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173 December 21, 1955 A regular meeting of the Board of Directors of P. Lorillard Company was held today at the office of the Company, 119 West 40th Street, New York City. There were present Messrs.: W. J. Halley I. J. M. H. J. E. Peak Blacknall Dawley A. James D. A. Henderson F. G. Searle F. M. Walson H. F. Temple H. B. Parmele T. L. Perkins G. 0. Davies L. Gruber Anna F. Woessner, Secretary Mr. Halley, President, presided and the Secretary acted as Sec- retary 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. Dawley, seconded by Mr. Perkins, it was unani- mously RESOLVED: That the increases in salary as set forth on the sheets attached to and made part of these minutes, by reason of addi- tional responsibilities and being individual merit increases in op- eration of an established plan of salary increases based upon merit and/or length of service within established salary rate ranges, be and the same hereby are in all respects approved, ratified and con- f irmed . It was stated to the meeting that, under the provisions of the Employees' Retirement Plan, all salaried employees covered by the Plan who have reached the age of sixty-five years have been retired on the income provided for in the Plan; that Section 4, subsection (1)(e), provides that the Board of Directors may employ on a retain- er or fee basis any person who is receiving a retirement allowance under the Plan; that certain retired employees bad been employed on a retainer or fee basis during the year 1955, and that officers and department heads had been consulted for the purpose of determining which, if any, of those employees so retained should continue to be employed on said retainer or fee basis, which retainer or fee would be in addition to the retirement income such employees would receive;~;,;,,r:*.,,,. that in the opinion of the persons consulted, the special experience and knowledge of the employees shown on the schedule presented to the meeting, which is annexed to these minutes as a part hereof, make it O highly desirable that their services be retained on either a full-tin &j or part-time basis as set forth after their respective names, and tha ~ it was recommended that each of said persons be offered a contract fc O the year 1956 or a part thereof, as the case may be, for the type of ~ service and at the retainer or fee set forth after each such name on on the schedule. Thereupon, after full discussion,

174 On notion of Mr. Dawley, seconded by Mr. Searle, the following preamble and resolution were duly adopted: WHEREAS,.it is the opinion of this Board that the persons recommended have such special experience and knowledge as to render the retention of their services highly desirable for the benefit of the Company, • NOW, THEREFORE, BE IT RES_OLVED: That the proper officers of this Company be and they hereby are.authorized to enter into and to execute with each employee whose name.is set forth on the schedule attached to these minutes and made a part bereof, a contract for one year from January 1, 1956, or a part thereof as the case may be, for the type of service and at the retainer or.fe.e set forth after each name, which retainer or fee shall be in addition to the retirement income of each such employee, said contract to e.mbody such other terms of employment as may be deemed advisable by.the. proper officers of the Company. The President stated to the meeting that it had been brought to his attention that a number of employees who heretofore have been re- tired under the Employees' Retirement Plan, and those who will be re- tired during 1956, all of whom have had many years of service with the Company, whose services have not been and will not be retained, are now receiving or will receive inadequate r.etirement incomes from the Employees' Retirement Plan because of changed economic conditions. He stated that the Retirement Board at a meeting held December 20, 1955, adopted a resolution recommending to the Board of Directors a method of alleviating this hardship on the employee concerned, whereby, if approved by the Board, this Company would make a contribution to each such employee which would be in addition to the retirement in- come, the total of such contributions for the year 1956 not to ex- ceed $14,500.00, and that in his opinion the Board should authorize such contributions in recognition of the long and faithful service of such employees to the Company. Thereupon the Secretary presented to the meeting the resolution regarding this matter which was adopted at a meeting of the Retire- ment Board held December 20, 1955, and also presented a schedule show- ing names of such employees, length of service, amount of annual re- tirement income, proposed Company contribution, and the total amount each employee would receive if the recommendation of the Retirement Board be approved. Thereupon, after full discussion, On motion of Mr. Henderson, seconded by Mr. Searle, it was unani- mously RESOLVED: That in order to alleviate the hardship, by reason of inadequate annual retirement income, of certain heretofore retired employees and those to be retired during 1956, who have served this Company long and faithfully, the proper officers of this Company are hereby authorized to expend not to exceed the sum of $14,500.00 dur- ing the year 1956, on the following basis: That each former employee who heretofore has be-en retired and each employee who will be retired during 1956 under normal retire- ment, whose name is included on the schedule presented to this meet- ing, and whose retirement income is less than $1,000 per annum, be paid by the Company an amount of money to supplement his annual re- tirement income in accordance with the follow ing length of service plan: I j l i I

