Evidence is now available to indicate that the 14-to-18- year-old group is an increasing segment of the smoking population. RJR-T must soon establish a successful new brand in this market if our position in the industry is to be maintained over the long term.

I believe that for the typical smoker nicotine satisfaction is the dominant desire, as opposed to flavor and other satisfactions.

If younger adults turn away from smoking, the industry will decline, just as a population which does not give birth will eventually dwindle.

It should be said that we are presently, and I believe unfairly, constrained from directly promoting cigarettes to the youth market...Realistically, if our Company is to survive and prosper, over the long term, we must get our share of the youth market. In my opinion, this will require new brands tailored to the youth market.

They represent tomorrow's cigarette business. . . As this 14-24 age group matures, they will account for a key share of the total cigarette volume -- for at least the next 25 years.

Younger adult smokers are the only source of replacement smokers If younger adults turn away from smoking, the industry must decline.