refocus the mission and activities

C
of The Tobacco Institute, pointing out that the plan was basically
i designed to represent the mznbe-rs more effectively in the current
strongly anti-smoker environment . He stated that the plan involve d
four essential aspects : First, a new "business plan" for the Institute's
organization, so that there will be a fundamental change in the Institute
from a reactive to a pro-active postUre ; second, some intermediate action
programs such as a possible advertising program which would be presented
by the Chairman of the Coamnunications CoRUnittee later in the meeting ; .
third, the organization of what could be termed a r'tobacco action network"
to organize supporters of the industry ; and~fourth, development of long-
range plans for successfully dealing with issues . Mr . Kornegay said that
he presently hoped to bring before the Executive Conmittee more definite
plans for implementation of the program at the scheduled meeting of the
Executive Comnd.ttee in September .
The President then presented in~more detail the proposed
"business plan"'for the Institute . He listed and discussed eight
objectives : Improving industry intelligence and the assessment of
information on issues ; the development of broad support for effectiv e
action on issues throughout the coun ; improving the Institute' s
scientific information~services ; strengthening the Institute's state and
local activities ; strenghtening the Institute's federal relations program ;
improving public understanding and good will for the role of tobacco and
the contribution of the tobacco community in America ; strengthening Insti-
tute direction and control of its plans and activities ; and adoption of
an annual planning and control process to evaluate regularly the Institute's
progress in meeting its objectives .
Following the President's presentation, there was general
discussion of the plan . Mr . Edens statedithat the development of what
was termedthe "tobacco action network" was essential and that clearly a
-6-
comprehensive national capability should be developed . Mr . Hobbs
complimented Mr . Kornegay and the Institute staff and stated that
R. Ji. Reynolds wi71l basically support the entire proposed program,

c
which, he emphasized, required considerable augmentation with specifi c
programs . Mr . '~Mz1!7hiser also corromented that the presentation appeared
to cover an intensive and strong program, and he reacted favorably .
Mr . Stevens connnented that Lprillard wholeheartedly endoi^sed the plan .
It was further suggested~that a special meeting of the
Executive Committee be held in possibly sixty days, in which a more
detailed report can be .m3de on plans for development of a tobacco
action network, and that at the scheduled Executive Committee meeting
in September there be a rrrore detailed presentation on long-range plans .
Upon motion duly made and seconded~, these suggestions were approvedi .
Mr . Bowling then reported, as Chairman of the Corrummications
Coirunittee, and presented suggested creative and media proposals for a plan
of comdnunication for the industry, including examples of possible media
ads, the latter to be subject to :legal analysis and clearances . Mr .
Kornegay expressed the appreciation of the meeting for the work of Mr .
Bowling and' the ComQmmications Committee . There were various expressions
in favor of the development of an effective and lawful advertising
program and the discussion of approaches and content of such possible
programs . The Executive Committee directed that Mr . Bowling and his
Committee, working with Mr . Kornegay and his staff and their legal and~
other advisers, further consider and refine the proposed program, or develop
other proposals for possible advertising programs .
The meeting then recessed for lunch at 1 :15 P .M., withthe
meeting resuming at 2 :15 P .M.
In the absence of 'IYeasurer Cumnins, Pres i dent Kornegay
reported for the Budget CorrQnittee . He stated that the Budget Committee
-7-
had'met on June 14, 1977, had reviewed the 1977 budget against experience
c during the first five months of the year and~also in light of anticipated
activity for the remainder of 1977 . The revisions in the 1977 budget which
the Budget Comnittee recommended for adoption were set forth in the
proposed revised budget which had been distributed prior to the meetin g
to each member of the Board~of Directors . Mr . Kornegay briefly summarizedi
the proposed revisions in the budget, including provision for the initial
cost of a proposed economic study of the tobacco industry and an increase
to provide for an advertisirg contingency fund, .
Thereupon,, upon motion duly made and~seconded, it was
unanimously
RESOLVED, That the proposed amendments to the Institute
budget for 1977 be, and hereby are, adopted, and that the
remainder of the resolution relating to the 1977 budget
adopted at the meeting of the Board on December 9, 1976,
continue in full force and effect .
It was also reported that, in view of the increases in the
1977 budget, there should be a revision in the authorization covering
assessment of additional dues .
Thereupon, upon nation duly made and seconded, it was
unanimously
RESOLVED, That there should be, and there hereby is,
authorized a revised assessment of Additional Dues for 1977
in the amount of 1,5300 of the annual dues of members liable
for additional assessment, with payment to be made in such~
installments and on such dates as are determined by the
'I'reasurer .
-8-
Mr . Temko said that these items should be confirmed~forfnally
by the Board of Directors and that, in view of the fact that the next (
scheduled meeting of the Board was not until December, it would probably
be done by a mail ballot .
Mr . Pepples, as Chairman of the Ct>nunittee of Counsel, reporte d
briefly on pending Federal Trade Om ission matters .
Mr . Ehringhaus was then called upon to report on state
activities . He briefly siuranarized developments in Illinois and California .
With~respect to the California situation, there was a presentation by
Messrs . McDowell and~Woodward on their evaluation of the anti-smoking
efforts being mountedin California .
Mr . Kornegay then discussed~with the meeting the date for the
special meeting on developments in the new program which had been
suggested~earlier in the meeting . It was agreed that the meeting would
be held on August 22', 1977 in Washington . The President expressed his

C
appreciation for the fine attendance at the meeting and, most
importantly, for the extremely productive session .
There being no further business, the meeting was adjourned .
Acting Secretary
C
f

a ~. r. .,.
MINUTES OF THE SIXTIETHIMEETING

OF
THE EXECUTIVE COMMJTTE E
The Sixtieth Meeting of the Executive Comm,ittee of The
Tobacco Institute, Inc ., was hel&at Loew's Warwick Hotel, in
New York, New York, on July 29, 1976, at 10 :00 A .M .
The following members of the Executive Committee wer e
present :

Louis F . Bantl e
Joseph E . Edens
( W . Brooks George
William D . Hobbs
C . I . McCarty
Ross R . Millhiser
R . A . Rechholtz
Arthur E . Sloat
Colin Stoke s
There were also present Messrs . DeB'aun Bryant of Brown & Williamson
Industries, Inc . ; Ernest Pepples of Brown & Williamson Tobacco Cor-
poration ; Joseph Greer of Liggett & hlyers Tobacco Company, Inc . ;
Ronald S . Goldbrenner of Lorillard, A Division of Loews Theatres, Inc . ;
James C . Bowling and Alexander Holtzman of Philip Morris Incorporated ;
C . Dennis Durden, J . R . Peterson and H . C . Roemer of R . J . Reynolds
Ind'ustries, Inc . ; James Chapin and Ralph L . Rossi of United States
Tobacco Company ; David R . Hardy and Donald Hoel of Shook, Hardy &
-2-
.,
Bacon ; Horace R . Kornegay, President of The Institute ; Earle C .
Clements, J . C . B . Ehringhaus, Jr ., Kathryn R . Golden, Marvin A .
Kastenbaum, William Kloepfer, Jr ., and John F . Mills of The Institute ;
and H . Thomas Austern and Stanley L . Temko, of counsel to The
Institute .
as Secretary and recordedthe minutes .
It was stated that copies of the minutes of the Fifty-ninth
Meeting of the Executive Committee, held September 25, 1975, in
Washington, D . C . had been sent to each member of the Committee .
There being no additions or corrections, the reading of the minutes
was dispensed with .
President Kornegay reported for the staff on recent developments
He first discussed federal legislation developments, with the most im-
portant being the hearings on S . 2902, the Hart/Kennedy bill t o
increase tobacco taxes and the proposed amendment, sponsored by Senators
Hart, Kennedy and Moss, to the pending tax legislation which was
similarly designed to increase tobacco taxes . Mr . Kornegay summarized
the hearings on S . 2902, including Mr . Judge's testimony on behal f
of the tobacco industry and also mentioned that the Committe e
Print of the hearings had just become available . He also summarized
the pend'ing legislative status of the tax reform bill, which is
currently being considered in the Senate . Mr . Kornegay said tha t
the present versions of the Toxic Substances legislation, which is still
pending in both Houses, specifically exempt tobacco products . The
discussion of the legislative picture was completed with a reference to
the fact that, following the passage of the Consumer Product Safety
4 __ Commission Improvements Act of 1976, the law suit brought by the American t
C -3-
Public Health Association, seeking Commission jurisdiction over

C cigarettes, had been dismissed by the court as moot .
Turning to state and local government developments, Mr .
Kornegay reported that anti-cigarette activities had intensified in
state and local jurisdictions this year . He also summarized the
measures that had passed in various states in the past few years and
the pen&ing leg!islation that is of concern to the industry .
The third area covered in the President's report was the
work of the communications staff of The Institute . Mr . Kornegay
informed the group that the first issue of the new publication,
The Tobacco Observer, is scheduled to appear fairly soon and that
plans for other publications were on schedule .
It was reported that the industry's Bicentennial contribution,
the model of the ship Brilliant, is already on display at The
Smithsonian Institution, that the reception connected with the shi p
is scheduled for the evening of September 29 in The Smithsonian, and
that the staff is developing an appropriate souvenir brochure . Mr .
Kornegay concluded his report with a discussion of the two unfair and
inaccurate articles dealing with tobacco which appeared in the last two
issues of the Reader's Digest .
Mr . Mills briefly supplemented the President's comments o n
S . 2902 and the comparable proposed'amendment to the pending tax reform
legislation .
Mr . Kornegay stated that, in the absence of the Chairman of
the Committee of Counsel, he had been requested to report that the
Committee had been occupied with the Federal Trade Commission litigation
and related administrative developments . He then called on Mr . Austern

-4-
It ,
who briefly summarized for the group the Institute's activities
relating to the FTC matters .
Mr . Kloepfer stated that the activities of the Communications
Committee had been covered in the President's report and that he ha d
no additional report .
Mr . Hobbs stated that Mr . Wade had asked to be relieved of
his duties as a member and chairman of the Communications Committee,
and suggested that Mr . C . Dennis Durden be appointed to the Committee .
Mr . Kornegay appointed~Mr . Durden as a member of the Committee to fill
the vacancy resulting from,the resignation of Mr . Wade, and extended
a hearty welcome to Mr . Durden as a new member of the Committee . Mr .
Kornegay also appointed Mr . James C . Bowling as Chairman of the
Communications Committee .
Mr . Edens moved, and it was unanimously passed, that The
Institute express to Charles Wade its appreciation for the long and
c
devoted service which he had rendered to the industry and to The
Institute wh :ch he hadserved in a number of capacities . It was
observed that Mr . Wade had made a most valuable contribution to the
work of the Institute substantially from its inceptiom, that he had
served as a key member or chairman of several Institute committees,
and that all were deeply grateful for his contribution .' The President
was directed to convey the sentiments of the group to Mr . Wade .
Mr . Kornegay said the next matter for consideration was O
the suggestion to change the time and place of what had been th e
Spring Meeting~, particularly since the time of the Annual Meeting ha d
r now been advanced to December . After discussion the staff was directe d
: ._ . to attempt to secure reservations for the Boca Raton Hotel and Club,
-5-
Boca Raton, Florida, for Wednesday, February 23, or Thursday, February
24, through February 26, 1977, or, if this could not be arranged,
reservations at Innisbrook, Tarpon Springs, Florida, for February 23
through February 26, 1977 .
It was pointed out that, pursuant to the recent amendment to
the By-Laws, the Annual Meeting is scheduled for the first Thursda y
in December, December 2, 1976 . Discussion revealed that this presented
a serious inconvenience for some members of the Board, and it was agreed :
that the meeting would be adjourned from December 2 to Thursday,
December 9, 1976 .
Mr . Millhiser rose to pay tribute to Edwin P . Finch, who
passed away July 15, 1976 . Thereupon, upon motion duly made and
RESOLVED, That The Tobacco Institute, its Board of
Directors and staff, expresses deep sorrow at the passing
of Edwin P . Finch, an outstanding executive and industry
statesman who served1with great ability and constant
devotion as an Institute leader as Chairman of the
Executive Committee and as a long-time member of the
Institute Board of Directors ; an d
FURTHER RESOLVED, That all who had the good fortune
to know Ed Finch will miss his quiet wisdom and warm
companionship .
The meeting then rose in silent prayer to the memory of F1r . Finch,
who had been so esteemed a friend and so valuable a champion of the
industry . The President was requested to send a copy of the resolu-
tion to Mrs . Finch .

Mr . Kornegay stated that, before the close of the meeting,
he wished, on behalf of the staff and all the members, to express
their happiness at seeing Mr . Judge back on the job after his recent
C
Illness .
There being no further business, and without objection, th e
meeting was thereupon adjourned .
/S/ Stanley L . Temk o
Acting Secretary
t
TIHE TOBACCO INSTITUTE, INC .
MINUTES OF TIIIC' FIF''Y-EIGIITH MEETIiVG OF
THE EXECUTIVE COMMfl]TTEE
-~t-
The Fifty-eighth meeting of the Executive Committee of The
Tobacco Institute, Inc . was held at Loews L'Enfant Plaza in Washington, D .C .
on April 11, 1975 at 9 :30 A .M .
The followin- members of the Executive Committee were present :

Joseph E . Eden s
William D . Hobbs
Cha.rles I . McCarty
Ross R . Millhiser
Arthur E . Sloat
There were also present Messrs . DeBaun Bryant andErnest Pepples
of Brown & Williamson Industries, Inc . ; Joseph H . Greer and' Frederick P . Haas
of Liggett & Myers Incorporated ; Arthur J . Stevens of Lorillard, A Diivision
of Loew's Theatres, Inc . ; Thomas F . Ahrensfeld, James C . Bowling and Alexander
Holtzman of Philip Morris Incorporated ; Hi. C . Roemer and Charles B . Wade, Jr .
of R . J . Reynolds Industries, Inc . ; Ralph L . Rbssi of Unitea States Tobacco
Company ; William W . Shinn of Shook, Hardy and Bacon ; Horace R . Kornegay,
President of The Institute, Earle C . Clements, Constance Drath, FrankliniB .
Dryden, Anne H . Duffin, WilliamDtayer, J .C .B . Ehringhaus, Jr,, Donna Hilderley,
William Kloepfer, Jr ., Phyllis M . McGovern, Jack Mills, Frederick Panzer and
George Yenowine of The Institute ; and H . Thomas Austern, Herbert Dym an d
Robert Sussn:an, of counsel to The Institute .

-2-
Mr . Kornegay presided at the meeting and Mrs . Hilderley acted
President Kornegay reviewed the discussions of the Committee
meetings of March 13 and March 26 which led to the assignm.ent of the
Institute staffto consider various materials presented on the latter
date andto develop recommendations for presentation to the Committee at
this special meeting .
Mr . Kornegay then called on Mr . Kloepfer who outlined the two
staff recommendations : 1) Small-scale regional publication, with
follow-up research, of two media messages on the history and importance
of tobacco in America ; and 2) "'spot" local market insertions of a
series of messages on the nonsmoker issue, with informal follow-up study
of public reaction . The various messages were summarized',, and this was c
followed by a. discussion of the markets in which the advertisements might
be run . Mr . Kloepfer then presented details on cost of both campaign s
as outlined .
After extensive d~iscussion, Mr . Hobbs moved that the staff
recommendations be accepted, with the provision that the type of
professional research proposed for the magazine advertising,be conducted
in the same manner for the newspaper advertising to assure comparative,
quantitative information on the public reaction to them both . The staff
was further instructed! to report the results to the Executive Committee
at the earliest possible date .
t-
-3-
The motion was seconded by Mr . Sloat, and the vote was taken .
Six members of the Executive Gommittee voted in the affirmative, and one
member abstained from voting . Therefore,, the motion was carried' .
There being no further business, the meeting was thereupon
adjourned .
Acting Secretary
MINUTES OF THE FIFTY-SEVENTH MEETING

OF
THE EXECUTIVE COMMITTE E
The Fifty--seventh Meeting of the Executive Committee of
The Tobacco Institute, Inc .', was heldat The Drake Hotel in New York
City on March 26, 197,5, at 2 :30 P .M .
The following members of the Executive Committee wer e
present :

Joseph~E . Eden s
W . Brooks George
William D . Hobbs
Charles I . McCarty
Ross R . Millhiser
Arthur E . Sloat
Colin Stoke s
Brown & Williamson Industries, Inc . ; Joseph Greer of Liggett & Myers
Incorporated ; Arthur J . Stevens of Lorillard, A Division of Loews
Corporation ; Thomas F . Ahrensfeld, James C . Bowling and Alexander
Holtzman of Philip iYiorris Incorporated ; H . C . Roemer and Charles B .
Wade, Jr ., of R. J . Reynolds Industries, Inc . ; Ralph L . Rossi of
United States Tobacco Company ; David R . Hardy and William W . Shinn
of Shook, Hardy & Bac= ; Horace R . Kornegay, President of The Institute,
Anne H . Duffin, J .C .B . Ehringhaus, Jr ., Kathryn R . Golden and William ~11
Kloepfer, Jr ., of The Institute ; and H . Thomas Austern and Stanley L .
Temko, of-counsel to The Institute .