175 Those with thirty years of service and more, to receive an aggregate of $1,000 per annum; 2) Those with fifteen to twenty-nine years and eleven months of service, to receive an aggregate of $750 per annum; 3) Those with ten to fourteen years and eleven months of ser- vice, to receive an aggregate of $500 per annum. FURTHER RESOLVED: That such payments are authorized for the year 1956 only, with respect to each such retired employee and those who will be retired during 1956, shall not be transferrable by them, shall cease as to each retired employee upon his or her death, and may be terminated as to any one or more or all of them at any time by further action of this Board in its sole discretion. On motion of Mr. Perkins, seconded by Mr. Peak, it was unani- mously RESOLVED: That the firm of Haskins & Sells, Certified Public Accountants, of 67 Broad Street, New York, New York, who have hereto- fore been serving this Company as Auditors, be and they hereby are appointed Auditors of this Company for the year 1956. Mr. Halley stated to the meeting that agreement had been reached with Consolidated Cigar Company for the purchase by it of the Com- pany's Cigar Division, consisting of the Company's two brick build- ings and one concrete building situated on the block bounded by Cary and Main Streets and Twenty-second and Twenty-third Streets in Rich- mond, Virginia; the machinery located in those buildings; and the Company's brands and brand names, and good will in connection there- with, other than those relating to little cigars. He stated that the aggregate purchase price of those items was to be approximately $1,950,000.00 and that it had been agreed that Consolidated would also purchase, at the value thereot on the books of the Company, the Company's inventories of leaf tobacco located in such buildings (which was estimated to be in the neighborhood of $3,000,000), and the Company's inventories of raw materials and manufactured stock. He stated further that the method of payment, namely, whether the purchase price would be paid in a lump sum in cash or would be paid over a period of time, would depend upon the degree of success of certain financial negotiations which Consolidated was then conducting. Thereafter, after full discussion, on motion of Mr. Searle, seconded by Mr. Henderson, it was unanimously RESOLVED: That the action of the officers of the Company in negotiating the sale to Consolidated Cigar Company of the assets comprising, in general, the Cigar Division of the Company on the basis of the general terms stated to the meeting be, and the same hereby is approved. FURTHER RESOLVED: That the proper officers of the Company, acting on the advice of counsel, be and they hereby are authorized to enter into an agreement with Consolidated Cigar Company for the sale of such assets on terms substantially similar to those stated to the meeting. The Secretary presented to the meeting the Minutes of the meet-

176 ings of the Executive Committee held on November 23, 30, December 7, 14 and 21, 1955, and read to the meeting a summary thereof. There- upon, On motion of Mr. Dawley, seconded by Mr. Perkins, it was mously unani- RESOLVED: That the actions taken by the Executive Committee at its meetings held on November 23, 30, December 7, 14 and 21, 1955, are hereby in all respects approved and ratified. On motion duly made and seconded, the meeting adjourned. Secretary . , , E t

I I I I Salary Increases approved held December 21, 1955: EFFECTIVE JANUARY 1, 1956 NEW YORK OFFICE Woessner, Anna F. Nuber, August C. Erickson, Henry E. Robbe, Fred G. Ferriter, John C. Hayden, Henry L. Whitmore, George B. Cummings, Howard F. Diehl, Edwin S. Wyland, Robert B. Eldredge, Don E. Davies, Arthur L., Jr. Davies, George O. Naumann, Edward W. Weiske, Frederick H. Dooley, Harry A. Howard, Joel Kienast, Joseph C. Miele, Vincent F. Eichhorn, Alexander R. Kontos, Edward G. Nazaruk, William J. Chouinard, Edward J. Sposato, Charles G., Jr. Driscoll, William G. Winters, Jonathan W. Darby, John J. Fredricksen, Floyd T. Campbell, Robert F. Galvin, John J. Jockel, John L. Duffy, William E. Hahn, Edward P. Birn, Walter N. Mason, John L. Stevenson, Ralph W. Combs, John 1[. Henelt, Anthony H. Ross, Robert L. Brisotti, Julius C. Caldararo, Frank T. Mintzer, Samuel Sperry, Sam D. Leben, Joseph P. John F. Eustice Miller, Meyer Harpring, Joseph J. Rockefeller, George D. Erb, Charles R, Fanning, Hugh l[. Alston, William W, by the Board of Directors at a meeting From the rate of: $ 9,500 per annum 6,700 8,500 16,200 8,000 11,575 9,600 6,250 10,575 12,000 6,250 7,800 21,000 14,500 14,700 12,850 0,200 5,700 4,650 6,550 6,550 8,200 4,654 5,500 6,000 5,250 18,000 8,250 6,000 6,750 6,550 5,300 8,275 6,625 12,200 10,100 11,400 10,200 10,200 9,285 9,130 6,400 7,100 .5,800 5,175 5,850 20,000 8,000 10,500 10,000 13,000 n „ m To the rate of: $10,500 . 7 , 200 9,500 17,000 8,250 12,000 9,875 6,600 12,000 13,000 6,500 8,400 23,000 15,350 15,350 13,350 per annum ., m n 8., 500 5,900 4,800 6,800 6, 900 8.500 4,, 900 5,650 6,250 5,450 20,000 8,550 6,250 7,000 6_, 800 6, 000 8,600 6,890 12,700 10,500 1.1, 800 10,600 11,100 9,650 9,500 6,650 7,380 6,030 5,385 6,080 21,500 8,250 11,400 10,500 13,500 n m (continued)

