MINUTES

Spring Board Meeting NC Agricultural Foundation, Inc.; NC Tobacco Foundation Inc. and NC Dairy Foundation

March 29, 2017

The joint Spring meeting of the NC Agricultural Foundation, Inc. (NCAF); NC Tobacco Foundation Inc. (NCTF) and NC Dairy Foundation (NCDF) was held at 1:15 PM on March 29, 2017 at the NC State University Club in Raleigh with the following officers, directors, university personnel and guests in attendance:

Officers and Directors

Kelly Archambault

Andy Ballance

Johnny Barnes

Cal Berryhill

Ray Best

Stan Biconish

Graham Boyd

Tommy Bunn

Tommy Burleson

Robert Burrage

Fred Burt

Billy Carter

Gary Cartwright

Jeff Chandler

Leslie Cook

Rick Coor

Albert Corbett

clinton crocker

Peter Daniel

Jay Darden

Chris Daubert

Sam Davis

Brantley DeLoatche

Philip Duncan

Andy Eure

Gary Evans

Beth Farrell rep Commissioner Troxler

Bob Ford

Jimmy Gentry

Brenda Gilbert

Mike Godley

Eric Gonder

Roy Gorena

Frank Grainger

Maggie Hamm

Linda Harris

David Hartman

Mandy Hasty

Zane Hedgecock

Kendall Hill

Paul Hill

Sara Hough

Jim Howie

Jim Hunt

Eddie Jennings

Deborah Johnson

Mickey Keck

Kathy Kennel

Don Kerr

John Kimber

John Kinneer

Blount Knowles

Leigh Lane

Bernard Lennon

Chester Lowder rep NC Farm Bureau

Fred Miller

Carroll Moseley

Stanley Oliver

Christian Overton

Jacob Parker

Bob Paxton

Mary Peloquin-Dodd

Parker Philips

Jim Poindexter

Nelson Powell

Richard Reich rep Commissioner Troxler

David Rives

Harvey Roberts

Sharon Rogers

Bill Scott

Connie Smith

Jim Smith

Walter Smith

Steve Sorrells

Larry Sykes

Paul Talley

Ronnie Trantham

Matt Vann

Hester Vernon

Brian Warren

Dan Warren

Wayne Watson

Mark Wellons

Craig West

Jeff Wilson

Steve Wilson

Paula Woodall

Larry Wooten

Debbie Worley

Guests

Greg Anderson

Lyndsey Beasley

Sylvia Blankenship

Rich Bonanno

Becky Boston

Celeste Brogdon

Blake Brown

Pam Byington

Richard Campbell

Susan Colby

Bill Collins

Roger Crickenberger

Erin Delehanty

John Dole

Shelia Fisher

Libby George

Carl Hollifield

Sarah Joyce

Todd Klaenhammer

Kevin Lee

Steve Lommel

Thomas Manshack

Catherine Maxwell

Tom Mease

Joyce Munro

Sonia Murphy

Robin Pipken

Tanzania Ray

Patti Stewart

Rhonda Sutton

De Teague

Alycia Thornton

Chris Wessel

Beth Wilson

Clay Womble

Cheryl Yanik

Virginia Yopp

New Member Orientation Presentations 9:30 AM – 10:30 AM: Associate Dean Sylvia Blankenship – College Update Dr. John Dole – Academic Programs Dr. Steve Lommel – Research Dr. Rich Bonanno – Extension Ms. Celeste Brogdon – CALS Alumni & Friends Society and Events Team Ms. Kathy Kennel – Overall Foundation Responsibilities Joint Agricultural, Dairy and Tobacco Committee Meetings 10:30 AM – Noon: Academic Programs Committee – Breezeway Development Committee – Adult Side Bar External Relations Committee – State Room Investment Committee – Wolfpack Board Room Research & Extension Committee – University Room Joint Luncheon Noon – 1:00 PM: After a welcome from Associate Dean Sylvia Blankenship, Mr. Richard Reich gave an update from NCDA &CS on behalf of Commissioner Steve Troxler. Dr. Blankenship introduced Ms. Sara Lane, coordinator of CALS career services. Ms. Lane then introduced two students who made presentations: Ms. Jalynne Waters and Mr. Daniel Miller. Annual Meeting 1:15 PM – 2:30 PM: Welcome – Paul Talley, Chair, called the 2017 annual spring meeting of the North Carolina Agricultural Foundation to order. Talley told the group the Foundation is having an outstanding year in terms of cash and new pledges. We need strong Board support, especially as we strive to continue our fund raising growth and continue our role with the Think and Do the Extraordinary Campaign. We also need to continue to grow our endowments for the