Tobacco Documents Online

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NOTICE OF MEETING Mal-ch ]9, 1970 The Annual Meeting of stockholders of American Brands, Inc. will he bold in tbe Grand Ballroom of The Waldtlrf.Astoria, Park Avenue at 50th Street, N~w York City. at l0 o'clock in the fore~ioon (Eastern Daylight Saving Time) on Wednesday, May (~, 1970, for the following purposes: (1) To dect directors; (2) To consider and vote on a proposal (designated Proposal 1 and set forth in the following proxy statement), approved by the Board of Directors, to cb:~L Lybrand. Ross Bro~. & Montgomery independent auditors ~or the Company f.r the year I970; (3) To tin,sider and vote on a proposal (designated Proposal 2 and set h,rth in the foBowJng proxy statement), approved by the Board of Directors, to appr.w' thl' e~sting Pj'ofit-Shaa'i~Jg Plan of American Brands, Inc.. which will be l~snlnl~iltcd ~n the Annual Meetit~g pursuant to the Plan; (4) To consider and vote on a proposal (designated Proposal 3 and set f~t'th in the following proxy statement), approved by the Board of Directors, to apln'~vc and adopt Ihe amendments described therein to the Retirement Pian fi~r Eraployce, :rod Former Employees of American Brands, inc. and Desiunated M~liated CorpaHtimt-. to be effective as of January l, 1970; (5) To consider and vote on a proposal (designated Proposal 4 aJld set I'cnth in the following proxy statement), approved by the Board of D~rectors, to anl~'lM Article XII of the Company's By-Laws. constituting an ~ncenfive eoJrtpensatio. Idzm, in the manner stated in Proposal 4; (6) To consider and vote on a proposal relating to any new stock option plan (designated Proposal 5 and ~et forth in the fuUowing proxy statement), expected to be made by four stockholders; (7) To eovsider and ~te on a proposal relating to cumulative voting (desigm~ted Proposal 6 and set forth in the following proxy statement), expected to be made le. four stockholders; and (8) To transact such other business as Illay properly come before the meeting. The stock trat~sfer books will not be closed bat holders of Common Stock. t. h,' entitled to vote, n~u~ be holders of record at the do~e of business on March 9. lClT(I- Joan W. H~,NLON, Secrett~r~

PROXY STATEMENT The accompanying proxy is soiidted by the Management. It may be revoked by written notice given to the secretary of the meeting at any time before b~iug voted. Proxies in this form properly executed, duly returned to the Management and not revoked, will be voted for the election of directors (unless authority therefor is withheld) and on the numbered Proposals described in this proxy statement ~provided that, as to Proposals 5 and 6, they are batroduced at the meefil, g), and in accordance with any specifications made as provided in he proxy The Management is not aware at the date hereof of any matter to be presented at this meeting other than the election of directors and Propasals I through 6, If an)" othe~ matter is properl> presented, it is intended that tim persons named in the proxies will vote thereon according to thelr best judgment. Presence at the rnee6ng does not of itsdf revoke the proxy,. The only securities of the Company entitled to vote are shares of Comnmn Stock {$6.25 par value), with o~e vo~ pel share. There are 26,733615 shares outstanthng at the date of tbis proxy statement. ELECTION OF DIRECTORS The Board of Directors consists of ~eventeen members who a~e elected to hold office until the next AnuuaI Meeting or until their successors are duly elected and qualified, it i~ intended that proxies in the accompanying form will be voted for the nominees named below or, in the event any such nominee is not a candidate or is unable to serve as a director at the time of the deetinn'{whidl i~ not now expected), for any nominee who shaft be designated by the present Board of Directors to fill such ~aoaney. The nominees named below, with the exception o:[ Francis X, Wbelan who has been deeted a direetur effective March 31, 1970, are members of fi~e pre~ent Board and have served as directors o the Company for the periods commencing with the dates set after tfieir respective names. There are set ~orth below opposite the annie of each nousinee L1) under the heading "Common," the shares of Common Stock of the Company beneficially owned directly or indirecdy by he nora nee on Febr~a y 1, 1970, plus the number (!f any) of shares of such Common Stock beffi on December 3l, 1969 by the Trustee of the Profit Sfmrin8 Plans of the Company and a subsidiary a r bu able to ~oluntary deposits made through payrell deductions that is equivalent as of that date to his undivided proportlo.ate beneficial interest in all such shares, and (2) under the heading "Common attributable to profit sharing.," the numbr'r df any) of shares of such Common Stock held on December 35, 1969 by the Trustee of the Plans attributable to profit shaxlng that is equivalent a~ of that date to his undivided proportionate beneficial interest in a~ such share~. The infnrnmtiun ~ to ~eeurit1' holdings is based on information rece red by the Compan~ from the nominees, from the Profit Sbarlng Plan Committee and from the Trustee. /2) Year first , I / Cmnmoa Positions and offices with Compan~ elected Corn mc n attribmab/e to N~me ar ~ther principaloccupati~n (el dim~u~r ,e) tdl profit sMring Philip H. Cohen Director of Advertlsing(b) 19(>7 1,437 370 Horst G. Denk President and Chief Executive Officer. Sunshine 1970 100 -- Biscuits, Inc. Henry G. French Vicc-Presiden~ Manufactmelb) 1966 3.,033 546 Boone Gross Retlred I formelly President, The Gil!ette Company ~ 1965 200 -- Robert K. Hdmann" President and Chief Operating O0ieer 1963 6,71,1 1,286 Cyril P. Hetsko* Senior Vice-President and General Counsel 1965 998 633 Donald M. Klook President and Ch ef Execu ve Officer, Duffy-Mott 1968 3.,000 -- Company, Inc. Everett Kov]er Pres den James B Beam Distil]in~ Co. 1967 8,000 415 Julien B. McCarthy V ce-Pres den Mann a¢ ure and Leaf bl 1965 175 861 Charles A. Mehos~ Vice President and Treasurer 1967 1,700 490 Eugene F. Mooney Vice-Presidens~ales f h ) 1963 7.138 1,063 Mark R. Norman A Managing Director, Lazard Brothers & Co.. Lid, 1970 250 -- George J. Schramm~ Vice-President and Controller 1968 1,727 530 John B. Sparrow Director of Leaf Purchase~igarette and Smoking 1958 3,040 828 Tobaccos t b I Robert B. Walker~ Chairman of the Board and Chief Executive Officer 1953 13.140 2,755 Francis X. Whelan Executive Vice.President and President.elect, 1970 2,266 586 American Cigar Division George H. Woodard~ Chairman, Walling & Woodard, lnc. 1964 700 -- Management Consultants • blember of Executive Commiltee ol the Company's Board of Di ec or~. (a) The o~ces listed oplaosbe the name of a notttin~ ale his ~rineipal occupation and are corporate off~ees ot the Company unless otheI" wise indicated above or in note 'b) helzw. (hi Positions in The American Tobacoo Company, a divis~n of American Brand~, inc. 7

Ic) The nulnber$ of shares attributable to voluntary deposits included in the nttm~oer* shown in Goltlmn (1) are as [o]low~: PhiliI~ H. Cohen, 15~ Betlry. G French, 28~; R bert K. Helmann. 474., Eugen F Moonev, 1,038 ; ~eorge $ hramn~ 73¸, J~hn B Spar ow, ~1¢0; and Francis X. Whei~t~ 266. i d The ntu~bers shown in Column {1 do pot Include shares awned h~ the wives or mlno~ children of, or other relatives sharin~ 0~e • t~1~e h~slte as, tho loUowittg Ilonaltleeb Ul tht amolltll~ set a~ter their na~ll~; Bclor/c Gro~s, 800; ~r~tt Kov]er. P~q~; Juti~li B. 5IcCarth~. 26; and Roh¢:t B. Walker, 24. Ia each ease the ~mlne~ discl~m~ that he is t~e beneficial owner of such ~hares. Horse G. Denk has been employed by Sunshln¢ Biscuits, Inc. since November 1967, successively as Vice Presiden~ Oper~tioa~, Exeeutire Vice President and, since July 1969, Pre~id~t and Chief Exeoutis'e Officer. From 1965 to 1967 he was a Vice President of Ward Foods, Inc. He became a director of American Braad~. lnc. on January 1, 1970, Mark R. Norman has been a Managing Director of Laaard Brothers & Co., Ltffi, bankers, since April 19g0. He is a director of other United Kh~gdom cerporation~, including the Company's ~absidiarp, Gafiaher Limited. of which he has also been Chairman since May 1963. He became a director of American B:ands, ln¢. on January l, 1970. Francis X. Whelan has been employed by the Company since d948. After six years as Executive Sales Manager of the Company's cigarette operations, in 1969 he became Executive Vice Preddeat of the American