Mr . Kornegay presided at the meeting and Mr . Temko acted as
Secretary and recorded the minutes .
Mr. . Kornegay opened the meeting with a summary of various
Congressional measures of interest to the group, including the current
status of tax legislation and of various amendments offeredby Senator
Moss to the agricultural authorizati=legiislation~ .
The President then called on Mr . Austern, who reported on
developments with respect to the Federal Trade Commission investigation
since the March 13, 1975 meeting of the Executive Committee .
Mr . Kloepfer summarized the discussion at the March 13
meeting of the Executive Committee relating to the development of media
messages that would put the rights of smokers and non-smokers in proper
perspective . He stated that, in preparation~for the current meeting,
several examples of possible media,messages had been prepared . Mr .
Kloepfer called upon Warren Donahue of Intermedia, Inc ., assisted by
Dr . Appel and~Mr . Stolting of A .H .F . Marketing Research, to present a
group of suggestions . Mr . Hobbs and Mr . Judge then presented preliminar y
illustrations of possible campaigns, including both possible media :
messages and the use of related materiais . After discussion, th e
Committee directed the Institute staff to review the various material s
considered during the meeting and to develop recommendations for

~
presentation to the Executive Committee . The next meeting of th e
Executive Committee, to consider the staff'recommendations, was called

O
for Friday, April 11, 1975, at 9 :30~A . M . in Washingtoni, D . C .
There being no further business, the meeting was thereupo n
ad,j ourned .
Acting Secretary
/
. r

i
MINUTES OF THE FIFTY-SIXTH MEETING

OF
THE EXECUTIVE COMMITTE E
The Fifty-sixth Meeting of the Executive Committee of
The Tobacco Institute, Inc ., was held at the Loew's L'Enfant Plaza,
in Washington, D . C ., on March 13, 1975, at 9 :30 A .M .
The'following members of the Executive Committee wer e
present :

Cj Joseph E . Eden s
W . Brooks George
William D . Hobbs
Charles I . McCarty
Colin Stoke s
Brown & Williamson Tobacco Corporation ; Joseph Greer and Frederick P .
Haas of Liggett Group ; Arthur J . Stevens of Lorillard, A Division of
Loews CorporaLion ; James C . Bowling and Alexander Holtzman of Philip
Morris Incorporated ; H . C . Roemer and Charles B . Wade, Jr ., of R . J .
Reynolds Industries, Inc . ; W . E . Springer of United!States Tobacco
Company ; David R . Hardy and'William W . Shinn of Shook, Hardy & Bacon ;
Horace R . Kornegay, President of The Institute ; Earle C . Clements,
Anne H . Duffin, William Dwyer, J .C .B .Ehringhaus, Jr ., Kathryn R .
Golden, Donna Hilderley, Marvin~A . Kastenbaum, William Kloepfer, Jr

J
0
., Go
-2- .,
John F . Mills, Roger L . Mozingo, Frederick Panzer and George H .
Yenowine of The Institute ; and H . Thomas Austern and Stanley L .
It was stated that copies of the minutes of the Fifty-fifth
Meeting of the Fxecutive Committee, held December 5, 1974, in~New
York, New York, had~been sent to each~member of the Committee . There
being no additions or corrections, the reading of the minutes wa s
dispensed with .
Mr . Kornegay reported on developments since the January
meeting of the Board of Directors . He referred to proposals relating
to tobacco which had been introduced in the Congress, and various other
bills which reportedly might be introduced .
The next area covered by the President was Public Relations

C
and Communications, including the activities of the two spokespersons
who had recently joined the Institute staff, a meeting with th e
Smithsonian representatives on progress to date in connection with
the project involving the construction and display of a scale model
of the tobacco ship Brilliant, work on a possible revision of the
Tobacco Institute film~on smoking and health, and the status of
various booklets in process . Mr . Kornegay also mentioned that Albert
Barr's resignation as a member of the Institute staff had been
accepted with deep regret, and that the Institute had~been fortunate
in securing the services as the new Institute publications director
of George Yenowine, who was introduced to the meeting .
The President reviewed the situation relating to the National
Cancer Advisory Board's .activities on smoking and health, and reported

ti
-3-
I
that the Institute was preparing a full comment on the scientific
questions involved .
Mr . Kornegay reported to the group on the recent JAMA
editorial on smoking and health, the response which it had elicited
from~various Congressmen, and the discussions between the Institute
and the JAMA staff on the pubZicati=of a response from the
Institute . He mentioned that Dr . Kastenbaum was scheduled to address
the American Statistical Association, and that the Third World
Conference on Smoking and Health was scheduled from June 2 to June 5
in New York City .
Mr . Kornegay then turned to the area of state activities .
After briefly describing the extremely well organizedantj-smoking
activities now being seen in an increasing number of states and local
areas, Mr . Kornegay called on Mr . Ehringhaus to report in greater
detail . Mr . Ehringhaus described the various types of anti-smoking
legislation which were being advanced in state and local jurisdictions
and summarized the status of bills in some states . He*reported on
the strength of anti-smoking groups and, in particular, their current
focus on efforts to outlaw smoking in various buildings or localities .
Mr . Kloepfer then elaborated on the activities of anti-
smoking groups, and presented various recommendations for augmentin g
and further coordinating Institute public relations and state activities ~
work . In particular, it was suggested that the group consider the
development of media messages which would put the rights of smokers

C11
and non-smokers in proper perspective . After discussion,
. it wa~
s .
t
♦
-4- .}
decided that a meeting of the Executive Committee be called for
Wednesday, March~26, 1975, at 2 :30 P .M . in New York City further to C

consider this area .
Chairman Judge reported to the group =the status of
American Brands and the decision of that company to make a substantial
contribution to the Institute activities, although it was no t
prepared to rejoin the Institute as a member at the present time .
At the request of the President, Mr . Temko discussed the
pending cases involving Consumer Product Safety Commission juris-
diction~over tobacco products .
Mr . Kornegay then initiated discussion~of the current
Federal Trade Commission compliance investigation . After summarizing
the status of the matter, he called upon~Mr . Austern, who reported on
the various negotiations which Mr . Kornegay and he had'conducted with
the Commission staff and the written presentations which had been
developed in conjunction with the Committee of Counsel . Mr . Austern
said that the statement presenting the positi=of the six major
cigarette manufacturers, designed to accompany the FTC staff report
and recommendations, would be submitted to the Commission staff by
the end of the week .
Chairman Judge, in commenting briefly on the FTC matter,
encouraged the members to read the statement, expressing his view
that it was a masterful work on which Messrs . Kornegay and Austern
and the Committee of Counsel deserved the congratulations of the
group •
The President then reported that there was some difficulty
with the date of September 11, 1975, for an Executive Committee

41
meeting and, after discussion~, the meeting date was changed to

!
Thursday, September 25, 1975 .
adjourned .
Acting Secretary
MINUTES OF THE FIFTY-THIRD MEETING OF

THE EXECUTIVE COMMITTEE
The Fifty-Third Meeting of the Executive Committee of
The Tobacco Institute, Inc ., was held at 10 :00 A .Mi ., on July 25,
1974, at The Regency Hotel, Now York City .
The following members of the-Executive Committee wer e
present :
Messrs . William S . Smith, Chairman

J . M . Arledg e
Joseph E . Eden s
W . Brooks George
Ross R . Millhiser
Colin Stoke s
Williamson Tobacco Corporation ; Joseph Greer and Frederick P . Haas of
Liggett & Myers Incorporated ; Lester Pollack of Loews Corporation ;
Arthur J . Stevens of Lorillard, A Division of Loews Corporation ;
Thomas F . Ahrensfeld, James C . Bowling and Alexander Holtzman of
Philip Morris Incorporated ; H . C . Roemer and Charles B . Wade, Jr ., of
R . J . Reynolds Industries, Inc . ; Ralph Rossi and W . E . Sprimger of
United States Tobacco Company ; David R . Hardy andDonald K . Hoel of
Shook, Hardy & Bacon ; Abe Krash of Arnold & Porter; Martin Ryan Haley
of Martin Ryan Haley & Associates ; Horace R . Kornegay, President o f
The Institute ; Earle C . Clements, Franklin B . Dryden, J .C .B .Ehringhaus, Jr .,

Kathryn~R . Golden, Marvin A . Kastenbaum, William Kloepfer, Jr ., and
John F . Mills of The Institute ; and Stanley L . Temko, of counsel to
The Institute .
It was stated that copies of the minutes of the Fifty-Second
Meeting of the Executive Committee, held March 14, 1974 in Washington,
D .C ., had been sent to each member of the Committee . There being no
additions or corrections, the reading of the minutes was dispensed with .
President Kornegay reported on pending Federal legislation
and the activities of various Governmental agencies . He summarize
h dthelgisavuonwthrepc masutobli
an agency for consumer protection and referred to the transmittal to
the Congress of the 1974 Report from the Department of Health,
Education and Welfare on the Health Consequences of Smoking, and the
legislative recommendation in the accompanying letter fromiSecretary
Weinberger .
Mr . Kornegay also reported on developments in the current
investigation by the Federal Trade Commission Compliance Division
of cigarette advertising and on the filing of a petition by a group
of furniture manufacturers associations with the Consumer Products
Safety Commission seeking a ban on cigarettes that did not self-
extinguish within a designated period of time .
Mr . Kornegay stated that there had been three recent invita-
tions to participate in radio and television discussions relating to
smoking, and that all three had been accepted, with~Mr . Kleopfer
appearing on two television programs and Mr . Springer of United States

t
-3-
Tobacco Company participating in the third program . The President
then called on Mr . Dryden, who reported on the energy and fuel
situationi .
Mr . Roemer, as chairmanlof the Committee of Counsel, stated
that Mr . Kornegay had!covered the matters on which he would have
reported and stated that the Committee of Counsel was keeping abreas t
of the various agency developments and that the Committee would meet
in the near future .
Chairman Wade of the Communications Committee stated that
there was nothing significant to :report for that Committee .
Mr . Kornegay then introdt .iced the presentation of the .
Institute's proposed program for state activities . He first calle d
upon Mr . Martin Ryan Haley, who summarized the conclusions of his
review of the various state relations activities carried on by the
industry, the significant type of changes which have occurred in stat e
legislatures, and the increasing number of issues which are being
considered by these bodies . Mr . Ha1ey then outlined his suggEstions
for improving,the state relations programs of the Institute and of
its members .
Following Mr . Haley's presentation, President Kornegay
stated that the Institute staff had developed various proposals
responsive to the recommendations of Mr . Haley and that Mr . Ehringhaus
and Mr . Kloepfer woul&summarize the proposals as currently developed .
Mr . Ehringhaus directed his attention principally to plans
for a modest but effective organization of field representatives .
He stated that the Institute proposed to employ and place in the field ,
~
hopefully by January 1, 1976, six area representatives . He indicated
that the Institute's present plans called for two of .these Institute
representatives to be in the field~before the end of 1974 . There
ensued a general discussion of the program, including its adequacy
and its expected cost .
Mr . Kloepfer then discussed the communications aspects of
the Institute program for improved and expanded state activities . He
suggested that the Institute should become an expanded source of
basic information about the cigarette industry and that it should
expand the number and type of its communications . He stated that work
was in progress on pamphlets and brochures dealing with a number of .
subjects, that consideration was being given to a reediting and
shortening of the Institute film relating to smoking and health, and
that the Institute planned to arrange professional tests of various
communications to determine their effectiveness .
General discussi=of the entire presentation then followed,
with questions being put to Mr . Haley and the other participants .
Messrs . Cullman, Edens, Smith, Rossi and George stated that they were
in general agreement with the viewpoints expressed by Mr . Haley and
with the program outlined by the Institute staff . Mr . Haas stated
that he and his associates desired to consider the proposals further,
and that he would communicate the views of his organization to Mr .
Kornegay as promptly as possible . Mr . Pollack stated that Mr . Judge
had unfortunately been unable to attend :the meeting and that he
desired to discuss the matter with Mr . Judge and his other
associates, and would then be in touch with President Kornegay .

It was suggested by Mr . Edens that the Institute staff
should~proceed to refine its program in more detail and particularly
to evaluate its impact on the 1975 and 1976 budgeteof the Institute .
In addition, at the Committee's suggestion, Mr . Kornegay stated that he
would immediately proceed to set up a meeting with~the Tobacco Tax
Council to organize a group, probably to be called the Joint Liaison
Committee, that would facilitate the coordination of state relations
activities of the Institute and the Tobacco Ta.x Council .
There then followed, under Other Business, a discussion
of the proper age for adult sampling under the Cigarette Advertising
Code, and a:discussion of the activities of the Tobacco Working Group
of the Department of Health, Education & Welfare .
adjourned .
/s/ Stanley L . Temko

Acting Secretary
L
I
~** *
MINUTES OF THE'FIFTY-SECOND MEETING

OFTHE EXECUTIVE'COMMITTE E
The Fifty-Second meeting of the Executive Committee of The
Tobacco Institute, Inc ., was held at 10 :25 A .M . on March 14, 1974, at
Loew's L'Enfant Plaza, Washington, D . C .
The following members of the Executive Committee were present :
Messrs . Edwin P . Finch, Vice Chairman

J . M . Arledg e
Joseph E . Edens
W . Brooks George
Curtis H: . Judge
Ross R . MilLhiser
Colin Stoke s
There were also present Messrs . Cyril F . Hetsko of American Brands,
Inc . ; DeBaun Bryant of Brown & Williamson Tobacco Corporation ; Joseph Greer
of Liggett & Myers Incorporated ; Arthur J . Stevens of Lorillard, A Division
of Loews Corporation ; Thomas F . Ahrensfeid~, James C . Bowling and Alexander
Holtzma.n of Philip :Morris Incorporated ; H . C . Roemer and Charles B . Wade, Jr .,
of R . J . Reynolds Industries, Inc . ; W . E . Springer of United States Tobacco
Company ; Abe Krash of Arnold & Porter ; David R . Hardy and~William W . Shinn
of Shook, Hardy & Bacon ; Horace R . Kornegay, President of The Institute ;
Earle C . Clements, Franklin B . Dryden, Anne H . Duffin, J . C . B . Ehringhaus,
Jr ., Kathryn R . Golden, Donna Hilderley, Marvin A . Kastenbaum ,
William Kloepfer, Jr ., John F'. Mills, Frederick Panzer,

-2-
Frank L . Sundstrom and Frank J . Welch of The Institute ; andStanley L .
In the absence of the Chairman because of illness, Vice
Chairman Finch presided at the meeting and Mr . Temko acted as Secretary
and recorded the minutes .
It was stated that copies of the minutes of the Fifty-First
Meeting of the Executive Committee, held November 29, 1973, at the Drake
Hotel in New York City, had been sent to each member of the Committee .
There being no additions or corrections, the reading of the minutes was
dispensed with .
President Kornegay reportedon developments since the January
meetings of The Institute . After summarizing the status of various
legislative proposals in the Congress, Mr . Kornegay briefly reviewed
federal agency developments . He reported on the petition filed with the
Consumer Product Safety Commission by Senator Moss and the American Public
Health Association and on the petition filed with the Federal Trade
Commission~seeking the banning of billboardadvertising of cigarettes .
The President also reviewed generally anti-smoking proposals in the states
and in local government units . InIthe discussion of state activities ,
Mr . Kornegay emphasized the increased number of proposals based on claimed
personal discomfort of non-smokers and the continuing efforts to prohibit
smoking in various classifications of buildings . Mr . Ehringhaus briefly
elaborated on the present situation in various states . At the request of
the President, Mr . Temko reported on the status of the proceeding befor e
the Interstate Commerce Commission dealing with the regulation of smoking

-3-
,
on interstate buses .
In the absence of Chairman Smith there was no report of the
Executive Committee . Mr . Finch openeda brief discussion of industry
research projects . In the discussion it was confirmed that there would
be an on-site review of the Harvard University project on May 30, 1974 .
Mr . Roemer mentioned the guidelines promulgated by the Tele-
vision Code Review Board governing the advertising on television of
such foods as vegetable oils and margarines, including the referenc e
in the guidelines to cigarette smoking . Mr . Roemer said the matter
would be considered by the Committee of Counsel .
Mr . Judge rose to note that this would be the last meeting
which~Mr . Finch would attendin his official capacity . He proposed
the following resolution, which was approved by a rising ovation to
Mr . Finch :
RESOLVED, That the Executive Committee

of The Tobacco Institute, for itself and al l
of the members of the Institute and the Institute
staff conveys its highest,and most sincere
expression of gratitude, affection and estee m
to Edwin Perkins Finch upon his retirement from
active participation in the activities of The
Tobacco Institute after more than a decade of
faithful and fruitful service .
FURTHER RESOLVED, That all those who

served with Ed Finch in the work of The Institute
appreciate his continuing contributions to The
Institute and to the industry, his leadership and
resourcefulness, and his distinguishedservice over
the years, including his significant achievements
as Chairman of The Institute's Executive Committee
and his ten years of service on the Board of
Directors .
FURTHER RESOLVED, That we extend our kindest

and most personal regards and best wishes that the
years ahead provide leisurely, healthy and happy
days for this most respected gentleman ; that we
IV
-4-
extend our sincere congratulations on his out-

standing career, and make abundantly clear to
him that we look forward with utmost pleasure
to our continuing personal association with him .
Mr . Finch, responding briefly, expressed his appreciation
of the sentiments expressed by his fellows, and stated he would miss
greatly his associations with the group . He emphasized his enjoyment
of participating in Institute activities over the years, and his hope
that through the unified work of its members The Institute woul d
continue to be an important factor in protecting and advancing the
interests of the industry . President Kornegay, on behalf of th e
staff, stated that Mr . Finch had been a great strength to The Institute,
had made monumental contributions to The Institute's work and the
industry, and~expressed the wish of everyone for continued happiness
for Mr . Finch and his charming wife .
ad3ourned .
/s/ Stanley L . Temko ~

Acting Secretary
Minutes '
Annual Meeting
0002f O5792
MINUTES OF THE NINEFEEr]'IH! ANNUAL, MEETTING

OF THE MEMBERS OF THE TCBACCO INSTITUTE, INC .
The Nineteenth~Annual Meeting of the Members of The
Tobacco Institute, Inc ., was held at the Warwick Hotel in the City
of New York, State of New York, on December 9, 1976 at 10 :00 A .M .
The follaaing mernbers were represented by the person s
indicated :
Brown 9 Williamson Tobacco Corporation

Joseph~ E . Edens
Charles I . McCarty
DeBaun Bryant
The Bloch Brothers Tobacco Company

Stuart F . B]loch
G . A . Georgopulo & Company, Inc .

G . B. Georgopul o
Larus & Brother Company, Inc .

