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33 .February 18, 1953 A regular meeting of the Board of Directors of P. Lorillard Companp held today at the office of the Company, 119 West 40th Street, New York City. There were present Messrs.: R. M, Ganger W. J. Halley I.H.Peak J, J. Blacknall L. Gruber D. A. Henderson F. G. Searle A , Jame s H. B. Parmele M. E. Dawley Todd Wool was In the absence of the Chairman of the Board., Mr. Ganger, President, presided and the Secretary acted as Secretary of the meeting. On motion duly made and seconded, the reading of the minutes of the previous meeting was dispensed with. On motion of Mr. James, seconded by Mr. Dawley,.it was unanimously RESOLVED: That a dividend of $1.75 per share on the Preferred Stock of this Company be and it hereby is declared payable April 1, 1953, to stockholders of record at the close of business March 9, 1953. On motion of Mr. James, seconded by Mr. Dawley, it was unanimously RESOLVED: That an interim dividend of 30¢ per share on the outstanding Common Stock of this Company be and it hereby is declared payable April 1, 1953, to stockholders of record, at the close of business March 9, 1953. On motion of Mr. Henderson, seconded by Mr. Halley, it was unanimously RESOLVED: That the Transfer Books of the Registered Three Per Cent Debentures of this Company, due 1963, shall be closed at 3:30 P. M. (the close of business) on March 16, 1953, for the payment of interest thereon, due April 1, 1953, and shall be reopened on April 2, 1953. The President stated that at the Annual Meeting held in 1951, the stock- holders had amended Section 1 of Article II of the By-laws to provide that the Annual Meeting should be held the first Tuesday in April at such place in the State of New Jersey or at such place in New York City, New York, and at such hour as may be designated from time to time by the Board of Directors before notice of the meeting is given. Ho stated that in his opinion, it would be advisable to have the Annual Meeting held at eleven o'clock in the forenoon at the Hotel Astor, on Broadway between 44th and 45th Streets, in NaW York City, New York, as he felt that such a meeting place would be much more convenient to the stockholders than any place in the State of New Jersey. Thereupon, On motion of Mr. James, seconded by Mr. Gruber, it was unanimously RESOLVED: That the Hotel Astor, on Broadway between 44th and 45th Streets, in New York City, New York, be and it hereby is designated. as the place for the h olding of the Annual Meeting of Stockholders to be held April 7, 1953, and that

•leven o'clock in the forenoon be designated as the hour for the holding 37 of such meeting, and FURTHER RESOLVr:D: That the Secretary be and he hereby is instructed and authorized to state said designation of the time and place of the meeting in the notice of the meeting. On motion of Mr'. Gruber, seconded by Mr. James, it was unanimously RESOLVED: That (in lieu of closing the Stock Transfer Books) 3:30 P. M. (the close of business) on Monday, March 9, 1953, be and the same hereby is fixed as a record date for the determination of the stockholders of the Compan3 entitled to notice of and to vote at the Annual Meeting of Stockholders to be held April 7, 1953. FURTHE,R RESOLVED: That only stockholders of record at 3:30 P. M. (the close of business) on March 9, 1953, shall be entitled to notice of and to vot at such Annual Meeting, notwithstanding any transfer of any stock on the books of the Company after said record date. On motion of Mr. Gruber, seconded by Mr. James, it was unanimously RESOLVED: That Messrs. F. H, Weiske and A. Riefner (neither of them bein :- a director not a candidate for that office) be and they- hereby are appointed to act as Inspectors of Election for the election of directors at the Annual Meeting of Stockholders of this Company to be held April 7, 1953. FU$fiHFR RESOLVED: That Mr. Frank Caldararo (who is not a director nor a candidate for that office) be and he hereby is appointed Alternate Inspector of Election to act as such Inspector at said Annual Meeting of Stockholders in event e ither Mr. ue iske or Mr. R iefner is unable to serv+e. Mr. Wool stated to the meeting that under the regulations issued by the Securities and Exchange Commission, a proxy statement and annual statement is required to accompany the notice and proxy for the annual meeting of the stockholders and thereupon presented to the meeting drafts of notice of the annual meeting of the stockholders to be held April 7, 1953, proxy statement, and proxy. On motion of Mr. Gruber, seconded by b1r. James, it was unanimously RESOL'JED: "That the drafts of the notice of the annual meeting of stock• holders to be held April 7, 1953, proxy and proxy statement (subject to such changes in said drafts, if any, as may be deemed necessary or advisable by counsel in order to comply with the law and regulations) which have been pre• sented to this meeting, be and the sam3 hereby are in all respects arrroved and adopted at the acts of this Board, and the Secretary is he-eby ordered to have the same duly printed and mailed to the stockholders in accordance with the requirements of law and to have copies thereof, when printed, to these minutes as a part hereof. r.i ~ FURTEE,•R RESOLVED: That the annual f inancial statement shall be mailed ~ the stockholders along with the notice, proxy statement and proxy, in accord ,p with the custom of this Company and the regulations of the Securities and Ex _J change Commission. There was presented to the meeting a certificate dated February 13, 19`.