t Pile, John W. Taylor, Fred M. Hobgood, Dennis J. Winstead, Frank J., Jr. McCauley, James L. Lindsey, Louis H. Bennett, James E. Hoffmann, George A. Vance, Bussey H. Berner, John • Block, M. Sabel Billings, Roswell S. Andre, William, Jr. Corby, Arthur I. Yellen, Manuel Storm, Frederick W. Cramer, Morgan J., Jr. Primus, Edmund P. Gercken, Howard E. Snyder, Robert W. Sullivan, Walter L. Murray, John E. Young, Raymond W. Temple, Harold F. Rodman, George E. Smith, John J. Juneman, Herbert C. Walson, Fred M. Connors, Patrick G. MacMillan, David J. Hoyt, Earle J. Krause, Frank, Jr. Cusick, Gerard A. Grosso, Leonard D. Seeman, Jacob Schmidt, Max R. Bernholtz, Edward L., Jr. Bohlken, John H. M. Kopf, Albert A. Kurtz, John J. Lubus, Joseph J. Zarembo, John E. Marzoni, Pettersen B., Jr. Brokaw, Caleb C., Jr. From the rate of: To the rate of: $18,420 10,100 7,500 6,000 6,000 10,500 19,700 20,000 16,000 8,700 12,950 6,250 9,000 14,800 19,500 14,800 15,000 15,000 15,750 11,600 7,600 149100 9,000 26,000 6,050 5,250 5,550 18,000 11,750 18,250 11,800 7,900 5,700 5,000 4,725 4,550 4,900 4,700 5,100 4,200 4,800 7,350 16,350 7,800 per annum $19,200 per annum ^ 10,850 " ^ 7,750 ^ " 6,250 ^ ^ 6,500 ^ " 11,500 ^ ^ 20,800 " " • 20,800 " " •16,500 " " 9,000 ^ ^ 13,450 ^ " 6,500 ^ " 9,300 " '• • 15,450 ^ •' 20,500 ^ " 15,450 " 15,650 ^ " 15,650 ^ " 16,250 ^ " • 12,100 ^ ^ 7,950 ^ " 14,600 ^ " • 9,350 " " 27,000 " ^ 6,300 ^ " • 5,500 " " 5,850 " " • 20,000 ^ " . • 12,450 ^ " • 18,750 " " • 12,800 " " • 8,450 " ^ 6,050 ^ ^ • 5,400 ^ " 5,000 " ^ 4,850 " " • 5,300 " " • 5,100 " " • 5,300 " ^ • 4,350 ^ ^ 5,000 ^ " • 7,750 . " ^ 17,350 ^ " 8,300 " GREENSBORO Van Hise, Oliver B,, Jr. Comstock, William D. Rainbow, Harold J. 10,500 8,300 8,300 ^ ^ ^ OLD GOLD BRANCH Fieg, Eugene C. 16,000 Y Okerson, William D. 11,750 " Schultz, Albert A. 6,250 ^ Kraus, John A. 8,300 ^ 11,000 . 8,600 8,600. 16,600 12,500 6,550 8,650 ^ ^ m ^ " ^ i U (continued)

