MASTER SETTLEMENT AGREEMENT App.1 MASTER SETTLEMENT AGREEMENT TABLE OF CONTENTS ~ I. RECITALS.................................................................................................... I II. DEFINITIONS............................................................................................... 3 (a) 11Aecountu .......................................................................................... 3 (b) "Adult"............................................................................................... 3 (c) "Adult·Only Facility"........................................................................ 3 (d) "Affiliate".......................................................................................... 3 (c) "Agreement"...................................................................................... 4 (f) "Allocable Share".............................................................................. 4 (g) "Allocated Payment" ......................................................................... 4 (h) "Bankruptcy"..................................................................................... 4 (i) "Brand Name".................................................................................... 5 (j) "Brand Name Sponsorship"............................................................... 5 (k) "Business Day".................................................................................. 6 (I) hCanoon" .. .. ... ..... ....... .. ... ............. .... .......... ..... .... .. ..... ............ ......... 6 (m) "Cigarette" ...................................................................................... ... 6 (n) "Claims"............................................................................................. 7 (o) "Consent Decree"............................................................................... 7 I (p) "'Court" ...........................................................,................................... 7 (q) "EscrO\\'" .... ......... ... .. .. .. .... ............. ........... .............. .......... ............. 7 ! (r) "Escrow Agent.,................................................................................. 7 i (s) "Escrow Agreement" .. .. ................ .......... ... .. ................ ........... ........ ... 8 (t) "Federal Tobacco Legislation Offset"............................................... 8 ~ (u) "Final Approval"................................................................................ 8 i (\I) "Foundation"...................................................................................... 8 \ (w) "Independent Auditor"....................................................................... l 8 I (X) "Inflation Adjustment"....................................................................... 8 I, (y) "Litigating Releasing Parties Offset"................................................. 8 (z) "Market Share".................................................................................. 9 } (aa) "MSA Execution Date"...................................................................... 9 ' (bb) "NAAG" ............................................................................................ 9 (cc) "Non-Participating Manufactw-er"..................................................... 9 (dd) "Non-Settling States Reduction"....................................................... 9 i (cc) "Notice Parties"................................................................................. 9 ; '• (ft) "NPM Adjustment"............................................................................ 1o j. (gel "NPM Adjustment Percentage"......................................................... I 0 I (hh) "Original Participating Manufacturers"............................................. 10 (ii) "Outdoor Advenising" ....................................................................... 1o i {jj) "Participating Manufacturer"............................................................. 11 i L ' .j. (kk) "Previously Settled States Reduction" .............................................. 12 (II) "Prime Rate" ...................................................................................... 12 (mm) "Relative Market Share" ................................................................... 12 (nn) "Released Claims" ............................................................................. 13 (oo) "Released Parties"............................................................................. 14 (pp) "Releasing Parties" ........................................................................... 14 (qq) "Scttlillg State".................................................................................. 15 (rr) "State" ••••••••••••·•··············--··-.···················•••••••••••·•·····•••••••···••u·········•· 15 (ss) "State-Specific Finality" .................................................................... 15 (n) "Subsequent Participating Manufacturer" ........................................ 16 (uu) "Tobacco Product Manufacturer" ...................................................... 16 (vv) "Tobacco Products" ........................................................................... 17 (ww) "Tobacco·Related Organizations" ..................................................... 17 (XX) "Transit Advertisements" .................................................................. 17 (yy) "Underage"......................................................................................... 18 (zz) "Video Game Arcade" ...................................................................... 18 (aaa) "Volume Adjustment" ....................................................................... 18 (bbb) "Youth".............................................................................................. 18 Ill. PERMANENT RELIEF................................................................................ 18 (a) Prohibition on Youth Targeting......................................................... 18 (b) Ban on Use of Cartoons..................................................................... 19 (c) Limitation of Tobacco Brand Name Sponsorships............................ 19 (d) Elimination of Outdoor Advertising and Transit Advertisements .................................................................................. 22 (c) Prohibition on Payments Related to Tobacco Products and Media................................................................................................. 24 (f) Ban on Tobacco Brand Name Merchandise ...................................... 25 (g) Ban on Youth Access to Free Samples.............................................. 26 (h) Ban on Gifts to Underage Persons Based on Proofs of Purchase . ...... ... ......... ......... ........... ............ .......... .... .... ...... ............... 26 (i) Limitation on Third-Party Use ofBrand Names................................ 27 G) Ban on Non-Tobacco Brand Names.................................................. 27 (k) Minimum Pack Size ofTwcnty Cigarettes........................................ 28 (I) Corporate Culture Commitments Related to Youth Access and Consumption............................................................................... 29 (m) Limitations on Lobbying ................................................................... 29 (n) Restriction on Advocacy Concerning Settlement Proceeds............... 32 (o) Dissolution ofThe Tobacco Institute, Inc., the Council for Tobacco Research-U.S.A., Inc. and the Center for Indoor Air Research, Inc................................................................................ 32 (p) Reaulation and Oversight ofNew Tobacco-Related Trade Associations....................................................................................... 33 (q) Prohibition on Agreements to Suppress Research............................. 35 (r) Prohibition on Material Misrepresentations....................................... 36 ·ii· IV. PUBLIC ACCESS TO DOCUMENTS ........................................................ 36 V. TOBACCO CONTROL AND UNDERAGE USE LAWS........................... 41 VI. ESTABLISHMENTOFANATIONALFOUNDATION............................ 41 (a) Foundation Purposes.......................................................................... 41 (b) Base Foundation Payments................................................................ 42 (c) National Public Education Fund Payments........................................ 42 (d) Creation and Organization ofthe Foundation.................................... 43 {e) Foundation Affiliation....................................................................... 44 {f) Foundation Functions ........................................................................ 44 (g) Foundation Grant-Making ................................................................. 46 (h) Foundation Activities ................................. ,....................................... 47 (i) Severance ofthis Section................................................................... 47 VII. ENFORCEMENT.......................................................................................... 48 (a) Jurisdiction......................................................................................... 48 (b) Enforcement of Consent Decree........................................................ 49 (c) Enforcement ofthis Agreement......................................................... 49 (d) Right ofReview................................................................................