W. Brooks George
Liggett & Myers Tobacco Company, Inc .

Joseph~ Greer
Lpri:lla.rd, A Division of Loews Theatres, Inc

. Tisch .PrestonR
Arthur J . Stevens
Philip Morris Incorporated~

F,oss R . Millhiser Gt
Thomas F . Ahrensfeld

Colin Stoke s
William~ D . Hobbs

Louis F . Bantle
-2-
There were also present Messrs . B . D . CumLins and Ernest Pepples of
Brown 6 Williamson Tobacco Corporation ; James C . Bowling and Alexander
Holtzman of Philip Morris Incorporated ; Max H . Crohn, Jr ., C . Dennis
Ihmden, James R . Peterson and H . C . Roemer of R . J . Reynolds Tobacco
Canpany ; James Chapin and Ralph Rossi of United States Tobacco Company ;
Marlow W . Cook and David Henderson of Cook and Henderson ; Donald Hbel
and William W . Shinn of Shook, Hardy & Bacon ; Will'iam~A . 0'Flaherty of
Tobacco Tax Council ; Horace R . Kornegay, President of The Institute ;
Kathryn R . Golden, Secretary of The Institute; Earle C . Clements,
Franklin B . Dryden, Anne H . Duffin, J .C .B . Ehringhaus, Jr ., William H.
Hecht, Donna Hilderley, Marvin A . Kastenbaum, William Kloepfer, Jr .,
John F . Mills, Frederick Panzer and',Charles L . Waite, M .D., of The
Institute ; and Stanley L . Temko, of counsel to The Institute .
Mr . Kornegay acted~ as Chairman of the meeting and Mrs . Golden

C
The meeting was called to order and the Secretary notedithat
official notice of the meeting had been mailed to all members of The
Institute on October 15, 1976 with a superseding notice mailed on
October 29, 1976 . Mrs . Golden announced the presence of a quorum, with
nine of the eleven member amE)a ies represented .
Mr . Kornegay stated that copies of the Minutes of the
Eighteenth Annual Meeting, held January 29, 19761, in New York City, had
been mailed~to all members . There being no additions or corrections,
and without objection, the reading of the minutes was dispensed with~and
the mnnutes were approved .
At Mr . Kornegay's request Mr . Temko sumnarized the contents
of the annual report required by Section 519 of the Not-For-Profit e

r--*r
r . F
-3-
Corporation Law . He stated that copies of the report, withcopie s

C of the 1976 Balance Sheet and Statement of Receipts and Disbursements
prepared by the Institute's auditors, Coopers & Lybrand',, would be
mailed to each member .
The Chairman then stated that the next order of business was
the consideration of the proposed amendments to the By-Laws of the
Institute, as set forth in the memorandum and notice of October 29, 197 6
sent to the members of the Board . The first proposed amendment wo l d
permit a parent c ar=ration of a subsidiary which is a member of the
Institute to hold formal membership in the Institute and the second
amendment changes the date of the annu .sl meeting of the members from
the first Thursday in December at 10 A .M. to the second Thursday
in December at 10A .M . each year . Thereupon, upon motion duly made
k and seconded, it was unanimously
RESOLVID, That the By-Laws of the Institute be, and hereby
are, amended by amending Article II to read as follows :
"Article I I
Membership
Section 1 . Any person, firm~or corporation engaged in
the business of manufactuming and marketing of cigarettes,
smoking tobacco, chewing tobacco or snuff shall be eligible
to become a member of the Institute upon such terms and
conditions as are prescribed herein . A corporation~which
is not engaged in such business but which owns all or
substantially all of the outstanding stock of a corporation
which is so engaged and~whi,ch is a member shall also be
eligible for membership as a "parent corporation member"
subject to the additional terms and conditions applicable to

- 4-
such~members as provided for in~Section 2 of this Article and
elsewhere herein .
Section 2 . A parent corporation and the member of whic h
it is the parent shall be treated as a single member jointly
entitled to one vote on all matters including the election
of directors .
Section 3 . Any person, firm or corporation eligible
for membership shall present to the President a written~
application, which application shall contain an agreement
signed by the applicant to the effect that said applicant,
if elected to membership, will fulfill and perform all of
the obligations and requirements contained in the By-Law s
of the Institute and any amendments which may be made
thereto . Such application shall state the basis for the
eligibility of the applicant .

c
Section 4 . Upon receipt of any application for
membership the Secretary shall present such application for
determination of the applicant's eligibility by vote at the
next regular meeting of the Board of Directors . The determi-
nation of the applicant's eligibility, which shall be based
upon the definition of eligibility contained herein~to be
applied on a uniform basis, and the effective date of such
member's election, shall be determined by a majority vot e
of all the directors at the time being of the Institute . If
the vote is favorable, the Institute shall notify the appli-
cant that the application~has been approved .

~. r
Section 5 . Membership in the Institute may be termi-
nated by resignation or as otherwise provided in thes e
By-Laws . All rights of membership shall cease upon terminatio n
of membership, but a member shall thereafter remain liabl e
for dues and assessments to the extent provided in Articl e
III . Any m°mmp may, by giving written notice of suc h
intentionto the Board of Directors, with3raw frcm member-
ship effective upon receipt of such notice or at any later
time specified therein . A parent corporation member shall
be terminated as a member at the same time the membership
of the corporation of which it is the parent is terminated
for any reason .
Section 6 . Any member who shall fail to pay his dues
and assessments within 30 days after the same become due
shall be notified in writing by the Treasurer of the Insti-
tute . If payment is not made within 30 days after receipt
of such notificationof nonpayment, the Secretary shall
report such nonpayment to the Board of Directors . The Board
of Directors may, without further notice and hearing, expel
suchmember from membership . Such a member shall forfeit
all rights and privileges of membership without prejudice
to the right of the Institute to collect frorn him all his
financial obligations .
Section 7 . The members who as of the date of any
election of directors would be subject to assessment for
Additional Dues, as provided in Section 1 of Article III
of these By-Laws (whether or not any such assessment is

-6-
actually made), shall as a grroup~constitute a separate
membership class (the "Class A Members") for the purpose of

(
electing directors . The Class A members, together with their
parent corporation members, shall be entitled to elect twice
the number of directors as there are Class A members . The
members not subject to such assessment other than parent
corporation members shall as a group constitute a separat e
membership class (the "Class B members") for the purpose of
electing directors . The Class B members, together with their
parent corporation members, shall be entitled taelect the
same number of directors as there are Class Bmembers ."
FUR'IHER RESOLVED, That the By-Laws of the Institute be, an d
hereby are, amended by amending Article IV to read as follows :
nARTICLE I V
Meetings of Member s c
Section 1 . The annual meeting of the members for the
election of directors and for the transaction of such other
business as may properly come before such meeting shall b e
held at 10 :00 a .m . on~the second Thursday in December each
year befinning with the year 1977, or if that day shall be
a legal holiday, then on the next succeeding business day ."
Mr . Kornegay then announced that the next order of busines s
was the election of Directors to serve until the next Annual Meeting
of the Members . Thereupon, upon motion duly made andseconded, the
following Directors were elected or reelected to serve until the
next annual meeting of the Members or until their successors shall
e
-7-
have been duly elected andqualified:
Louis F . Bantle
Stuart F . Bloch
Timothy M . Cornell
Joseph F . Cullman 3rd
Joseph E . Edens
W . Brooks George
G . B . Georgopulo
William D . I-Yobbs
Curtis H . Judge
Charles I . McCarty
Ross R'. Millhiser
W . D. Rosson
Arthur E. Sloat
Colin Stokes
Preston R . Tisch
There being no further business, the meeting was adjourned
and the President thereupon called the Thirty-eighth Meeting of the
Board of Directors of The Institute .
Secretary
a :•: .,~
Corrected 8/10/76
15
MINUTES OF THE EIGHTEENTH'ANNUAL MEETIN G

OF THE MEMBERS OF THE TOBACCO INSTITUTE, INC .
The Eighteenth Annual Meeting of the Members of The Tobacco
Institute, Inc ., was held at the Hotel Regency in the City of New
York, State of New York, on January 29, 1976, at 10 :30 A .M .
The following members were represented by the persons indicated :
Brown & Williamson Tobacco Corporatio n

Joseph E . Eden s
G . A . Georgopulo & Company, Inc .

George B . Georgopul o
c Larus & Brother Company, T/A House of Edgeworth

W . Brooks Georg e
Liggett & Myers Tobacco Company, Inc .

Raymond Mulliga n
Arthur E . Sloat
Robert A . Rechholt z

Curtis H . Judg e
Arthur J . Steven s
Philip Morris Incorporate d

Joseph F . Cullman 3rd
Ross R . Millhiser

Charles B . Wade, Jr .
H . C . Roeme r

Thomas O'Grady
-2-
There were also present Messrs . DeBaun Bryant, Ernest Pepples and B .D .
Cummins of Brown & 4lilliamson Tobacco Corporation, Inc ., Joscph Greer
of Liggett & Myers Tobacco Company, Inc . ; James C . Bowl ing and Ater.ander
Holtzman of Phiilip Morris Incorporatcd ; Wi,lliam W . Shinn of Shook, Hardy
& Bacon ; Horace R . Kornegay, President of The Institute, Kathryn R .
Golden, Secretary of The Institute ; Earle C . Clemenits, Franklin B . Dryden,
J . C . B . Ehringhaus, Jr ., Donna Hilderley, William Kloepfer, Jr ., and
John F . Mills of The Institute ; and Richard F . Brady and Stanley L . Temko,
of counsel to The Institute .
Mr . Kornegay acted as Chairman of the meeting and Mrs . Golden acted
as secretary and recorded the minutes .
The meeting was called to order and~the Secretary noted that official
notice of the meeting had been mai'led to all members of The Institut e
on January 2, 1976 . Mrs . Golden announced the presence of a quorum,
with eight of the eleven member companies represented .

c
Mr . Kornegay stated that the Minutes of the Seventeenth Annual
Meeting, hel'd~ January 30, 1975, in New York City, had been mailed to
all members . There being no add'itions or corrections, and without
objection, the reading of the minutes was dispensed with and the
minutes were approved .
At Mr . Kornegay's request Mr . Temko summari'zed the contents o f
the annual report required by Section 519 of the Not-For-Profit Corpora--e•
tiorn Law . He stated that copies of the report would be mailed t o
each member
. U 1
M'&
e
. ► „ --,k. 1
-3-
s
The Chairman then stated that the next order of business wa s
the election of Directors to serve until the next Annual Meeting of
Members . Thereupon, upon motion duly made and seconded, the followin .g
Directors were elected or reelected to serve until the next annual
meeting of the Members or until their successors shall have been duly
elected and qualified ::
Louis F . Bantle
Stuart F . Bloch
Timothy Cornell
Joseph F . Cullman 3r d
Joseph E . Edens
W . Brooks George
• G . B . Georgopul o
William D . Hobbs
Curtis H . Judge
Charles I . McCarty
Ross R . Millhiser
W . M . Rosson
. Sloa
:ArthuE t
Colin Stokes
There being no further business, the meeting was adjourned an d
the President thereupon called the Thirty-sixth Meeting of the Board of
Directors of The Institute .
i
' J
MINUTES OF THE SEVENTEENTH ANNUAL MEETING

OF THE MEMBERS OF THE TOBACCO INSTITUTE, INC .
The Seventeenth Annual Meeting of the Members of The Tobacco
Institute, Inc ., was held at the Hotel Regency in the City of New
York, State of New York, on January 30, 1975, at 10 :30 A .M .
Brown & Williamson Tobacco Corporatio n

(Joseph E . Edens )
Larus & Brother Company, T/A House of Edgeworth

(W . Brooks George )
Liggett & Myers Tobacco Company

(Robert A . Rechholtz )
Lori~llard, A Division of Loews Corporation

(Preston Robert Ti.sch )
C Philip Morris Incorporated
(Joseph F . Culima.n, 3rd )

(William D . Hobbs) .

(W . E . Springer )
There were also present Messrs . DeBaun~Bryant, Charles I . McCarty an
; Joseph Greer,
dErnestPplofBw&WiamsnTobcCrpti
Frederick P . Haas and James Scott Hill of Liggett Group ; Lester Pollac k
of Loews Corporation ; Curtis H . Judge and Arthur J . Stevens of Lorillard, 0

4
A Division of Loews Corporation ; Thomas F . Ahrensfeld, James C . Bowling,
Alexander Holtzman and Ross R . Millhiser of Philip Morris Incorporated

; CA
H . C . Roemer, William S . Smith and Charles B . Wade, Jr ., of R . J . Reynold s
W
Industries, Inc . ; Marlow Cook, David R . Hardy and William W . Shinn of
Shook, Hardy & Bacon ; Horace R . Kornegay, President of The Institute ;

C . Gilbert Collingwood, Treasurer of The Institute ; Kathryn R . Golden,
Secretary of The Institute ; Earle C . Clements, Constance M . Drath,
Franklin:B . Dryden, Anne H . Duffin, William F . Dwyer, J .C .B . Ehringhaus,
Jr ., Donna:Hilderley, Marvin A . Kastenbaum, William~Kloepfer, Jr . ,
John F . Mills and~Frederick Panzer of The Institute ; and H . Thomas
Austern and Stanley L . Temko, of counsel to The Institute .
Mr . Kornegay acted as Chairman of the meeting and~Mrs . Golden
acted as secretary and recorded the Minutes .
The meeting was called to order and the Secretary notedthat
official notice of the meeting had been mailed to all members of the
Institute on January 5, 1975 . Mrs . Golden announced the presence of a
quorum, with seven of the twelve member companies represented .
Mr . Kornegay stated that the Minutes of the Sixteenth Annua l
Meeting, held January 31, 1971+, in New York City, had been mailed to
all members . There being no additions or corrections, and without

c
ob3ection, the reading of the minutes was dispensed with .
At Mr . Kornegay's request, Mr . Temko summarized the contents o f
the annual report required by Section 519-of the Not-For-Profit Corporation
Law . He stated that copies of the report would be mailed to each member .
The President then stated that the next order of business was
the election of Directors to serve until the next Annual Meeting of
the Members . Thereupon, upon motion duly made and seconded, the
followingDirectors were elected'or reelected to serve until the next
annual meeting of the Members or until their successors shall hav e
been duly elected and qualified :
tf-
-3-
Louis F . Bantle
Stuart F . Bloch~
Martin J . Condon, II I
Timothy Cornell
Joseph E . Eden s
W . Brooks George
G . B . Georgopulo
William D . H'obbs
Curtis H . Judge
Charles I . McCarty
Ross R . Millhiser
Arthur E . Sloat
Colin Stokes .
There being no further business, the meeting was adjourned and
the President thereupon called the Thirty-fourth Meeting of the Board
. 'ofDirectsThInu
MINUTES OF THE SIXTEENTH ANNUAL MEETIN G

OF THEt•iEMBERS OF THE TOBACCO INSTITUTE, INC .
The sixteenth Annual Meeting of the Members of The
Tobacco Institute, Inc ., was held at the Hotel Regency in the
City of New York, State of New York, on January 31, 1974, at
10 :30 A .M .
The following members were represented by the person s
indicated :
Brown & Williamson Tobacco Corporation

(E . P . Finch )
G . A . Georgopulo & Company

(G . B . Georgopulo )
Helme Products, Inc .

(James N . Gnall )
Larus & Brother Company, T/A House of Edgeworth

(W . Brooks George )
Liggett & Myers Incorporated

(Arthur E . Sloat )
Lorillard, A Division of Loews Corporation

(Preston Robert Tisc h

(Ross R . Millhiser )

(William S . Smith )
Scotten, Dillon Company

(Timothy Cornell )

(Ralph Rossi)
.*A F
-2-
Williamson Tobacco Corporation ; Joseph Greer, Frederick Haas and
David Welsh of Liggett & Myers Incorporated ; Curtis H . Judge, A . W .
Spears and Arthur J . Stevens of Lorillard, A Division of Loews
Corporation ; Lester Pollack of Loews Corporation ; Thomas F . Ahrensfeld,
James C . Bowling, C . Gilbert Collingwood and Alexander Holtzman of
Philip Morris Incorporated ; H . C . Roemer and Charles B . Wade, Jr ., of
R . J . Reynolds Industries, Inc . ; Ernest Summers of Scotten, Dillon
Company ; Thomas Pickett of United States Tobacco Company ; David R .
Hardy and William W . Shinn of Shook, Hardy & Bacon ; Jerome Chapma n
and Abe Krash of Arnold & Porter ; Horace R . Kornegay, President of
The Institute ; John J . Murphy, Treasurer of The Institute ; Kathryn R .
Golden, Secretary of The Institute ; Earle C . Clements, J .C .B .
Ehringhaus, Jr ., Donna Hilderley, Marvin A . Kastenbaum, William
Kloepfer, Jr ., and John F . Mills of The Institute ; and Stanley L .
Temko and,Richard L . Brady, of counsel to The Institute .
Mr . Kornegay acted as Chairman of the meeting and Mrs .
Golden acted as secretary and recorded the Minutes .
The meeting was called to order and the Secretary noted
that official notice of the meeting had been mailed to all members
of the Institute on January 11, 1974 . Mrs . Golden announced the
presence of a quorumy with ten of the twelve member companie s
represented .
Mr . Kornegay atated that the Minutes of the Fifteent
hAn ualMe ting,heldJanuary,25,1973,inNewYorkCity,hadbe nC

A
mailed to all members . There being no additions or corrections,
t
-3-
and without objection, the reading of the• minutes was dispense d
with .
At Mr . Kornegay's request, Mr . Temko summarized the
contents of the annual report required by Section 519 of the Not-For-
Profit Corporation Law . He stated that copies of the report would be
mailed to each member .
Mr . Temko also announced receipt of notice of termination
of the membership of The Bloch Brothers Tobacco Company with the
parent company, Helme Products, Inc ., alone retaining membership .
The President then stated that the next order of business
was the election of Directors to serve until the next Annual Meeting
of the Members . Thereupon, upon motion duly made and seconde&, the
following Directors were elected or reelected to serve until the next
annual meeting of the l"IeMbers or until their successors shall hav e
been duly elected and qualified :
J . M . Arledge
Louis F . Bantle
Timothy Cornell
Joseph E . Eden s
Edwin P . Finch
W . Brooks George
G . B . Georgopulo
Curtis 11 . Judge
Ross R . Millhise r
G . Jackson Ratcliffe
Arthur E . Sloat
William S . Smith
Colin Stokes
There being no further business, the meeting was adjourned

and the President thereupon called the Thirty-second Meeting of the
Board of Directors of The Institute .
Secretary
SPECIAL MEETING OF TIIS MEfJLBERSHI P
March 29, 197 3
A special meeting of the membership of The Tobacco Institute ,
Inc . was held at 10 :00 A .M . on March 29, 1973, in the-offices of the
Institute, 1776 K Street, N . W ., Washington, D . C .
The meeting was held pursuant to waiver of notice of the time ,
phace'and purpose of the meeting, executed'by each member of the Institute .
The BlochlBrothers Tobacco Co .

