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MINUTES OF THE ANNUAL MEETING OF THE STOCKHOLDERS OF P. LORILLARD11 COMPANY, HELD AT THE LORILLARD SNUFF MILL, NEW YORK BOTANICAL GARDEN, BRONX PARK, NEW YORK, NEW YORK, ON APRIL 5, 1955, AT ELEVEN O'CLOCK IN THE FORENOON. Mr. H. A. Kent, Chairman of the Board of the Company, acted as Chairman of the meeting at the request of Mr. W. J. Halley, President, who presided and called the meeting to order in accord- ance with Section 4, Article II of the By-laws of the Company, and Miss Anna F. Woessner, Secretary of the Company, acted as Secretary of the meeting. There were produced on behalf of the Board of Directors the transfer books and stock books of the Company, and there was pre- sented'a full, true and complete list, in alphabetical order, of all the stockholders of the Company entitled to notice of, and to vote at, this meeting and to.vote at the ensuing election, with the residence of each and the number of shares held by each, to wit: The stockholders of record at 3:30 P. M. on March 7, 1955, the record date fixed by the Board of Directors for the determination of the Stockholders entitled to notice of, and to vote at, this meeting. The Chairman stated that these books were produced and this list was presented as required by law for the inspection of the stockholders present; and such books and list remained open for inspection dur- ing the whole of the meeting. There was presented a copy of the Notice of the Meeting with Proxy Statement and form of Proxy, together with aff idavits showing mailing thereof and publication of the notice of meeting in accord- ance with law and the By-laws of the Company, the same being as follows :

P. LORILLARD COMPANY Notice of Annual Meeting of Stockholders TO BE HELD APRIL 5, 1955 I To the Stockholders of P. Lorillard Company: NOTICE is hereby given that the Annual Meeting of the Stockholders of P. LORILLARD COMPANY, a New Jersey Corporation, will be held at the historic mill known as The Lorillard Snuff Mill located in The New York Botanical Garden, Bronx Park, New York, N. Y., at eleven o'clock in the forenoon of April 5, 1955, for the following: (1) The election of thirteen (13) Directors to hold office until the next Annual Meeting of Stockholders or until their successors are elected and qualified; (2) To consider and vote upon a proposed resolution in respect of the modification and amendment of the Retirement Allowance Plan for hourly rated and/or piecework employees, which resolution is described and set forth as Resolution No. 1 in the enclosed Proxy Statement; (3) To consider and vote upon a proposed resolution authorizing the Board of Directors to further amend said Retirement Allowance Plan for hourly rated and/or piecework employees, which resolution is described and set forth as Resolution No. 2 in the enclosed Proxy Statement; and (4) The transaction of such other business as may properly come before said meeting and any adjournment or adjournments thereof. The Stock Transfer Books will not be closed, but only stockholders of record at the close of business on March 7, 1955, will be entitled to vote, notwithstanding any transfer of any stock on the books of the Company after such record date. ANNA F. WOESSNER, Secretary. Jersey City, N. J. February 25, 1955 If unable to be present at the meeting, please sign the enclosed Proxy and return it in the accompanying envelope so that the meeting may be properly held. PLEASE NOTE : In accordance with the authority given to the Directors by the stock- holders at the Annual Meeting held in 1951, the Directors have designated the place for the Annual Meeting this year as the historic mill known as The Lorillard Snuff Mill located in The New York Botanical Garden, Bronx Park, New York, N. Y. To reach the Snuff Mill, see the accompanying directions.