Cigar Division. He /tas been elected Preslde~t of that dMslon a~d a director of the Company, effective March 31, 1970. REMUNERATION There is set ~ortfi in Column 41) of the folffiwing tabulation, on an accrual basi~, all dizeet remuneration paid by the Company and its subsidiarie* to the inlio':eing persons for servise~ in all eapacitie~ while directors or officers ,~f the Company durin$ it~ last fiscal ye~tr: each director of the ComPany whose aggregate direct r~munel~Bo~ exceeded $30,000, and ~ach of the three higkeat paid officers of the Company whose aggregate direct remuneration ,xceeded that amount; and all directors and officers of eke Company as a group. The 1969 profit shares of th~so indivlguaI~ payable to the Trustee under the Profit-Sharing Hans of the Company or a subsidiary ar~ stated in C:dumn (2). Estimated. annual retirement benefits to the same indlviduah at normal retirement date under existing r~tirement plans are stated in Colmnn (3). (2) Profit share (3) ll) ~Dr 1969 Estimated annual A~egate pit,able to ~et iremlln~ benefit N ame tdi r~dix'id aat CglJaeitlo~ il~ which iremll~terat Jot~ '~ru~Le~ at ll13r Rlal urideatityof group remuaetaticmw~srece~ved (a) (d) {e) (B (e) (f) (g) retiremotst date {h) iambs L. Bauchat(i}/j) Vice President, and President and Chief $ 45,383(i) -- Alfred F. Bowden Philip H. Cohere ttenry G. Preach i,¢il D. H~r(1) (k) R,~bert K. tteimann !i) C!rll K Hetsko(i) D,,nald M. Kloek([) E'~rett Kovler(i) J allen B. MeCar flap (1) Charles A. Mebo~(i) Eugene F. Mooney GeorEe d. Schramm(i) ]-~hn B. Sparrow }tohert B Walker(1) 8 Director~ and Officers a~ ~ group(m} Executive Officer, Suns fiine Bi~cuits~ Inc. ; President and. Chief Exeeufire Officer, Sun~hlne Biscuit~, Inc.(e) Viee-P~esldenh and President, Cigar Dis~sion; President~ Ammlcan ~igar DivMdn(c) Director of Advertising(b) Director 013/Ianufaeturing; Vice- Pr esident--Mauafaeture ~ b) (c) Execath'e Vice President Executive Vice-President; President and Chief Operating O~mer (c) Vice-President and General C~ unsel ; Senior Vice.President and Generffi Coun~elle} President alxd Chlef ~xecuti~.e O~icer, Duffy.Mott Cmnpany, In¢. President. Jalaes B. Beam Bisti31n$ Co. Vice.President- Manulaetnre and Leaf (b) Treasllrer Vice-President--Sales (b) Controller; 3%e-Presldent and Controller It) Director of Leaf Pt~reilases-- Cigarette and Smoking Tobaceosib) President a~d Chairixaan o~ the Board of Directors; Chairman nt lhe Board and Chief Exrcutive O~eer [c) 112,435 $ 16,897 $31,571 ($23,711) 77,524 11,526 7,440 (5,182) 73,077 10,842 18.633 (9,899) ~14,282 12,566 -- 175,420 26,587 26,834 (20,844) 128,365 19,348 25,067 (18,452) 100,015 -- 22,032 417,817) 173,983 82.365 37,500 (26,213 } 92,988 13,906 19,951 (14,089) 67,647 10,007 18,439 (9,776) 106,418 15,972 24,013 (16,048) 72,077 11,611 15,755 (10,974) 76.458 11,362 19!374 (15,3951 273,414 ,11,663 37,500 (26,72~) $1,727.986 $238.~3

(a) Capa¢it~s referred to ~er~ ~lb ~e Compauy unIes~ other~viBe indicate~ abaw 0r in ~otB ~b/ be[o~. (b) Foli~i~n in C~m~an~ unt [ J'un~ ~. ~9~ a~d t~e eah~r ia The Am~iean Tubacco C0mpan~¸ Di ~ 1. (ct C~n~e effective ~ul~ I. ~9. (d~ In~lud~ u~deierr~d noneomln~ent po~6on of ine~mi~e cora~en~tion f~ i969 m~der Ardcle X~[ o~ the By-La~ ~xe~p ~ t~ ]~f~l~. F,J~ck and ~lee, who ~id z~t par~cipate cker~iJ], J~eIud~ a~ ~ e~ch o~ "~s. Kloe~ aiLd ~,ler hi ~o on o n enh~e eom~,~ ~0~ ~or 1969 ~r ~he Exec~li~ h c~ iv~ ~l~n ~f ~ ~b~idi~y ~l ~i~ ~e i h~ p~'~nc~.~l ¢~¢~-ut ~e ~f~c~r" le) ~h~ deluxe6 0~Im~e~t ~ of lr~enti~ ~a~i~ ~der /,rI~e}e ~]| ot ~he ~ -L~w~ ac~ for all .e~ o ~a tlci ~19~ bein~ the fi s ~esz for which ~a pro~ed) pa~ah ~ o e~h pa~ ~ant ~ b~ ~mp]~ meal ~y the Corn ~at~n i~ [~lal]m~t~ a~ ~ec~e~ 1~ ~eetle,~ ~ Ith~ t~ 0~ v.~ie~ 1~ L~l¢l~ded 1~ ~hl~l~ ~ to Ihl~ p~ox, ~lat~I . C~m~e~ n~ ~th he ye~ i960, Articl~ Xr[ hab ]~ro~d~d tot the t~C~u~tion ~i th~ 3e~e~ed ~ozLio~ of ~a ~t ~e ~o~p~n ~t o~ ~ e~c]~ p~t~ipan ~r ~ ~erJ~d~ t,~ ~Ie~r~ Bauehat a~d [~ag~ a~6 over ~-y~a~ ~i~dt to th~ ~th~r ~artil~lpa~t~) in ~'~s~ of de~rr~.d in~enti~ e~l~:~af~u ~crued Io~ all ~ear~ ol par~[~ation i~eludin~ 1969. are ~ [o~low~: J~m~ L. Bauchat. $3,7~¢ 151,0S9) ~ Alfred F. B~wden. ~]~,~ ($~.30~t ; Phili~ H. Cohen, ~4.747 ($6,~) ; H~nr~ G. Fr~n~h~ $7.2~. /~.078) ; V~gi~ D. Ha~rl S~1.