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k~ = -" CONFIDENTIAL RELEASED FOR PUBLICATION THURSDAY, MARCH I, 1956 NOT 5EFORE~ pLEASE 1955 Annual Report

f NOTICE OF MEETING Flemington, N. J., March 1, 1956 The Amlual Meeting of stockholders of Tm~ AMEmCAN TOBACCO COMPanY will be held at No. 34 Camst Street, Flemington, New Jersey, at o~c-thlrry o'clock ~n the afternoon (Eastern Stand~-d Time) m~ Wednesday, April 4, I986, for the folldwing purposes: (l) to elect Directors; (2) to consider and vote upon a proposal (desi~ated Proposal A and set forth in the following proxy statement) made by three stockholders; and (3) to transact such other business as may properly come before the meeting. The stock transfer books will not he closed, but holders of Preferred Stock and Common Stock, to be entitled to vote, must be holders of record at the close of business on March 5, 1956. JOHN W. HANLOr~, Secretary

PROXY STATEMENT The enclosed proxy i~ solicited by the ManagemenL The proxy may be revoked in writing given to the Secretary at any time before being voted. Proxies in the form enclosed, properly executed by stockholders and duly returned to the Management and not revoked, will be voted and, where a specifi- cation is made on the ballot provided therein, wiLl be voted in accordance with such specification. Attendance at the meeting does not serve to revoke the proxy. The outstanding nmnficr of each class of vothag securities of the Company is: Prefected, 527,831 shares; Common, 6,512,522 ~bere~ (of which 1,560 shares will become entitled to vote only if certificates which piior to the merger with American Cigarette and Cigar Company on December 31, 1953, repre- sented Corrrmon ¸Stock of American Cigarette and Ciger Company, are sur~ndeled in exchange for Common S~Ck certificates of the Company by the close of business ca thu record date). The Preferred Stock is enBtlnd to four votes per share The Cormnon Stock is entitled to one vote per share. The reooed date fo~ the determination of s~ockholders entitled to vote at the meeting is the dose of business March 5, 1956. ELECTION OF DIRECTORS The Board of Directors consists o{ ofneteen members who are elected to hold oglce until the next Aanual Meeting or until their snccessors are duly elected and quali~ed. It is intended that proxies in fl~ accompanyfo~ form wiB be voted for the nominees named below. These nominees, with the exccptthn of William B. Young, are members of the present Board and have served as directors of the Company for the periods commensing with the dates set after their r~spective names. The Company is informed that these nominees ware directly or indi~eoLIy Ibe bene~sia| owners of outstanding securities of the Company at the dose ul business on February I, 1956, as sol forth after their respectlw names. year First Name Orpheus D. Baxaiys Alfred F. Bowden Richard J. ~ylaa ThorlRl9 P, Connor~ James IL Coon John A. Crowe John $. Dowd Other po~ifioasand O$~¢es with Compa~" sad prlacipai O¢cupatlon(a) Vice-Presldent and 1Vianaglng Director, The American Tobacco Company of the 0rle,~t, Inc. (b) Assistant to the Presidcah The Amcrloan Tobacco Company Vice-President and Director of Pur- chases, The Amorisan Tobacco Com- pany D~reetor of Tramc, The American Tobacco Company Vice-President and Comptroller~ The American Tobacco Company V~ee-Pr~ident and Assistant Chie~ of Manufacture. The American Tobacco Company Executive Vioe.Presldeat, American Suppliers, Incorporated (b) 2 ~le~ed ~¢ctor Commou Preforre~ 1940 1,805 62 1951 650 1929 3~250 450 1946 300 1936 783 106 1931 800 105 1946 400