I I I I LOUISVILLE BRANCH From the rate of: Cheek, Alexander J., Jr. $18,800 per annum Everson, Harry E., Jr. 5,550 Greenf ield , llil l ia A. 6,250 Head, Bernard E., Jr. 6,000 Kirzinger, George W.,. Jr. 6,600 Lotz, Robert W. 6,550 McKinney, Earl 7,150 Powe, Ellerbe, Jr. 7,150 Reich, Melvin F. 7,600 Siers, Earl T. 12,000 Smith, Benjamin R. 6,800 Summers, Ray 6,650 Jacoby, Paul R. 7,800 Fronk, Eugene R. 5,465 Hall, Donald M. 6,600 Lawrence L. Lenharr 5,250 McCarthy,. John H. 6,250 Schlenk, William A., Jr. 5,575 Young, William B. 8,100 Calvert, Courtland 5,450 n m « r M p Williford,Lloyd H. 87 per week DANVILLE LEAF DEPT. Scruggs, Annie E. Seward, Andrew B. Taylor, Carl A. 4,010 p9r annum 6,270 't 6,250 " LEXINGTON LEAF DEPT. Spissu, Charles C. 5,550 Thomas, John L., Jr. 5,350 Brewer, William R. 4,800 Shinkle, Thomas H. 7,600 LANCASTER LEAF DEPT, Lantz, Richard A. WISCONSIN LEAF DEPT. Ellingson, Ole F. Klinefelter, Marlow D. McCormick, William A. Nichols, John L. 4,450 5,950 5,750 5,060 8,000 EFFECTIVE DECEMBER 30, 1955: Louisville Branch Allen, Maynard H. Bailey, Marion W. Batts, Boyd D. Beckwith, Edward S. Bentley, Ermon H. Behr, Emmert F. Best, Joseph E. Brown, Howard E. t, it ., M m it To the rate of: $19,500 5,850 6,450 6,950 7,100 6,850 7,450 7,450 8,600 12,600 7,100 6,950 8,000 6,250 6,900 5,500 6,400 6,250 8,400 6,250 4,850. per annum N m 4,110 6,520 6,550. „ „ 5,875 5,675 5,300 8,600 4,800 6,250. 6,050 5,400 8,500 m n M m „ $88 ' 72 94 101 73 -97 90 72 per week tt tt Q (continued)

Bruner, John E. Bube, Delbert F. Clark, Coy A. Cooper, George N. Cundiff, Calvin Dunphy, Thomas J•. Durbin, Joseph D..• Eanes, Moir E. Geiser, Carl H., Jr. Gillis, Earl Goulder, Junius R. Hardesty, Paul S., Sr. Hauselman, Ralph L. Hawkins, Wendell R. Highley, Millard, Jr. Highley, Millard, Sr. Hite, George C., Jr. Hubbard, John R. , Johnson, William L. Lindauer, Robert S. May, Joseph R. Miller, Elmon R. Parsons, Neale A. Quaack, Raymond L., Sr. Rains, Eugene D. Ransdell, willian, T. Raser, Carl E. Rassinier, Arnaud.J,.. . Rathburn, John E. Sabo, Mickey N. - Schleicher, Harold B. Sears, Ernest E. Siers, William C. Singleton, Estill R. Smith, Edward D. Tomes, Deward B. Van Bakel, Adrian J. Warden, Elmo K, Jr. Weiss, Robert P. Welborn, Charles B. White, Ernest White, Leon E. White, Thomas A. Williams, Stanley R. Head, Malcolm E. Kraus, George E. EFFECTIVE JANUARY 2, 1956 Old Gold Branch Bernard, Richard P. Bernardt, Carol L. Boratgis, Gregory Browne, Douglas A. Brush, Sanford D. Chadderton, Arthur From the rate of: To the rate of: •$82 per week 86 . ft 80 •' 110 " 83 " • 84 " 88 " 80 " 84 •' 68 " 109 " 65 " 70 •' 73 " 73 " 85 " 86 " 69 •' 102 " • 93 " 83 " 86 ff 80 't . 101 " 87 •' 77 " 91 " 88 ft 72 •' 86 " 69 " 84 " 79 " 110 " 71 " 105 88 •' 90 " 71 " 106 " 86 '• 79 " 68 " 70 •' 78 " 83 " 89 74 74 106 81 72 m N $87 per week 90 •' 84 " 115 " 87 •' 87 •'. 92 " 87 90 ft 72 " 115 " 68 •' 72 ft 78 " 77 " 88 " 89 " 73 " 112 " 98 " 87. " 89 " 87 't 106 •' 92 " 80 " 94 " 94 it 76 " 90 •' 73 " 87 " 84 " 115 " 73 " 110 `.' 94 " 94 " 73 f' 112 •' 89 " 83 " 70 " 75 It 84 " 88 •' 92 77 76 ill 84 75 .o n ft ft tt « (continued) N C

