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P. LORILLARD COMPANY Notice of Annual Meeting of Stockholders TO BE HELD APRIL 7, 1959 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 2:30 o'clock in the afternoon of April 7, 1959, 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 the Certificate of Incor- poration of the Company under which the presently outstanding shares of Common Stock would be split on a 2 for 1 basis and, in connection therewith, the authorized Common Stock would be modified; and (3) 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 19, 1959, will be entitled to vote, notwithstanding any transfer of any stock on the books of the Company after such record date. Jersey City, N. J. February 26, 1959 ANNA F. WOESSNER, Secretary. 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.

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 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. LORILLARD COM- 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 persons for their expense in so doing at a total estimated cost of about Five Thousand Dollars ($5,000). 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 Stock Preferred Stock Total Number of Shares------------------ ,~ 3,282,024 98,000 3,380,024 Number of Votes-_-______________ 3,282,024 98,000 3,380,024 Only stockholders of record at the close of business on February 19, 1959, 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. ame of Nominee rinei,Pa! Oecu¢atson or Em¢loyment Name of corporatsan in whieh such occupation is carried on Year when first elected Director Approximate amount of each class of securities of the Company beneficially owned directly or indirectly as of 7anuary 19, 1959 Lewis Gruber Chairman of P. Lorillard Company 1946 11,000 shares of the Board and Common Stock Harold F. Temple Chief Executive Officer President P. Lorillard Company 1943* 6,450 shares of George 0. Davies Vice President, P. Lorillard Company 1955 Common Stock 5,500 shares of Treasurer and Common Stock Manuel Yellen Director of Finance Vice President P. Lorillard Company 1956 8,500 shares of and Director Common Stock of Sales * Has served continuously since, except for period January 16, 1950, to April 28, 1953. 3

ame of Nominee rincipal Occupation or Employment Name of corporatson in which such occupation is carried on Year when first elected Director Approzimate amount of each class of securities of the Compan y beneficially owned directly or indirectty as of January 19, 1959 Harris B. Parmele Vice President P. Lorillard Company 1950 5,800 shares of George A. Hoffmann and Director of Research Vice President P. Lorillard Company 1957 Common Stock 5,000 shares of Morgan J. Cramer and Director of Manufacturing Director of Export P. Lorillard Company 1958 Common Stock 1,238 shares of George W. Davidson and Government Operations Vice President Federal Tin Company 1957 Common Stock 3,000 shares of Herbert A. Kent Consultant P. Lorillard Company 1939* Common Stock 3,375 shares of F. Gladden Searle Industrialist 1943 Common Stock 900 shares of Donald A. Henderson Treasurer Twentieth Century-Fox 1946 Common Stock 328 shares of Film Corp. Common Stock Melvin E. Dawley Vice President, Lord & Taylor- 1950 568 shares of Director and Department Store Common Stock arold X. Schreder General Merchandise Manager Executive istributors Group, 956 12 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, col- lectively, they comprise the entire membership of the Board. Each of such nom- inees 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 Commission except Morgan J. Cramer, who, for more than five years prior to his election as a director effective December 1, 1958, had served the Company as Director of Export and Government Operations. 4

REMUNERATION AND OTHER TRANSACTIONS WITH DIRECTORS AND NOMINEES FOR THE FISCAL YEAR ENDED DECEMBER 31, 1958 The following table sets forth all direct remuneration paid by the Company and its subsidiary for the fiscal year ended December 31, 1958, to (1) each person who was a director of the Company at any time during such year and whose aggre- gate 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 of Incentive Compensation Paid Currently Capacities in Which Remuneration Was Received Lewis Gruber $70,000.00 $97,117.03 President Irvin H. Peak 43,750.00 76,552.49 Executive Vice Presi- dent (a) Harold F. Temple 36,000.00 66,270.22 Vice President George 0. Davies 36,000.00 66,270.22 Vice President and Treasurer Manuel Yellen 36,000.00 66,270.22 Vice President Harris B. Parmele 36,000.00 66,270.22 Vice President George A. Hoffmann 32,500.00 52,132.10 Vice President and Director of Manufac- turing Morgan J. Cramer 17,095.83 28,750.00 Director of Export and Government Opera- tions George W. Davidson 24,000.00 20,000.00 Vice President- Federal Tin Com- pany Officers and Directors as a group 495,245.75 689,070.00 (a) Effective December 1, 1958, Irvin H. Peak, who reached retirement age on that date, resigned as a Director and Executive Vice President. The Company has entered into a contract with Mr. Peak under which, effective that date, he was engaged in an advisory capacity through December, 1959, for compensation at the rate of $30,000 per annum. 5

