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33 MINUTES OF THE ANNUAL MEETING OF THE STOCKHOLDERS OF P. LORILLARD COMPANY, HELD IN THE GRAND BALLROOM OF THE BILTMORE HOTEL, MADISON AVENUE AT 43RD STREET, NEW YORK, NEW YORK, ON APRIL 8, 1958, AT ELEVEN O'CLOCK IN THE FORENOON. Mr..Lewis Gruber, President of the Company, acted as Chairman of the meeting in accordance 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 of the stockholders of the Company entit led to notice of, and to vote at, this meeting 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 February 20, 1958, 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 f or 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 w ith affidavits showing mailing thereof and publication of the notice of the meeting in ac- cordance 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 8, 1958 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 Biltmore Hotel, Madison Avenue and 43rd Street, New York, N. Y., at eleven o'clock in the forenoon of Apri18, 1958, 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 amendment to Article XII of the By-laws of the Company relating to incentive compensation which is described in the annexed Proxy Statement; (3) To consider and vote upon a proposed restricted stock option plan, certain options heretofore granted, and a waiver of preemptive rights incidental thereto, all as described in the annexed 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 February 20, 1958, will be entitled to vote, notwithstanding any transfer of any stock on the books of the Company after such record date. i ANNA F. WOESSNER, Secretary. Jersey City, N. J. February 28, 1958 `0 I" v m If unable to be present at the meeting, please sign the enclosed Proxy and return W it in the accompanying envelope so that the meeting may be properly held. 10

Proxy Statement RIGHT TO REVOKE PROXY ANY STOCxxoLDM 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 provision 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 con- trol from acting, the proxy will be voted at the said meeting and at any adjourn- ment 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. Lo1tiLLAZtD Con2- PANY. 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 person for their expense in so doing at a total estimated cost of about Three Thousand Dollars ($3,000). To the extent necessary in order to assure sufficient representation at the meeting, officers and regular employees of the Company and others regularly retained by 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 stock- holders 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. 2

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 Pre erred Stock Stock Total Number of Shares____-- ~ .2,852,854 98,000 2,950,854 Number of Votes_-_ 2,852,854 98,000 2,950,854 Only stockholders of record at the close of business on February 20, 1958, will be entitled to vote. 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 succes- sors 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 substitute nominee and the other nominees named below. Approximate amount of each class of Name of Year securities of the corporation when Com¢any beneficially Principal in which such ~rst owned directly or Name of Occu¢ation or occupation is elected indirectly as of Nominee Em¢loyment carried on Director January 27, 1958 Lewis Gruber President P. Lorillard Company 1946 3,000 shares of Irvin H. Peak Executive P. Lorillard Company 1943 Common Stock 2,500 shares of Vice President Common Stock arold F. Temple and Director of Leaf Activities Vice President . Lorillard Company 943* ,450 shares of and Director Common Stock of Sales -t1 Harris B. Parmele Vice President P. Lorillard Company 1950 800 shares of ~ and Director Common Stock ~ of Research C* W * Has served continuously since, except for period January 16, 1950, to April 28, 1953. V ... 3

ame of Nominee George 0. Davies rincipal Occupatson or Employment Vice President, Name o f corporation in which such occupation is carried on P. Lorillard Company Year when first elected Director 1955 Approximate amount of each class of securities of the Company beneficially owned directly or indirectly as of January 27, 1958 500 shares of anuel Yellen Treasurer and Director of Finance Vice President . Lorillard Company 956 Common Stock 700 shares of .ik ,. eorge A. Hoffmann and Director of Advertising and Marketing Director of . Lorillard Company 957 Common Stock t 1,000 shares of George W. Davidson Manufacturing Vice President Federal Tin Company 1957 Common Stock 500 shares of Herbert A. Kent Consultant P. Lorillard Company 1939** Common Stock 3,000 shares of F. Gladden Searle Industrialist 1943 Common Stock 800 shares of Donald A. Henderson Treasurer Twentieth Century-Fox 1946 Common Stock 328 shares of Melvin E. Dawley Vice President, Film Corp. Lord & Taylor- 1950 Common Stock 500 shares of arold X. Schreder Director and General Merchandise Manager Executive Department Store istributors Group, 956 Common Stock 00 shares of Vice President Inc.-Investment Common Stock Executive Vice President Bankers Group Securities, Inc. -Mutual Fund ** Has served continuously since, except for period September 1, 1955, to December 19, 1956. Each of the nominees named above is now a director of the Company and they, collectively, comprise the entire membership of the Board. Each of such nominees was elected to his present office by a vote of security holders at a meeting for which proxies were solicited under Regulation X-14 of the Securities and Exchange Com- mission except George W. Davidson, who, for more than five years prior to his election as a director on August 21, 1957, had served Federal Tin Company, the Company's subsidiary, in various capacities, including director, General Manager and Vice President. 4

