Tobacco Documents Online

1953 nnu I rep rt

NOTICE OF MEETING FlemkLgt~u, N. J., March 1, 1954 NOTICE is HEREBY GI~Ehr that the Annual Meeting of the Preferred "and Common Stockholders of TItE AI~ERtCAN TOBACCO COMPAN~ will he held at No. ~4 Court Street, FIeming~on, New Jersey~ at one-thirty o'elock in the afternoo~ (Eastern Slandard Time) on Wednesday, April 7, 1954, for the followhlgpmposes: (1) to elect Directors; and (2) to ~ransaet suchotherhltsineas as may properly come before the meeting, Tho Preferred and Common Stock transfer books will ~_ot be clo~d, but holders of Preferred Stock and Cormmon Stock to he entitled to vote must he holde~ of rseord at the close of husiuess ou .~iarch 8, 1954. JOHNV7~. HA~LON, ~e~e~ry

PROXY STATEMENT The enclosrd proxy is solicited on behalf of the Management. The proxy may he revoked in writing given to the Secretary at any time before being voted. Proxies in the form enclosed, properly executed by stockholders and duIy returned to the Management and not revoked, will be voted. Attendance at the meeting does not serve to revoke the proxy• Prior to the merger with American Cigarette and Cigar Company which became effective on Decem- ber 31, 1953, the Company had outstanding 526,997 shares of Preferred Stock and 6,454,110 shares of Common Stock, all of whieh arc entitled to be voted at the meeting. In addition, the number of shares of Preferred Stoeh and Common Stock of the Company represented by certificates issued after the time the merger became effective and before the clos¢ of business on the record date referred to bdow, upon sur- render for exchange pursuant to the Agreement of Merger of certificates which previously represented shares of Preferred Stock and Commtm Stock of American Cigarette and Cigar Company, wilI be entitled to be voted at the meeting. The maximum number of such additional shares which could thus become entitled to be voted is 58,200 shares of Common Stock and 834 shares of Preferred Stock, of which 47,280 shares of Common Stock and 354 sbarcs of Preferred Stock had thus become entitled to be voted as of February i, 1954. The Preferred Stock is entitled to four votes per share. The Common Stock is entitled to one vote per share. The record date for the determination of stockholders entitled to vote at the raee6ng is the dose of business March 8, 1954. ELECTION OF DIRECTORS Tbe Board of Directors consists of nineteed members who are elected to hold office until the nexL Annual Meeting or until their successors are duly elected arid qualified. It is intended that proxies in "the accompanying form will be voted for the nominees named below. Thane nomirtecs constitute the pre~ent Board and have served as directors of the Company for the periods commencing with the dates set after their respective names. The Company is informed that these nonfinees were direclly or indirectly the beneficiaI corners of outstanding securities of the Company at the close of business on Fehrmtry 1, 1954, as set forth after their respective names. Name Orphcu~ D. BaxaIya Alfred 17• Bowgen Richard J. goylan DougIan W. Bra~h~ar yenr First Other positions and Offices with Company Elected and Prinoipal 0 ccnpatlon (a) Director Common pre~erreol Vice.Presldent told Managil~g Director, 1940 1,fl61 62 Th~ ~Lflflel~]can Tobacco Cc~npally of gm Orient, I~o. (b) Assistant to the Pre~idcmt, The American 1951 550 Tob~co Company Vice-President and Director of Fur- 1929 3,025 d~SO ehase~, The American Tobacco Corn- pony Vice-President, American Suppliers, In- 1948 500 corporated; Conceal glalt~ger of Stemmerie~ of The American Tobacco Company and American Suppliers, incorporated (b) Director el Traffic, The American 1946 200 Tobacco Company Vice-l~eslderrt and Comptroller, The 1936 783 106 Kr~eriean Tobacco Cempmay 2