~me A. Golxlon FindIay Charles Gm~thow Virgil D. Hagcr Paul M. Hahn Hiram R. Hanroer Harry L. Hilyard John R. Huteb~ngs, Jr. A. LeRoy Janson WiUfam H. Og~bury Jara~ F. Strickfand Robert B. Walke~ William ]3. Young Ot her Pe~itio~ and Omecs wlth Company and ~iaelpal O~l~don (a) Vice-Pre~ident~ American Cigazeit~ mid Cigar Division of The _4meriean Tobacco Compmay Vice.President, Am~r~cau Cigarette and Cigar Division of The Aravr]can Tobacco C~lapany Assistant to the Vice-Presidents in charge of lnauufaetuze, "the American Tobacco Company Pres~dvnb The Amerlcma Tobsseo Com- pany Directer of Research, The American Tobacco Company Treasurer, The American Tobacco Com- pany Vlce-Presidenb American Suppliers, In- corporated th) Au011tor, The American Tobacco Com- pany ~s;~tant Chk~ o~ ~anufacture~ The American Tobacco Company President, AmcxJc:m Supplier% lncorpo. rated th) Direolor of Sales, The ~aerican To- bacco Com]pany Assistant to the Vlce.Pxesidents in charge of manufacture, The American Tobacco Company Year Firs~ F2eeled Director Common preferred 1953 2,005 1953 1,000 1955 190 1931 6,784 1938 300 1944 350 1951 500 1948 418 1930 200 50 1946 820 1955 210 600 (a) lrt each instslleo, lhe pt~kioD.s and cruces wiIh the Comp~nb' and it~ su~sldlmrle~ llsted ~tor the tt~¢ of tl nominee are aloe his prlrtelpaI occupation. (b) A~Ii~ted c~mpaay engaged in purchase and handlt~g of leaf tobacco. The Company is also informed that none of the nominees was directly or indirectly the beneficdal owner on FebraalT 1, 1956, of outstanding securities of subsidiaries of the Company, other than directors" qualif~Sng shares, except William H. Ogsbury, wbo owned beaefieially on that date two shares of Common Stock o£ Cuban Tobacco Company Inc. Mr. Young has been employed by the Company for more than 40 years. Since February 1, 1953, he has se~zed as Assistant to the Viee-Presldents in charge o~ manufacture. During the past 5 years and for miniy years prior thereto he has been an assistant to the officers of the Company in charge o~ ils man~aetm~ng operations. In the eyelet any nornh~ee is not a candidate or is maabIe to serve as a dlreetor at the time of the eleetlon, which is not now expected, it is intended that the p~xJes will be voted for any nominee who shall be designated by the present Board of Directors to fill such vacancy. 3

Proposal A The Company is informed that L~wis D. Gilbert, a record holder of 80 shares of Common Stock, whoso address is 1165 Park Avenue, New York 28, New York, and/or John J. Gilbert, a record holder of 80 shares of Common Stock, whose address is 3.165 park Avenue, New York 28, New York, and/or John Campbell Henry, a record holder of 400 shares of Common Stock, whose address is 5 East 93rd Street, New York, New York, intend to introduce at the fortheomi~ Annual Meotlbg the following resolution (designated herein as Proposal A) : "REsoLVr~: That the stockholders of The American Tobacco Company, assembled in annual meeting i~ person and by proxy, hereby request that tile Board of Directors take the necessary stops to amend the by-laws of the Co*poration so as to increase the number of diroctot~ from nineteen Io t,aJen~y.'~ The proposers of tiffs resolution, ~iessrs. Gilbert, Gilber~ and Henry, have ~urdished the following statement setting forth the reasons advanced by them in suppoxt of their proposal: "I.ast year some 222,935 votes were ~ast in favor oi a slmilar proposal, showing many owners el A.~rican Tobacco share our vinw- point that the public stockholders shm~ld be represesated on the Board which, at lb¢ present li~ne, includes only empinyee~ of the Corporation. R. J. Re)molds Tobacco Company ha~ now put its ~rst no=-enapinyee director on its Board and American Tobacco sko~dd do the same. This is o~peeially important at the present time of uncertainty for the tshaceo intiu~try. If you agree, please mark your haUo~ FOR this resolntth~, otherwise i~ is auto,helically east ag~lbst it." The Management recommends that ye~ ~ot~ AG.