College. He then thanked again all of the NC Agricultural Foundation Board members for their attendance, support, and efforts. Welcome – Bob Paxton, Chair, called the 2017 annual spring meeting of the North Carolina Dairy Foundation to order. Paxton reminded attendees we need support for the upcoming June Dairy Month Educational Plan solicitation, which includes the Dairy Youth Foundation check-off. He encouraged everyone to talk this effort up with producers and processors. We need to continue to work to expand dairy production in NC and to increase stability in our milk prices. He then thanked Dairy Foundation Board members for their time and efforts; their leadership and support are greatly appreciated.

Welcome – Mandy Hasty, Chair, called the 2017 annual spring meeting of the North Carolina Tobacco Foundation to order. Hasty stated this has been a year, in fact a decade, of great change for the tobacco industry that continues today. We are doing very well in contributions and the Foundation’s General Fund continues to remain stable. Dr. Blake Brown just completed a very successful tobacco short course. And we continue to work towards the $10 million goal for the William K. and Ann T. Collins Distinguished Professorship in Tobacco Research, Extension and Teaching. Hasty then thanked Tobacco Foundation Board members for their guidance and commitment to the Tobacco Foundation and industry.

Committee Reports

Research and Extension Committee Report – Mr. Fred Burt, a Wake County Farmer with the North Carolina Agricultural Foundation, reported that the following updates and presentations were made:

- Dr. Steve Lommel - Research - Dr. Rich Bonanno – Extension - Mr. Jake Erceg – Animal Science Livestock Judging Team funded by the NCAF

- Ms. Shalimbala Chizonda – Food, Bioprocessing and Nutrition Sciences milk use project funded by NCDF

- Mr. Hunter Mason – Organic Tobacco Production Academic Programs Committee Report – Dr. David Rives, with Zoetis, reported on the following discussions:

- Recruiter position - Admission plan - Packtrac - Holistic admissions - Nominate a Student program - Ag Institute industry focus groups - AGI Veteran programs

Recommendations to the board:

- Thank you for recruiter position - Nominate a Student. Also AGI open to apps until July - Consider funding Industry Focus Groups (8 around the state at about $700)

External Relations Committee Report - Mr. Ray Best, with Duke Energy, reported on the following discussions:

- Dr. Blankenship gave a college update.

• NC Plant Sciences Building is progressing and will be a showplace at NC State.

• Staff is assisting with design elements.

• Will include space for hosting events.

• Dean Linton is in China on an animal agricultural visit.

• March 15 was Ag Day Downtown. Thanks for everyone’s participation. - Mr. Richard Campbell discussed Communications Services updates.

• Sign up for the CALS Weekly Update: go.ncsu.edu/calsweekly

• Campbell explained strategy and tools to evaluate the impact of the communication being pushed to audiences.

• Focusing energy on many social media channels, especially video content for YouTube

• Won two ACE Gold Medals for coverage on student access and the “corpse flower”. - Dr. Rhonda Sutton presented information on various CALS Leadership Programs.

• Working with pre-college students, undergraduate and graduate students, faculty, staff, extension and external stakeholders.

• Will be forming a leadership advisory committee. - Ms. Celeste Brogdon reported on the CALS Alumni & Friends Society

• CALS has over 30,000 living alumni, with over 8,000 of them in the Triangle.

• 22,500 CALS alumni can be reached by email.

• Tailgate/Ag Day will be NC State vs. Marshall on September 9, 2017. 2016 Tailgate sold out.