~16 (~26.i~t Robe l K B. ~alk~. ~3~7~2 151c~,073) ; ~d Di~ecl~r~ a~ O~e~ a~ a ~o~p~ ~750,424 t$~72~ ~ela~ Ih~ ~al ~n~la]lme~ pal~hle o~er 3 y~r period~ ~n~ ~ ~9~ h~in~ the an~[ In tallment ~ay~h]~ over 10 year pcrJohs . (D As of Deee~he~ ~h 1969. Pro£t-Shari~ Plan ~al~s (otMr ~an ~alan~es ~.trillut~l~le to ~/uut~r!¸ d~o~it~ m~de I~ ~tr~ ~.e~ctions) reprinted by the Pla~ "U~it~" ~tandl~ to the credit 0f tke participalt(s n~m~d in t~ above ~nble, ~n¢~i~ he ~et ~a[u~ o~ t~a~ d~t~ o{ t~ ~rc~b~ ~l ~har~ of G~ ~t~k o~ th~ (~o~pa~y held hy th~ Trn~te~ of the Plan~ ~qulvalenl ~n ~r~t ~ ~I excl~di~l~.9~;l~'ir~ro~ ~hare~ ~o~ ~9 (~a~'~ lo the Tr~Ie~ ~ 1970>~ w~re ~s ~ollo~a~ .lam~ L. Bau~ 0 ; Ali~e4 ~. ~o~. ~iLip 1~. G~he~ ~30,717; ~r~ G. F~n~h. ~1,691~ ~r~[ D ~eL¸, ~ 0 ; Rohe~ F~ H~, $1~0 ~6, ~ Clrl] P. ~e~k~. $52856, ; E ~It Ko~l~r $1K0%~ J~ien B. ~ cCarlh~• ~.'~¢ 258 ChAr's A .... ~ ~hos ~I~S. L~n, eF. Mooney, ~10~308~ Geo g~ . S~h ~m~m, ~9~ 89; ]uhn ~. ~alTow, ~01~; Rober( B. W~ k~ ~ ~0,919; a~4 Dlre~ or~ and O~r~ (g) TM ~me~ i~ Coil:an (2J ~e the ~oli~r ~aIue~ a~ 0~ De~h~ ~1. 1~6~ of ~e PIau ~UM~" eonslilulin~ the profit shar~ oi ~h~ n~med i~dlviduM~ ~r I~6~. I J) ~ Ju~¸ 29. ~f~9. Ame~ ia CMum~ Q) ~s for ~9~9 th~ ~l~h thai ~ate, (~) R~tlr~ ]~ 30. l~9. J~ in C~l~m~s /D a~d (2) ~e ~r 1~9 t~o~h thai &~. ~ml Th~ ~g~re~I~ ~e~r~r~li~ ~o~" t~ ~al 1~ ~9~ [m~ t~ ~r~F ~d iI~ ~*~d~. or~ ~ ~:r~l ~L~ o~ ~¢~ ~ll At the Aunu~ ~ee~ing iu lgh~ the ~t~c~oLder~ a~opted ~ ~tock Option P[m~ under ~vh~h ~ptLon~ may ~e ~r~nted te k~t' emplo)'ee~ of the Co~paay a~3 it~ *u~iarle~ fo~ ~ot more tha~ 6~)~0 sha~es of Common S~ock of ~t~ Company. The followin~ Iah~lation show~ a~ to L~e dlr~t~ ~d o~r~ of ~ Co ~p~ y ~m~ aho~e and as ~o ~I/ dlrector~ at~ o~cers of th~ C~mpany a~ ~ group, (ll ~or t~e p~riod from inc~pti~ll ~f t~e plan t~ ~e d~te ~¢~'~ll (a) flao ~,umber aI z~aBr~s ¢ad]ed {or b? opfiou~ grante3, ih) ~he ~verage optlo~ price per share, (¢1 the number o~ s]~att.~ purchased by exercise o{ o~ti~n~, {d) the aggr%~ale purchase price o~ such ~ha~s and (~ t}~e aggregate markd valuta o[ such sl~ares on the ¢t~ea o~ purchase an¢~ (2) the ~am~r an3 a~'er~ price i~; ~hare o~ shar~s ~ubj~et t~ unexer¢ seal op Ottt h~ld as of Fehrtmry 1~ 1970. O~Iinn~ held Ol~[iorts exereise~ OlJt ~nn~ ~ranted ~r~ge aNaa~ o~ ~da~ Idtta] o~ A~ erug~ pl~ee A~,~i'eg.;t e ~a~-~l i.er i~entit~ ~i ~troup Share~ r, er ~h~ Sh~re~ .~ri~e val~e Sbare~ ~hare J~ta~L.i~au¢]hll 4,000 $3S0~3 4,000 $ ~3~q94 $ 1~.l~5 -- -- Fh~li~ H. Cohel~ 2.500 3225 1,000 2,2,230 3K000 ~,5~0 ~:~.~ ~ Henry G, Frendx ~.000 ~&¢vg~ 60¢* 19.3~a~ 2L56~ 3.i00 3a.2~3 Cyril F. 14etsk~ ~,000 32.70 -- -- -- ~000 ~27(~ Donald .XL Ki~ck ~.000 36.6~,~ -- -- -- 6,6~/ ,~.!~25 J¢/el~ B McC~r h! 4,0~ 32~/J ~ -- L 4¸000 ~ Char]es A. 3I~:ho~ 'kilO0 ~KBg] ]~500 48,37~ 5L.~3 ~.5~1 ,~ 87~ ~e~ F. XIoone!¸ 4,000 ~2.~ 4.000 1~9,000 ~ g6,3 ~ -- Ge~rlI~ ~'. Schramm 4,000 3&609 ~0~ 48.~.75 51.7S0 :~.~G 34.~2~ ]ohrt B. Sparrow 2.~0 32.2~ -- ~ -- 25~0 ~-~-~ lt~ert B. Walker 15,000 S~.0~ 10,000 ~2~500 3~8.~50 ~,000 34.~0 All Dk~Iot ~ ~nci Otik ~1, a~ ~ Group gq.500 ~3~.(t4a ~6.~tO ~,L93~1~ $1,xgKoI4 47,100 ~3~.~)7 4

During the period employees other thgn e~cers and directors were granted upti~ns for 89,500 shares at an average ,pdon pr~c~ per share of $53.795. Subsequ~t to the respeetlve te~m~:nafions oi their associafi0~ with the Compaz~y, Mr, Ba~ehet sold ~0~0 shares and M~ W. FAIfot Bro~'ldee (~he received an option for 4,000 shere~ wh~lc a dlreefor) soI~ ~30 shores of (~m~on Stock of t~ Corapany. The C~m~a~y is not i~rmed M any ot~er sale of its Common ~tock during t~e period hy any uptionee who was a director or o~eer at the time he was gra~lted an option or al the titu~ of ~al~. Proposal~ I~LECTIO~ OF INDEPENDENT AUDITO!RS The bianagemont recommends the election by the s~ckhold~rs of Lyhrand, Ross Bros. & lClontgomery ~s independent au6itors for the Company ~or the year 1970, iu lth~ with fld~ recommen&atlon the Maua~ment intends to inttcdae~e ~t the forthcoming Am~ual Meeting th~ following re~olutlo~ (d~slgnatec~ herein as P~oposal l) : ~SOLV~D, thai Lybra~d, ll~s Brco. & Montgomery he and ~ey hereby are ~eted in~ependen! ~dltors ~r the Company/or the year 1970. Thi~ firm of