... r....- _ .~.•y fM+..•:~-t4 To Todd Wool, Vice President, 39 6/10th of 1% of such income, amounting to $22, 31+4.60 To Frank Hopewell, Vice President, 6/10th of 1% of such income, amounting to 22,3)A.60 To Irvin H. Peak, Vice President, 6/10th of 1% of such income, amounting to 22,34k.60 FURTHF,,R RESOLVID: That the certificate of the Executive Vice President, Director of Finance,- be annexed to these minutes as a part hereof., There was then presented to the meeting a letter dated February 18, 1953, from Mr. R. M. Ganger, the President, containing his recommendations as to what other officers and key personnel of the Company, and in what amounts the remainder of the incentive compensation income provided for in Article XII of the By-laws should be paid. On motion of Mr. Henderson, seconded by Mr.- Dawley, (each Director present mentioned on the list requesting that he be marked not voting with respect to to the amount to be paid to him), the following preambles and resolutions were unanimously adopted: WBE•?r E":S, by Section 2 of Article XII of the By-laws, the Board of Directors is required to cause the payment and distribution from incentive compensation - income to other officers and key personnel of the Company and its subsidiary of 10% of such incentive compensation income, less such amounts as shall be paid to the President and Vice Presidents in accordance with said By-law; and WHEREAS, the President has submitted to this Board, in accordance with Section 3 of said Article XII of the By-laws, his recommendations as to what other officers and key personnel, and in what amounts, said payments should be made, NC47, THEREFORE, BE IT RESOLVED: That the proper Officers of this Company be and they hereby are authorized to make payments from said incentive compensr tion income to each of the persons named in the President's recommendation in the amount set after each such person's name. FU'~i THER RESOLVED: That the recormmendation of the Pre sident be annexed to these minutes as a part hereof. The President called to the attention of the meeting that some of our competitors aanufactttring a regular-size cigarette had recently brought out a king-size cigarette under the same trademark as their regular-size cigareti„e and stated that in view of the great growth of the king-size cigarette in recent years, it seemed advisable for this Company to produce, in addition to the OLD GCLD regular-size cigarette, an OLD GOLD king-size cigarette. Thereupon he presented and there was read to the meeting a memorandum prepared by Mir. P. B. Marzoni, Director of Market Research, setting forth theo reasons for and against the production of an OLU GOLD king-size cigarette. Af ter full discussion, it was On motion of Mr. Henderson, seconded by Mr. Dawley, unanimously RESOLVED: That this Company manufacture and sell a king-size 01.1) GOLD cigarette in addition to the regular-size OLD GOLD Cigarette.

I 40 The President stated that he desired to call to the'attention of the meeting that the Company has been sued by G. B. gent & Sons, Ltd., a British corporation, which manufactures brushes, seeking to enjoin the Company from using the trademark XE1PT or a cigarette package with white and gold coloring or the design emblem of a castle, and also for an accounting of all profits realized from the sale of KEW Cigarettes, together with damages and costs.• He further stated that the defense of the action is being taken care of by our General Counsel, Perkins, Daniels & Perkins, and Mr. Walter H. Free of the firm of Campbell, Brtunbaugh, Free & Graves, our trademark counsel, and that he is advised by our Counsel that in their opinion the action is without merit. On motion of Mr. Dawley, seconded by Mr. Bl.aclmall, it vas unanimously RESOLPLD: That this Company contribute to the American Red Cross, for 1953, the sum of $7,000.00,-to be allocated between the New York Office of this Company and its various branches.' On motion duly made and seconded, the meeting adjourned. ( Secretary.

39 executed by W, J. Halley, Executive Vice President, Director of Finance, and approved by Haskins & Sells, the independent Auditors of the Company, certifying that the amount of incentive compensation income for the calendar year 1952 is $3,724,i0o.65. Thereupon, on motion of Mr. Henderson, seconded by Mr. James, (each officer present requesting that he be mark6d not voting with respect to the amount to be paid to him), the following preamblesand resolutions were unanimously adopted: WHEPEAS, there has been presented to this Board, as provided by Section 1 of Article XII of the By-laws, a certificate of W. J. Halley, Executive Vice President, Director of Finance, approved by the independent Auditors of this Company, certifying that the amount of incentive compensation income for the calendar year 1952 is $3, 724,100 .65; and WHEREAS, Section 2 of said Article XII of the By-laws provides that the Board of Directors shall cause payments to be made from said incentive compensation income in the amount of 1% of such income*to the President of the Company, 8/10th of 1% of such income to the Executive Vice President of the Company, and 6/10th of 1% to each of the other Vice President; and WffiEREA.S, Herbert A. Kent has occupied the office of President of the Company from January 1, 1952 to May 1, 1952, Robert M. Ganger (formerly Executive Vice President) has occupied the office of President from May 1, 1952 to the end of the year 1952, W,J. Halley (formerly Vice President) has occupied the office of Executive Vice President from May 1, 1952 to the end of the year 1952, Levis Gruber has occupied the office of Vice President from May 1, 1952 to the end of the year 1952, and Todd Wool, Frank Hopewell and I. H. Peak have occupied the offices of Vice President of the Company, respectively, during the entire calendar year 1952; NC1W, THF,'R~.'FORE, BE IT RESOLVED: That the proper Officers of this Company be and they hereby are authorized to make the following payments and distribu- tions from the incentive compensation income of this Company: To Herbert A. Kent, President, prorated from January 1 to May 1, 1952, 1% of such income, amounting to: $12,413.67 To RobertM. Ganger, President, prorated from May 1 to end of 1952, 1% of such income, amounting to: $24,827,34 As Executive Vice President, prorated from Janu- ary 1 to May 1, 1952, 8/10th of 1% of such in:.ome, amounting to: 2, 930 .94 To William J. Halley, Executive Vice President, pro- rated from ~Say 1 to end of 1952, 8/10th of 1% of such income, amounting to: 19,861,88 As Vice President, prorated from January 1 to May 1, 1952, 6/10th of 1% of such income, amount- ing to: 7,448.20 To Lewis Gruber, Vice President, prorated from May 1 to end of 1952, 6/10th of 1% of such income, amounting to: 14, 896 .4A As Director-Employee, prorated from January 1 to •^"^ " 1"^4+ elf i d, cvf such income, 4,965 .46 34o758.28 27 .310.08 W N 0 , 46 19, 861.86 .i~ m I