Development Committee Report - Mr. Parker Philips, with the NC Agricultural Foundation, reported on the following discussions:

- Ms. Sonia Murphy gave a campaign and fundraising report.

• The University has raised $1,066,386,690.

• CALS has raised more than $267,000,000 in the Think and Do the Extraordinary Campaign

• This fiscal year CALS has raised $72,362,812.

- Dr. Blake Brown, Department of Agricultural and Resource Economics, reported on the Farm Management Training Program for NC sweet potato and tobacco forums supported by the NC Tobacco Trust Fund Commission, individual donors and the Tobacco Growers Association of NC. The program requires $250,000-300,000 per group. The Development Committee was charged with helping seek support and funding for future programs.

NC Agricultural Foundation Investment Committee Report – Ms. Paula Woodall, with First Citizens Bank, reported on the following:

- At December 31, 2016, the Foundation had total investable assets of $119.3 million, see Attachment A.

- Operating Fund Investments make up $35.8 million of the total investable assets - Long-Term Investments: the bulk of the Foundation’s assets are endowments that were valued

at $74.8 million as of December 31, 2016. Endowments are invested with the NC State Investment Fund, Inc., which realized a net investment return of 5.6% for the fiscal year-to-date as compared to the benchmark of 5.2%. The one-year performance, also as of December 31, was 4.3% as compared to the benchmark of 6.1%.

- Total endowment support for the College is $148.8 million - Life Income Funds are now managed by Kaspick and had a market value of $8.6 million at

December 31, 2016. NC Tobacco Foundation Investment Committee Report - Dr. Larry Sykes, retired from Philip Morris USA, reported on the following:

- The NC Tobacco Foundation Investment Committee met jointly with the NC Ag Foundation Investment Committee this morning.

- At December 31, 2016, the NC Tobacco Foundation had total investable assets of $9.4 million, see Attachment B, which was made up of:

• $5.6 million in Long-term investments with the NC State Investment Fund

• $3.8 million in Short-to-intermediate term operating cash investments - Because the Tobacco Foundation’s funds are invested in the same manner as the Agricultural

Foundation’s funds, the Tobacco Foundation investment performance is comparable to the returns reported by Paula Woodall in her committee report.

Dr. Blankenship thanked everyone for their reports. Approval of Minutes Approval of Minutes for NC Agricultural Foundation – Dr. Blankenship called on Dr. David Rives,

standing in for Mr. Bryan Blinson, for a review of the minutes from the Fall board meeting. A motion

was made to approve the minutes, was seconded and passed.

Approval of Minutes for NC Dairy Foundation – Dr. Blankenship called on Ms. Kathy Kennel, standing in for Mr. Michael Sherrill, for a review of the minutes from the Fall board meeting. A motion was made to approve the minutes, was seconded and passed. Approval of Minutes for NC Tobacco Foundation – Dr. Blankenship called on Mr. Graham Boyd for a review of the minutes from the Fall board meeting. A motion was made to approve the minutes, was seconded and passed. New Business Dr. Blankenship asked for a discussion of any new business at this time. As no new business was discussed, she called on the Budget Review Committee Chairs for their reports.

Budget Review Committee Reports NC Agricultural Foundation – Mr. Dan Warren with Buffalo-Warren Company reported on the February

23, 2017 Budget Review Committee meeting; the materials have been mailed and e-mailed out to our

board members prior to today’s board meeting. Warren called on Mr. Tom Mease to review the budget.

Tom gave an updated on the following: In November 2014 the Board approved $1,000,000 for Plant

Sciences Initiative (PSI) planning to be structured as a long term loan to the General Fund similar to the

Feed Mill Fund loan. In April 2016 the Board approved an additional $500,000 for a total of $1.5 million.

It is anticipated the loan will be disbursed by 12/31/17 with repayment to begin in FY 2019. The loan

will be ten years and have an annual variable rate currently 1% with projected payments of $160,000.

The Feed Mill loan has been paid off.

Talley called for a motion to approve the General Fund Budget for 2017/2018. The motion was

seconded with no objections and was approved.