cortical p~blJc sccountant~ has hcen ~or 58 yeats th~ indupe~dent auditors for the C~mpany. In a~cordance ~ith the Con~pauy's practice a m~z~er of the firm wi~ attend the Annua! iVleeBng and respond to que~Bons tha~ may b~ a~d by stock~olde¢~, The a~rzna~i~e vo~ .f a ma'~eit, of the ~'ote~ earl b~ the holder* of Common ~toek veiling_thereon is ~eee~at~ i',,1" the ado tlor~ of Proposal 1. The M~uagemenl recommends that ~ou vote FOR Proposal 1, I'roposal 2 RESUBMISSION OF PROFIT-SHARING pLA~ ]hc Pr~fit-~hariug Plan of American Brands, Inc. wa~ adopted by the stockho~ers at the Anuuei ~¢l~tiug ia ~960 ,,ud all, roved by them in amended ~orm upon res~hmission at the Annual Me~ting in 1965. Fro~ time tc tithe s~nee ihL~ last ~taekholder approva~ the Board of Directors, in the e~erclse of ire amendatory authority, has i~a~ ~ number ,,t qha~e~. '~he principal changes are: (1) rethtegr~fien of the Plan with Social ~ee~rhy he~ei~t~ ~ucees~ve]y at the I,-~,]~ ~t S&600 ~nd $7.800; (2) amendmrm ~ the Plan definifio~ o~ 'J.~et Income Be~ Taxe~" Ithe m~ure ~or ,~,ler~fizzin~ the amount of the Comp~ny'~ annua] contribution to the Plan) to Im~mk exel~eion ~rom inoo~ ~f the ,,~¢~ruli~g r~suit~ of ~ny suheMiar~" ~he~ employee* are not e/iglhle for Plan rremhershil~; (3) mothfcatio~ of the ~(,slh~g [lrovisieas so that i~ the event of partial termination of th~ Plan the accouats of a~ rnem~r whose employme~ i. d~erehy termiua~d become th]ly vested; (~) reeogalfiou of employme~t with an a~liated eospc~ratloa in determi~ng , ~i~ib~l;ty f~r Plan m~mhershlp und vesting; (5) extension of the Plan to seatoua[ employees meeting e~:rtaln conditlons, ~Llld L6i pro~[dlng fur placing investm~,~t auth~eity over the Diversified Fund of the Plan Trtest in the he~ds of an ,,,~t~hle Investment Manager in lieu of the plan Trustee. The Plan ~ resubmitted at this Annual M~ing in accordance ~ith a provision calling for r~s~bmisslon to the stoekhalders within five years a{~r the last stockhokler ~pprova~. Summary o~ Plan \ brief ~e~ripfion of the material features of the Plan a~ correnfiy ~t* effect appears below. A cop), of the Plan ~i~] he sez~l to any stock&elder- upon t~luest to the ~e~tetary at the Compartp's o/~ce at ~4& Park Avenue, New Y.rk, \, Y. 10017, and copies will h~ available at the meeting. Stockholders are referred to the text of the Plan, and the /,,~l~%g summary is quali£ed by such reference. I;,nployees Co~red. All r~u]~r full-time employees of th~ Co~ps.y ~nd one of its ~heidlarles. The liath~'~i'- ~u.:m~. Corporatloa, ~ecome r~raher~ of the Plan on the Janaary 1 ~ollowing completion of one calendar year of ' mlfi]llloas servh~. ~emhersh~p also ~bends to ~easoti~l employees of the Company wfio meet certain condRfons. \l~;,:~ximato[y 10,900 emidoyees participated in profit sflarin~ for 1969. Employer Co~ttrlbutio~, Eash yea~ the partieip~tin~ empIoyer~ eo~ttShute a sum ~qua] to the following peree~tage~ ,d "~nsolidated .Net I~eome Before T~-x~ (as defined in the P]an): 31~,~. of the fret $100,0Cfi.000, plus 5% ef the ...xt ~3u./)f/0,t~30, plus 6% of any excess, No eonteibution will he m~de. ho*ce~z. ~or any )~rr (a) for vshich Net Im'.m,~ Belore T~xe~ does zmt equM ~c exceed l&~o of ~et ~orth. (hi in which a cash dfoide~d is ~ot p~id o~ the ~.:,,Inm.n Stock of the C~mpal~v, or (e) in excess of the amotmt deductihi© for that year by the participa*in~ empioyer~ t,,r F-deral bteome tax purposes. The ~oard of Bireetor~ may (~ itt diser~tlon diseoatflme, suspend or reduce ,,llt~ ih~leil~s. 5

Investment by Trustee, Employer ¢ontributlons are paid to the Trustee of th~ ProKt-Sharlttg Plan Trust to be credited by it one-thlrd to the American Stock Fund for i.~estJ~ent solely in Common Stock of the Company and two. th~rd~ to the Diversified Fund f~r investment itt such secur~tles and other property as be Trustee~ or a desig:nated Irtv~stment ~¢la~.