Proxy Statement RIGHT TO REVOKE PROXY ANY STOCKHOLDER giving the proxy enclosed with this statement has the power to revoke the proxy at any time prior to the exercise thereof. Your attention is called to the pro- vision of New Jersey law providing that the attendance at the meeting of a stockholder who may have theretofore given a proxy shall not have the effect of revoking the proxy unless the stockholder so attending shall in writing so notify the secretary of the meeting at any time prior to the voting of the proxy. Unless the persons named in the proxy are prevented by circumstances beyond their control from acting, the proxy will be voted at the said meeting and at any adjournment or adjournments thereof in the manner specified therein. BY WHOM AND THE MANNER IN WHICH THE PROXY IS BEING SOLICITED The proxy is solicited by and on behalf of the management of P. LORILLARD COMPANY. The expense of the solicitation of proxies for this meeting, including the cost of mailing, will be borne by the Company. In addition to the use of the mails, the Company may request persons holding stock in their name or custody, or in the name of nominees, to send proxy material to their principals and request authority for the execution of the proxies and will reimburse such persons for their expense in so doing at a total estimated cost of about One Thousand Five Hundred Dollars ($1,500). To the extent necessary in order to assure sufficient representation at the meeting, officers and regular employees of the Company, at no additional compensation, will request the return of proxies personally, by telephone or telegram. The extent to which this will be necessary depends entirely on how promptly proxies are received, and stockholders are urged to send in their proxies without delay. The management has no knowledge or information that any other person will specially engage any employees to solicit proxies. VOTING SECURITIES OUTSTANDING The outstanding number of each class of voting securities of the Company and the number of votes to which each class is entitled are as follows : Common Stock Pre f erred Stock T o tal Number of Shares . . . 2,852,855 98,000 2,950,855 Number of Votes . . . 2,852,855 98,000 2,950,855 Only stockholders of record at the close of business on March 7, 1955, will be entitled to vote. ~E7 ~ v 2 w w Ln ~ M

ELECTION OF DIRECTORS At this Annual Meeting, thirteen (13) Directors are to be elected, who shall hold office until the next following Annual Meeting of Stockholders or until their successors are duly elected and qualified. It is the intention of the persons named in the enclosed form of proxy to vote such proxy for the election of the nominees named below. If any of the nominees named below is not a candidate for election as a Director at the meeting-an event which the management does not anticipate-the proxies will be voted for a substi- tute nominee and the other nominees named below. Name of Nominee Principal Occupation or Employment Approximate amount of each class of Name of Year securities of the Corporation when Company beneficially in which such first owned directly or occupation is elected indirectly as of carried on Director February 16, 1955 Herbert A. Kent Chairman of P. Lorillard Company 1939 3,700 shares of William J. Halley the Board of Directors President P. Lorillard Company 1941 Common Stock 2,000 shares of Common Stock Frank Hopewell Executive P. Lorillard Company 1940 2,515 shares of Vice President Common Stock Irvin H. Peak Vice President P. Lorillard Company 1943 1,779 shares of Lewis Gruber and Director of Leaf Activities Vice President P. Lorillard Company 1946 Common Stock 1,200 shares of Joseph J. Blacknall and Director of Sales Vice President P. Lorillard Company 1950 Common Stock 1,016 shares of Alden James and Director of Manufacturing Vice President P. Lorillard Company 1950 Common Stock 1,000 shares of Searl dd F Gl and Director of Advertising Industrialist 1943 Common Stock 1 500 shar s f e a en . , e o Donald A. Henderson Treasurer Twentieth Century- 1946 Common Stock 328 shares of Melvin E. Dawley Vice President, Fox Film Corp. Lord & Taylor- 1950 Common Stock 300 shares of arris B. Parmele Director and General Merchandise Manager Director of Department Store . Lorillard Company 950 Common Stock 00 shares of Harold F. Temple Research Director of P. Lorillard Company 1943* Common Stock 1,250 shares of Frederic M. Walson Brand Development Director of P. Lorillard Company 1953 Common Stock 100 shares of Purchasing Common Stock * Has served continuously since, except for period January 16, 1950, to April 28, 1953. 3