NC Dairy Foundation – Mr. Bob Paxton, who stood in for Mr. Jim Howie at the February 23, 2017 budget meeting, reported on their Budget Review Committee meeting. The materials have been mailed and e-mailed out to our board members prior to today’s board meeting. Paxton asked Mease to review the budget with the board. Mease called on Mr. Jim Howie to give an update on the NC Dairy Foundation Challenge to create the Dairy Education Center and Creamery Café. Mr. Howie indicated that in in 2006 the Executive Committee approved funding of $200,000 for a Dairy Education Center and Creamery Café in Schaub Hall. Due to some changes that have taken place on campus we are now proposing a new location at Lake Wheeler. There is a lot of traffic at Lake Wheeler, and you have a connection with the dairy farm and the dairy museum which could be used for educational purposes for the surrounding community. We would have the opportunity to show a working farm, and it also gives students exposure to production, processing and distribution. We will also have decreased construction cost as well as better access for customers. Also an external financial assessment has been done, and it showed to be very beneficial. On Friday, March 17, the Dairy Campaign Committee met with the Dean and Directors and approved the Dairy Enterprise System and Department moving forward conditional on:

• Work out details of an MOU between CALS and the FBNS Department on future responsibilities, liabilities and revenue path.

• Obtain donor approval for using donor funds on our revised concept.

• At the committee’s request, the Dean will pursue getting university approval for project construction to be handled through the Foundations Office, rather than through the main campus university procedures. (This would be much less expensive and is critical to staying within expense target.)

One of these conditions is donor approval, and the NCDF is one of the primary donors to the future

creamery. Today we are requesting a budget revision to the current commitment by the NCDF. The

current commitment reads:

“At a special meeting of the NC Dairy Foundation Executive Committee on December 6, 2006, a funding

proposal titled "NC Dairy Foundation Challenge to create the Dairy Education Center & Creamery Café at

NC State University" was presented. The Executive Committee approved funding of $200,000

contingent upon the Dairy Education Center and Creamery Café securing an additional $300,000 in

funds through the Sweet Acidophilus Committee and $1.9 million through other private investment,

alternative funding and/or institutional support. Due to the contingent nature of this proposal, no funds

have been reserved from the NC Dairy Foundation Annual Fund.”

Mr. Paxton then requested a motion to approve moving forward with the NCDF support of $200,000

based on our current numbers, which decreases the required $1.9 million to the amount raised to date.

A motion was made and seconded with no discussion and approved.

Another motion was made to approve the NC Dairy Foundation Fund Year 2017/2018 budget. The

motion was seconded with no objections and approved.

NC Tobacco Foundation – Mr. Billy Carter reported on the February 23, 2017 Budget Review Committee meeting; the materials have been mailed and e-mailed out to our board members prior to today’s board meeting. Mr. Carter asked Ms. Hasty for a motion to approve the NC Tobacco Foundation Fund Year 2017/2018 budget. The motion was made, seconded and approved with no objections. Delegation of Duties Dr. Blankenship called Paul Talley and Mandy Hasty to the podium for a motion to delegate the duties of the President of their respective boards to the Assistant Secretary until the position is filled. Mr. Talley read the NCAF resolution, Attachment C. He said this is to give Kathy Kennel authority to act as President until the position is filled. He then asked for a motion, which was seconded and approved. Ms. Hasty read the NCTF resolution, Attachment D, and then asked for a motion which was seconded and approved. Executive Committee Update Dr. Blankenship called on Ms. Kennel to discuss changes to the NCAF, NCTF and NCDF Executive Committee. Ms. Jill Tasaico is replacing Mr. Scott Douglass as Assistant Treasurer for each board. Ms. Kennel then called on Paul Talley, Mandy Hasty and Bob Paxton. Each made a motion, which was seconded and approved. (See Attachment E)

Old Business Dr. Blankenship asked if there was any old business to discuss from any of the Foundations, and then called on Ms. Mary Peloquin-Dodd for an update. LaPaz Project Update Ms. Peloquin-Dodd gave a brief history of the LaPaz gift, which was received in 2008 from Bill White’s estate. The remainder of his estate went into a trust for his daughters. We have the following:

