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1 Minutes of a meeting of the Board of Directors of Philip Morris & Co. Ltd., Incorporated held at the offices of the Company, 100 P ark Avenue, New York City, New York on December 16, 1953 at 9:30 ofclock in the forenoon pursuant to due notice mailed to all of the directors, Present, the following directors: Messrs. A. E. Lyon 0. P. McComas L. G. Hanson W. H. Hatcher C. T. Ames, Jr, K. H. Rockey H. E. Riddell W. B. Ryan, Jr, Abs©nt - G. P. Brauburger 0. H. Chalkley Mr. Paul D. Smith, a member of the firm of Conboy, Hewitt, O'Brien & Boardman, general counsel, was also presen~. The meeting was called to order by Mr. A. E, Lyon who acted as Chairman, and the Secretary recorded, On motion of Mr, K. H. Rockey, duly seconded by Mr. H. E. Riddell, the following resolution was unanimously adopted: RESOLVED, That the minutes of the meeting of this board held on November 24, 1953, copies of which were furnished to the mem- bers of the Board, be and the same hereby are adopted as and for the minutes of the said meetings. On motion of Mr. 0, P. MeComas, duly seconded by Mr. W. B. Ryan, Jr., the following resolutions were unanimously adopted: 0 .~ co 0 ~ ~.n cr

RESOLVED, That the regular quarterly divi- dend of $1.00 per share on the Cumulative Preferred Stock 4%o Series and the regular quarterly dividend of $0.975 per share on the Cumulative Preferred Stock 3.90% Series be and the same hereby are declared payable February 1, 1954 to holders of Preferred Stock of the respective Series of record at the close of business on January 15, 1954; and be it further RESOLVED, That a regular quarterly dividend of $0.75 per share on the Common Stock of the Company be and it hereby is declared payable January 15, 1954 to holders of Com- mon Stock of record at the close of busi- ness on December 31, 1953. Mr. McComas called attention to changes which had been made in the Proxy Statement subsequent to such Statement having been submitted to each director prior to this meeting. Referring to the Report of October 1, 1953 of: Morgan Stanley & Co, which recommended a share-for-share ex- change ratio of Philip Morris common stock for Benson & Hedges common stock, Mr. McComas stated that he had written a letter to Morgan Stanley & Co, under date of December 15, 1953 furnishing that firm with certain data and information, offering to secure any other data if desired, and that Morgan Stanley & Co. give their opinion as of the present time. Mr. McComas further stated that he had received a letter from Morgan Stanley & Co., dated December 16, 1953, in which they stated that they had reviewed such production, sales and earnings figures of Philip Morris & Co. Ltd., Incorporated and Benson and Hedges as they thought necessary to bring their information up to date, in order to determine whether or not

their recommendation contained in the October 1, 1953 report should be changed in any way, and that the letter concluded: "After studying these later figures, we can see no reason to change our prior recommendation and, accordingly, herewith con- firm to you that, as of today, we do still recommend a share•e for-share exchange basis as a fair one from the points of view of the stockholders of both Philip Morris & Co. Ltd., Incor- porated and of Benson and Hedges." Thereupon the Chairman instructed the Secretary to make the two letters referred to above a part of these minutes. Mr. Paul D. Smith, Counsel, reviewed the action to be taken by the directors at this meeting relative to the Special Meeting of stockholders to be held in connection wlth the proposed acquisition of Benson and Hedges common stock. Discussion followed relative to the date of the Special Meeting, the Record Date of those who can vote at the meeting, the mailing of the proxy material, and other related matterQ. Upon motion of Mr. H. E. Riddell, duly seconded by Mr. W. B. Ryan, Jr., the following resolutions were unanimously adopted: RESOLVED, That, in the judgment of the Board of Directors, it is advisable, and in the interest of the Company, that the Company ac- quire from the holders of Common Stock, $t} par value, of Benson and Hedges, a New York Cor- poration, such number of shares thereof as may be possible (but in no event less than 355,460 shares) in consideration of the issue by the Company of a like number of shares of its authorized Common Stock, $5 par value; and further RESOLVED, That a special meeting of the stockholders of the Company be and the same

hereby is called to be held at the Jefferson Hotel, Jefferson and Franklin Streets, Richmond, Virginia, on January 26, 1954 at 12 o'clock Noon, Eastern Standard Time, to consider and vote upon such proposed acquisition and to transact such other business as may properly come before the meeting; and further RESOLVED, That January 5, 1954 be and the same hereby is fixed as the record date for the determination of stockholders who shall be entitled to receive notice of and to vote at such special meeting of stockholders, and only holders of Common Stock, $5 par value per share, of recora at trne close of business on that date shall be entitled to vote at said meeting; and further RESOLVED, That Messrs, A. E. Lyon, 0. Parker McComas, L. G. Hanson, 0. H. Chalkley, G. P. Brauburger and Paul D. Smith be and they hereby are designated by this Board as Proxies under the Management Proxy; and further RESOLVED, That the notice of special meeting of stockholders, proxy statement, management proxy and letter to stockholders as presented to this meeting be and the same hereby are approved subject to such additions, amendments and modifications as counsel for the Company may deem necessary or desirable; and further RESOLVED, That the Secretary of the Company be and he hereby is directed to mail or cause to be mailed at least ten days before said special meeting, first class postage prepaid, a copy of said notice of special meeting, proxy statement and letter to stockholders to all record holders of Cumu- lative Preferred Stock, Common Stock, $5 par value per share and Common Stock, $10 par value per share, at the close of business on January 5, 1954, and that there also be enclosed in the envelopes addressed to the holders of Common Stock, $5 par value per share, a copy of the management proxy and a postage prepaid return envelope; and further RESOLVED, That the proper officers of the Company be and they hereby are authorized, empowered and directed to notify the New