~r, in its th~cc~on may select, Effect/re at the cl~s~ of bUS/hess on February 2~, 1970, the Board o~ Directors de~i~mate~ Irving: Trust Company as successor Trustee oi Ide Trust and appointed heo~nis~ Sayles & Company~ fnco~orated, as In'cestm~at _Manal~er of the Divcrs~ed F~nd, wi~ ~o1~ investment authority fur thet fund. Apportfontnent oi Contributions to Members. Contr~utio~s arc app,3rtloned to Plan rnerabers ~ the he~is of each me~rb~r's Adjusie~t E~ti~gs for the year ~. r~la~io~ ~ the Ad~s~e~i E~rn~ of eli raernbers. "Adiu~ Ear~i~gs" for any year means earning:s ~or that year plus g:0% o~ ~uch ~arnings in exce~ o~ $7,800. Distrlbtttiott and ~thdratva~s. A vaembar's Lalances in the Pro~t-Shering P~an Trnst arfsillg from erepIoyer con~ributlot~s b~olne distrthutab]e upon termination of ~mp[oyrnel~t. in csses ~f t~r~in~ttlon by {]eath or r~tir~m~nt (or u~o~n partial or complete termil~atfon ~ ~e Plan) the f~I amount is d~strthntab[e, In the case of any ~ther tcrmlna- tion a percenta~ v~xying wilh th~ olemher~s length of service mrd reaching 100% upon ccmpleti~n of thirteen years~ contiltu~us service is ~stalbutabl~ except that upon termination of empluymcnt ~or seriou~ m~sconduct (thsch~rg:e for cause, as defined in the Plan) the ~n~i~ amount of such balances is suSject to forfeiture. D~strth~t{c~n is made by such method of s~tt~emsntrs ~i~le dlstrthut~n in ~ash or partly in cash and p~rtly ~n Common Stock o~ the Compatly, periodic cas~ installments, purchase o~ annuity, or nthcr~i~e--as the Prol~t-Sharing Plan C~mmiRee appointed }~y the Board of Directors to a~]ntinist~r the Plan ~letermin~a. A member tnay w~ldraw a portion o~ his Plo~t.sharin~ he~anc~s durthg ~mpl~'ment, subject to certain r~s~rictions and .~vbject also to the penalty of a 10~ forfriture~ Thee and all other [or~itures ar~ reapp~rti~ne~ among ~an ril~m~ers annually. Vofttntary D~posfis. In addiiion to recelvi~l~ ¢ontrthut~on~ from th~ Colnpany, the Piton Trustee is authorlzed t~ accept rolu~tar~ deposits from ~n~th~rs i~ reg, alsr ~l~-time crnployrnc~t~ Any e~igib~c mern}~er may become a depositor by electin~ to mahe del3oSlt~ of his own fund~ ]~y payroll deduction in anlount~ no~ re.re tha~ 10% of hi~ bas~ pay. ~ch ~F+~al~or l~s the op~ion of g:irec~ing that ~s deposlts he all~c~t~ ~or J~,estr~e~t entirely in d:e Ar~erican ~lock Fund or un¢~ird in that fund and two.thirds in the Dive~i~ed Fund. D~osited ~ut~ds may be withdrawn during employment, subject to limhetiorts provided in the Finn. Depoalt balances become disLrihetable in full upoll termthation of the ~nemher's participation a~ a dcpos~tor~ Approximately 1,600 raembers had deposit hela:qcc~ ~it l)~cemi~er 3i~ 1969. 1969 Employer Contributions under Plan and 1969 Incentive Compensation under ~4rticle XII The ¢ont~ibutlons of th~ participating employers to the Eornpa~ly~s Profit.Sharing ]?[an accrued for the year 1969 amount to $7,518,764 (equivalent to ~3,381.705 a~ter Federal a~d state taxe~ based on incor~), of which $206~118 ~s apportlonsb{e to the accounts of 13 directors at~d o~cers and $7,312,~46 to other employees. For th~ same year incentive compen~atlon u~der Article XfI of the By-L~tws was accrued in the follow[n~ amounts for the en~ploye~s partlc~pat~n~ l~crein: The undeterred t~oncontin~;ent portion (c~n~ti~uthig one-l~alf of such compensation) aggregated $685,169, o~ which $452,712 was acczued for 13 dircctors and officers. The ~leferr~¢l contingent a~rtion (constituting the other half ~f suc~ compcusationl, a~ter reduction by prefiX.sharing in fl~ case of persons parti¢[patlng in the Company's Profit.Sher~g Plan for that year, ag:~-reg:ated $~02~56, of ~hich $2~0,424 was accrued for sllc~ ~,irectors an¢~ o~cers. RESOLUTION CONSTITUTING PROPOSAL 2 The reso[utlon constituting Proposal 2 is as follow~: R~SOLVED~ that the Profi~Sharlng Plan of Amealca~l Brands, Inc,, as resubmitted to this Azmual Meeting pur~'uant ~o See&o~ 7 of Arti~ XJ there~L ~e au~ ~t bcr~by is :~pl~d. The a~lmaahv~ vote of a majority of the votes cast by the l~oId¢rs of Comrnon Stock voting thereon fs necessary for the adoptlor~ o~ Proposal 2. ~e Management r¢comme~s th~ ~ vote FOt~ Prop~aI 2. 6

