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EXHIBIT erCn 119 wEST FORTXZTH STHEET NEwYoRx18,N.Y. LEWIS GRUBER PRESIDENT February 28, 1958 To My Fellow Shareholders: Year by year an increasing number of you attend our annual meeting and I sincerely hope that this year, when we have the best report ever to make to Lorillard's family of owners, will see our biggest meeting yet. However, if you cannot attend-and I realize it may be impossible for you to be in New York City on April 8-I urge you to exercise your enclosed proxy by mail. It is of prime impor- tance to the future welfare of your Company that you do so. Without your vote, it is impossible for Management to do anything but guess at your reaction to its handling of your Company's affairs-and, frankly, we don't like to run your business that way. This year your proxy covers three points and it is Manage- ment's hope that you will approve its past record and future plans by voting affirmatively on all three. Number 1 is the election of 13 directors who will help set your Company's future course. Number 2 is'an amendment of the By-Laws governing Incentive Compensation for employees and has been designed with one thought in mind: to give maximum protection to shareholder rights. The recommended changes'stem from our last annual meeting when several shareholders pointed out from the floor that the,present plan is outdated and suggested it be brought into line with today's con- cepts. At that time Management agreed to look into the situation and appointed a committee of directors, none of whom are partici- pants, to study our Incentive Compensation plan and similar plans in force in other well-managed companies. Their findings demon- strated that the present plan is indeed inadequate and antiquated, and the revised plan was drawn up in line with the committee's recommendations.

The plan, as amended, calls for rigid new safeguards for protection of shareholder rights and of dividend payments, and it is expected that the net effect of the change will be to reduce incentive compensation payments below present levels. Management is proud to present it for shareholder approval in accordance with its promise of a year ago. Number 3 is a new plan introducing, for the first time, stock options for employees. As all industry has found, it is impossible in these intensely competitive days to attract and keep key employees of highest caliber without meaningful incentives apart from straight cash remunerations. Thus, our new plan is intended both to attract people who can assure Lorillard's future progress and to retain and further encourage those responsible for our recent dramatic growth. This is a restricted stock option plan under which employees, mainly responsible for the record-breaking pace of our business this past year and for its financial success in future years, can purchase additional shares of the Company's authorized stock. The plan has been approved by the Board of Directors but will not be made effective until it has also received the approval of shareholders. It will then be administered by a committee of directors who are not participants in this plan. It is my firm belief that, under the orderly and manageable terms of the proposed stock option plan, our Company will enjoy tangible and substantial benefits arising from a loyal body of exceptionally able employees who, because of this measure of future financial secu- rity, can singlemindedly devdte themselves to the job at hand-the continued growth and progress of our Company. I urge'you to read and study the enclosed proxy statement carefully. If in your judgment, the proposals are well taken, and if you can concur in the spirit of intent and feel as deeply as we do that their adoption will be of invaluable aid to Company and shareholder alike, then I urge you to have your signed proxy, voted affirmatively, in by April 8. Sincerely, President