~INST ProposaI A. It is the viewpoint o~ the Management that all o:~ the stockholders nl the Company are public stock- holders who are represented faiHy and with due regard to the interest of every stockholder by the Board of Directors elected by the great majority of the Company's stoekhoIder~, The long-conBnued record of successful operation o~ the Company's business by directors giving their entire time and effort to the service of the Company and its subsidiaries has demonstrated, in the opinion of the Management, that a board so constituted is in the best in~ereBts of this Company. The Management believes that changes in the nmnaber of directors comprising the Board should ~xoL be promptcti by considerations such a~ those advanced by die proposers of proposal A. At the t955 Annual "~eetlbg the stockholders defeated an identical proposal by 96.54% of the votes cast. The ~tianageraent is not aware at the dale hereof o:~ any matter that is intended to he presented at this meeti~ other than the electinn of directors and Proposal A. If any matter not lmown at the date hereof is propeJly presented for action at the meeting, it is i~tended that the persons named in the proxies will vote thereon aecm'ding to their best judgment. RE~f[JNERAT1ON R~muneratio~ el Directors and Officers. There ~s set leith in the following tabulbtinn~ on an aeernal basis, all direst remuneration pald by the Company and its subsidianios Lo the followlbg persons for se*win~s in all capacities while directors or ofiqcers of the Cot~pany during its last fiscal year: each director, and e~sh of the thr~e h~ghcst pttid odice~ of th~ Company whose direct ~ggregale remuneration exceeded $30,000; said nil directors anti officers of the Company as a grottp. EstBuated annual retirement hanefil'~ to the ssane indlvlduals at normal retire~ncnt date under the ~egrement Plan for eml~oye~s adopted by the stockholders at the 1949 Amauni Meeting are staled in Column (4). 4

(D Name cff indlvidua] or idcnfiLy of ~oup Orpheus D. Baxaly~ Alfxed F. Bowden Richard J. Boyl~ Thoraas P. C~oanor s James R. Coon(e) John A. Cr~wo(e) Jolm S. Dowd A. Gordon F~adlay (e) Preston L. Fowler(e) (f) Charles Gun,how(e) Paul M. Hahn(e) Hiram R. I4amner EdmLm~l A. Halvey(g) Harry L. Ililyard( el Jolm R. llutchhxgs, Jr. A. LeRoy Jansen Wilffam H. OgsI~ary James F. Strloldand Robert B. Walker Directors and Off'cars as a group (2) (3) Capadfies h "~hieh ~gate r~uner~t[o~ w~ received rcmu~eratio~ Vice-Fre$1dent and Managing Director, The $ 55,000 Amorican Tobacco Company o~ the Orient, Inc.(a) As~istavt to the President, The Axaerlcan 41,875 Tobacco Company Vice-Presldent and Director of Pnrehases~ 172,179(b) The American Tobacco Company Director of Tra~c, The American Tobacco 36,0C0 Company Vice.President and Comptcoller, The American 172,179(b} Tobacco Company Vice.President and As~isLant Chief of Mwau- 172,179(b) fac~x-e, The American Tobacco Company Executive Vico-Pr~ideat* Amerloan Suppliers, 60,000 Dmorporated.(a) Vice-President* Ameaican Cigarette and Cigar 37,500 Divisi¢~ of The American Tobacco Company Vice-Preaident and Chief of Mannfacturc, 172,179(h) The American Tobacco Company Vlce-President* Amea:mma Cigarette and Cigar 44,000 DiviBion of The Ameriua~ Tobacco Company President, The Amerlean Tobacco Company 272,724(¢) Director of Re.earth, The .Mnerlean Tobacco 50,000 Company Vice-President h, Charge of Sale*, The Amer- 45,~4(d) ican Tobacco Company Treasurer, The Am~rloan Tobacco Company 55,000 Vice.President, American Suppllers~ Iocorpo- 49,000 rated(a) Auditor: The American Tobacco Company 55.000 Assistant Chief of Manufacture, The American 50,000 Tobacco Company Preside=t. Am~tlcan Suppliers, Incorporated (a} 75,000 Director o~ Sales, The Ar~erican Tobacco 31,015(h) Company Directors and O~tcer s as a group 1,694~41 (a) Affiliated oompany engaged hL p~xch~a ~d ha~dlil~ o~ leaf rebate, {h) Iaclnd~ $122,I79 Article XIX incentive compensation. (e) I~hdea $152,72'b ArtieIe XN incentive eomi~o~atiom (d) Inciudes $82,135 A~ieIe XII incentlve ¢om~cnsaUon ~ac~ed 12ri~ :o retirom~L (e) Also o~iee~ o~ sFsliated company ~r zompa~e~ (~) Retiring April 4, I956. (g} ReciredAprlI 6,1955. (h) Remun~atioa ahown is for ~eriod subsc~tue~t to election a~ a ddrec~r oa April 6, I955. 5 (4) Estimated m~nual totireme~ be~¢~t at aonomsl ~tlrement Onto $17,000 15~500 17,000 11,434 17,000 17,000 18,308 14,000 14,816 11,143 25,000 1~,378 17,000 12,152 II,2~7 15,528 17,000 16:895 16,100