(Thomas M . Bloch )
Brown & Williamson Tobacco Corporation

(Edwin P . Finch )
Liggett & ltjers Incorporated

(Joseph Greer )
Lorillard, A Division of Loews Corporation

(Arthur J . Stevens )

(Joseph F . Cul7man, 3rd) •
R . J . Reynolds Industries, Inc .

(A . H . Gallowa.y )

(Louis F . Bantle )
Williamson Tobacco Corporation; Thomas F . Ahrensfeld, James C . Bowling, C c
Alexander Holtzman and Ross R . Mi]lhiser of Philip Morris Incorporated ;

H . C . Roemer, William S . Smith and Charles B . Wade, Jr ., of R . J .
, - .-
Reynolds Industries, Inc . ; David R . Hardy andWilliam Shinn o f
Shook, Hardy, Mitchell & Bacon; Horace R . Kornegay, President of the
Institute, Earle C . Clements, Franklin B . Dryden, J .C .B . Ehringhaus, Jr .,
Gilbert D . Huebner, Marvin A . Kastenbaum, William Kloepfer, Jr ., John F .
Mills, Frederick . Banzer, Frank L . Sundstrom and Frank J. Welch of the
Institute, Kathryn R . Golden, Secretary of the Institute ; and Stanley L .
Temko and David Ni . Brown, of counsel to the Institute .
Mr . Kornegay acted as Chairman of the meeting and Mrs . Golden
acted as Secretary and recorded the minutes . The Secretary announced
that_:e, quorum of the members was present . .
The proposed amendments to the By-Laws of the Institute, as
set forth in the memorandum of March 16, 1973, attached to the Notice
of Special Meeting of Board of Directors scheduled for March 29, 1973,
were then considered . After discussion, it was concluded that the
proposed amendments were in order except that it would be preferable
to provide that a quor=for the transaction of business by the
Executive Comunittee shall consist of seven members of the Executive
Committee instead of five as provided in the proposed amendments as
circulated . During the discussionit was noted that the proposed
amendment, which would increase the number of directors from those
compa,nies liable for the assessment of additional dues, would enable
added executives to participate and contribute in the work of the Board .
The discussion revealed a strong consensus that the chief executive officer
of the member companies or comparable executives, as reflected in the
current membership of the Board, should continue as members of the Board

and that, in those instances where a company might have two of its
officials serving on the Board, the second member customarily should
be the operating head of the tobacco subsidiary or division .
Thereupon, upon motion duly made and seconded, it was
unanimously
RESOLVED, That the By-Laws of the Institute be and they
are amended as follows :
Article II is amended by adding a new Section 5 to read

r
as follows :
"Section 5 . The members who as bf the date of any

election of directors would be subject to assessmen t
-for Additional Dues, as provided in Section 1 of Article III
of these By-Laws (whether or not any such assessment is
actually made), shall as a group constitute a separate
membership class (the "Class A members") for the purpos e
of electing directors . The Class A members shall be en-
titled to elect twice the number of direcLOi•s as therc
are Class A members . The members not subject to such
assessment shall as a group constitute a separate member-
ship class (the "Class B'members"') for the purpose of
electing directors : The class B members shall be entitled'
to elect the same number of directors as there are Class B
members . "
Section 2'of Article V is amended to read as follows :
"Section 2 . The Board of Directors sh all, subject to

the provision of paragraph 5 of the Certificate of Incorpo-
ration, consist of twice the number of directors as there
are Class A members of the Institute plus the same number
of directors as there are Class B members of the Institute .
Directors shall hold office until the annual meeting o f
the members next ensuing after their election, and .until their
respective successors are elected and shall have qualified .
Seven,directors shall constitute a quorum for the trans-
action of business, but if at any meeting of the Board there
shall be less than a quorum present, a majority of those
present may adjourn the meeting from time to time ."
Article VI is amended to read as follows :
"The Board of Directors, by resolution adopted by

a majority of the entire Board, may designate from
among its members an Executive Committee consist-
ing of threee or more directors, which to the extent
provided in such resolution shall have all the
authority of the Board except as otherwise required
by law . Vacancies in the Executive Committee may
be filled by the Board of Directors at any meeting
of the Board . The Executive Committee shaLl keep
regular minutes of its proceedings and report the
same to the Board of Directors when requested by the
Board . The Executive Committee shall, meet upon the
call of its Chairman or the President of the Insti-
tute . The presence of seven of the members of the .
Executive Committee shall constitute a quorum for
the transaction of business ."
President Kornegay suggested that it would be in order for th e
Class A members to elect additional directors pursuant to the newly
enacted Section 5 of Article II of the By-Laws .
Thereupon, upon motion duly made and sccor,ded, the fc"o :*~~
directors were elected by the Class A members to serve until the next
annual meeting of the members, or until their successors shall have
been duly elected and qualified:
Joseph E . Edens
Curtis H . Judge
Ross R . NIilihiser
Raymond Mulligan
William S . Smith
There being no fZrther business, the meeting was adjourned .
i
Secretary
Minutes
('~+s Committe e
C,pMrA1LtN, EN; L+wr''
Q1002f 05813
COMMi7NICATIONS COMMITTE E
C Minute s
Tuesday, January 18, 1972, at The Institute office :
Attending were Chairman Wade and members Blalock, Bowling,

Bresnahan, Hardy, Kloepfer and Pickett, and Copeland
Robinson, newly designated to represent Liggett & Myers
on the Committee . Also attending were Messrs . Shinn and
memJ:o of counsel, Mr . James Dowdell of R . J . Reynolds,
and Mrs . Duffin and Messrs . Kornegay andPanzer of The .
Institute staff .
1 . Minutes of the December 17, 1971 meeting were approved ..
2 . Mr . Warren.Donahue, of Intermedia, Inc ., an adver-

tising agency, presented his recommendations for an
institutional advertising campaign by "the Cigarette
Makers of America" on the subject of the smoking,-health
controversy, as requested by the Committee at its
December meeting .
All members of the Committee participated in discussion of'

the recommendations and it was the Committee's recommenda-
tion that the presentation should be made to the Executive
Committee on January 27 . Mr . Donahue provided a copy of
his proposal to each Committee member, to facilitate
internal company consideration prior to that date .
. It
~V
' arg CA4<n
COMri'IiJNICATIONS COMMITTE E
Minute s
Wamffl~esday, March 10, 1971, at the Institute office :
Attending were Chairman Wade and members Blalock,

Bowling, Bresnahan, Hardy,Pickett and Kloepfer . Also
present were Institute staff members Kornag .:V, Duffin,
Panzer, Barr, Huebner and Kastenbauri ; William~Shinn of
Shook, Hardy, Ottman, Mitchell & Bacon ; Alexander Holtzman
and Frank Saunders of Philip Morris ; and Robert Mayall of
Liggett & Myers, representing Mr . Provost .
1 . Minutes of the December 15, 1970, meeting were

approved as previously circulated .
2 . The Committee recommended that Mr . Temlco of

Covington & Burling and Mr . Harold'Brayman,
consultant to The Tobacco Institute, b e
C invited to a i: i:CiiC'i i 1-- s TucC c :ii lg ' .
3 . Mr . Kornegay and Dr . Huebner conducted a "dress

rehearsal" of their proposed briefing sessions
for media representatives throughout the country,
and invited comments . The Committee recom.~nended~
general changes in format and content . Chairman~
Wade askedeach member to send'specific comments
to Mr . Kornegay or Dr . Huebner promptly . Subject
to the necessary revisions, the first actual
presentation will be scheduled~in the immediate
future .
4 . The staff reported on a meeting heldat The Institute

by Mr . Kornegay on March 9 for 16 executives of tobacco-
related associations, to brief them on The Institute' s
public relations work . It was the consensus of the CO
executives that the staff would develcp methods of
participation in public relations activities by CA
members of the other associations . The Committe e
requested that it be kept informed of staff intentions
withirespect to this .
C
Y.
r'': , - .
.
-2-
C 5 . Mr . Kloepfer said he had tentatively decided to

"mothball" attempts to plac :e The Institute's broad-
cast material on the air in response to continued
anti-smoking broadcasting, in view of the nearly total
commitment by stations to the current FCC position .
The Committee recommended that The Institute notify
all broadcasters that it has such material available
for the asking, and that it develop an :interim method •
to be kept aware, on a random basis, of the nature and
content of anti-smoking broadcasting . Mr . Shinn and
Mr . Holtzman pointed out that under current FCC
policy, stations are required under the Fairness
Doctrine to provide time for contrasting ; points of
view on specific allegations about cigarette smoking,
as distinguished from generalized allegations . '
Depending on available information on~current anti-
smoking broadcasting content, The Institute may
attempt to prepare specific responses .
6 . The Committee urged the staff and legal counsel to

cooperate in the preparation•of a draft position
paper on the matter of moderation in various aspects
of ,11fe yncluding smGnirig . At the same t~ : :;e, thc
Committee did not feel it would be appropriate for
The Institute to take a :position on the matter of
smoker courtesy toward non-smokers, but it was
suggested that the staff couldgive further study
to this .
7 . The Committee discussed the possibility of providing

information on smoking and1health by means of leaflets
included~in cartons of cigarettes, and recommended
that this not be considered further .
8 . The Committee approved a staff suggestion to publish

The Institute's "research" advertisement of last
December in~newspapers in a state capital, with
reprints to be mailed to members of that state's
legislature, provided that such a mailing wer e
done by a spokesman for the tobacco industry
located within that state .
- 3-
C 9 . Mr . Kornegay was advised to reply negatively to a

proposal from the National Tobacco Festival at
Richmond for Institute financial support .
10 . The Committee recommended that the staff move ahead

with production of articles for weekly newspapers
in which Dr .'Huebner would comment on current
research reports on smoking and health, and that
additional distributioniof the articles be made to
the tobacco trade press and to member companies for
their employee publications .
11 . On the matter of communications with the medical

profession, Mr . Kornegay said that it is Dr .
Huebner's view that in the present environment
the response to Institute efforts is wholly nega-
tive, andthat such efforts further weaken the
industry's position . Dr . Huebner statedthat it
is not possible effectively to communicate with
physicians on a direct mail basis .
12 . Mr . Hardyrnoted that he has available detailed

analyses of the several HEW reports on smo ; .-ing
and health, with the exception of the 197 1
Surgeon General's report . He urged the
company public relations directors to obtain
these .
V
13 . The Committee agreed to meet next on Friday
afternoon, May 14, during the Spring Meeting of
The Institute at Hot Springs, Va .
Public Relations Committee
r
(p002f05818
Minutes -9
Committee on Legal Affairs
i
$002605819
II
Minut e s
Budget Committee
~ ----
600260582U
THE TOBACCO INSTITUPE, INC .
Increase
C 1976 1976 1977 (Decrease )
Approved Actual Approved 1977 Budget
Eudget Expenditures Budget Over 1976 Exme.nd .
ADMINIS"TRATION
Sal :aries :
Officer/Professional $ 961,000 $ 876,648 $ 989,00 0 $ 112,352
Secretarial/Clerical 180,593 173,958 225,00 0 51,04 2
Total Salaries 1,143,593 $1,050,606 1, 2$ 14,00 0 163,394
Trave1' Expenses 120,000 112,946 145,00 0 32,054
Local Conference, etc ., expenses 73,500 55,135 65,00 0 9,86 5
Pension Plan 244,195 190,106 214,00 0 23,894
Group Insurance 75,500 62,433 75,50 0 13,067
Total Administration ,6 6,788 ,47 ,226 , 13, 0 0 42,274
GIIVERAL
Rentals $ 125,000 $ 127,580 $ 142,25 0 $ 14,670
Telephone/Tel'egraph 40,000 44,245 42,00 0 (2,245)
Stationery/Supplies 17,000 21,864 17,00 0 (4,864)
Furniture/Equirment 13,000 18,862 15,50 0 (3,362 )
Postage/Messenger 16,000 14',163 16,00 0 1,837
F}nployer Taxes 42,200 40,807 51,45 4 10,647
Insurance 5,000 3,757 5,00 0 1,243 :
Printing/Reprints 23,000 30,974 32,00 0 1,026
Books/'Publications 4,000 2,225 4',27 5 2,050
Subscriptions 7,000 4,889 7,00 0 2,11 1
Legal Fees 210,000 224,143 225,00 0 857
Tobacco Growers' Information Cte . 30,000 27,500 44,92 5 17,425
Audit Expense 3,000 4,750 5,00 0 25 0
Miscellaneous 7,000 10,482 7,00 0 (3,482)
Membershios/Dues 22,000 17,641 22,00 0 4,359!
Meetings Participation 25,000 6,557 25,00 0 18,443
Fees/Services 20,000 29,911 24 .,00 0 (5,911)
State Activities 750,000 697,344 750,00 0 52,65 6
~ Total General 551,3592200 1,32 ,b94 1,435,40 4 107,7101
Total Administration E General 3,015,988 , 7$ 98920 ,148,90 4 349,9 4
PUBLIC RELATTION S
I - Internal Information & Counse l

a . Professional Services $ 76,500 $ 71,389 $ 35,00 0 $ (36,389)
b . Film/Tape Purchases 5,000 578 2,00 0 1,422
c . Newsletter 16,000 13,228 16,70 0 3,472
d6 Media Report Services 7,000 5,469 7,00 0 1,53 1
Total Item I 04,500 90,664 0, 0 0 29,964
II - Publications
a . Tobacco Publications $ 41,080 $ 36,996 $ 20,90 0 $ (16,096)
b . Other Publications 62,525 19,094 51,90 5 32,811
c . Tobacco Observer - -- 43,00 0 43,00 0
d6 Storage Handling -- -- 1,00 0 1,000
Total Item II 03y60 $ 56,p90 6,8 0 bU, 11 S
III - Other Projects

a . Speci:al Releases $ 5,000 $ 6,790 $ 8,00 0 $ 1,210
b . Motion Picture 48',700 42,833 65,00 0 22,167
c . Advertising Contingency 400,000 - 400,00 0 400,000
d . Brief ings 100,000 --- -- --
e . Bicentennial 58',500 61,325 -- (61,325)
Total Item III 612,200 110,948 473,00 0 362,0 2
Total Public Relations ~- 82b',30b 2$ 57,702 650,50 5 392,30 8
'IIOTAL ALL CATEGORIES $3,836,293 $3,056,622 $3,799,409 $ 742,787

MINUTES OF THE TWENTY-SECOND MEETING O F

THE BUDGET COMMITTE E
The Tuenty-second Meeting of the Budget Committee of The
Tobacco Institute, Inc ., was held at 3 P .M ., May 13, 1976, at The
Greenbrier, White Sulphur Springs, West Virginia .
The following members of the Committee were present :
B . D . Cummins, Chairman
John~ V . Blaloc k
James C . Bowling,
Alfred M . Peterson~
Ralph L . Rossi
C David M . Wels h
There were also present Messrs . Horace R . Kornegay, President of The
Tobacco Institute, Franklin B . Dryden, J . C . B . Ehringhaus, Jr .,
Kathryn R . Golden, Donna Hilderley and William Kloepfer, Jr ., of The
Institute, and Stanley L . Temko, of counsel to The Institute .
Chairman Cumm2ns presided at the meeting and Ms . Hilderley
acted as secretary and recordedthe minutes .
Mr . Cummins stated that he had reviewedthe cash reports
through April and the current outlook for the remainder of 1976 . He
noted that there were only three items in the proposed revisions in
the "Administration" and "General" sections of the 1976 Budget calling
for increases . The proposed increases totalled$71,000 .00~and were

-2-
explained in the footnotes to the proposed revision . Mr . Cummins

C
also reported that there were two requests for increases in the
"Public Relations" section totaling $27,100 .00, also explained in
the footnotes, or a total requeste6increase in the overall 1976
Institute budget of $98,100 .00 .
After discussion, the Committee concluded that the revised
budget be recommended to the Board'of Directors for approval .
Chairman Cummins announced that the next meeting of th e
Budget Committee was scheduled for October 12, 1976, at 10 A .M . at
the Institute offi~ces in Washington, D . C ., to consider the proposed
budget for the year 1977 .
Acting Secretary
+
MINUTES OF THE TWENTIETH MEETING OF

I THE BUDGET COMMITTEE
The Twentieth Meeting of the Budget Committee of The
Tobacco Institute, Inc . was held at 3 :00 P . M ., May 19, 1975, at
The Greenbrier, White Sulphur Springs, West Virginia .
The following members of the Committee were present :
C . Gilbert Collingwood, Chairman
John V . Blaloc k
c James C . Bowling
Alfred Peterson
Ralph L . Rossi
David M . Wels h
There were also present Horace R . Kornegay, President of
The Institute ; Kathryn R'. Golden and Donna Hilderley of The Institute ;
and Stanley L . Temko, of counsel to The Institute .
Chairman Collingwood presided at the meeting andMrs . Hilderley
Mr . .Collingwood reported that he had reviewed with Mrs . Golden
the cash reports through April and the current outlook for the remainde r
of 1975 . Revised budget figures for the "Administration"'and "General"

-2-
portions of the 1975 Budget were reviewed in detail, with discussio n
of the items resulting in a total proposed increase of $119,150 under
the "Administration" and "General" sections of the budget . There
were no changes suggested in the Ptablic Relations portion of the
1975 budget .
. ~ .
After discussion, the Committee concluded that the revised
budget be recommended to the Board of Directors for its :approval .
It was announced that the next meeting of the Budget
Committee .was scheduled for September 25, 1975 at 10 :00 A . M . in ~
Washington,'D . C .
Acting Secretary
MINUTES OF THE NINETEENTH MEETIN G

OF THE BUDGET COMMITTE E
The Nineteenth meeting of the Budget Committee of The Tobacco •
Institute, Inc ., was held at 10 :30 A . M . on September 17, 1974, at the
Institute offices in Washington, D . C .
The following members of the Budget Committee were present :
Messrs . C . Gilbert Collingwood, Chairman

John V . Blaloc k
James C . Bowling
Zachary T . Smith
David M . Wels h
There were also present Peter Marzullo, of Lorillard, A Division
of Loews Corporation ; President Horace R . Kornegay, Franklin B . Dryden,
Kathryn R . Golden and Donna Hilderley, of The Institute ; and Stanley L .
Mr . Collingwood presided at the meeting and Mrs . Hilderley acted
as secretary and recorded the minutes .
The "Administration" and "General" portions of The Institute
proposed budget for 1975 were considered in detail by the Committee, with
a review being made of the 1974'estimated expend'itures and of the 1074
approved revised bud'get . It was pointed out that the Officer/Professional
salaries itenin the "Administration" portion of the budget reflects four
new staff personnel, two of whomiare replacements for vacant positions .