ag ~d !l- ff F. ~d ~d rio 3O ff ~e in 3S ~y l, 0{her po~iIion~ a~d Omens ~ Company EIected ~a~o and p~ncil~l O0ca]patlnu (a) Dire ctor Common prde~ed Iohn A. Crown Vice-President and Assistant (~tluf of 1931 800 105 Manufacture, The Amc~'i~an Tobac~Q Company John ~. Dowd Exeentlve Vise-p~esideat, American 1946 400 Suppl2~rs, Incorporated (b) A. Gordon Findlay Vice.Fresldenb American Cigarott~ and I953(o) 2~005 Cigar Division of The American Tobacco Company Prestan L. Fowler aflee-Preeldent and Chief of Manu- 1941 800 l(J0 facDare, The American Tobacco Company " Charles Ganshow Vice Prcsldent, American Cigarette and 1953(c) 900 Cigar Di~ision of The American Tobacco Co~apan~ Paul M, Hahn President, The _~merlcan Tobacco Com- 1931 4,784 pany Hiram R. Hanmer Director of Rczearch, The American I938 200 Tobacco Company E&nuntl A. Har~ey ¥1ee-pze~ideat In CAarge ul Sa)cs, The 1932 1,024 40 American Tobacco Company Harry L. I~ilyar d Treasurer, The Aznerlcan Tobacco Corn- 1944 350 pany John IL Hutohlngs, Jr. Viee-pre~idenb Kulerican Supplit~, In- 1951 300 coxpozate~l (b) A. LeRoy ]anson Auditor~ The American Tobacco Corn- 1948 318 party William H. Ogsburf Assistant Chief of Manufactnre, Th~ 1930 150 50 American ToLacoo Company James 1~. Strieklaad President, American Stlppilers, Ineorpo- 1946 520 ratod (b) (a) ~n each ]nstaneo) t~e po~it~omq and o~c~s with the Company n~ld irm suhsidiarlel listed after the name of a nominee are a~st~ ~:ds ~inclpaI 0ceapatlon. (b) Agillat~d company engaged ~n purchase sad handlin~ of ]c~f lobacco. (e) ICirsl IJeeame a d~¢etor ot the Company at th~ ~o~e o~ b~,,iness on December 31, 1955 when th~ merger with ~merlea~ Cigarette ttttd Cigar C~mpany bee~m~ e~etive, h~vlng ?0¢e~ named In become ~t director Jn the Affreement of Merger ~dopted at lh~ Spe~a| ~eetlng o~ $I0ekholders n~ the C~mpany held December 2, I953, The Company is also informed that none o£ the nominees was directly or indirectly the beneficial owner on February l, 195~, o~ ~ntstandlng securities o~ subshtiarie~ of Sac Company, other than 31rectors' qrtali~ylng shares, except Wi21iam H. 0ilshury, who owned beneficially on that date two shares of Cormnon Stock of Cuban Tobacco Company Inc. The Company is also info)rned that the ~9regolng nominees include three persons who were stock- hoIders ot Amerietm Cigarette and Cigar Company crying beneficlally more than 50 sharos respectively of its Common Stock when its merger into the Company became effective on Decemhar 31, 1953, namely: A. Gordon Findlay, 250 shares; Charles Ganebow, 101 shares; and Paul M, Hahn, 285 ebares. The Company is also informed that Mrs, Paul M. Hahn at that t/me owned 85 shares. By the terms o~ tha mergey) each such sl~are was co.vetted into 8 shares o~ Common Stosh n~ the Company ~avlng a t~en mashe~ value of 611~ per sha~e. These sharaholding~ were the .~ame as l~ad been reported to tlm stock~ hoIdors in the Proxy Statement for the Special Meeti.g of Stockholders of the Company held December 2, 1953, at which the merger was adopted by the ~toekholders. 3