From the rate of: To the rate of: Collins, Patrick A. $70 per week $73 per week Cowan, Thomas L. 78 '• 82 •' Dancausse, Miguel 90 " 93 •' De Graaf, Nicholaas 90 •' 93 " Forte, Leonardo 69 " 72 " Kelly, Walter C. 75 •' 79 " Kraus, Adam 115 " 120 •' Lake, Harvey W. 58 •' 62 •' Langlois, Gerard J. 105 •' 110 •' Leibold, Henry C. 78 •' 81 •' Lent, Alice D. 90 •' 94 •' Leszczynski, Martin 105 •• 110 " Maebe, Armand 105 " 108 •' McCulloch, Harry 120 " 125 " Mohring, Bernard F. 91 " 95 •' O'Brine, William J. 99 •' 102 •• Randazzo, Salvatore 81 '• 84 " Robertson, Alexander 77 '• 80 •' Robertson, John H. 85 " 88 •• Schneider, William 93 " 98 " Wanek, Jerry 87 " 90 " Williams, Raymond E. 70 •' 72 •' EFFECTIVE JANUARY 5, 1956: Danville Leaf Dept. Kinder, Frederick E. 79 m 82 ~ Lewis, Howard W. 74 n 78 Rogers, Charlie G. 87 .• 92 .. Starkey, Marion N. 79 .. 82 Tilley, John li. , Jr. 76 .• 80 . Wall, Ernest H. 74 ~. 78 •, EFFECTIVE JANUARY 4, 1956: Lexington Leaf Dept. Drury, Orville C. 66 .. 70 .. Tincher, William C. 75 .. 79 s Tucker, Lee R. 82 ., 86 ff Wheeler, William B. 75 .. 79 ., Williams, Stanley D. 77 ., 79 ., EFFECTIVE JANUARY 2, 1956: Wisconsin Leaf Dept. Gumz, Donald 0. 65 " 68 •' Mulrine, Daniel J. 68 " 72 •' Nielsen, Norman K. 65 •' 68 •• O W M+ ~ O ~ O 0~

Name: Type of Employment: Retainer: Payable: Berkley, Claude W. To perform the normal functions of Media Director $15,950.40 Advertising Dept. and carry out such other special assignments as may be directed by the Vice President, Director of Advertising, devoting thereto his full time. Bittel, C. C. To render services in the Sales Dept. of the Com- $ 1,200.00 Sales Division pany and such other assignments as may be request- ed, devoting thereto two weeks during.each month of the calendar year. Monthly First and third week in each month Clemens, Leslie E. To assist and advise the Insurance Dept. and to $ 4,784.64 Monthly Insurance Dept. perform such other assignments as may be requested, devoting thereto his full time. Harris, R. M. Warehousing of display advertising and sales pro- Sales Division motional material, distribution of such material to the Sales Organization as directed by the Sales Service Dept., and to perform such other assign- ments as may be requested by Assistant Sales Mana- ger, Sales Manager, Sales Promotion Manager, or Field Manager, devoting thereto his full time. Higgins, Edward F. To assist and advise the Purchasing, Sales and Advertising Dept. Advertising Departments and to perform such other assignments as may be requested, devoting thereto his full time. $ 2,442.08 Weekly M,M og ti 'd 0-a (+0 A co $ 7,787.52 Monthly co ~. u, d rnco • G. McNeish, John J. To render services in the Sales Dept. of the Com- $ 3,990.43 Weekly Sales Division pany, and such other assignments as may be re- quested, devoting thereto his full time from Feb- ruary 1, 1956. Miller, Joseph To assist the Branch Manager and Foremen in pro- $ 4,769.00 Monthly Lo#isville Branch duction, manpower, warehousing, processing opera- tions at the Leaf Warehouse Div. of the Louisville Branch of the Company, and to carry out such other 1,01a04TE0 assignments as may be requested, devoting thereto his full time.