-2-
The add'ition'of two new positions to the Public Relations staffconform s
to the programwhich was reviewed by the Executive Committee in July o f
this year .
The Committee discussed in some detail the "Pension Plan" item,
and it was suggested by_the Chairman that the Committee, at its next
meeting, should have available the information relating to the determination
of the costs of the program, such as the actuarial assumption, the salary
scale, and the evaluation :techniques . Chairman Collingz•:ood also recom-
mended that the Pension Committee of The Institute review the costs and
adequacy of the funding for the l'ension Plan" and report to the Budget
Committee . It was agreed that any necessary adjustment to the "Pension
Plani"litem in the 1975 proposed budget could be approved by telephone or
mail .
Mr . Ehringhaus was called into the meeting to report on the
1974'budgeted program under the "State Activities" item and to discus s
the projected costs for this category for 1975 . The Committee was advised
that the proposed program had been reviewed and generally approved by the
Executive Committee at its July 25, 1974 meeting .
After discussion, it was agreed that the "Administration" and

$
"General" portions of the proposed budget be recommended to the Board of O
Directors for its approval . N

C:
The Committee then considered in detailthe "Public Relations" ~
portion of the proposed 1975 budget . Mr . Kloepfer entered the meetin g
to answer questions of the Committee . After discussion, the Committee
recommended that the "Public ReJations" portion of the proposed budget

-3-
be approved, subject to review by the Communications Committee . It was
suggested that Chairman Wade of the Communications Committee should con-
vey any suggestedchanges to Chairman Collingwood, who in turn would
communicate with the members of the Budget Committee . It was the
consensus of the Committee that in the future the Communications Com-
mittee should consider the "'Public Relations"' portion of the Institute
budget prior to consideration of the proposed budget by the Budget
Committee .
Based on1974 annual dues, which~are subject to chan ;e for
the 1975 year, it is estimated that an assessment of additional dues
inthe amount of approximately 1050% ofthe annual dues of members
subject to additional assessment will be required to fund the proposed
1975 Institute budget .
The Committee recommended that, in accordance with established
procedure, there be a mid-year review of the 1975 Institute budget, at
which time any necessary adjustments could be considered . It was further
recommended by the Committee that the Board of Directors authorize the
President, with the concurrence of the Treasurer, to permit overexpendi-
tures in any of the three sections of the 1975 budget, provided that the
overall total budget is not exceeded .
The Committee further directed the Institute to circulate a
copy of the 1975 preposed budget to the Board of Directors prior to~the
Annual Meeting of the Institute on January 30, 1975 .
Acting Secretary 61
THE TOBACCO IN :,TI
Proposed Budp e
C Estimated
1974
Expenditure s
QINISTRATIO N
Salaries :
Officer/Professional $ 668,98 4 $115,000
Secretarial/Clerical 140,75 6 3,84 3
Total Salaries 809,74 0 $116,843
Expenses - Travel 72,26 8 21,700
- Local Conferences & Others 51,17 0
Pension Plan 127,43 42,000
Group Insurance 137,241, 12 .00 0
Total Administration 1,097,85 0 $19-' ,54'3
. . ERAL
Rentals $ 99,29 8
Telephone/Telegraph 31,10 0
Stationery/Supplies 13,40 8
Furniture/Equipment 13,00 0
Postage/Messenger T,577
Eaployer Taxes 21,54 3
Insurance 2,500
Printing/Reprints 15,25 0
Books/Pub3ications 2,05 6
Subscriptions 5,18 5
Legal -Fees 117,84 1
Tobacco Growers' Inf . Comm . .30,000 :
Audit Expense 1,75 0
Miscellaneous 2,800
Memberships/Dues 16,250 20,00u
M.eetings/Conferences 2,400 25,000
Fe 'Services 18,000 18,o00
S Activities 250,000 : 250,00 0
cotal General 649,958 702,55 0
TAL ADMINISTRATION & GF.NERAL 1,747,808 Vi,848y55 0 2,305,28 5 5

BLIC RELATION S
I - Internal InB . & Counse l

a. Professional Services $ 122,000 $ 122',00 0 $, 56,000 12 [ $(66,ooo)
b. Film/Kinescope Purchases 2,500 2,50 0 5,00 0 2,50 0
c. Neuslietter 14,000 14 , 00 0 13,50 0 (500)
d. Media Report Services 6 000 6 00 0 8 000 13 L 2 000
Total Item I 1 4,500 144,50 0 T 82,50 0 ( 62 ,000 )
II - Publication s
a . State Booklets $ 11,200 $ , 11,20 0
•a . Tobacco Publication s $ 20,000 14 / $ 8,800
b . Cigarette Controversy 2,000 ,~2,00 0
C . Miscellaneous Publications
fb . Other Publication s
41,000 41,00 0 in
31,000 15 L (12,000) O
Total Item II 5' 20 SL,20 0 51,00 0 $ 13,200) N
III - OtTer Pro!ec*_ s

a . Special Releases $ 5,000 $ 5,00 0 $ 5,000 $ ---
b . Motion Pictures 53,600 53,60 0 38,100 16 / (15,500)
C . Advertising Contingency -- 400,00 0 400,000 17 /
Od . Briefings --- 100,900 18 / 100,000
Total Item III 58, 00 58, 0 0 : 543,10 0 $ 84,50 0
TAL PUBLIC RELATIONS 257,300 57,30 0 . 70,600 19,30 0

'TAL ALL CATEGORiES $2,005,108 $2,505,85 0 '2,9a1,885 7a,o35
nd(- _s new category designation
As recommended for approval by the Budget Coa .mittee 9/17/74

. .
-- ~
FOOTNOTES TO PROPOSED 1975 BUDGET :
C _LJ - Request for increase in this category reflects anticipated contract renewal adjustments and the
addition of four new staff members .
Requested increase in this category is to cover contemplated salary adjustments for the 1975 year .
_IJ - Increase in this category reflects increased expenses anticipated for new staff members and adjusts
to anticipated costs rise .
~- Since new staff members should have minimaL expenses in this category, no adjustment is requested' .
_JJ - With the addition of four new staff members and four State Activities field men, costs in these
categories will be increased .
Under the 'cost of living index' clause in the Institute lease, there was a rental increase in May
of 1974 . Requested increase in this category adjusts to this increase, anticipates an increase in
May 1975 . Additionally, it is proposed that the Institute acquire a small, one-room office in the
Hill area .
~ f- Increases are requested in these categories to cover anticipated cost increases due to inflation
or rate increases .
8/- The Institute is considering acquisition of a small computer, "start up" costs of which are estimated
to be $20,000 . Further investigation is necessary to determine the feasibility of this acquisition
and to justify the cost factor . At the present time, this is a contingent item, to be confirme&
before presentation of the Budget to the Board of Directors in Januar•,r . . If cost cannot be justified,
this category amount request will be reduced to $1,600 . '
Increase requested for this category reflects anticirste3 rates and base amounts for employer eo:Lri-
butions to FICA and unemployment insurance, increase in nuctier of employees, and~possible increas e
in personal property tax costs .
10 - Expenditures contemplated under this eategory are as follows :
( Covington & Burling - $95,000 .

Outside counseL - 15,000 .
11 - Expenditures contemplated under this category are as follows- :
Field personnel :
Salaries $110,000 .
• Expenses 65,000 . $175,000 .
LegaL & consultant 325,000 .
12 ,- Request for this category is substantiaLly less than in 1974 since no public opinion survey is
scheduled in the odd year . Funds for part-time professional help and advertising consultant are
included in this request .
13 - Requested increase in this category is due to increased rates and tobacco publicity .
1~ - This category was called "state booklets" in the 1974,budget ; for 1975 requested funds include
publication or republication of five of these, plus a new edition of "Tobacco, Pioneer in America,"
and "Facts About Tobacco ." •
15 - This category was called "Cigarette Controversy"and "Miscellaneous Publications" in the 1974 budget .
Requested budget amount includes several leaflets or pamphlets on various aspects of the ssoking-
health controversy .
16 /- Budget request for this category is estimated to cover costs of revision and distribution of "The
Need to Know" ; and promotional mailing, additional prints'and distribution of "heaf . "
This category is a carry-forward from previous budgets ; expenditure from this item is subject to
specific recommendation and approval, of the Executive Committee .
L8 - This request is a new budget item ; projected on assumption that the Institute will have a'new
~ medical director, and that he will take part in briefings to media and other groups with a presen-
tation to be constructed of visual material's "from scratch ."'
MINUTES OF THE' EIGHTEENTH MEETIN G

OF THE BUDGET COMMIITTE E
The Eighteenth~meeting of the Budget Committee of The Tobacco
Institute, Inc . was held at 4 P . M ., on May 16, 1974, at The Homestead,
Hot Springs, Virginia .
The following members of the Budget Committee were present :
C . Gilbert Collingwood, Chairman

James C . Bowlin g
•Ralph L . Rossi
David Welsh
There were also present Mr . Charles B . Wade, Jr ., of R . J .
Reynolds Industries, Inc . ; Franklin B . Dryden, J .C .B . Ehringhaus, Jr .,
Kathryn R . Golden and Donna Hilderley, of The Institute .
Mr . Collingwood presided at the meeting and Mrs . Hilderley
The "Administration" and "General"'portions of the proposed
revisions to The Institute 19741budget were considered by the Committee .
At Mr . Collingwood's request, Mr . Ehringhaus explained in some detail
the expandedactivities under the "State Activities" category . After
discussion, it was agreed that the "Administration" and "General" portions
of the revised budget be recommended to the Bbard of Directors for approval .
There were no anticipated changes in the "Public Relations"'portion of the
budget .
I
-2-
After discussion~, it was agreed' that the Committee would meet a t
10 A .M. in the Institute offices in Washington on Tuesday, September 17, 1974,
to consider the Institute proposedbudget for the year 1975 .
Acting Secretary
0
THE TODACCO INSTITUTE, INC .
127h BudTyt Revisio n
h-Month 8-Month Total 1974 Approved Requested Increase

Actual Anticipated Anticipated 1974 Revised or
Expenditure s Expenditures Expenditure s Budget Budget (Decrease )
tstration
_aries - Off ./Prof . $223,411 .21 $ 410,573 .06 $ 663,984 .27 $ 710,000 $ 710,000
Sec ./Clerica l 46 860 .31 94 401, .L1 141 264 .72 147,000 147,000
Total Salaries 270,271 .52 $ 534,977 .47 805,248 .99 857,000 $ 857,000
Expenses - Travel 17,488 .77 52,500 .00 69,988 .77 70,000 70,000
Expenses - Local 14,899-84 34,800 .00 49,699'.84 53,000 53,000
Pension Plan 1,050 .56 126,949 .44 128,000 .00 128,000 128,000
Group Insuranc e 14,020 .90 23 979 .00 37,999 .90 45,000 38,00 0 1! (7,000)
Total Administratio n 317',731 .59 773',205 .91 $1,090,937 .5 0 $1,153,000 1,I46,00 0 (7,000 )
General
Rentals $ 31,351 .18 $ 68,648 .00 $ 99,999 .18 $ 93,000 $ 100,000 ? / 7,000
Telephone/Telegraph 10,087 .42 20,175 .00 30,262 .42 32,000 32,000
Stationery/Supplies 6,705 .o4 8,400 .00 15,105 .04 10,00 0 15,000 3 / 5,000
Furniture/Equipment 2,291 .44 10,000600 12,291 .44 20,000 13,000 ~ (7,000 )
Postage/Messenger 2,899 .5 5 7,000 .00 9,899-55 . 10,000 10,000
Employer Taxes 11,138 .94 12,000 .00 23,138 .94 27,500 23,50 0 (4,000)
Insurance 2,148 .06 500 .00 2,648 .06 3,000 3,000
Printing/Reprints 3,962 .74 12,000 .00 15,962 .74 19,000 16,00 0 (3,000)
Books/Publications 1,045 .45 1,400 .00 2,445 .45 2,000 2,500 • 500
Subscriptions 1,413 .3 2 3,500 .00 4,913 .32 - 5,00 0 5,000
Legal Fees 57,022 .59 77,977 .00 134,999 .59 135,000 135,000
Tob .Growers!Inf .Cos+.m . 111,000 .00 18,500 .00 29,500 .00 30,000, 30,000
Audit Expense 1,750 .00 --- 1,750 .00 2,000 1,750 ~J (250)
Miscellaneous 2,800 .00 2,800 .00- 5 ;000 2,800 (2,200 )
Memberships/Dues 8,884 .15' 11,000 .00 19,884 .1520,000 20,000
Meetings/Conferences 2,400 .00 22,600 .00 25,000 .00 25,000 25,000 --
Fees/Services 4,519 .8 9 13,000 .00 17,519 .89 20,00 0 18,000 (2,000 )
State Activitie s 131 785 .56 1i18 000 .00 249 785 .56 165,000 1 2 ,50 000 5 / 85,000
Total General 290,405 .33 407,500 .00 $ 697,905 .33 $ 623,50 0 702,550 79,050
Total Adminis . & General 4608,136~ 1,180,705 .91 $1,788,842 .83 $1,776,500 1,848 .55 0 72,050
Relations
~internal Inf . & Counse l
a .Prof . Services $ 35,906 .84 $ 86,000 .00 $ 121,906 .84 $ 122,000 $ 122,00 0
b .Film/Kin .Purchase --- 2,500 .00 2,500 .00 2,500 2,500
c .Newsletter 2,685 .84 11,000 .00 13,685 .84 14,000 14,00 0
d .Media Report Service 2,411 .14 3,300 .00 5,711 .14 6,000 6,000
Total Item D $ 41,003 .82 $ 102,800 .00 $ 143,803 .82 $ 144,500 $ 144,50 0
II-Publication s
a .State Booklets $ 5,260 .74 $, 5,800 .00 $ 11,060 .74 $ 11,200 $ 11,20 0
b .Cig .Controversy -- 2,000 .00 2,000 .00 2,000 2,000
c .Misc .Publications 16,200 .27 24,000 .00 40,200 .27 41,000 41,000
• Total I'tem II $ 21,461 .01 $ 31,800 .00 $ 53,261 .01 $ 54,200 $ 54,200 (a --
III-Other Project s
a .Special Releases $ -- $ 5,000 .00, $ 5,000 .00 $ 5,000 $ 5,000
b .Motion Picture 19,979 .15 33,000 .00 52,979 .1 5 53,600 53,600
c .Advt .Contingency --- -- --- 400,000 400 000 6 /
Total Item III, 19,979•15 $ 38,000 .00 $ 57,979 .15 $ 458,600 458,60 0
Total Public Relations 2, 3 .9 $ 172',000 .00 255,043 .98 57,300 657,300
TOTAL ALL CATEGORIES 469-o-,580 .90 1,353,305 .91 2,043,88 481 2, 33,800 $2,505,850 72,05 0
Because of experience rating, a dividend has been received from the insuring company, as well as a rate decrease for
the year 1974 .
Replacement of word processor, contemplated under Furniture/Equipment category in the 1974 budget, is now being
handled by rental equipment . A eorresponding decrease in the Furniture/Equipment category reflects this requested
increase in the Rentals category .
Requested increase in this categpry reflects increase in paper and other supply costs since the first of the year .
Billings for audit services for the entire year 1974 have been received and paid .
After the September 1973 meeting of the Budget Com .mittee, it became evident that there would be accelerated activity
under this category, necessitating an increased budget . Because the Committee was not able to study a requested
iacrease prior to presentation of the .proFosed 1974 budget to the Board of Directors in January, decision was made
~ to postpone this request to the May 1974 meeting of the Budget Cam .nittce . The intention to seek this increase was
brought to the attention of the Executive Committee at its November 1974 meeting and : to the Board of Directors at
_9J its January 1974 meeting .

