extended by secondary picketing at Asbestos Wharf, North Vancouver, on October 5,
1978. Settlement was reached on January 15, 1979 with the new Collective Agreements
expiring on June 30, 1981. Production employees represented by Local 6536 will receive
weighted average pay increases totalling 21.4% over the term of the new agreement,
while Office and Technical employees represented by Local 8449 will receive weighted
average pay increases totalling 15.1% over the same term.

At year end negotiations continued with the Registered Nurses Association and
with the International Longshoremen and Warehousemen’s Union.

Litigation

Personal injury actions are continuing in the United States naming Cassiar Asbes-
tos Corporation Limited and others as defendants.

The Plaintiffs are asbestos workers or members of their families who claim sub-
stantial damages for alleged injury to health by reason of the inhalation or ingestion of
asbestos fibres or dust. Neither the existence of liability nor the extent of possible
damages has been determined at this time. Product liability insurance was carried until
1975 but has been unavailable since then. Current sales agreements provide that
Cassiar’s customers shall warn their employees, agents and customers of the possible
dangers involved in handling asbestos and shall provide them with safeguards against
those dangers.

Management, Staff and Employees

Appointments — Following the resignation of Mr. Peter Steen, Mr. J.D. Little was
appointed President and Chief Executive Officer, effective January 1, 1979. Mr. Steen’s
contribution has been most appreciated by the Board.

In December 1978, Mr. A.T. Kana, formerly Secretary-Treasurer, was appointed
Vice-President, Finance and Administration, and Mr. B.G. Pewsey, formerly General
Manager, became Vice-President, Operations.

In Memoriam

The Board of Directors records with sadness the death on April 14, 1979 of Nicholas
Gritzuk. Mr. Gritzuk was associated with Cassiar in its early development and served as
Manager of Operations from 1961 to 1965. He rejoined the Company as Chairman of the
Board in April 1976.

Acknowledgements

The Directors and management wish to acknowledge their appreciation of the
efforts of the employees during 1978.

On behalf of the Board,

J. Douglas Little,
President
April 30, 1979