- Stock which was subsequently sold - $7.3 million in a restricted account - a Distinguished Professorship for $2.8 million - roughly $160,000 in various accounts in cash - 31,000 shares of a spinoff stock created from the initial sale of stock

We have used the gift to fund over $4 million in research at LaPaz, funded almost $2 million for the Dean’s use for overhead recoveries from the research, and we have operated as the majority owner of the farm under the Foundation’s leadership for the last 3 years. LaPaz is structured as follows: The NCAF was gifted 56.6% interest in LaPaz. Bill White’s daughters still own 13% and other minority owners have 30.4%. The minority owners are seeking an exit from the investment. They have stuck with the farm for a long time, and we have as a group been trying to divest from LaPaz for some time. It has taken a lot of management attention and time, and it is a tough industry. There has been a lot of

competition in the caviar industry, trade restrictions, international competition, you name it, it has been there. We did have a potential sale last year, but parties backed out. We have been looking for marketing opportunities, but it has been difficult. Our total operating costs at this point are budgeted for almost $800,000 next year with revenue of $165,000. We have an outstanding capital improvement loan, and we have two large buildings out there with the sturgeon. We have been keeping lights on and employing people, and the farm has been run well except for the fact it is a single product business in a tough industry. We have funded a bridge loan in anticipation of some divestment of the farm. So we have roughly $2.4 million in debt or bridge funding outstanding. On March 2 the LaPaz Management Committee recommended that the University Treasurer and the Dean begin negotiations with the executor of the estate that originally provided the gift to us. We have started the process, and Mary has spoken with minority owners. Mary said we would like to move forward with this gift so that we can focus on the fundraising mission of the College, so we would like to move forward with a Resolution. Mary then called on Sonia Murphy who reiterated Dean Linton’s support of this solution. Paul Talley then read the Resolution (Attachment F). After some discussion regarding the debt forebearance, a motion was made, seconded and approved. Dr. Blankenship called on Paul Talley, Bob Paxton and Mandy Hasty to officially close their respective Foundation meetings. Talley, Paxton and Hasty thanked their Board members for their attendance and support and declared their Foundation meetings closed. Dr. Blankenship also asked all board members to please hold October 31st for the Joint Fall Board meeting and please have a safe trip home. She then thanked all the Board members for their participation and attendance and reminded LaPaz Committee members of the meeting immediately following in the State Room across the hall. The meeting was adjourned.

Assistant Secretary, North Carolina Agricultural Foundation, Inc. Assistant Secretary, North Carolina Tobacco Foundation, Inc.

Attachment A

Attachment B

Attachment C

Attachment D

Attachment E

AMENDED 2016 Nominating Committee Report

North Carolina Agricultural Foundation, Inc. Officers: (One year term ending in 2017)

Chairman Paul Talley

Vice Chairman Scott Prestage

Secretary Bryan Blinson

Assistant Secretary Debbie Worley

Assistant Secretary Kathy Kennel

Treasurer Mary Peloquin-Dodd

Assistant Treasurer Paula Woodall

Assistant Treasurer Scott Douglass Jill Tasaico

President Vacant

Past Chairman Albert Corbett

Amended 2016 Nominating Committee Report

North Carolina Tobacco Foundation, Inc.

Officers: (One year term ending in 2017) Chairwoman Mandy Hasty Vice Chairman Craig West Secretary Graham Boyd Assistant Secretary Frank Grainger Assistant Secretary Kathy Kennel Treasurer Mary Peloquin-Dodd Assistant Treasurer Scott Douglass Jill Tasaico Assistant Treasurer Larry Sykes President Vacant Past Chairman Carlton Barefoot

Amended

2016 Nominating Committee Report North Carolina Dairy Foundation

Officers: (One year term ending in 2017) Chairman Bob Paxton Vice Chairman Clifford Loflin Secretary Michael Sherrill Assistant Secretary Larry Wooten Assistant Secretary Kathy Kennel Treasurer Mary Peloquin-Dodd Assistant Treasurer Charles King Assistant Treasurer Scott Douglass Jill Tasaico President Vacant Past Chairman Sam Dobson

Attachment F