proposal 3 PROPOSED A~MENDMENTS TO REVISED RETIREMENT PLAN "l~e Retirement Plan for Employees ,~ld F~rm~r Employees of American Brands, ~e, and Designated Alfilla~ed Corporations, known as the Revived Retirement Plan, w~s adopted by th~ stockholders at the Manual Meeting in 1960. It has since bceu amended from fime to tim~ by the ff~,ard of Directors and at the Annual Meeting in 1965 by the stockholders, Approxlmatcly 11.400 employees of the Company and The Haibeway,Sleane Corporation are covere~ by the Plan. Of this number, 12 are directors or otficer~ o[ the Company, The Board of Directors recemly adopted certai~s athlifional amendments, to fiecome effcctiv~ a~ of January 1, 1970, suhject to tile receipt of e tavorkhle ruling of the Internal Revenue Service and subject also to approval by the stock- holders ot the Company. The Revenue rulh~ fi~ been received. Summary el Proposed Amendments The proposed ame~dment~ to the Play ebenge the formul~ by Ivhieh the amoun~ of retiremem benefils is calculated, introduce a r~nim~ benefit and increase the presertt maximwai benefit, and broaden eligibility for severance bene- fits. A brief &seription of tbe material features of the amen&heats appears belo,~. Tbe text of the amendments will be sent to a~y ttoekhMder upon written request to tfie Secretary at the Company's office, 245 Park Avenue, New X0rk, N. Y. i0017~ and copies will he available at the meeting. Stockholders ~a-e referred to the text and the following ~uramary is qualified by such reference. Benefit Formu/a. Under the Plan as now in effect, retirement, spouse's, severance and disability benefits arc bs,~ed on th~ employee's earnings througk0ut th~ period of his employrae~t aud are payable at an annual rule equal to the sum (or its actuarial equivalent) of (i) a "pats service" beneft b~sed on years of continuous employment before 1960 multiplied by 4/5 of 1% of 1960-1964 average annual earnings up to $4800 and 1!~% of such carinngs in ex~:ess of $4,g00, plus (if} a "future service" benefi~ equal to I% of earningl after I959 The amendmenLs (which apply ouly to persons in service on or after January 1, 1970) would ~uhetitute a "final pay" gel tfiis "career pay" formula and base benefits on the average earning~ M the five bighes~ ~,omee~ti~e ),ears in the Fatal tea year~ of eIa/dolment, with the arn0unt of benefit equal to the sum (or its acmnriai equivaJsnt) of 1% of suck 'final average" earnings multiplied by the number oi years el continuous service up to 35, plu~ Y2 of 1% ~f final average earulng~ in ez:cess ot $'4,800 multiplied by the number of years of continuous service before 1960 within dee applicable period. (In th~ ease oi severance bei~efits, only service from age 30 is taken irae account, and iu the case of disability benefits a portion of the benefit is paid from elm genera/fronds of the Company.) When an employee heeome~ entitled to benefits aff~r more than 35 years of eonthmo~us aervloe, the amendments would ba~e his benefitl on the last 35 years of such service, raffler than on the first or last 55, wbishmcer produces the higher benefit, as provided in the Plan a~ now in effect. The proposed new formula is intended to provide larger benefits more in keeping with current and antleipat~d future pay l~veis. There are, however, certaha empioyee~ for whelxt the new formula would produce ~mail0r benefits than the pre~ent fox'mule and therefore the proposed amenfiments also provide that benefits under the Plan as now in effect shall not he reduced for any employee ~s a result of the a~nendments, Minimum and Maximum Benefits. Under th~ Plan as now in effect there is no minimum benefit prescribed. ql"ne pioposed amendraentt would provide a minimum benefit ~or employees retiring at or after age 62 and toe all retirements for disabifity, regardle,,s of any ~naller amount produced by the benefit tormula, i~ au aunual amount equal to $36 multipfied by the recognized number of years of service in reguIar furl-lime employment and $I8 mu[tlp[ied by the recognized number of years of service in seasonal employment. The amendment~ would also change the max~um annual benefit from $37,~)0 ~ $7.5,90ffi Severance Benefits. Under the Plan as now in effect severance benefits, i.e., pensions payable by reason of termination of service otherwise than by retirement, death or disahlllty, are payable only to regular full.time employees who are at least 5(J years of age (but net y~t 55) and who haw at least 20 years of service immedi~te[y prior to terminatio~ of service. The proposed amendments woubi broaden the allgififfffy for severance benefi~ so as in ir~elude any ~eg~lar full-tim~ employee havizlg at least 20 )ears of s~rviee who~e age and years of service total 70 or more.