REMUNERATION OF ALL DIRECTORS AND NOMINEES DURING THE FISCAL YEAR ENDED DECEMBER 31, 1954 There is set forth below amounts paid or set aside by the Company and its subsidiary, and all pension or retirement benefits proposed to be paid under the Company's Employees' Retirement Plan, to, or for the benefit of, each person who was a Director, or one of the three highest paid officers, of the Company at any time during the fiscal year ended December 31, 1954, and who received aggregate remuneration exceeding $30,000 and to, or for the benefit of, Officers and Directors as a group : (*) me lary ncentive Compensation Accrued (*) Estimated Annual Benefit on Retirement Under Employees' Retirement Plan (**) Herbert A. Kent . . . . . . . $ 60,000.00 $ 13,000.00 (1) William J. Halley . . . . . . 60,000.00 38,575.10 $ 17,938.00 Frank Hopewell . . . . . . . 45,000.00 30,860.08 12,978.00 Irvin H. Peak . . . . . . . . 36,000.00 23,145.06 8,217.00 Lewis Gruber . . . . . . . . 36,000.00 23,145.06 8,550.00 Alden James . . . . . . . . 36,000.00 23,145.06 7,079.00 Joseph J. Blacknall . . . . . . 36,000.00 23,145.06 4,061.00 Harold F. Temple . . . . . . 25,000.00 13,000.00 9,541.00 H. B. Parmele . . . . . . . . Frederic M. Walson . . . . . . 25,000.00 17,000.00 13,000.00 13,000.00 6,890.00 6,135.00 ~ Officers and Directors as a group . 503,596.68 234,165.42 117,622.00 Pursuant to Article XII of the By-Laws of the Company, entitled "Incentive Compensation for Officers and Key Personnel", as readopted in amended form at the Annual Meeting of Stockholders for the year 1954, a portion of the amount shown under this heading in respect of each of the following named persons has been accrued for contingent future payment as follows: William J. Halley, $15,077.50; Frank Hopewell, $28,360.08; Irvin H. Peak, $20,645.06; Lewis Gruber, $15,750.00; Alden James, $9,928.18; Joseph J. Blacknall, $20,645.06; Harold F. Temple, $2,470.71; Harris B. Parmele, $5,508.33; Frederic M. Walson, $1,432.50; and Officers and Directors as a group, $119,817.42. These estimates assume continued employment at salary rate in effect December 31, 1954, until normal retirement dates. NoTE 1: Mr. Kent has passed the retirement age and received $11,619.48 in accordance with the terms of the Employees' Retirement Plan, in addition to the compensation set forth above. Such amount will continue to be paid to him annually until his death and thereafter to his wife, if she shall survive him, until her death. This amount is not included in the Estimated Annual Benefit on Retirement for Officers and Directors as a group. All of the remuneration set forth was received by the persons named in their capacities as officers or employees of the Company. AUDITORS The Board of Directors has appointed Messrs. Haskins & Sells, Certified Public Account- ants, to be the independent Auditors of your Company, and a representative of that firm %0 ~ will be present at the Annual Meeting of Stockholders. V {* 4 W ttt ~ W

PROPOSED MODIFICATIONS OF RETIREMENT ALLOWANCE PLAN FOR HOURLY RATED AND/OR PIECEWORK EMPLOYEES The Company maintains a non-contributory Retirement Allowance Plan covering all hourly rated and/or piecework employees of the Company which was instituted in 1952, with the approval of the stockholders, as a result of collective bargaining with the various unions representing such employees. As of December 31, 1954, there were approximately 4,150 such employees. To be eligible for a retirement allowance, such an employee must remain in the service of the Company to his 65th birthday and must have completed 20 years of credited service, as defined in the Plan. Retirement shall be automatic at age 65 except in special cases and by Company request where there is a definite need for a par- ticular type of knowledge, skill or ability. Under the Plan, as now in effect, the monthly retirement allowance for an employee retiring with 30 or more years of credited service is $100 reduced by any Social Security and other public pensions to which such employee may be entitled. The retirement allowance for an employee retiring with 20 but less than 30 years of credited service is an amount which bears the same ratio to $100 as the number of years of credited service bears to 30, such amount being reduced by any such Social Security or other public pensions. The Plan is administered by a Retirement Board, appointed by the Board of Directors. The entire cost of the Plan is being borne by the Company out of current income, on a "pay as you go" basis, with no fund having been set up to provide for the payment of such benefits. Article X of the Plan provides, in part, that no modification, change or amendment thereof which materially increases the cost of the Plan may be made unless first approved at a meeting of the stockholders of the Company. The primary Social Security benefit provided for under the Federal Social Security Act was $85 per month in 1952 and has been increased to $108.50 per month, effective January 1, 1955. In operation, however, the result of the provision of the Plan as now in effect under which the Company receives the benefit of any Social Security benefits payable to retired employees has been to materially reduce and in some instances eliminate entirely any payment to such employees from the Company. As a result of collective bargaining with the major unions representing the hourly rated and/or piecework employees of the Company, certain modifications in the method of the computation of benefits has been agreed upon by such unions and the Company which are intended, in general, to result in some payment being made under the Plan to each employee retiring with at least 20 years of credited service. Thus, it has been agreed with such unions that an employee who retired prior to January 1, 1955, having had more than 20 but less than 30 years of credited service is to be entitled to receive under the Plan a monthly amount which shall bear the same ratio to the difference between $100 and his Social Security benefit not in excess of $85 per month and other public pensions as the number of his years of credited service bears to 30; that an employee who retires after January 1, 1955, with 30 or more years of credited service is to be entitled to receive under the Plan a monthly amount equal to $125, reduced by any such Social Security and other public pensions; and that an employee who retires after January 1, 1955, with 20 but less than 30 years of credited service is to be entitled to receive under the Plan a monthly amount which shall bear the same ratio to $125, reduced by any such Social Security and other public pensions, as the number of his years of credited service bears to 30. The relative costs for 1955 of the Plan as now in effect and under the proposed modification, based on the assumption that all employees would retire upon reaching retirement age, are as follows : As estimated by the actuary at the time the Plan 5