- No expenditures are presently contemplated under this category . However, it seems expedient to continue to provide
for this contingency . Any expenditure from this item continues to be subject to piior approval of the Executiv e
Committee . . . .
Financial Report s
6oo26os834
. THE TOBACCO INSTITUTE, INC .
ANNUAL REPORT OF DIRECTORS PURSUANT T O
SECTION 519 OF THE NOT-FOR-PROFIT CORPORATION LA W
The following report is respectfully submitted to the
membership of The Tobacco Institute, Inc ., in accordance with the
provisions of Section 519 of the Not-For-Profit Corporation Law
of the State of New York .
1-2 . The assets and liabilities, including trust funds ,
of the Institute as of the end of the last fiscal year, December 31 ,
1975, are shown on the Balance Sheet prepared by the Institute, whic h
_0isattached to this report . The principal changes in assets an d
liabilities, including trust funds, during the 1975 fiscal year
may be seen by comparing the December 31, 1975 Balance Sheet with
that for December 31, 19711, prepared by the Institute, which is
also attached to this report .
3-4 . The revenues and expenses of the Institute, both un-
restricted and restricted to particular purposes, for the fiscal
year ending December 31, 1975 are shown in the Statement of Receipt s
and Disbursements prepared by the Institute's auditors, Coopers & ~
Lybrand, which is attached to this report . j V
5 . The Institute presently has eleven members, no change over `
the year immediately preceding the date of this report . A complete Go

G?
CA
-2-
list of the names and~addresses of the current members may be
found in the offices of The Tobacco Institute, Inc ., 1776 K
Street, Northwest, Washington, D . C . 20006 .
Respectfully submitted ,
President and Executive Directo r
6z~ .~~, .,
Actiing Treasure r
January 29, 1976

T
-3-
VERIFICATI01J
Horace R . Kornegay, bei!ng duly sworn, states that he is the Presi ;dent
of The Tobacco Institute, Inc ., and that he has read the foregoing
report, and that the statements contained therein are true to the
best of his knowledge .
Subscribed andsworn to before me

this aS'day of January, 1976 .
~ c . t; Lx~
Nbta y Public i
My Co~rnission Ex^*e s
VERIFICATIO N
B . D . Cummins, being du!ly sworn, states that he is the Acting
Treasurer of The Tobacco Institute, Inc ., and that he has read the
foregoingireport, and that the statements contained therein are true
to the best of his knowledge .
~-~---r~-
Subscribed,and sworn to before me

th i s a~"-day of January, 1976 .
Nota `y\Publ ic ~
h`y l:omhussian txpr:es June 30, 197ti- ~
BALANCE SHEE T
ASSETS
Accounts Receivabl e $ 3,579 .70
Cash 246,711 .5 4
Deposits 770,0 0
Petty Cash 500 .00
Payroll Imprest Fund 2,000 .0 0
Total Assets $253,561 .24
FUND BALANC E
Balance as of January 1', 1975 $154,057 .9 0
Excess of Receipts over Disbursements 99,503 .3 4
Fund Balance as o f
December 31, 1975 $253,561 .24
f
BALANCE SHEET
ASSET S
Accounts Receivable $ 915 .58

Cash 143,956 .74
Deposits 770 .0 0
Petty Cash 500 .00
Imprest Cash Fund 5,000 .00
Payroll Imprest Fund 2,000 :.0 0
$153,142 .32
FUND BALANC E
Balance as of January 1, 1974 $ 45,128 .04
Excess of Receipts over Disbursements 108,014 .28

Fund Balance as o f
December 31, 1974 $153,142 .32
. .. ~ . . ~ ..T ~ ~-,.;: ~Y`w -~ t~, v,IA- : iy~1 : •i
. . . . . ~' ~ . . . ?• ' ~I . . . . . . •
• COOPERS & LYBRAN D

CERTIFIED PUBLIC ACCOUNTANT S
WASHINGTON OFFICE
t
COOPERS & LYBRAN D

CERTIFIED PUBLIC ACCOUNTANT S
[
IN PRINCIPAL AREA S
OF THE WORL D
The Board of Directors

The Tobacco Institute, Inc .
( Washington, DX .
We have examined the accompanying statement of cash

receipts and disbursements of The Tobacco Institute, Inc . for
the year ended December 31, 1975 . Our examination was made in
C accordance with generally accepted auditing standards,and ,
accordingly, included such tests of the accounting records and
such other auditing procedures as we considered necessary in the
circumstances .
The statement has been prepared on the cash receipts

C and disbursements basis of accounting as described in Note 1 and,
accordingly, does not purport to present the results of operations
as they would :appear had generally accepted accrual basis account-
ing principles been applied in its preparation .
In our opinion, the accompanying statement of cash re-

C ceipts and disbursements for the year ended December 311, 1975
presents fairly the information set forth therein and has been
prepared on a basis consistent with that of the preceding year,
except as described in Note 2 to the accompanying,statement .
C .+ .. .4 .~
Washington, D .C .
January 7, 1976
0-+
1
STATEMENT OF CASH RECEIPTS AND DISBURSEMENT S
(NOTE 2 )
for the year ended December 31, 1975
Testing
Laborator y
Institute Division Tota l
Receipts (Note 3) :
Annual dues $ 258,995 $ 2,250 $ 261,245
Additional assessments 2,237,642 236,887 2,474,529
Contribution from nonmember 250,000 - 250,000
Other 50 50
Total receipts 2,746,687 239,137 2,985,824
Disbursements •
Salaries, officers and professional 620,856 104,453 725,309
State activities 5141202 - 514,202
Deferred compensation (Note 4) - 131,004 - 131,004
Salaries, secretarial and clerical 153,464 - 153,464
Professional fees and expenses 239,463 7,755 247,218
Travel and local conference expenses 150,970 2,578 153,548
Pension expense (Note 5) 156,005 10,234 166,239
Rent (Note 6) 111,262 34,827 146,089
Public relations :
Internal Information & Counsel 52,734 - 52,734
Other projects 236,142 - 236,142
Publications 33,819 - 33,81 9
Insurance, including group plans 50,425 9,312 59,737
Stationery, printing and postage 39,780 16,413 56,193
Telephone and telegraph - 3g,312 1,742 35,054
Tobacco Growers Information Committee 2,483 - 28,483
Taxes, principally payroll 29,967 9,156 39,123
Dues, subscriptions and publications 24,431 470 24,901
Meetings and conferences 2,007 - 2,007
Office furniture and fixtures 11,765 17,823 29,588
Miscellaneous 1,958 677 2,635
Leasehold improvements 7,002 5,342 12,344
Advances to employees, net 2,664 - 2,664
Repairs and maintenance = 5,855 5,855
Cigarette samples - 27,053 27,05 3
Total disbursements 2,631,715 253,690 2,885,405
Excess of receipts over (under) disbursements 114,972 (14,553) 100,419
Cash balance, January 1, 1975 119,859 32,013 151,87 2
Cash balance, December 31, 1975 $ 234,831 1 460 $ 252,29 1
January 1, December 31,

Analysis of cash balance :
Operating accounts
zVgsoqzooa 1975 1975 -
$ 144,872 $250,291
5,000 -
Imprest account
Payroll imprest account 2,000 2,00 0
$ 151,872 2 2 2 1
The accompanying notes are an integral par t

of the Statement of Cash Receipts and Disbursements .
2
r
THE' TOBACCO INSTITUTE, INC' .

NOTES TO STATEMENT OF CASHRECEIPTS AND DISBURSEMENT S
1 . Accounting policie s
C The statement has been prepared on the cash receipt s

and disbursements basis of accounting whereby cashireceipt s
are recorded as received and cash disbursements are recorde d
whenidisbursed .
2. Statement presentatio n
C
This statement includes the cash receipts and dis-
bursements of The Tobacco Institute, Inc ., including its
Testing Laboratory Division . Previously, (for the year ended
December 31, 1974 and prior) separate statements of cash
receipts and disbursements were prepared for both the Institute
( and the Testing Laboratory Division .
3 Dues and assessment s
Annual dues for the Institute are determined by

applyingtherate established in theBy-Lawsto the annual
C
production of each member company . Additional assessments
represent the amounts required in excess of annual dues to
fund budgeted expenditures . These amounts are assessed~to
the applicable companies (as determined :in the By-Laws) by
applying a percentage, eight hundred and seventy-eight in
t 1975, to their annual dues .
Annual dues for the Testing Laboratory Division are

afixed amount for each member company of the Division . Ad-
ditional assessments represent the amounts required in excess
of annual dues to fund'bud'geted expenditures . These amount s
are assessed to :the applicable companies (as determined by agree-
ment) by applying a percentage which is based upon each company ► s
pro rata share of domestic annual cigarette sales .
$
Employment agreement s
Th e ns itute
I t as h
en ered
t into employment contract s
with certain key emplloyees, providing for specified compensation
during the contract periods and for the payment of deferred
compensation thereafter . The Institute is funding the contrac-
tual liabilities for the deferred compensation through th e
purchase of retirement income policies and investments in mutual GJ
funds an~d' savings accounts . The income from these investments i s
not included in the accompanying statements .
Continued,
3
NOTES TO STATEMENT' OF CASH RECEIPTS AND :DISBURSEMENT S
. Pension pla n
r The Institute has a noncontributory pension plan for
all full-time employees including those of the Testing Labora-
tory . The plan is administered by a Pen~sion Committee . Con-
tributions to the plan, made currently for each year, ar e
actuarially determined and include normal cost and amortization
of prior service costs over thirty years .
C
Pension expense of $166,239 includes the Institute's
and the Testing Laboratory's contributionito the planiplus
$9,942 of operating expenses .
The Institute is making the necessary revisions to

{ its plan to comply with the Employee Retirement Income Security
Act of 1974 . These revisions are not expected to cause a sig-
nificant increase in future pension costs .
6 . Lease commitment s
The Institute occupies office space under a :noncancel-
able lease which requires minimum annual rental payments of
approximately $107„000 and~expires on May 31, 1979 . The lease
includes a provision which allows the minimum rental payment s
to be adjusted'annually for changes in the consumer price
index .
The Testing Laboratory Division occupies office space

under a noncancelable lease which requires minimum annual rental
payments of approximately $37,000 and expires on October 31, 1978 .
Income taxe s
C
Under provisions of the Internal Revenue Code and the
applicable income tax regulations of the District of Columbia,
the Institute is exempt fromitaxes on income other than un-
related business income :. No payments for income taxes were
required'in the year ended December 31, 1975, since the Institute
had no unrelated~business income .
4
COOPERS & LYBRAN D
CERTIFIED PUBLICACCOUNTANT S
1100 CONNECTICUT AVENUE,N . W.
OF THE WORLO,
WASHINGTON, D . C . 2003 6
January 27, 197 5
Mr . Horace R . Kornega.y, President

The Tbbacco Institute, Inc .
1'776K Street, N . W .
GJashinoton, D! . C . 2003 6
Dear Mr . Kornegay, :
We recently completed our examination of the financial

statements of The Tobacco Institute, Inc, for the year ended
December 31, 1974 . This work included a review of the accounting
procedures and related controls of the Institute . As a result of
this review and in an effort to be of assistance to management ,
we believe the following comment should be brougYlt to your attention .
Effective Cash Management Could Increase

the Institute's Incom e
T.Je noted that over the past year the

Institute maintainedlan average daily
balance of approximately $110,000 in its
noninterest bearing checking account .
Using surplus cash to~create additional
income has become an important, basic
function of good asset manacement .
We recommend that manaoement give

consideration to investing all excess
ca!sh~ in such away that will provide for
maximum return on investment without
sacrificing asset security or impeding
the flow of cashinecessary for day-to-day
operations .
Nere is how commercial banks
can help you assess collection
and investment opportunitie s
) ~Il (1 do, 1 ,
?A
"0260S-$48
R 1\1GI\G A TR .-1DE ,1SSOCI :ITIO\ or their financial affairs . Others utili"r.e members, perhaps no more than a
il a professional society is littl e fiscal a`~ents, such as bank trust cle- score of large comp .ulies }lavlilf ;
difTercnt than heading up abusi- partmcnts . But, in m :lny cases, cash large annual assessments . Otllcrs
ness . management is a primary responsi- have hunclrecls or thottsancls of
Although the association is a non- bilitv of the chief stalf executive . members remitting ducs related to
profit organization, it provides an asset size . Still others have many
ever-widening array of scrvices to a hlaking the job easie r thousands of indi%iclu ;lls paying a
distinct market . Lii:e other business A rel.ationsllip with a bank or its standard dues fee . In most cases,
firms, it has a marl:et base and cus- trust department can make this tllou,Il not all, ducs are rcqursted
tomers who are chagcd a fee for critically important responsibility annually, at the start of cither a
services . easier to hanclle and financially calendar or Tiscal vear .
In return, the association is paid more rewarding . Many banks both Not only is there a peak period
by dues and other charges, includ- xalue and desire association busi- for ducs, but CXpcnclitures also
ing project fees or other onc-time ness . Most metropolitan banks can tend to have peaks and Vallcys-
special assessments that are not tailor cash management plans to conN'cntion time bcin« a major
much dilTerent than operating a the specific needs of an association, pcak . Working within cycles, thure-
business . just as banks do for any other cus- forc, is imllortant for ef`ectivc cash
Like the corporate treasurer, the tomer . Beyond this is a wide range Inatl ;lgCtnent .
association manager should he con- of otber financial services awailable Wllatcvcr the association's merrl-
cerned Ath : receiving and llostin to an association and to its sta(T . hcrship structure, tlte cotnnlon
dues or other memhcr Ila~ nwnts The concept of cash nlana,tcmcnt goal is to collect funds quickly, and,
expcditiouslt• and Ilancflin .- cash means more than taking in ducs, where practicablc, nlininli ;:c costly
flow in an eflicicnt manner tll ;tt p!acin g some funds in chccking ac- pimccssing tinle .
II,u%_CS fltudS nUt . ._`_'Cli11 for Clir- coL'ltc tJ Illei :t it"Illedlate and I_-_t's nc• .' : look a t some l,•tnk scr%,-
rent eXpCndltllreS into secllre ltl- short-term needs, and puttinq, the ices dcsi~!ned to assist the associa-
vcstnlrnt, hroviOng an ohtinulnl balance in sat•inf;s or s ;lvines ccr- tiun in collrcting funds and nloving,
rate of return . tificatcs . tltrm c}tlickly into the ns, :ocitltiurt's
The nonprofit cll,lractrr of an The assochtion's objcctive in account and lrclnl there into bud~,et-
asso .'i ;ltiun or profrtision ;ll sc;cirhy handling its funcls sholtlcl he liclttid- ccl itenls and inrrsttncnts .
docs not clt'tr ;lct from this c>bjcc- ity and security . 'l'ltis objCcti% .e ;lll-
tirc . ,11trr all, cash ntctn :lltrntent is plics cdtt ;llly to current oln•r•llillr Tfle lockbo x
clrsis!ned to tirld e .\tra inconte ilt ;ll fund, and accuntul ;ltcd reserves . The Iurkbox is a Ilost oflice box
can he Ir ;lnslntccl into hCttCr snlarW In this rcNllVrt, tFle cuntnWr"ci ;ll set ill) by a banl ., wllcrl : the b ;lnk
levels and 1Wnclitti, ;llltlitional stall, bank is a tuol ; througI1 it . tlle ;lsso- is cllllllori .~.Cd to cl .tinl an ;lsulria-
Illore "crNicc•s, and I ;tr} .rr arcutnu" CI :ltlllll Illail ;lt!~'1' Call ;1titiCss ;l Ill1111- tiun's ducs nt :,il ;lnll Ilrocess it on a
latccl rctirrvcs-fin ;lnci ;ll tt ;tins the ber of clitlrrenl cullcctiun and in- cl ;lilv or uthet' ;lf :rrccl tlllcln h ;lsiti,
mcnlbrr,llill ncrd nt,l Il .ly fot' . vc•stnlcnt .,Itct n ;ltivcs . witll till• checl.s bl•inl ; cli~lx,sitecl
Sonlt• I ;u t~rr ;lsmlri ;lt iuns citlpluv Asulri ;ttit'n Inrnll,l•t sllip struc• into tllc• ;lsuci ;ltio,t'ti :,ccount . fn-
skilletl prufcssional", to :lllnlini .trt' turc :s ditfrt' Willrl~• . Some Il ;lVc few voices, or potitiilrlv a ctlnllltltcr t ;lp c
22 ASSOCIATION ,11,1\'ACiI :111 :wrT - Jtlnuary 1975