'P}m amounts referred to in the notes to the above table as Artie/e Xll inoentlve compensation were accrued as incentive compensation (based 023 amount of Company profits), tmdez Article Xll of the By-Laws, as anaended by vote ul the stockholders at the 1951 Annual Meeting. No amount was set aside or accrued during tile Company's last fiscal year for pension or retirement benefits proposed to be paid under any existing plan by the Company or any of its s~sldlaries to any ulficer or director of t]w Company. The Rellrement plan for employees adopted hy vote at the stock~ulder~ at the 1949 Annual Meeting covers approximately ]8,500 regular fpll-time empioyee8 of the Company and its subsidiaries. Tke aggrngate amount of remuneration :~or the C~seal year 1955, re~elved from the Company and its subsidiaries, directly or indirectly, on an accrual basis, by all the directors and officers of the Company a.s a group, was approximately sixteen one-hundredths of 1% of the Company's consolidated net sales. MISCELLAIX~OUS Any stockhoMer making wrltten request therefor to the Seeraary of the Company will be furnished a summary of the Azmuul Meeting wbisi~ will be prepared after the meeting has been held. Messrs. Lyhrartd, Ro~ ll~o~. & Montgomexy lm~ heex~ for marry ye~s d~e iudep~ndeu~ a,adito~s f~ t~ Company, and are appointed by resolution of the Board of Directors. In aceorderlee with the Company's customary practice, a member of the film of auditors will attend the Annual Meeting and respond to questions which may be asked by stockholders. Commezlts or suggestions by stockholders with regard to the audit are welcomed~ as they m'e with regard to all othew matters affecting the Company's interests. Flemington, N. ft., is reached by the Lehigh Valley Railroad. The present train schedule, wMeh is subject to change and should be eoniirmed, is as follows: Leave Pennsylvania Station (33rd Street and Sevetub Avenue, New York, N. Y.) 10:55 A. M. Arrive Flemlngton Jmletion I2:03 p. M. Leave Flemlngton Junction 5:22 P. 1%~. Arrive Penusylvmtia Station 6:40 P. M. The Company wilt procure transportation from New Yock to Flemington by railroad and return by railroad or, if expressly requested~ return by b~, at Company expense for any stoeHlolder of record desirous of attending the meeting, on his notitying the Secretary in writing at 111 Fifth Avenue, New York 3, New York, not later than March 29, 1950, that be wishes such transportation obtained. If you do not pints to attend, you are urgendy requested to execute the enclosed proxy a~d mail it to the Company promptly. Expense o~ $oIisittathn. The expense el the solthltatiort o1 proxies ~or this meetthg, including the cost of maillng, will be beam by the Company. In addition to mailing copies of this material to stockholders, the Company wiI1 t-eq nest pemons who hold stock in their names or custody or in the names of nomthoes for others, to forward copie~ of such material to those pexsons for whom they hold stock of the Company and to request authority for the execution of the proxies. To die extent necessary in order to assu~e su~elent representation at the meeting, officers and some regular employee~ of the Company and approximately 5 emplnyees of Philip G. Cameron Company will request the return of proxies by telephone, telegram or in person, at an estimated cost of about $12,000. The amount of the expense to be borne by the Company will depend upon the volume of shares represented by the proxies ~ in response to the 1Notice of Meeting. If proxies are not received promplly, it may be necessary :~or the Compmay to send telegraphic solicitation to those stock]solders who have not responded. Stockl~olders who do not intend to be present at the Meeting are urged to send in their Proxie~ without delay. Prompt response ~s helpful, and your eooperatien wilt be appreciated. February 15, 1956. 6