Although the Management does not contemplate the possthility, in the event any nominee is not a c~udldate o~ is ~mahI~ to ~ex~-~ as a director at the time of the elecdo~h it is imeudc4 tkat t~e p~oxi~ w~lI be voted fo~ any nominee who shaIi be designated by tim presem Board of Directors to fill such vacancy. The Management is not aware at the date hereof of any matter that is intended to be presented at thls ~eming othe~ thau th¢ elemio~ o~ dlr~cto~s ~l a p~p~zal omLted ~om the p~ox'i and p~Dxy ~ta~- ment pursuant to Rule X-ldA-8(c) o~ the Securities and Exchange Commission: I~ any matL~ not known at the date hereof or so omitted is pxoperly presented for actiou at the mecting~ it is intended that the persons named ~n the proxies w/ll vote thereon according to their ]Jest jttdgraenL REMUneRATION Rem~era~ion of Directors aml Officers. There is set ~orth in the foBow~ng tabulation, on an aec~aal basis, all dlre~ rem~erafion paid by the Company and its s~b~idiaries to th0 fonowth5 persom for services in all capacities while di~oetors or o~ers of the Company dmln5 its last fiscal year: each director, and each of the three highest paid o~¢ers, of the Company whose direct asg~ate remuneration exceeded $50,000; and all dlrec~ors and oi~cers of the Company as a group. Estimated ann~a~ redr~m~t b~efits to the same indlvldus]s at normal retirement date under the Retirement Plan for employees ado~d by the stoc!tholders at the 1949 Annual Meeting are stated in Colum~ (5). (I) Name st i~dividu~I or identity of ~TOUp Orphex~ D. BaxaX~s AHred g. Bo~.dvn Richard J. BoyIa~ Douglas W. Rrashear TEoT~tas P. Conn(l~ James R, Coon(b) John A. Crows(b) John S. Dowd Preston L. Fowled(b) (2) Capacities in which x~ ~ u n o~a tion xv as ~e~ei~ d Vicc~Presldent and Matmg~ng Ditcher, The Amerlean Tohaceo Company of the Orient, Inc. (a) Assistant to the Presldonb The American 39,I57 14,000 Tobacco Company ¥iee-Presi&nt and Director st Par- 50.000 $105.481 I7,000 eha*~, Tim American Tobacco C~m- Irony Vice-President, Ametlca~ Suppliers~ In- 45,000 14,584 corporated (a) ; C, enzra/ Manage~ of $tenmacrles Director of Traffic, The American To- 34,000 11,575 bases CompmW Vics-Preslder~t and Comptroller, ~h¢ 50fi00 105,481 17,000 Ax~ericau Tobacco Company Vice-Prcsiden~ and Assistant Chief of 50,000 105,481 17,000 Manuhcttu'c, TI~ ~sriean Tobacco Company Executive Vice-President, American Snp- 60~000 17..983 pilers, Incorporated (~) Viee-PreMdent and Chle~ o~ Manu~ae- 50~000 105,481 14,816 tree, The American Tobaee~ Company (a) Affiliated ~mpany engaged in purchase and handling of leaf tobaeeo~ (b) Also a~r of af~iatM company ar eompa~ies. 4 (5) Estimated mva,¢,¢.l h~ncfit (4) at norms! (~) ~avllcipation ratiremen~ ,~laJ~s ~ profits dat~ $ 50,0~ 516,~68