was put into effect and on the basis of the then Social Security benefits-approximately $22,000 ; as estimated by the Company under the Plan as now in effect but on the basis of the Social Security benefits effective with respect to the year 1955-approximately $13,000; and as estimated by the Company under the above-mentioned revised method of computation and the increased retirement benefit agreed to with such unions-approxi- mately $39,000. All of such figures are estimates based upon various assumptions, including mortality rates and other actuarial factors. Your management believes that the adoption of such modifications is highly desirable in order to retain the harmonious relationship that exists between your Company and its employees and that such modifications are in keeping with the present day trend in negotiated retirement plans. It therefore recommends that they be approved. In addition, as indicated above, the Plan, as now in effect, contains the provision, referred to above, which requires that any amendment which would materially increase the cost of the Plan to the Company must first be approved by the stockholders. In the absence of such provision, under the General Corporation Law of New Jersey the Plan may be revised or amended (other than to divert any income which may have been set up to provide for the payment of retirement allowances to employees under the Plan) by the Board of Directors, and any such revision or amendment would be subject to being altered, amended or repealed by the stockholders. Since any revision of the Plan in the future would be a result of collective bargaining with the various unions representing the hourly rated and/or piecework employees of the Company, your man- agement believes it advisable at this time to obtain authority from the stockholders for the Board of Directors to make future revisions of the Plan in accordance with the above- mentioned provisions of the General Corporation Law of New Jersey. Accordingly, the stockholders will be asked to vote at the Annual Meeting to be held April 5, 1955, upon the following resolutions : RESOLUTION NO. 1 REsoLVED : That the modifications, changes and amendments to the Retirement Allowance Plan for hourly rated and/or piecework employees as described in the Proxy Statement with respect to this Annual Meeting be, and they hereby are, in all respects ratified, approved and confirmed. RESOLUTION NO. 2 RESOLVEB : That the Board of Directors of the Company be, and it hereby is, authorized to amend the Retirement Allowance Plan for hourly rated and/or piecework employees by deleting from said Plan the provision that any modification, change or amendment to said Plan may be made only when first approved at a meeting of the stockholders of the Company, and, thereafter and from time to time, to make such amendments to said Plan as may be required as a result of collective bargaining and in accordance with the provisions of the General Corporation Law of New Jersey. At a meeting held November 17, 1954, your Board of Directors approved the adop- tion of the modifications referred to above and at a meeting held February 16, 1955, the Board of Directors formulated the above-mentioned resolutions, declared that in its opinion the adoption thereof was advisable and directed that said resolutions be submitted to the stockholders at the Annual Meeting to be held April 5, 1955, for their approval. The affirmative vote of two-thirds in interest of each class of stockholders present at the meeting and voting is required in order that the said resolutions shall be approved. The Company has in effect an Incentive Compensation Plan for officers and key personnel which provides in substance that from "incentive compensation income" (which U 6