NOTICE OF HEETING F|em~ng~on, I~. ~., March l, 1956 The Annual Meeting of stockholders of TaE A~ERICAN TOBACCO COMPANY wilI be held at No. 34 Cour~ Streot, Flemthgton, New Jer~ay, at onc-thlny o'clock in the afternoon (Eastorn Standard Time) on Wednesday, AprlI 4, 1956, ~or the foLlowing purposes: (1) to elect Dff~etors; (2) to consider and vote upon a proposal (desigaafed Propo~ol A and set ~orLh in the folIowi~g prnay sb~tement) made by tln~ stockholder~; and (3) to ~ransact such other business as may properly come 5eforo the meoting. The stock Lransfer hooks will not he closed, hut h~ders of Preferred Stock and Common Stock, to be entitled to vote, must be holders of record at the dose o5 bL~iness on ~vIoxch 5, 1956. JOHN ~. ~L~LON, Secr~ary

PROXY STATEMENT The enclosed proxy is sol~clted by the Management. The proxy may be revoked in writing given to the Secretary at any time before being voted. P~oxles in the form enclosed, properly executed by stoc~ioldsrs and duly returned to the Management and not revoked, will be voted and, where a speeifi- ~atinn is made on the ballot prov4dsd thex¢in, wi]] be voted in accordance with such specification. Attendance at the meeting does not serve to revoke the proxy. The outstanding number of each class of voting socurltle~ of fl,e Company is: P~¢Jerred, 527,831 shares; Common, 6,512,522 shares (of which 1,360 shares will become entitled to vote o~ly if certificates which prior to the merger with American Cigarette and Cigar Company on December 31, 1953, repre- sented Common Stock of American Cigarette and Cigar Company, are suxrendered in exchange for Cormnon Stock cortillcates Of ~he Company by the close of business on the record dato). Tho Preferred Stock is entitled to four votes per share. The Common Stock is entitled to one vote per share. The record date f~r the determination of steckholdsrs entitled to vote at the meeting is the closo of husine~ March 5, 1956. ELECTION OF DIRECTORS The Board of Dineetors consists of nineteen meanbcrs who are elected to hold office until d~o next Annual Moetin$ or until their successors are duIy eIected and qualified. It Js intended that proxies in the accompanying form will be voted for tho nominees named beIow. These nominees, with the exception of William B. Young, aro members of the present Board and have served a~ dlreclors of the Company ~or the periods commencing with the dates set after their respechve names. The Company is informed that these nominees wero dJreclly or indircelly the beneficial owners of out~tanthng securit~s of the Company a~ the closo of bt~incss on Fckruary ], 1956, as set forth after their respective names. year Frrst ~rame Orpheua D. Baxaiys Alired F. Bow~Ien Richar¢l J. Bo~la, Thomas P. Connors James E. Coon John A~ Crowe Jaha S. Dowel Other positions and O~ioe~ with Compe~y and Principal Occupation(a) Vic~presi~eut and Man~ng IY~ector~ The American Tobacco Company of the Orient, Inc. (b) Assistant to the President, The Araerlcan Tobacco Company Via~-Presi~r~t and Director of Pur- cb~sc% The Am=ri~an Tobacco Como Irony Director of Traffic, The American Tobacco Company Vice.Presldent and Comptroller, The American Tohe~co Cemp~my ¥ice Prcslden~ and A~slstant Chief of Manufactare, The American Tobacco Company Executive Vice.President. ~%m~rlcen Sepp][e~s, Incorporated (b) 2 Elected Director C~n~mm. Prefexrcd 1940 1,805 62 1951 650 1929 3,250 450 1946 300 1936 783" I06 1931 800 105 1946 400

