KTSTC Phase II Payment Plan

Resolution of the Board of Directors of the Kentucky Tobacco Settlement Trust Corporation adopting a plan for distribution of financial assistance from the National Tobacco Growers Settlement Trust

Approved March 22, 2004

The Kentucky Tobacco Settlement Trust Corporation hereby resolves that the plan for distributing proceeds from the National Tobacco Growers Settlement Trust be comprised of the following guidelines:

Compensation for Quota Owners be made to owners of quota identified by the USDA Farm Service Agency as of July 1, 2003 and/or the final lease and transfer date;

Compensation for Growing Farms and Grower/Tenants be based on a weighted average of payment pounds (average of effective quota and marketings) from crop years 1998, 1999, and 2000;

An additional application period would be conducted in 2004 to certify basic quota recipients for crop year 2003.

Growing Farm and Grower/Tenant compensation shall be limited to those individuals who maintained a vested interest in tobacco production in 1998 and/or 1999 and or 2000 as described in previous compensation plans. Compensation from the trust would be made only for the years in which an applicant had a vested interest in tobacco production, as described under previous compensation plans.

Phase II Tobacco Settlement Definitions