Coat oy Plan and Proposed Amendments It is the pre~ent inte~tlon of the Co~p~my to fund the Lm~unded past servlce co~ ~ ~e P;a~ o~r lhe 81-~ar period cammenclng on January l, 1970. According to the latest report of the Company's independent actuary, this c~st for the Plan a~ ~ow in effect is approximately 8~,530~000. The actuary he~ estimated (using, for the ~rst time with this ~an~ a/eve~ funding method of vatuation, an ~sur~d interest rate of 5% and actuarial assumptions for anticlpa~ed PI~ wlthdrawa[s and ~uture w~e incre~ses~ that the a~lendiaen~ will produce a net increase in unfunded past ~rviee co~ o~ approximately $14,602,000. T~ pre~nt annual cost o| funding to the Cor~pany and its parHalpati~ a~liatc. mx~ the ~et add~onal cost by reasons of the amendments, are acco~in~y estimated as fol]ows: Aetuary's E011mate Befor~ Taxe~ A~aual payYaent with respect to part service $2,603,000 A~nual pa~anent with respect to current service .............................. $4,279,000 Totals ...................... $6,882,000 Plan as Nu'~ Addilional Cost of ~n Effect Amendments A~ter Deducting ,After ])educting "1" tt 2~es (at CttTrent A¢Iuttr} $ r~xes tat Cur~e~I R,~tel) as ~sdmated Estimate RatesJ a~ E~timaled h~, C~mlaar~y Before "r~xe~ by Company $1,260,000 $1,26~,000 8612,000 82,071,0~)0 8 25,000 8 12,000 $8,331,000 $1,290,000 8624,130~ Estimated Retirement Benefits Under the Plan as proposed to be amended, annual retirement benefits at normal retirement of the ioI[owing persons named in the ta~e under "Remuneration" on page 3 who are currently hi the employ of the Company would be a~ fol[ow~ (the figures in parentheses sh~wthg the reduction upon the actual or assumed election by the employre of an optional joint and survivor annuity) : Alfred F. Bowdon, $3a,13S ($28,6t4) ; Pl~iiip H. Cohen, 88,100 ($5,612~ ; Henry G. French, $26,313 i$19,1(J6); Robert K. Heimann, $~639 ($31,569) ; Cyrit F. Hctskn, 830,342 (~22,334) J~hen B. McCarthy, $30,876 (821,80~) ; Charles A. Mchos, $23,530 ($14,899) ; Eugene F, Mo~ney, $35,240 ($23,551 i ; George ~. Schramm, $2%857 ($19,403) ; John B. Sparrow. $27,291 ($21,686) and Rohert B. Walker, $75.000 (~49,1411). RESOLUTION CONSTITUTING P~tOPOSAL 3 The resolution constituting P~oposa[ $ i~ a~ foffew~: R~SOLV~O. as e~nditionally adt~pted by the Board of Directors, that the amenthncnts to the Retirement PlalL for Employees and Former Employee. of American B~ands, Inc. ~nd Designated Affitiat~d Corporations described in the proxy statement accompanying the no~iee of this Annual Meeting be and they hereby are appzoved, to be effective as of January i. 1970. The a~rmatlve ,~ote of a ~ne]orJ~ o~ the v~to~ ca~t by the ]raider's of Co~mo~ S~r~k young the~-eon i~ necessary for the adoption of P~oposal 3. The Managemem reeornmends that you vote FOR Proposal 3. Proposal 4 PROPOSED AMI~DMF2~TS TO AETICLE XII OF THE BY-LAWS Article XIl of the By-Laws ~f the Company in ~ts original form was ado~ted by the sl~ukholders in 1912. ti has bad the same puzpose of fUZltlshing inctmtive compensation to key employees fr~r more than 55 ~ars. As now in effect. Article XII provides that of the amount available as incentive compensation ~or any year 1B% skall be aliot~d to the C]xairman of the ~o~d and Chief Executive 0fi%er a~d 12% to the Pre~idenL ~d Chief Operating Of~cer q vihe together eonsRtut~ the Incentive Compensation Committee), with the balance ~f 70% bei~3 available for allotment to other key employees constitutthg the Mzalagement Group. Of the 70% tffe~ available for allotment to the ~a~agomertt Group, 24% is alloRe(1 by Article XI| to participants in that group in proportion to their fixed salaries arid the balance (46%, plu~ a~.y amourds not allotted to die t~o o~cer~ re~erred to above a~ a re~dit of vacancies i~ httose o/~e~) i~ a[lottable by the lement~ve Compensation Committee within the Managemerd Group, entircly at its discretion as to amounts and individuals. Article XII also proiddes that or~o.he[i of the amount allotted to each p~Riclpant shall be paid to hffe in cas~ as soon a~ praetleable after a]lOtla~e~t and that the other one-bail, after red]action as stated in the next seatence- 8