Year First Other Position~ and Off~¢e~ .~th C~mp~ay Elected N~me J~td ]~rlndpal Oemupatlon (a) Dir eat ~r Common preferred A. Cordon Findlay Vice president, Amerlean Cigarette and 1953 2,005 Cigar Division of The American Tobacco Company Charles Ganshow Vice-Resldent, Amerlcma Cigarette and 1953 1,000 Cigar Division of The American Tobacco Company Virgil D. Hager Aasistm~t to the Yicc-Pres~dents in 1955 190 clmrgs of manufacture, The American Tobaoea Company Paul M. Hahn President, The American Tobacco Corn- 1931 4,784 party Hiram R. Hanmer Director of lle~earch, The American 1938 500 Tobacco Company Harry L. riilyard Treasurer, The American Tobacco Com- 1946 350 pony John R, Hutohiags, Jr. Vicc-Predde~t, A~nerican Suppliers, In- 1951 500 coIporatsd (b) A. LeRoy Jonson Auditor, The American Tobacco Corn- 1948 418 pony Williara H, Ogshnry Assistant Chief of Manufacture, The 1930 200 50 American Tobacco Compm~y J~roes F. Strlckland President, American Suppliors, Inoorpo- 1946 8.20 rated (b) Rober~ B. Walker Director of Salcs, Tim American To 1955 210 bocce Company William B. Young ~ssisrant to the Vie~.Prcsidcnts in 600 charge of man~actme~ The American Tobacco Company (a) lrt e~mh instance, the positions and of~ccs with the Company ann[ its ~ubsid~i~ listed a£ter the ~xa~ o~ g nomgnee are ~a hla pr }~¢ipz~ occupation. (b) A~liatod company engaged in puxcha~¢ and Laa dling o~ leaf tobacco. The Company is also informed that none of the nominees was directly or indirectly the beneficial owner on February 1, I956, of otttstanfilng securities of subsidiaries o~ the Company, other thou directors' qualifying shares, except William H. Ogsbury, who owned beneficiaIly on that date two shares of Common Stock o~ Cuban Tobacco Company Inc. Mr. Young has been empIoycd by the Company for more than 40 years. S~ce Fcbraary 1, 195,3, he has setwed as Assistant to the Vice-Presidents itx charge of manufacture. During dm past 5 years and for many yeat~ prior thereto he has been an assistant to the officers of the Company hl charge of its manufagturing operations. In rite event any nominee is net a candidate or is unable to serve as a director at the time of the election, which is not now expected, it is intended that the proxies will he voted for any nominee who shall be designated by the present Board of DhreeLors to fill such vacancy. 3

PTvposal d The Company is informed that Lewis D. Gilbert, a record holder of 80 shares of Comraon Stock, whose address is 1165 Park Avenue, New York 28, New York, and/or John J. Gilbert, a record llolder of 80 ahares of Common Stock, whose address is 1165 Park Avenue, New York 28, iNew York, and/or John CampbeB Henry, a record holder ul 400 ~laxes of Common Stock, whose address is 5 East 93rd Street, New York, New York, intend ~o introduce at the forthcoming AImual Meeting the following resolutimi (designated kereha as Proposal A) : "RESOnVED: q~at the stoelsholders of The Amerlean Tobacco Company, assembled in annual meeting in person and by proxy, hereby request that the Board o£ Directors take the necessary steps to amend the by-laws of the Corporation so as to increase the number of directors from nineteen to ~.wenty3~ The proposera ol this resolution, Messrs. Gilbert, Gilbert and Henry, have furnished the following statement settiz~g forth the reasons advanced by them in suppmt of their proposah "Last year some 222~935 votes were east in favor of a similar proposal, showil~g many owners of American Tobacco share ore" view- point that tile public stocld~olders should be represented on the Board wiffeh, at the present time, includes only employees of the Corporatiom R. I. Reynolds Tobacco Company has now put its fixst non-employee director on it~ Board and A~erieon Tobacco should do tke same. Tiffs is especially important at the present time of mwertaiff~- for the tobacco iDdustry. If you agree, please mark yottr ballot FOR this resolution, ether'also it is automatieaUy cast against it." The Management reeolmnends that yoz~ vote AGAINST Proposal it. It is th~ vie~oint of the Management that all of the stockholders of the Company are public stock- holders wire are represented fairly and with due x~egmcd to the interest of eve~T stockholder by she Board of Directors elected by the great majority of the Company's stockholders. The long-eontiffued record of suoeessfui operation of the