REMUNERATION OF ALL DIRECTORS AND NOMINEES FOR THE FISCAL YEAR ENDED DECEMBER 31, 1957 The following table sets forth all direct remuneration paid by the Company and its subsidiary for the fiscal year ended December 31, 1957, to (1) each person who was a director of the Company at any time during such year and whose aggregate remuneration for such year exceeded $30,000; (2) each person who was one of the three highest paid officers of the Company during such year and whose aggregate remuneration for such year exceeded $30,000; and (3) all persons, as a group, who were directors or officers of the Company at any time during such year : ame alary Amount o f Incentive Compensation Paid Currently Capacities in Which Remuneration Was Received Lewis Gruber $ 60,000.00 $ 48,896.95 President Irvin H. Peak 45,000.00 43,117.56 Executive Vice Presi- dent Harris B. Parmele 36,000.00 37,338.17 Vice President Harold F. Temple 36,000.00 37,338.17 Vice President Manuel Yellen 32,000.00 37,338.17 Vice President George 0. Davies 29,416.66 36,856.55 Vice President and Treasurer George A. Hoffmann 24,650.00 30,617.56 Director of Manufacturing George W. Davidson 21,500.00 12,000.00 Vice President- Federal Tin Com- pany Frederick M. Walson 20,000.00 16,250.00 Director of Purchasing Officers and Directors as a group 471,966.50 375,782.52 The following table sets forth, for each person named above, (a) all pension or retirement benefits proposed to be paid to such person .under the Employees' Retire- ment Plan of the Company in the event of retirement at normal retirement date, directly or indirectly, and (b) all benefits proposed to be paid to such person or his beneficiaries (subject to prescribed conditions) for a period of ten years following 5 E

retirement or other termination of employment out of all incentive compensation to date under present Article XII of the By-laws of the Company, as described below under the caption "Proposal A: To Amend Incentive Compensation By-law". me Estimated Annual Benefits on Retirement under Employees' Retirement Plan(Z) Present Estimated Annual Benefits on Retirement under Article XII of By-laws(2) Lewis Gruber $10,140.00 $10,248.08 Irvin H. Peak 8,667.00 9,944.71 Harris B. Parmele 8,780.00 4,549.06 Harold F. Temple 11,453.00 3,848.61 Manuel Yellen 10,569.00 3,369.47 George 0. Davies 7,990.00 3,362.02 George A. Hoffmann 4,532.00 1,561.76 George W. Davidson 7,333.00 Frederick M. Walson 7,005.00 745.71 Officers and Directors as a group 42,563.09 (1) (2) In each case, the estimate assumes continued employment at salary rate in effect December 31, 1957, until normal retirement date. Such estimate assumes continued employment and may increase under the operation of such Article XII, as now in effect or as amended in the manner described below, for future years but, subject to the conditions referred to in clause (b) above, cannot decrease. All of the remuneration set forth was received by the persons named in their capacities as officers or employees of the Company and its subsidiary. PROPOSAL A: TO AMEND INCENTIVE COMPENSATION BY-LAW Article XII of the By-Laws of the Company, providing for incentive compen- sation for officers and key personnel, was adopted in 1948 and has been amended from time to time on a patchwork basis to meet specific problems. Following a study by, and on recommendation of, a Committee of directors, none of whom is entitled to receive incentive compensation, the Board of Directors has formulated 6