Mr . Horace R . Korn :ega y
The Tobacco :Institute, Inc . -2- January 27, 197 5
We are enclosing a copy of a recent article which appeared

in the January 1975 publication of Association Management entitled!,
"'Cash Management for Associations" which should be of assistance to
you iin~implementing this program .
If we can provide any further assistance in implementing

this suggestion, please do not hesitate to contact us .
Very truly yours ,
~~a ~~
A\ ;'ord of cttivicc, ho\vrvrr : Ih'al !)Ihcr cyclical inconlc--stlclt as a mattn ily clnlr of f(ltir or illc>t't'
\;'itll it bank 111 :1t cyualeti srrvice c'ottvrnlion rcl~istratiort frc's and years are :tVailctl>lr at a iuinintunt
with h :iving an oflicrr on Il :ulcl \vhrn tr :ttlC shotv incunlr-- :tlso nlttst be of `1,000 and have on iulcresl r'att :
his atitiisfancc is ncedetl . taken into consiclrr :ttion in l>lan- of 7ki percent .
nint, yout' investtuent hrot;rant . Bear in mind that these are
Cashless societ y basic lypes of certilic :ttes for
Just :t few words here :lbout to- Reservo fund s amounts Icss than S-10U,000, 1)if-
ntorrotv's \vot ld may also hruvc Second, tllost associntions ovet• fcrent bctnks, \6thin I .•t .al limita-
hclhftil . Conlnlcrcinl 1> :tnkintt, along time create t'eserNe funds . llol>e- tions, can and tto v :u'y key cle-
with other fin :tncial instittltions and ftllly', tlle t'eserVc Will not be nCetlrtl ments of a certilicate sttc'h as the
the federal l!o\•rrnnlent, is in the for atisociation ul>erations (Itu'inl, niininlunt balance and the method
process of evolving an electronic any tti\•en )'c :u• . Iteset'\'c tunds creatc of colnlwunclint~ intcrest . Some
funds tr :lnsfcr system-thc so-c :lll- a cllshion-a special hro traln funcl, banks atttumatic :lllv renew certili-
ed cashless or checkless society . a btlilclin0 ftmd, or to fill somc otller cates, while others do not . As in
Thottgll still a number of years in need . But most important, the re- the case of re11ular chrckin f ; or-
the future as an operntional sys- serve fund stands aside from t :ur- savinps accounts, these ccrtificates
tem, the hardware and software 1-ent bWis?et :ll-\' consl(Iet-atl(>ns and are backrcl by federal insurance up
concepts alrcacty exist . We're not should be aclministercci accorci ; ;ll;ly, to thc hr~'Cilt lrlaximunL of ;-10,G00 .
talking pie-in-thc-sky . though in all 1>robability the critcria Incidrntallv, the savin-s account,
The implication for associations of liquidity and sectu-ity likewise whether passbook or statement
and professional societies is the will apply . savin"s, should not be o\-crlookcd
same as for businesses and inclivid- One final note before describing as a cash management ol]tion .
uals : near instantancous transfers investment alternatives . The neces- Though earning less interest than
of financial data-money and trans- sary first step in dc\-elopin, a cash a ccrtificatc, the savings account
action information as \vcll-bc- mana iement proRram is to \vork for practical purposes can bc
t\FCen two or more parties thl-olt?h ♦vith Your bankcr or financial act- dra\vn out at any time, ancl there-
electronic terminals . The ramlflca- viser in dcsigninn a portfolio that forc represents a high liquidity
tions arc countlcss, both in terms realisticallv balances budRCted cash sourcc ; that is, it is quickly and
of funds collection and funcls dis- needs against investment objec- easily convertible i :lto cash or
bursement for current buclnet items tives . The role of the association is checkbook money .
and in\•estments . Greatl}' affected, responding to membership needs .
nlorcover, will not only be trans- Supplementing dues income and re- Money market certificate s
action spced, but also the record- serves through optimum in\•estment hionev market certificates have
keeping and posting process . yields should facilitate this purpose . a nlinirnum balance of S100,000 in
erder to earn the optimum rate
Investment of fund s Certificates of deposi t available . No legal limitations arc
Collection services offered by Essentially, a certificate is a mini- imposed on rates, and the mini-
banks may be of limited value to mum-balancc savinms instrument mum maturity is only 30 days .
man} associations because of \-01- with a fixed maturitv and bearine Commonlv, thcse larbe denomina-
ume, but this is not the case where a predetermined rate of interest . tion certificates are issuecl by banks
funcls investment is concerned . The Rates and maturities on certificates for 30 or 60 or 90 days, six months,
following discusston of int'estment in amounts less than S100,000 are or one year, with nebotiated in-
alternatives af>plics to any associa- regulated by the federal govern- terest rates often varying consider-
tion which can c1lTorcl rented space ment . ably ; maturitv date is one variable,
and a salaried executive . The basic types of certificates and clollar :lmount is another . Re-
There al'e two kcy factors to con- otTercd by banks ranne from SI00 cently, for esample, 30 to 60-clay
sider . First, dues tend to be reccived and upward . Ccrtificates in the money market certificates were
at one time but are paid out ac- S100 to $1,000 ran ewith a ma- bearing a 12 percent rate, \vhile one-
cordin- to peaks and v :lllrys that tt-ity clate of 90 days to one year year certilicates in the samc dollar
ar.. 1)0cu', .a' tt> ii1,• ,'11•1rac :Cr of the have an i :aerest rate of 5!~z pcr- amc_!nt \\_rc t~ :. . in~ tell pr-ccilt .
associntion . UsuallN•, however, a cent ; nlaturity dates of one to ttvo- Botll money market certificates
continnullv declininl ; hortion of ancl-ollc half years, six percent ; and ccrtificates in :unounts less
elues income is available to liquid fronl tWo-ancl-une-half to four than `100,000 ln :ty be pttrchased by
and safe in\•estnlcnts . ycars, 6'-i percent . Certificates \vitll inclivicluals, cot'hor :ltions, associa-
In developing a cash management program, you should work

with a financial a dviser in designing a portfoli o
that realistically balances budgeted cash needs
against investment objectives
CA
24 ASSOCIA'1'lON itiiANAG1?N11iN'1' • J,tntlary 1975
lions, or any uthc•r t•ntitv that has ulinint :rl :tntuuul ! : and lnticstiin{~ are (IL'slrell, tltcn notes, huncls, or
funclti :, ;' :til :cl,lc . illi{llicit I,u :tr :tnlc•c•s uf licltiiclitv, u- fcclc•ral at"cnry ititiucs are t{lc' se-
hloncy nl :u kct ur I :rr{%• d( rnulnin :t- c-uritl', and coliipclilit,c intereti t curitics that shotrlcl he cunsiclerctl .
liort certificates f:111 into two c :ate- r :ttc* tilrticttncs . It tiliotllcl be notrcl 1lt :tt tioine is-
gorics . l .ool ;inl', ahcad, it is not cliflicul t tittes of fcderal :u•rtlcics are not
A prirn :-y ccrtific :tte is one sold lo e•nVitiiun even nlure extrntii% e directlti• lcu :u-anlCcd by thW l'orcrn-
direcl)y by a Ir,rnlc-or, tinclcr- m•%V innm• :tlinn by lini :s and otller fi- nlent as are 'I'reasulV is~ucs and,
govcrntncnt rcl"ul :tticlns, by a sav- n :tncial institutions as projected for this reason . frclCral nl'rncy is-
inl;s and Io :tn :rssociation--dircctly credit clenl :uld furthcr intensifies sttrs carr' V a sli{'htly hi{thcr yield
to a customcr . t}le cornhetition for loanahle funds . than direct Trcltl~ury ohlil" :ttions .
A second :tq certificatc differs \1Jhal the associalion manager 13 :tnks arlcl investnlcnt houses
chicfl}' in that a third Iwrrly is in- shoulcl rc•cornir.e is that he is a typicalt• m :tintain ull-to-d :tto in-
Volvcd, usually a hrokcr or clralcr . sellcr of funds in a seller's nlarkct, formation on yiclcls :tvailahle on all
Accordingly, cuslomcr A htrl'- a fact %Gich may he working to government securitics . Conscqucnt—
ehases a cc•rtiGcate from the hank, his adt-antaLge for some timc to 1y, they can rivc thcir customers
but, ncedinR his funds prior to the COllle . thc Various alternative inVrstnlents
ccrtificate's maturity clrctc, sells it available .
Repurchase agreement s Most banks and investment
(usually, thou"_h not always) at a
discount to customer B, a dealer . Ilcre a bank is selling its hold- houses have direct access to the
In turn, the dealer sclls the certifi- ing of ~o~•crnmcnt-backed debt is- New York mone%, market and can
cate for a fee to customer C, who sucs (Treasury or federal agency purchase and sell for their own
holds thc ccrtificatc until niaturity obligations) whilc simultancouslv accounts or for customers new is-/
and redeems it at the issuinv bank aorecins, to bu\' them back withili sues of LTOCeI-nment securities or
-frequently at a higher yield than a specified period, usually of short predously issued securities .
would be the case with a primary duration . The government obliLa- Char7es for these services vary
certificate . tions are sold and repurchased at from bank to bank .
Understandably, there are varia- par value . The bank pays interest The vields a%wilable on govern-
tions to this process . Most dealers which is usually less than the fed- ment and agency oblieations are a
tend to warehouse secondary cer- eral fund rate . Liquidity and safety function of the economic condition,
tificates, allowing buycrs to match are high, as are the rates . the 1cnRth of time the issue will be
maturitics to Mir spccific needs . outstanding, and anticipated
Acquiring certificates due in five or U .S . government obligation s changes in government borro~%,ings .
ten days is not unusual . New issues of marketable se- The actual movements in interest
The secondary market for large ct-ities fall into three major cate- rates, however, are more a result
denomination certificates gives gories : bills which nlature in three, of actions of the Federal Open \tar-
these instruments an inherent liq- six, nine, or up to 12 months ; ket Committee in its attempts to
uidity . A disadvant :tRe, of cotnse, notes which run for a period of control the money suppb' . This
is the government insurance limit five years or less ; and bonds with committce is composed of the
of $40,000, though defaults are dr- maturities eztendinn M-ond five seven Fedcral Resen-c Governors,
tttally unknown Mhere the issuing years . Once issucd, thcsc securities the President of the Fedet-al Rc-
bank is sound . are traded in the opcn market . scrve Bank of New York, and four
Consequently, invcstors have the presidents of Federal P.cserve
Commercial pope r option of purchasin<= either new Banks who serve on a rotating
Of growing importance and issues or esistin ,(- issues, dependin!1 basis .
volunlc in recent years, comnlcr- upon their specific investment ob- The spread bet,,\•cen yields on
cial paper is a debt instrument is- jectivcs . govcrnnlcnt securities and othct-
sued by a corporation or a ban k Treasury bills are the most liq- money market instruments of sinli-
holding comhan)% Yields ar e hic:h, uid of govcrnment securitics be- lar maturity (such as Corllnlel-clal
urually ^' or "tnse !- the prij,10 cause of 111e size and c]enth of the paper or negotiable certiticates of
rate . I3anh holding cotnhany com- IL .trkC1 . i~c\\' 1 "'atil,i y t)llls ale dcp,rsit) . .nects W 1-i :: :, investC :N
mcrcial paper is at-ailabl .: cithrr attctionrcl every Atonday, and buy- perccivr . Histurically, the sprca d
through a bank or a llloIlcy niarl .rt c•rs May purchase ul) to $250,000 has been less than one pcrcent .i,"-0-
broker . i\] :tturitics and ntininttntls, on a nonconlhrtilive bid . Recently, however, the spread has )( =
usually $50,000, are set by the Tre :tstn'1' bills are sold on a clis- hren nluch hi! ;tlrr, rrtlcctin{, in-
issuer, thuu{~h, like a secondary cottnt hatiis-tliat is, they are sold vcstor concern and the siLnificance
certiticate of cfeposit, can he ne- for lc•ss than tlle tnattu-ily of attachecl to liquidily .
f;oti :ttrd for VCrv brief prriods of the hillti, :uld the rcttr quotrd is the Burlcls and notes are duotcd on
time . Conintrri ial l, :ther is rlot in- actual yield to malttritV . 13rcausr a simpIr interest basis, ancl thc fol-
surcd, rxccht by the credit wor(hi- of tltr di>cotlnt fr :ttur .•, yiclcls fre- lowinr: fcll-nlula may he u',cct tcl dc-t %
ness ot the issurr . duentiy are IranSLatrcl into "bond terntinr the actttal yield clrrivcd-
The. flo :tlin{ ; 1'atc llote, ret'rntly edtliVtlcnt yield" to pertnit colu- on these lclnt,-lrrnl investnlettts . I
hionerri•d by Firtit National Citv p :tri"cln \vith utlter Inonry rltarhe t For example, a 20-year boncl at r;
13atllc of Ncw 1'ut k, is al> .o in forrrl in,t runtrnts . 7 .5 prrccrtt is l,urch :tsccl fur $,00
of ttcmecluity debt purclt :tsctllle ir► If itn•etitntrttts of a lotlt',rt• tVrtrt with a tnattrl-ity v :tlue of $1,000 .
Janu :ul' 1975 • M~SOCIr1'1-1ON A111Nr1GF_\1l :N'I' 25

• 'I ; Urti'rluinc Avrralte Int•csttncnt . tc•rltnolut ;irs can fac'ililclte \olunte
I r :uls ;tcl ion .
Ctu-rent 111cu lcct Price (ur price flaid) I Face Valuc • Crelfil contlnitntenl, to assist
Average Intrsltnrnt =- 2 in associatiott builklinl ; prot .,ratns ot'
SS00 -- S 1,000 u(lice ntoclrrnii ;tlion .
AI - ` 2
•'Tlu• avail•ahililv of a fttll ranl,e
AI - $90 0 of llerson ;tl b ;utl.iltl! and trltst tte-
r ;u'tntrrtt services to associatiou of-
To drterntinc yieltf, it is inil]or- there is an annual ahl]rcciation of ficers and stall' .
tant to realize that besides the $75 $10 ($'UO (liscount spread over 20 • l .inrs of credit for short-tet'tn
annual interest the bond pays, ycars) . financing, ncrds .
Bank trust dep :-ttnents custotn-
arily are assuciated with pension
2 . Compute Yield . plall Il]atla!',Cnll'llt and Cl,llitl'-tyhl :
Annual Interest -I- Avcrape Annual Apprrciatio n im•estnlen ls . I nelred, any associa-
YJelcl = tion consiltel'Illt', a cash t1l ;ltlai'C-
Avcrabc lnt•estnien t
l : : :nt rcl : : :~onsllii- witl, a bank
,,75 + ~ I0
Woulcl be remiss in not ctiscussiny
Y _ ~ $90 0 pcnsion and insurance hrograms
Y = 9 .444°.0 with a bank's trust department .
For the most part, trttst dchart-
Government obli~_,ations may be stand and define investment ob-
n]ent performance in these fields
purchased or solcl throuRh banks, jectives and work with a bank or
(lurinyT recent years has been cx-
stock brokers, investnlenl bankers, a financial adviser in constructing
ceptional .
and the Federal Reserve Bank . Se- a portfolio that realizes them .
The trust dehal-ti]lellt can also
curity is the highest possible . There Purposcly, discussion of intet-- offer certain cash nlana-emcnt al-
is a tremendous amount of liq- cst-diVidcrlct-Vield structurCs has tcrnatiVes unal'ailable tllrollE!ll the
uiclity because of awcll organized been played down-and with good
commercial sidc of a ban}c ; services
market that enables investors to reason . Ratcs rcllect prevailing cco- which particularty api]Iti- to longer-
buy and sell Treasury issues at a nomic conditions, which in turn term invcstmcnt of accun]ulatcd
n]on]ent's notice . affect the usefulness of one savinRs reserVes .
In general, the minimum dollar instrunlent as con tras ted xith Not stu-prisin~lV, the -rcater use
investment in short-term obliga- another . N1'hat to buy today, what of both commercial and trust scrv-
tions is $10,000, tllouah there are price to exhcct, how long or short iccs by associations has caused
exceptions . Long-term obligations to invest-there simply is no hard banks and th,~ir trust departments
-U .S . savin,,s bonds, for example and fast answer ezcept to selec t to seek to cnlar2c their share of
-are extremely flexible with re- options corresponcling. to needs, association business . This avail-
spcct to minimums . which is precisely what cash man- abitity of serviccs, often with the
a-ement is all about .
trust department acting as an as-
The bank's rolo in cash managemont Some larger associations employ
sociation's fiscal aRcnt, is an ex-
A commercial bank offers a larg e staff or consultant advisers to man- ample of the role that banks arc
number of investment alternatives aRe their fLmcis ; but most, as pre- playing .
to the n]ana< ;er of a trade associa- viously noted, assiL-n this task to It is a role whicl] also can bene-
tion or professional society . More- the executive director or an admin-
fit an association : The ereatcr num-
ovcr, this listing of options is by istrative assistant, \%herc it often ber of economicallv justifiablc
no means completc . Banks and is suborclilt :ttcd-and 1]crhaf)s f]rop- services utilizcd by an association
trust dCl)at•tmetlts, not to mention eI-ly so-to Otl]er association af-
should nlinin]izc the cost of an in-
other institutions and brokers, can fairs . dividual scrvicc .
prot-idc in evcn wiclcr selection of The coninlct'cial hank can serve
L'111phasizc the condi t ionat--cco-
rel :'t'~cly 5-c .,,c nt~ . ;ta]cn~ ol11)o1- cithul as a vehicl, ~t n11_ ; which tic]lii : .:aii}' jtl':ti(i ; I>i~ . You !~ave to
lunitics : for c~ :unhlc, lii(th-graclc association ntan~tcment works, or
ask "Is cash man :t,,,clnel]t-or a
corhorate bottcls, issucs of intcrlla- it can hcrfornl the V :tluablc fun(-- cotnhination of bank and trust dc-
tional deVelol)n]ent hanks, nlorl- tiun of cash nlanat;etncnt directly
p :urttncnt scrviccs - really worth-
[*_af:e f]articipcttionti . These and still for an association . while for nty association?" 'ftle
othct' int'cs(lucnts tend to 1)osscss answer will be yes, no, or maybe,
Factors to conside r
prc, :trr risk csl)osure, Itou-eVer . but linclinl ; out costs no more than
What the associatiun nt :ul :ll rr is Lxf)ertise, t'atc, and tec :hnolot6cal
a little time sl)enl talking with
seeking in nearly all cases is ntctxi- cah ;trity in hrll]inlt an association ti'our hattkrr . Lcl hiln looh at wll :lt
nlun] earnin,•.s witllin tltc Iran]c- collect and inve"t clurs inconle and
you're tloinl ; now, and thcn juclge
work of u'curity ancl licltliciily . tC~c't't'cs art• not the only factors
hiti ability to clo a licttcr jclb and
A bank also can firoVitle otltlCts to be cl' :tltr.Itcd in consiclerin,' a one WIlich Mrl'all costs your assu-
for short-Icrln invrtilntertt, niatch- bank relationsltifl . Othc•r factors cialion as little as 1>ostiible-itt
in(t tlte c•aslt nt :ln :tt"rnlrnt ncecls of inclutlc : dolL-u's and in 1]rccious st ;tll titne .
a parlicular as!,ucialiun to llle best • Assistance in futtlls tlishttrsc-
invcstnlenls . The trick is to unclcr• ntrnt, 1] ;trticul :u'Iy whcre contputc r
[us~jfl
_
0082 ;'65857
26 ASSnCIA'I'InN 11ANA( ;I?N11?N'1' • Janu :try 1975
By Douglas S . Culkin
transaction of the papcr work, are relationship ; it is a good idea to about $5 or S6 means little . For
returned to the association . shop before bu\•ii~Z D example, S500,000 transferred by
The basic question in considerinR wire could save three days in mail
a lockbox arranRcment is volume- Depository transfer syste m and processing time . Interest carn-
both the dollars involved and the This collection srstem is particu- ed-sav in the current commercial
number of dues paytnents proccss- larly applicable to an association paper market-could provide extra
ed . The bank, of course, charges for or professional society headquar- income of about $160 per day on
a lockbox . But conditions may justi- tercd imone ►netropolitan area but that amount .
fy the fee . having numerous autonomous units Depository transfers through
If the dollar volume is substan- scattered throuehout the count ► v . drafts and' bank wires offer another
tial, the time savcd by depositing These units report to their head- advantage applicable to most asso-
funds in a ; bank account, and then quarters any excess funds that are ciations reeard'less of size, whether
by prcdetermined~ agreement into deposited with their local banks . members or dollars . Let's call i t
interest-bearing assct's, can lead~ to This information is then relaved mobility, or the easy, flexible use
dollars carne& that more than justi- to the association's main bank in of alternatives . Many-perh :tps even
fy lockbox costs . Correspondingly, order to implement the transfer most-associations tend to deal
where the number of items proc- system . This system utilizes pre- with the financial institution locat-
essed by the bank is large, the printed drafts drawn on the local ed nearest to the hcadquaricrs of-
lockbox can reduce association staff depository and requirin,, no signa- fice .
costs in handling the transactions . ture . The draf'ts are filled out on a In certain instances, this practice
Now in the developmental st .1ge d :tilv basis or some other aRreed- may be self-defeating . For one thinn,
at some banks is the microencodin, upomschedule and drposite&direct- the nearbv financial institution may
of membership statrments, which, h, to the association's main account . be restricted or limited in the kind
when rcmittcd -with~cluws paYnlents, Transfer costs througlr bank of investment alternatives it offers .
et : :bles tl:~ ir.uti : '. o dr^.lts are ,~ i .~un•~~ . The L Its r-te Stt'nrt : ;re!z mR\• h : :,. :Coln-
icallla record-keeping function for to an association becomes apparent pct it ivc . Its technolc ► gical capacity
an association . where dollar amuunt is sizahle and ma y be less than desired . Or for
Compensation to a hank for lock- where tnaill time saved mcans plac- ntan)olhct- ►'lasUnl+ it ma y not cUnl-
box •crricr is usuallv in the form inlt these dollars more quickly into pletcl y lultill an association's n e cds .
of a fee or a hal .tnce-th ;tt is, a carninf;asscts . The. draft tr :tsfer or ~t•ire, how-
miniinum cash h . ► l ;incr which an ever, creatcs an ohoion wherrby an ~
associ ;ttion maintains with th~~~ bank Dank wires associatiun lnay t1tlllze its ncarhv
rroviding the lockbox . A1nm' vari- 1'unctic>ninl ; ctrn mttrc exprdi- tiuctncial instiltution as an access toC
ublrs alTrct both Ihr :unutont and tiousl' N ' than a drhositury tran"fcr a Iarrrr, more scihltitticatvd iustittt- Of
ntctlioa nf cu»tl~rnsati~~n . The hoint is the bvtk wirr-a tclrhhunr com- tion some dist :uece mv ► v :. Pruximity,aQ
is, the cxtent . of a rc1 :t1 iontihill l :u p•r- vvrs,ttiun that can activa!r a trl~•- thrn.~•li~rr, tw lunl"~•t' ► ti essential to ~
1}" duwrinincs a hnnl;'s rharl ;r . The l,rap h Ira ► Is ;tction . 1S'Ilrrc i tullur :t Wurl:inll tTliitiOnsltilp With : ► hattk ;LN
assori :► iiOn, thrrclurr, is ncfVisCil lu :unc ► unt's are substantial and tinte it has hc .•n tni'nintizrtf by technolohV
ln•l;aiu well in crn ► cntinl, a bank of the cssrnce, 11tr wit•c cu`t of and cunlhmitire forct•s .
January 1975 • ASSOC1A7'lON! N1AN'AG1"11i1 :NT 23