Company's business by dlreetm's giving their entire time and effort to the sexviee of the Company and its subsidiaries has dernozmlrated, in the opinion of the Management, that a board so oonstituted is in the best interests of this Company. The Management believes that cbanges in the r~umber of directors comprlshag the Board should not be prompted by considerations such as those advanced by the proposers of Proposal A. At the 1955 Annual Meeting the stoekhalders defeated an identical proposal by 96.54% of the votes cast. The Maimgement is not aware at the date hereof of axty matter that is intended to be presented at this meetthg other than th~ election of directors and Proposal A. If any matter not known at the date hero0l is properly presented for action at the meeting, it is intended that the persons named in the proxies will vote thereon according to their best judgment. RElVlU~RATION Remuneration o~ Direeto~ and O~cer~. There is set forth in the ~ollwalng tabulation, on an accrual basls, all direct remmle~ation paid by the Compsny and i~s s~bsidiarie~ to the ~oBowing persons ~or services in all eapacMes while direetor~ or oi~ee~ of the Company duAng its last fiscal year: each ~lirector, a~d each of the ti~'ee iff~est paid officers, of the Company whose dire~ aggregate remuneration exceeded ,~30,000; and ~1I dlrectol~ and officers of the Company as a group. Estimated annual retirement benefits to the same individuals at normal retirement date muter the Retirement Plan for emplo~es adopted by the stockhoMers at the 1949 Aroma1 Meeting are stated in Coiffmn (4). 4

(i) or id¢~- o~ ~roup Orpheus D. B~alys Alfred F. Bnwden Richard 1. Boy]an ~a~ R. Coon(e) John A. Crown(c) John S. Dowd A. Gordon Findhy (e) Pro*ton L. Fowle.r (e) (f) Charles Ganshew(e) P~I M. Hahn(n) I~ram R. Hanmer Edmund A. Harvey(g) Harry L. Hilyard (e) John R. Hntchlng*, Jr. A. LcRoy Janzon Willlam H, Og~bary James F. Striekland • Robert 13. Wa~er (4) Estimated znnual (~) (3) zotirement b¢n¢6t ~pa~i~es irt which Aggregate at rtormal remuneration ~ reedved remuneration retirement date glee-p~csldent and Managing Diceztor, The $ 55,000 $17,000 Kmerican Tobaooo Company of the Orient, L~e.(a) Assistant to Iho President, Thc American 41,875 15,500 Tcheceo Company Vice-Presldent and Director of pnrch~, 172~179(b)." I7.000 The Ame~tc~m Toheeeo Company D~teetor of T*a~fic, '~he Am~,ican Tobacco 36,~ 11,~¢ Company Vice-PreValent and Comptroll~, The American 172,179 (b) 17,000 Tahacoo Company Vice-Presldent and Atf~tant Chief cf M/mu- 172,179(b) 17,000 faerie, The American Tobacco Company Exeeativv Vice-President, A:merican Supphers, 60,000 18,308 fncorporated(a) Vice-Presldenb Amerloan Ci~a~tte and Cigar 07,500 14,000 Didslon of The Amorloan Tahae~o Company Vice.Presldent and Oaief of Manufacture. I7~I79(b) 14,816 The American Tobacco Company Vice-President, Amerleml Cigarette and Cigar 4~000 ll,l~ Division of The American Tobacco Company President, The Americlm Tobacco Company 272,724(c) 25,000 Director of Research, The American Tobacco 50,000 14,378 Company Vice-President iu Charge of Sales, The Amer. 46,404(d) 17~005 icaa Tahacea Compvty Treasurer, The AmeaS~n Tobacco Company 55,000 /2,152 Vice.Pros;dent, Amerlean SnppIiers, Ineorpo. 49.000 11.237 rated(a) Audilor: The American Tobacco Company 55:000 15,5~8 Assistant Cblef of Manufacture, The American 50,000 17,000 Tobacoo Company President, American SuppI/ers, Incorporated (a) 75.000 16,305 Director of Sahe, The American Tobacco 31,015(h) 16,200 Compa~ly 1,694.841 Direete~ and Ofl~cers Dhe~to~s and O~cera as a group as a group (a) A~iated compm~y ~,~gaged in purchase and handling of loaf teba~0. (b) I~lude~ $122,179 ~ticle XTI incentive eomp~ns~ti0n. (¢) ~¢lados $15~7~4 Artlele XII mc¢~iv* eompen~afioa. (d) In~htd~ ~32,135 A~iele XH in¢cnlive eompensat~n e~cd piior to retirement, (e) Ablo o~e~ of ~ed eompsmy or ~mpa nle~ {f) Ratlring AIx~l 4, 1956. • (g) R~e,i Aprll 0,1~5, (h) Ramun~r~ioa ~hown is ~r ~eriod ~ubsequ~nt to eI~t~aa a~ a dire0ter on April 6, ]955. 5