for submission to stockholders an amended Article XII (annexed hereto as Exhibit A) which, if approved, would become effective for the year 1958. If in effect for the year 1957, the proposed Article XII would have reduced incentive compensation by approximately $110,000. In its present form, Article XII provides, in substance, that in computing "incentive compensation income" there shall be deducted from consolidated net income before Federal income taxes the sum of 38% of such consolidated net income, dividends on the Preferred Stock and an amourit equal to $1.20 per share on outstanding Common Stock. A total of ten per cent of "incentive compensation income" is subject to distribution as follows: 10% of such total to the President; 8% to the Executive Vice President; 6% to each of not more than four Vice Presi- dents ; and 58 % to other officers and key personnel. The proposed Article XII, in substance, would substitute a formula under which the "Incentive Compensation Amount" would be the total resulting from the application of the following percentages to net operating income (that is, con- solidated earnings before Federal taxes on income, incentive compensation awards and capital gains or losses) : 3% of the first $12 million; 4% of the next $3 million; 5% of the next $5 million; and 6% of any balance. No change would be made in the proportions in which officers and key personnel would share in the "Incentive Compensation Amount." Under proposed Article XII (Sections 1 and 2) incentive compensation for any year would be paid only if a cash dividend had been paid on the Company's Com- mon Stock during such year and net operating income, as defined above, for such year should exceed 12% of net worth, as defined in Section 11. Other material changes from the present Article XII are as follows : SECTIONS 3-8. Present Article XII authorizes the Board of Directors or a committee appointed by the Board to provide for contingent future payment of all or part of the incentive compensation awards. Sections 3-8 of the proposed Article XII would authorize a committee (composed of directors who are non-participants under such plan) to provide for contingent future payment of not more than 75% and not less than 25% of allotments above $5,000 to employees in a Contingent Compensation Group determined under rules and regulations adopted by the com- mittee. Contingent payments would be made, in cash without interest, over a ten-year period, commencing upon termination of employment. Since proposed Article XII might be amended, as hereinafter stated, by the Board of Directors on 1* 7

the recommendation of the committee, the provision for payment of no interest might be changed in the future. The Board and the committee, however, do not have any present intention to make such change. Sections 3-8 would provide for a reduction in the Company's obligation in respect of such future payments in various contingencies, including leaving the Company's employ within a stated time or thereafter engaging in competitive activity. SECTION 9. Such Section would provide, in substance, that proposed Article XII might be amended by the stockholders or, upon recommendation of the com- mittee administering the plan, by the directors, except that only the stockholders would have power to amend the Article so as to increase incentive compensation for any year either in the aggregate or to any officer. Present Article XII provides that it may be amended only by the stockholders. Section 9(b) would retain the provision appearing in the present Article XII requiring resubmission of the Article to the stockholders once every five years. SECTION 10. Such Section would provide that proposed Article XII would take effect for the calendar year 1958 and would apply to calendar years there- after. SECTION 11. Such Section would contain defined terms required primarily by the inclusion in proposed Article XII of the formula described above and of the provisions for contingent future payment. The definition covering the computa- tion of the incentive compensation base would retain the provision of the present Article XII excluding capital gains and, in the interest of uniformity, would add a provision similarly excluding capital losses. Proposed Article XII would result in reduced incentive compensation for any year in which, with present capitalization, the net operating income (that is, con- solidated earnings before Federal taxes on income, incentive compensation awards and capital gains or losses) should exceed $13,800,000. For the year 1957, the amount of incentive compensation was $641,556.81 for officers and directors and $514,321.19 for other employees; if the proposed Article XII had been in effect for the year 1957, the amount of incentive compensation would have been $580,570.29 for officers and directors and $465,429.71 for other employees and the amount allotted to each of the persons listed in the foregoing remuneration table would have been reduced by approximately 10%. The formula set forth in the proposed Article XII is one believed by the Board of Directors to be equitable 8