ANNUAL REPORT OF DIRECTORS PURSUANT T O
SECTION 519 OF THE NOT-FOR-PROFIT CORPORATION LA W
The following report is respectfully submitted to the
membership of The Tobacco Institute, Inc ., in accordance with the
provisions of Section1519 of the Not-For-Profit Corporation Law of
the State of New York .
1-2 . The assets and liabilities, including trust funds ,
of the Institute as of the end of the last fiscal year, December 31,
1974, are shown on the Balance Sheet prepared by the Institute, which
c is attached to this report . The principal changes in assets an d
liabilities, including trust funds, during the 1974 fiscal year
may be seen by comparing the December 31, 1974, Balance Sheet with
that for December 31, 1973, prepared by the Institute which is also
attached to this report .
3-4 . The revenues and expenses of the Institute, both
unrestricted and restricted to particular purposes, for the fiscal
year ending December 31, 1974, are shown in the Statement of Receipts
and Disbursements prepared by the Institute's auditors, Coopers & 0
Lybrand, which is attached to this report .

C
5 . The Institute presently has 11 members, a decrease o f
one over the year immediately preceding the date of this report . A
complete list of the names and addresses of the current members may
be found in the offices of The Tobacco Institute, Inc ., 1776 K Street
Northwest, Washington, D . C . 20006 .
Respectfully submitted ,
>>~
President and Executive Directo r
January 30, 1975

-3-
VERIFICATION'
Horace R . Kornegay, being duly sworn, states that he is the President'
of The Tobacco Institute, Inc ., and that he has readthe foregoing
report, and that the statements contained therein are true to the best
of his knowledge .
Subscribed and sworn to before m e
VERIFICATIO N
C . Gilbert Collingwood, being duly sworn, states that he is the
Treasurer of The Tobacco Institute, Inc ., and that he has read the
foregoing report, and that the statements contained therein are
true to the best of his knowledge and belief .
Subscribed and sworn to before me
this a lsk day of January, 1 7,5 .

._,
~ --- A~ .c
No ', y Publi z
My missic/n Ex,_Ires Jure 30, 19
( THE TOBACCO INSTITUTE', INC .
BALANCE SHEET '
ASSETS
Accounts Receivable $ 915 .58

Cash 144,872 . 3 2
Deposits 770.0 0
Petty Cash 500 .00
Imprest Cash Fund 5,000 .00
Payroll Imprest Ftuzd 2,000 .00
Total Assets $154,057 .90
FUND BALANCE -
Balance as of January 1, 1974 $ 45,128 .04
Excess of Receipts ove r

Disbursements 108,929 .8'b
Fund Balance as of December 31, 1974 $154,057 .90
r.
BALANCE SHEE T
ASSETS
Accounts Receivable $ 10,101 .23
Cas h 26,856 .81
Deposits 770 .00
Petty Cash 400 . 00
Imprest Cash 5,000 .00
Payroll Account 2,000 .0 0
C Total Assets $ 45,128 . o4
FUND BALANC E
Balance as of January 1, 1973 $137,126 .2 3
Excess of Disbursements over

Receipt s (91,998 .19)
Fund Balance as of December 31, 1973 $ 45,128 .ok

~ -
~'i! {i ,;
,, 4 ;lpo,, , :
•A .a
COOPERS & LYBRAN D
The Board of Director s

Washington, D . C .
[
We have examined the accompanying statement of cash

receipts and disbursements of The Tobacco Institute, Inc . for the
( year en~ded December 31, 1974 . Our examination was made in accord-
ance with generally accepted auditing standards and, accordingly,
included such tests of the accounting records and such other
auditing procedures as we considered necessary in the circumstances .
( This statement does not purport to present the results

of operations as they would have appeared had generally accepted
accrual basis accounting principles been applied in thei r
preparation .
( In our opinion, the accompanying statement of cash receipts

and disbursements for the year ended December 31', 1974 presents
fairly the information set forth therein and has been prepare d
on a basis consistent with that of the preceding year .
L
Washington, D . C .
January 15, 1975
1
STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
(NOTE 1 )
[ for the year ended December 31, 197 4
Receipts (Note 2) :
I Annual dues $ 26o,469
Additional assessments 1,797,595
Repayment of advances, ne t 9,186
Total receipts 2,067,250
Disbursements :
[ Salaries, officers and professional $507,320
State activitie s 266,782
Deferred compensation (Note 3) 164,669
Salaries, secretarial and clerical 1 44, 279
Professional fees and expenses 130,652
Travel and local expense s 116,056
t Pension expense (Note 4) 107, 343
Rent (Note 5 ) 101,276
Public relations :
Internal Information & Counsel 145,018
Other project s 65, 429
Publications 47,647
C Insurance, including group plans 36,677
Stati,onery, printing and postage 35,243
Telephone and telegrap h 30 , 908
Tobacco Growers Information Committee 28,334
Taxes, principally payrol l 22,81~6
Dues, subscriptions and publications 20', 934
C. Meetings and conference s 5, 9oQ'
Office furniture and fixtures 5,839
Miscellaneou s 622
Total disbursement s 1,983,744
Excess of receipts over disbursements 83~506
( Cash balance, January 1, 1974 36535 3
Cashbalance, December 31, 1974 $ 11'9,859
January 1, December 31,
197~+' 1974
Analysis of cash balance :
Operating account $29,353 $112,859
Imprest account 5,000 5,000
Payroll imprest account 2,000 2,00 0
436,353' $119,859
C
L
NOTES TO STATEMENT OF CASH RECEIPTSAND DISBURSEMENT S
1 . Statement presentation
This statement does not include the cash receipts and

t disbursements of the Tobacco Institute~Testing La .boratory, a
division of The Tobacco Institute, Inc .
2 . Dues and assessment s

t
Annual dues are determined by applying the rate
established in the By-Laws to the annual production of each
member company . Additional assessments represent the amounts
required in excess of annual dues to fund budgeted expenditures .
These amount are assessed to the applicable companies (as deter-
t mined in the By-ha.ws) by applying a percentage, seven hundred
in 1974, to their annual dues .
3 . Employment agreement s
The Institute has entered into employment contracts
C with certain key employees, providing for specified compensation
during the contract periods and for the payment of deferred
compensation thereafter . The Institute is funding the contractual
liabilities for the deferred compensation through the purchas e
of retirement income policies and investments in mutual funds
C and savings accounts . The income from these investments is
not includedin the accompanying statements .
4 . Pension pla n
On December 31, 11972 the Institute adopted a noncontri-

C
butory pension plan for all full-time employees . The plan is
administered by the Pension Committee . Contributions to the
plan are actuarially determined and include normal cost and
amortization of prior service costs over thirty years . The
Institute's policy is to fund amounts accrued .
L
Pension,expense of $107,343 includes the Institute's 0
contribution to the plan plus $8,529 of operating expenses . Q
N
C7
Continued Q
C11
C Gb
0'!
3
NOTEST0 STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
Pension expense has been reducedby $5,813 which represent s

the amount received from the Tbbacco Institute Testing Laboratory
for its 1973 contribution to the plan . The Testing La .boratory's
1974 contribution was paid directly to the plan .
Lease Commitmen t
The Institute occupies office space under a noncancel-

I able lease which requires minimum annual rental payments of
approximately $101,000 and expires on May 31, 1979 . The lease
includes a provision which allows the minimum rental payments to
be adjusted annually for changes in the consumer price index .
t 6 . Income taxe s
Under provisions of the Internal Revenue Code, the
Institute is exempt from taxes on income other than unrelated
business income . The Institute had no unrelated business incom e
during the year .
L
A.
L
aP
J7,
COOPERS & LYBRAN D
The Board~ of Director s

Washington, D . C .
We have examined the accompanying statement of cashre-

ceipts and disbursements of the Tobacco Institute Testing Laboratory
for the year ended December 31, 1974 . Our examination was made in
accordance with generally accepted auditing standards and, accordingly,
included suchtests of the accounting records and'such other audit-
ing procedures as we considered necessary in the circumstances .
This statement does not purport to present the results

[ of operations as they would have appeared had'generally accepted
accrual basis accounting principles been applied in their prepara-
tion .
In our opinion, the accompanying statement of cash re-

ceipts and disbursements for the year ended December 31, 1974
presents fairly the information set forth therein~and has been~
prepared on a basis consistent with that of the preceding year .
Washington, D . C .
January 15, 1975
C
1
TOBACCO INSTITUTE TESTING LABORATORY
STATEMENT OF CASH RECEIPTS AND DISBURSEMENT S
(NOTE 1 )
for the year ended December 31, 1974 1
Receipts from members (Note 2) :

Annual due s $ 1 ~ 750
Additional assessments 247~750
Total receipt s 249,50 0
Disbursements :
Salaries $94,616
Rent (Note 3) 33,101
Cigarette samples 21,550
Laboratory equipment 15,173
Pension expense (Note 4) 12,125
Supplie s 10, 62 0
Insurance, including group plans 8, 723
( Taxes, principally payrol l 7,445
Fees and'services 6, 844
Repairs and maintenanc e 6,181
Office furniture and~renovations 3,245
Travel and local expenses 1,892
Telephone and telegraph 1,541
t Printing and reprints 1,483
Miscellaneou s 553
Tbtal disbursement s 225,092
Excess of receipts over disbursements 24,40 8

Cash balance, January 1, 1974 7,605
Cash balance, December 31, 1974, $ 32,01 3

C
2
TOBACCO INSTITUTE TESTING LABORATORY
NOTES T&FINANCIAL STATEMENT S
1 . Statement presentation !
The Tobacco Institute Testing Laboratory is a divi-

sion of The Tobacco Institute, Inc . This statement does not
include the cash receipts and'disbursements of the regular
operations of The Tobacco Institute, Inc .
2 . Dues and assessment s
Annual dues are a fixed amount for each member company

of the Testing Laboratory . Additional assessments represent the
amounts required~in excess of annual dues to fund budgete d
expenditures . These amounts are assessed equally to the appli-
cable companies .
3 . Lease commitmen t
The Testing Laboratory leases its facilities under
a noncancelable lease agreement expiring in October 11975 at
a monthly rate of approximately $2,400 .
[
4 . Pension plan ,
Employees of the Testing Laboratory participate in

the noncontributory pension plan of The Tobacco Institute, Inc .
The plan is administered by the Pension Commitee of the Institute .
Contributions to the plan are actuarially determined and include
normal cost and amortization of prior service costs over thirty
years . The Institute's policy is to fund amounts accrued~ .
Pension expense of $112,125 includes the Testing Laboratory's
contribution to the plan for 1973 and 1974 plus operating
expenses of $259 .
C 5 . Income taxe s
The Testing Laboratory is a division of The Tobacco

Institute, Inc ., and is exempt from income taxes other than un-
related business income taxes under the Internal Revenue Service
ruling obtained by the Institute . The Testing Laboratory had
C no unrelated!business income during the year .
C'9
c 00
C
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C'i
m

1968 Tobacco Institute

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1968 Tobacco Institute

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The TobacQp Ln,stitute,` Tric :'was formed i n

Mr . Bbvvxrj o'ia-~Gray served as ; Chairman of th e

Executiy.e 'Gt~mmi;~tee si4ce its inception on

Apri1 10, 1958 uniiI his resignation on Decem-

Mr . Edwin P . Finch was eiected Chairman a t

the Dec .ember=2, 1965 meeting and served unti l

Mr . Jojeph F . Cull.man 3rd became Chairman .

Brown 8 Williamson : Tobacco Corporation

General Cigar 8 Tobacco Co ., A Division of Culbro Corporation

G . A. Georgopulo 8 Company, Inc .

Larus 8 Brother, Inc .

Liggett 8 Myers Tobacco Company, Inc .

Lorillard, A Division of Loews Theatres, Inc .

Philip Morris Incorporated

R . J . Reynolds Tobacco Company

Scotten, Dillon Tobacco Co ., Inc .

United States Tobacco Company

THE TOBACCO INSTITUTE', INC .

Brown 8 Williamson Tobacco Corporation

General Cigar & Tbbacco Co ., A Division of Culbro Corporation

G . A. Georgopulo & Company, Inc .

Larus & Brother, Inc .

Liggett & Myers Tobacco Ccsnpany, Inc .

Lorillard, A Division of Loews Theatres, Inc .

Philip Morris Incorporated

R. J. Reynolds Tobacco Company

Scotten, Dillon Tobacco Co ., Inc .

United States Tobacco Company

Joseph E . Edens, Chairman

Horace R . Kornegay President and Executive Directo r

Franklin B . Dryden Senior Vice President

J .C .B . Ehringhaus, Jr . Senior Vice President

William Kloepfer, Jr . Senior Vice President

John F . Mill s Senior Vice President

Anne H . Duffin Vice Presiden t

William Hecht Vice President

Roger L . Moz i'ngo Vice President

Frederick Panzer Vice President

Marvin A . Kastenbaum Director of Statistic s

Charles L . Wait e Medical Director

B . E . Bacon Assistant Treasurer

Kathryn R . Golden Secretary

Donna Hilderle y Assistant Secretar y

Ernest Pepples, Chairman

James C . Bowling, Chairman

THE TOBACCO~INSTITUTE, INC .

DeBaun Bryant, Chairman

Section 1 . The Institute shall maintain an office in the City of

Section l . Any person, firm or corporation engaged in the busines s

Section 2 . A parent corporation and the member of which it is the

Section 3 . Any person, firm or corporation eligible for membership

Section 4 . Upon receipt of any application for membership the

Section5 . Membership in the Institute may be terminated by

Section7 . The members who as of the date of any election of

Section 1 . Each member elected pursuant to Article II shall pay annual C

If a member's estimated production of tax-paid cigarettes has been

No member or former member of the corporation shall have any obli-

Section 2 . The Institute's budget for each calendar year shall be

Section 3 . Upon termination of membership, a former member shall re-

Section 1 . The annual meeting of the members for the election of

Section 2 . Special meetings of the members of the Institute may be

Section 3 . Notice of annual meeting or special meeting shall be

Section 4 . One third~of the members of the Institute shall consti-

Section 5 . The President of the Institute shall preside at each

. Section 3 . ..•iembership in the Institute may be terminated by