The amounts referred to in the notes to the above table a~ Article XII incentive compensation were accrued as incentive eompen~alion (based on amount o£ Company profits), under Article XII o~ the B~Laws, as amended hy vote of the stockholders at thB 195I Annual Meeting. fqo amount was set aside or aeorned during the Company's last fiscal )'ear for pension or retirement henefits proposed to he paid trader any e.xisting plan by the Company or any of its suhsldiaries to any officer or director of the Company. The Retirement Plan for employees adopted by ~¢oto of the stockholders at the I949 Annual Meeting covers approaimately 18,500 regular fuR-time employees of the Company and its subsidiaries. The aggregate amount of remuneration for the fiscal year 1955, rccolwd from the Company and its subsidiaries, dixeefly or indirectly, on an accrual haais, by all the directors and ofl~ce~s of the Company as a group, was approximately sixteen one-hundredths of 1% of the Company's eomolidated not sales. MISCELIANEOU$ Any stockholder making written l't~quest therefor to the Secretary of the Company will he fur~qished a sm~mary of the Ammal Meeting which will he prepared a~er the meeting has been held. Messrs. Lphrand, ~oss ~ros. & Montgomm'y have heen for many years the independent auditors for the CompaJly~ and are appointed by resolution of the Board of Directors. In accordance with the Company's customary practice, a memher of die firm of auditors wil~ attend the Ammal Meeting and respond to questions wlileh may be ~shed by stoekilolders. Comments or suggestions by stoekholders with xzgard to the audit are welcomed, as they are with regard to ail other matters affecting the Colllpa~|y's interests. Flemington, N. J,, is ~aubed hy the Lehigh VsBey Railroad. The present train sched~o, which is subject to ubaxJg~ and should be eortfilmed, is as follows: Leave Pemisylvaaia Statiort (~3rd Street and Seventh Avenue, New York, N. Y.) 10:55 A. M. Arrive l~emington fftmetion 12:08 P. M. Leave Flemington Jonetion 3:22 P. M. Arrive Pennsylwnia Station 6:gO P. M. The Compmly will proettre transportation from New York to Flemin~on by raiirnad and return by railroad or, if expresslZ reguesge~ return by bus, at Company expense for ally stockholder of record desirous of attending the meeting, on his notifying the Secretary ill writing at t 1 ] Fifth Avenue, New York 3, New York, not later than March 29, 1956, that he wishes such transportation obtained. If you do not plan to attend, yon are urgently requested to execute the enclosed proxy and mail it to the Company promptly. Egpe~ae o[ Sollc~t~ior~. The expense of the soileltatlon of proxies for this me*ling, ineluding the cost of rr~ailing, will he borne by the Comparty. In addition 1o mailing copies of this material to stockholders, the Company will t~quest persons who hold stoeh in their lames or custody or in the names of nominees for others, to forward copies of such material to those persons for whom the3 hold st~ck of the Company ~nd to l'eqttest authority foe the execution of the proxies. To the extent necessary in order to assure safgcient representation at the meeting, of~cers and some regular employees of the Company and approximately 5 employees of Philip G. Camerort Company will request the retttrn of proxies by telephone, telegram or in person, at an estimated cost of about $12,000. The amount of the expense to he horne hy the Company will depend upon the volume of shares repl'eSented by the proxies reeeive~ in response to the Notice of Meeting. If proxies are not received prompdy, it may he neccssaly for the Company to send telegraphic solleBaBon to those stoddlolders who have not responded. StoeItholders who do not intend to be pre~ellt at th~ Meeting are ~tr~ed to send in their Proxies witho~t delay. Prompt resoozme is helpful, and your cooperation v¢~ll be appreciated. February 15, 1956. g