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January 18, 1956 177 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. I. J. J. H. J. Halley Peak Blacknall M. E. Dawley " A. D. L. James A. Henderson Gruber H. G. F. 0. Temple Davies F, F. M. G. Walson Searle 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. Henderson, seconded by Mr. Peak, it mously was unani- RESOLVED: That the Transfer Books of the Registered Three Per Cent Debentures of this Company, due March 1, 1976, shall be closed at three-thirty o'clock P. M., February 15, 1956, for the payment of interest thereon due March 1, 1956, and shall be reopened at ten o'clock A. M., March 2, 1956. Mr. Peak, Chairman of the Budget Committee, presented to the meeting the Capital Budget for the year 1956 and stated that the Committee had approved the same, and that it was desired to submit it to the Board of Directors for consideration and approval. There- upon, after full discussion, On motion.of Mr. Henderson, seconded by Mr. Searle, it was unani- mously RESOLVED: That the Capital Budget for the year 1956, submitted to this meeting by the Chairman of the Budget Committee, be and the same hereby is approved, ratified and confirmed in all respects, sub- ject to review from time to time by this Board as set forth in resol- lution of the Board adopted at a meeting held December 20, 1950. There was presented to the meeting a Sales Promotion Budget for the year 1956 calling for an expenditure of $5,500,000., to be allo- cated as follows:• OLD GOLD Cigarettes KENT Cigarettes EMBASSY Cigarettes (Export) $4,600,000. 792,200. 7 800. O W N O , ~ Tobacco Brands: 1+ BRIGGS $30,000. w BEECH-NUT 35,000. INDIA HOUSE 5,000,

178 Tobacco Brands, cont'd.: UNION LEADER $25,000. FRIENDS 5,000. $100,000. Thereupon, after full discussion, on motion of Mr. Searle, seconded by br. Dawley, it was unanimously RESOLVED: That the Sales Pr~omotion Budget for the year 1956, as presented, in the sum of $5,500,000., be adopted and that it shall be reviewed by the Board periodically during the year. There was presented to the meeting an Advertising Budget for the year 1956 calling for an expenditure of $14,210,000., to be allocated as follows: I OLD GOLD Cigarettes Magazines $104,085. Newspapers 171,985. Rad io 673,639. Television 9,249,663. Outdoor 37,628. Miscellaneous 113,000. Export 37,300. $10,387,300. KENT Cigarettes Magazines 1,141,134. Radio 173,590. Television 1,814,800. Miscellaneous 120,476. Export 18,700. 3,268,700. , I EMBASSY Export 46,000. BEECH-NUT, Newspapers 140,000. BRIGGS, Magazines '55,000. MURIEL, Newspapers $300,000. Export 3,100. 303,100. HEADLINE, Export 2,400. Philippine Tobacco, Export 7,500. Thereupon, after full discussion, on motion of Mr. Searle, seconded by Mr. Dawley, it was unanimously RESOLVED: That the Advertising Budget for the year 1956, as presented, in the sum of $14,210,000., be adopted and that it shall be reviewed by the Board periodically during the year. Mr.Halley referred to the proposed sale to Consolidated Cigar Corporation of the Company's Cigar Division and stated that negotia- tions had proceeded to the point where a form of agreement in substan- tially final form, embodying the terms generally stated to the Board at its last preceding meeting, had been arrived at. A copy of such form was presented to the meeting and such copy was directed to be marked for identification by the Secretary and filed with the minutes of the meeting. It was stated that such form had been agreed to by the parties in all respects except as to several relatively minor matters, the principal one of which was the provision relating to the effect on the obligations of the parties in the event that, at the time of the closing, any suit,, legal or other proceeding should be threatened or pending agai.nst either of the parties which would affect its ability to perform such agreement. It was stated that

179 further negotiation would be required in that regard. The other matters remaining open of which he was aware related purely to me- chanical details. Thereafter, after full discussion, On motion of Mr. Gruber,'seconded by Mr. Peak, it was unani- mously RESOLVED: That the proper officers of the Company be, and they hereby are, authorized to execute an agreement for the sale of the so-called Cigar Division of the C'ompany substantially in the form of the copy of agreement presente'd to the meeting, with such changes therein as such officers, acting on the advice of counsel, shall deem necessary or advisable. The Secretary presented to the meeting the Minutes of the meet- ings of the Executive Committee held on December 28, 1955, and January 4, 11 and 18, 1956, and read to the meeting a summary there- of. Thereupon, On motion of Mr. Henderson, seconded by Mr. Dawley, it was unani- mously RESOLVED: That the actions taken by the Executive Committee at its meetings held on December 28, 1955, and January 4, 11 and 18, 1956, are hereby in all respects approved and ratified. On motion duly made and seconded, the meeting adjourned. ~ Secretary