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 retirement or other termination of employment out of all incentive compensation to date under the above-mentioned Article XII of the By-laws of the Company. Such Article XII provides for incentive compensation for officers and key personnel of an amount equal to stated percentages of consolidated net earnings before Fed- eral taxes on income, incentive compensation awards and capital gains and losses. me Lewis Gruber Estimated Annual Benefits on Retirement under Employees' Retirement Plan(i) $10,590.00 Present Estimated Annual Benefits on Retirement under Article XII of By-laws(2) $ 31,383.19 Irvin H. Peak (3) 24,910.45 Harold F. Temple 11,453.00 15,729.68 George O. Davies 9,339.00 15,243.09 Manuel Yellen 11,769.00 15,250.54 Harris B. Parmele 8,780.00 16,430.12 George A. Hoffmann 4,840.00 9,201.38 Morgan J. Cramer 6,354.00 1,375.00 George W. Davidson 7,625.00 500.00 Officers and Directors as a group 132,992.20 (3) In each case, the estimate assumes continued employment at salary rate in effect December 31, 1958, until normal retirement date. Such estimate assumes continued employment and may increase under the operation of such Article XII for future years but, subject to the conditions referred to in clause (b) above, cannot decrease. It includes the following annual benefits based on incentive compensatior awards for 1958, constituting, in each case, one-tenth of the contingently payable part oi the incentive compensation award for such year: Lewis Gruber, $21,135.10; Irvin H. Peak $14,965.74; Harold F. Temple, $11,881.06; George O. Davies, $11,881.06; Manuel Yellen, $11,881.06; Harris B. Parmele, $11,881.06; George A. Hoffmann, $7,639.62; Morgan J, Cramer, $1,375; George W. Davidson, $500; and officers and directors as a group, $95,733.48. Irvin H. Peak, who retired effective December 1, 1958, elected pursuant to the Plan to receive the annual sum of $6,914.04 until his death, at which time his wife, if she shall survive him, will receive the annual sum of $2,600.00 until her death. 6

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. During the fiscal year ended December 31, 1958, the persons named above exercised certain options to purchase shares of Common Stock of the Company (exercisable at a purchase price in each case of $24 per share, which was in excess of 95 % of the mean between the high and low prices on the New York Stock Exchange on October 22, 1957, the date of grant) pursuant to agreements entered into by the Company and such persons on October 22, 1957, under the Company's Restricted Stock Option Plan, which agreements and Plan were approved in April, 1958, at the Annual Meeting of Stockholders. The name of each such person, the number of such shares purchased by him and the market value per share (the mean between the high and low prices on the New York Stock Exchange) on each date of purchase are as follows : Morgan J. Cramer, 1,000, $57.44; George W. Davidson, 2,500, $58.31; George O. Davies, 5,000, $57.69; Lewis Gruber, 10,000, $82.06; George A. Hoffmann, 3,000, $57.69, 800, $68.25, 200, $72.94; Harris B. Parmele, 5,000, $57.69; Irvin H. Peak 2,500, $57.44, 4,500, $69.31; Harold F. Temple, 5,000 $57.44; and Manuel Yellen, 5,000, $57.94. Officers and Directors as a group purchased 31,500 shares of Common Stock of the Company during the second calendar quarter of 1958 when the price range per share of the Common Stock on the New York Stock Exchange was $70-$50.25 ; 5,300 shares during the third calendar quarter when such price range was $72- $63.625 ; and 10,200 shares during the fourth calendar quarter when such price range was $89-$69.25. All options heretofore granted have been exercised. PROPOSAL TO SPLIT PRESENTLY OUTSTAND- ING COMMON STOCK AND TO MODIFY AUTHORIZED STOCK The Board of Directors recommends that the presently outstanding shares of Common Stock be split on a 2 for 1 basis and, for that purpose, that the Certificate of Incorporation of the Company be amended so as to change the presently author- ized 5,000,000 shares of Common Stock of the par value of $10 each into 10,000,000 7