may be defined as an amount equal to the consolidated net income of the Company and its subsidiary companies figured before deducting Federal taxes based on income or the payments or accruals to be made pursuant to said Incentive Compensation Plan minus the sum of (a) 38% of such consolidated net income, (b) dividends on any outstanding stock of the Company other than common stock, and (c) an amount equal to $1.20 per share on the average issued common stock of the Company) there shall be paid to, or accrued for the benefit of, the officers and key personnel of the Company 10% thereof. Under the provisions of such Plan the payment of all, or a portion of, such incentive compensation may be deferred to the future. For the fiscal year ended December 31, 1954, there was paid to, or accrued for the benefit of, Directors and officers the amount of $234,165.42 (including the amount of $119,817.42 representing incentive compensation accrued for contingent future payment) and to other employees the amount of $151,585.58 under this Plan. The Company also has in effect a funded non-contributory Employees' Retirement Plan which is limited to salaried employees of the Company and its subsidiaries who have completed three years of service, including such employees who are Directors and officers of the Company. Such plan provides for retirement at age 65 and retirement allowances in accordance with compensation earned during membership in the Plan. CONCLUSION The Annual Meeting is called for the purposes of electing Directors and considering and voting upon two proposed resolutions relating to the Retirement Allowance Plan for hourly rated and/or piecework employees and for the transaction of such other business as may properly come before the meeting. At the date of this Proxy Statement the manage- ment knows of no other matters which may come before the meeting. However, if any other matters properly come before the meeting, it is the intention of the persons named in the enclosed form of proxy to vote such proxy in accordance with their judgment. Dated February 25, 1955. 7

PROXY SOLICITED ON BEHALF OF THE MANAGEMENT OF P. LORILLARD COMPANY Ano1v all men ltp tljea prefsentfs, That the undersigned hereby constitutes, appoints and directs HERBERT A. KENT (Chairman of the Board of Directors), WILLIAM J. HALLEY (President), FRANK HoPEWELL (Executive Vice President) and ANNA F. WoESSNER (Secretary), or any of them, in the name, place and stead of the under- signed, to attend as the attorneys and agents of and for the undersigned, at the Annual Meeting of the Stockholders of P. LoR1zLLARn CoMrANY, a New Jersey corporation, to be held on the 5th day of April, 1955, at eleven o'clock in the forenoon, at the historic mill known as The Lorillard Snuff Mill located in The New York Botanical Garden, Bronx Park, New York, N. Y., as well as at any and all adjourn- ment or adjournments of such meeting, and to vote as the proxy of the undersigned thereat for the election of thirteen (13) Directors to hold office until the next following Annual Meeting of Stockholders or until their successors are elected and qualified, on the resolutions to be submitted to a vote of the Stockholders thereat in accordance with the notice of said meeting dated February 25, 1955, and for the transaction of such other business as may properly come before said meeting or any adjournment or adjournments thereof, according to the number of votes the undersigned would be entitled to cast if then personally present, and to do all such acts and things as may be necessary or proper in order to carry out the action taken by said meeting or any adjournment or adjournments thereof, hereby giving to said attorneys and agents, or any of them, power to substitute another or others in their or his stead and ratifying and confirming all that the attorneys and agents of the undersigned, or any of them, or any substitute or substitutes for any of them, may do by virtue hereof. The undersigned specifies the following action which he desires to be taken pursuant to his proxy at said meeting or any adjournment or adjournments thereof in respect of the proposed resolutions relating to the Retirement Allowance Plan for hourly rated and/or piecework employees, as numbered and set forth in the Proxy Statement, by indicating in the places provided herein whether he desires his shares of stock to be voted for or against the said resolutions. ._FOR_RESOLUTION No. 1M AGAINST RESOLUTION No. 1 a FOR RESOLUTION No. 2~ AGAINST RESOLUTION No. 2 Q Unless otherwise directed herein, the proxy or proxies ap pointed herein are authorized to vote in f avor o f the proposed resolutions relating to the Retirement Allowance Plan f or hourly rated and/or piecework employees as set f orth in the Proxy Statement. With respect to matters not known or determined at the time o f the solicitation hereo f said proxy or proxies are authorized to vote in their discretion. The undersigned hereby revokes any proxy or proxies heretofore given to vote upon or to act with respect to such stock. The undersigned hereby acknowledges receipt of the "Notice of Annual Meeting of Stockholders," dated February 25, 1955, the "Proxy Statement" and the Annual Report furnished therewith. IN WITNESS WHEREOF, I have hereunto set my hand and seal this day of , 1955. (sEAL) (Stockbolders should sign here)

( p. Bauua4d eaof-pa" PROXY Please sign other side and retxrn in enclosed envelope. I (For use only of Company) PREFERRED SHARES COMMON SHARES 86SE8Lt6