II Nameo indSv/duaI or id~aCtty nf G,c.9 Patti M. II~lm(b) Hiram B. Hanmer Edmm~e] &. Harvey Harry L. Hilyard(b) John R. Hmc~ug~, It. A, LeRoy fanaon William H. Ogsbury fames P. gtrlcldand i21 Capa©iIi~a in whtek remttner~C~on was ~4 Pre~ddonL, 'Fne American Tobacco Com- pany; President, American Cigarette and C~g'ar Company Director of Reseatc'a~ The Amorlean Tobacco Company x.rice-Proslden¢ i11 Charge of Sale% The Alnerlcan Tobacco Company Treomm:er, The ~araeriean T~Lacco Com- pany ~flee.PreH~emg American Suppliers, In- coGooraLed (a) Auditor, Thc Aracrican Tobacco Com- pany Assistant Chle~ of Manufacture+ The American Tobacco Company Presideng Amezdcan Suppgers, hmor- porate~ (a) EItimat~ ~nnual retirement b~St (4) at normal (~t P~r ticipatlon retirement Selane~ ia 9r~&t~ 3120;000 $131,852 $25,000 40,000 I~520 50,oog 105,481 I7,000 50,000 ,L~,293 50,000 15,669 50~000 17,000 ~,000 16,476 92,1,667 659,259 Directo~ and O~cers Directors and O~cers as a group Eta a gfou~ (a) Affiliated ¢ompa~F cn~aged ha p~tehsse ~nd hamdllng o~ leaf toLa~¢o. (h) ilso ¢~¢e~pf affI/iated company ~r o~mpa,ies. T~e amounts staled in Column (4) above were accrued as incentive compensation (based on amount of Company profits), under Article XlI of the By-Laws, as amended by vote of die stockholders at the I951 &mum Meeting. No amount was set aside or accrued during the Company's last fiscal year for pension or retirement benefits proposed to be paid under any ¢xisthag plan by the Company or any of its subsidiaries to any o~eer or director of rite Company. The Retirement Plan for employees adopted by vote of the stockholders at 6~e 1949 ArmuaI Meeting e~ve~ approximately 19,(100 regular fulbtime erapl~yees of tke C, Zmpa~y and its subs~diaxies. The aggregate amount of remuneration for the fiscal yeax 1953: received from the Company and its subsMiaries, directly or iedirectly, on an accrual basis, by all the directors and officers of the Company as a group, was approximately fifteen one-hundredths of 1% of the Company's consolidated net sales. MISCELLdNEOUS Any ~tocitholder making written request therefor to the Secretary of the Compa*~y will be fmmi~hed a summary of the Annual ~ecfi~g ~ich Mll be prepared after the meeting has been held. • Messes. Ly~rand, Bos~ Bros. & Montgomery have been for many years the independent auditors for the Company, and are ,appointed by re~olufion of the Boa~d of Direclors. in accordar~ce with the Company's customary pr~i~e, a memh~ ~f the ~m ~f audit~r~ ~iR attcad the &m~ ~eting a'~d respond to questions which may be a~ked by ~toeI&olders. Comments or suggestio~m by stoelthoidexs with regard to the audit ere we/corned, a~ the- are with ~ard to aii othe~ matters aft'octin~ the Company's interests. 5 3 % i

Flemlngton, N. ]., is reached by the Lehigh Valley Railroad. The presant train schedule, which is subieet to change artd should be confirmed, is as follows: Leave Pennsylvania Station (33rd Street and Seventh Avenue, New York, N. Y.) I0:55 A. M. Arrive Flemington Jmlcticn 12:03 P. M. Leave F~craingt~rL 1uv.~on 5:25 P.M. A~dve Pettr~y[vatda StafiQzt 6:40 P.M. The Company ~ proettr¢ transportation from New York to Fierningtou by railroad and return by railroad or, if expressly requested, return by bus, at Co1~pany expense for ~ay ~o~khzlder zf re~d de~uz of attentling the meefmg, o~ his notifyi~tg the Secr0tary in writing at l 11 Fifth Avenue, New Yorh 3, New York, prior to March 3I, ]954, that he wishes ~ush ixan~portation obtained, If you do no~ plan lo attend, you are urgently xe~inested to execute the enclosed proxy and real1 it to the Company promptly. Expense of Sol~itation, The expense of the solleltatlon of proxies for this meeting, including the eQst ~f raaHh~, wiE he bettl¢ by the Corapany. Inaddltiontomailh~gcoplesoflhismaterialtostockht~]der~ the Company will request persons who hold stuck in their names or snstody or in the names of nominees for ¢shers, t¢ forward ¢~pic~ ¢I such ~t~rial to th~¢ 9er~s {~r ~vho~ they hold ~toek of ~h~ Company artd to request authority for the exee=fon of the proxies. To the extent necessary in order to assure sufficient representation at the m~ti~g, o~eers and som~ regular empI~yee~ ~{ the Corapany and approxlra~tely 6 employees of Philip G. Cameron Company wi2l request the return of proxies by telephone, telegram or in person, a~ an estimated cost of ~o~t $14,000, '~he amount of the expense to he bozne by th~ Company will depend upon the volume of shares represented by the proxies received promptly in response to the Notice of Meeting. If proxies are not received promptly, it may he necessary ~or ~e Company to send telegraphic solicitation to those steckhulder~ who have not ~spo~ded. Stoeltholders who do not intend to be present al. the Meeting are urged to send in their Proxies without de~ay. Pzoml~ reep~nse is helpful, vnd yo~r cooperation ~vi~l he ~ppre~iate6. Fchx%ary 9, 1954