shares of Common Stock of the par value of $5 each and to provide that each of the presently outstanding shares of Common Stock be split into 2 newly author- ized shares of Common Stock of the par value of $5 each. No change is proposed in the rights or privileges of the Common Stock. Each holder of shares of Common Stock of the Company is entitled to purchase his pro rata proportion, according to the number of shares held by him, of Common Stock issued for cash, except 35,500 presently authorized shares (which would become 71,000 newly authorized shares) of Common Stock which may be issued on the exercise of options that may be granted hereafter pursuant to the Restricted Stock Option Plan of the Company and as to which shares such preemptive rights have been waived. In the opinion of the Board of Directors the proposed stock split, if effected, would result in greater marketability of the shares of Common Stock. The cost of selling and transferring the shares currently held by a holder of Common Stock would be higher after the proposed stock split than the corresponding cost in respect of the stockholder's presently outstanding shares. Assuming a market price of $80 per share (approximate market price on February 19, 1959), the cost of selling 100 of the presently authorized shares in New York on that date would be $54.36. The cost of so selling 200 shares after the proposed stock split at an assumed price of $40 per share would be $89.36. Since the above-mentioned proposal merely involves a stock split, no financial statements are furnished herewith. Counsel advise that, in their opinion, under present Federal income tax laws, the proposed stock split would not be taxable to the holders of Common Stock. The specific recommendation of the Board of Directors as to the proposed amendment to the Certificate of Incorporation to carry out such proposal is set forth below as "Proposed Amendment to Certificate of Incorporation." Under the applicable New Jersey law the affirmative vote of the holders of two-thirds in interest of each of the Common Stock and Preferred Stock out- standing at the close of business on February 19, 1959 is necessary for the adoption of the proposed amendment. 8

PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION The Board of Directors recommends that the applicable provision of the Certificate of Incorporation which now reads as follows : "FOURTH-The total authorized Capital Stock of this Corporation is 5,099,576 shares of which 99,576 shares are Preferred Stock of the par value of $100 per share of the aggregate par value of $9,957,600 and 5,000,000 shares are Common Stock of the par value of $10 per share of the aggregate par value of $50,000,000. Each share of Common Stock without nominal or par value previously issued is hereby changed into a share of Common Stock of the par value of $10. ***" be amended to read as follows : "FoURTH-The total authorized Capital Stock of this Corporation is 10,099,576 shares of which 99,576 shares are Preferred Stock of the par value of $100 per share of the aggregate par value of $9,957,600 and 10,000,000 shares are Common Stock of the par value of $5 per share of the aggregate par value of $50,000,000. Each share of Common Stock of the par value of $10 per share previously issued is hereby changed into two shares of Common Stock of the par value of $5 per share. * * * " AUDITORS The Board of Directors has appointed Messrs. Haskins & Sells, Certified Public Accountants, to be the independent Auditors of your Company, and a representative of that firm will be present at the Annual Meeting of Stockholders. CONCLUSION The Annual Meeting is called for the purposes set forth above and for the trans- action of such other business as may properly come before the meeting. At the date of this Proxy Statement the management 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 26, 1959. 9