annua| repor INCORP~TE~~/ FOR THE YEAR ENDED DECEMBER 3~ 1953 WITH CONSOLIDATED BALANCE SHEETS CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS Executive Office 111 FIFTH AVENUE - NEW YORK 3, N. t'.

19~3 Net income per ¢onunon sllave ...................... $5.90 Dividends paid per common share .................................... 4.00 1952 $4.79 4.00 Not sales ................................................................... $1,088,380,427 $1,065,738,454 Income~ before taxes on income .......................................... 99,231,963 78,351,963 Net income ............................................................... 41,225,921 34,068,963 Divideads paid (common and preferred) .................... 28,978,422 27,095,973 Po~on of ~ inceme inv¢.~ted in assets used in the business and to provide for debenlvxe sinking ~mid r.qldrements 12,247,699 6,972,990 Current assets, December 31 ............................................... 725,577,322 712,653,905 Current liabilities, December 31 ......................... 177,272,491 161,399,785 Net working capltal, December 31 .................... 548,304,831 551,254,120 Number of stuckholders at December 31: Common ........................................................................ 72,964 Preferred ........................................................................ 7,959 74,792 8,166 2

Fehmtary 5, 1954 t~D OIlR ~'£fg~]KHD~D]gIK~: Your Management presents in this An* nnal Report financial state~aents covmqng the operatlons of your Company, including its consolidated suhsidinries, for the year 1955. The "Highlights" page opposite gives a convenient *ummary of the finanelal results for last year as wail as a comparison with I952, and this letter discusses the year's more important developments. Some of the significant facts relating to 1953 operations were these: I. Dollar sales reached a new high of $1,088,380,427. Unit sales of cig- arettes declined sEglaly. The Com- pany's dollar and mlit sales continue tn be the largest in the industry. 2. Net income for the year increased to $41,225,921. 3. American Cigarette and Cigar Com- pany, a subsidiary of :ccitt Company, was merged into Tile America~ To- ha~¢o Company as of December 31, 1953. SA~E5 • m Sales of the Company in I953 amounted] to $1,088,380,427 mid were 2.12% higher than in 1952. The increase in dollar sales resulted from the increase in the prices of the Company's elgarette brands which be- came effective a~ the end o£ February 1953 when cignrette prlcea were decontrolled. As a result of the success attained by yo~r Goml~any's pALL ]~/Ig.LL a~4 HER- BERT TAREYTON Cigarettes (both king- size), a llumber of competitive brands en- tered the king-sizo field in 3952 and 1953 by introducing king-slze .asrsions of, and with, thelr standard-size cigarettes. The introduction of these brands in klag-size has materially expanded the king-size share of the market. Notwithstanding this new competition, PALL MALL increased its unit salas volume substantially in 1953; and HI~RBERT TAREYTON sale~ also increased. The industry's gain in king-size sales has been offset by declines in the sales of standard-size dgareaes. Although the unit sales of LUCKY STRIKE Cigarettes de- dined in 1953, ~urvoys indicate that the brand has slightly improved its position in the standard-slre market, DoEar sales of cigars of the Company and its subsldlarles ~vere higher in 1953 than in I952. Smoking tohaczo sales, in line with the trend of the industry, declined moderately.