York Stock Exchange of the record date and the purpose of said special meeting of stock- holders and to send copies of said notice, proxy, proxy statement and letter to stock- holders to the New York Stock Exchange and to the Securities and Exchange Commission; and further RESOLVED, That, if in the judgment of the Chairman of the Board or the President, any date, hour or period specified in any of the preceding resolutions shall become im- practicable, each of them be and he hereby is authorized to make such change thereof, other than the record date, as, with the ad- vice of counsel, he may deem necessary or proper and any reference in these resolutions to any date, hour or period shall be deemed to refer to the same as so changed; and further RESOLVED, That the proper officers of the Company be and they hereby are authorized, in its name and behalf, to engage Dudley F,. King to assist in the solicitation of proxies for use at said special meeting, and to make such agreement with him relating to his com- pensation and expenses, or otherwise relating to his services, as they may deem necessary or proper; and further RESOLVED, That the officers of the Company be and they hereby are authorized to do any and all acts or things in their judgment necessary or proper to effectuate the pur- poses of these resolutions. Thereupon there followed a discussion of other aspects of the proposed acquisition. Upon motion of Mr. H. E. Riddell, duly seconded by Mr. 0, P. McComas, the following resolutions were unanimously adopted: RESOLVED, That the officers of the Company, on its behalf, cause to be prepared, executed and filed with the Securitiss and Exchange Commission a registration statement under the Securities Act of 1933, and such amend- ments thereto as they may deem necessary or

advisable, with respect to a maximum of 444,325 shares of Common Stock, $5 par value, of the Company; and further RESOLVED, That L. G. Hanson, Senior Vice President and Treasurer of the Company, and Paul D. Smith, be and they hereby are appointed joint and several agents of the Company for the receipt of notices or communications from the Securities and Exchange Commission with re- spect to such registration statement or any amendments thereof, and with all powers set forth in the rules and regulations of the Securities and Exchange Commission under the Securities Act of 1933. Mr. 0. P. Upon motion of Mr. K. H. Rockey, duly seconded by McComas, the following resolutions were unanimously adopted: RESOLVED, That an appropriate application be made by this Company to the New York Stock Exchange for the listing of not more than 444,325 additional shares of Common Stock, $5 par value, of this Company, and that L. G. Hanson, Senior Vice President and Treasurer of the Company, and Paul D. Smith, and each of them, be and they hereby are severally authorized to execute, and to repre- sent the Company in connection with, such application, and to appear before the New York Stock Exchange, or before the Committee on Stock List or any other committee of said Exchange, with authority to make such changes in such application or in any agreement relative thereto, and to do any and all other things, as may be necessary to conform with the requirements for listing; and further RESOLVED, That an appropirate application be made to the Securities and Exchange Commission for registration under the Securities Exchange Act of 1934 of not more than 4!{.4,325 additional shares of Common Stock, $5 par value, of the Company, and that the officers of the Company be and they hereby are authorized and directed to prepare, execute and file an appropriate application for such registration with the Securities and Exchange Commission, with such

amendments thereto as they may deem neces- sary or d.esirable, by Mr. C. T. adopted: Upon motion of Mr. W. H. Hatcher, duly seconded Ames, Jr., the following resolutions were unanimously WHEREAS, the Company has in contemplation the making of an offer to holders of Common Stock, $4 par value, of Benson and Hedges, a New York corporation, to exchange the same for Common Stock, $5 par value of the Company on a share- for-share basis, and upon other terms and conditions, and WHEREAS, such offer, if made, will be set forth in a prospectus forming part of an effective registration statement filed by the Company with the Securities and Exchange Commission under the Securities Act of 1933 (such offer as set forth in said prospectus being hereinafter called the Exchange Offer), RESOLVED, That, effective upon the receipt by Guaranty Trust Company of New York of a prospectus of this Company certified by the President, any Vice President, the Secretary or the Treasurer to be a copy of the prospectus referred to in the preambles of this resolution: V (1) Guaranty Trust Company of New York be and it hereby is appointed, in connection with and for the purpose of the Exchange Offer, Exchange Agent for this Company and for the holders of Common Stock of Benson and Hedges depositing shares thereof for exchange pur- suant to the Exchange Offer; (2) The Exchange Agent be and it hereby is authorized, subject to the terms and conditions of the Exchange Offer, (a) to accept for and on behalf of the Company deposits of shares of Common Stock of Benson and Hedges for exchange pursuant to the Exchange Offer, (b) to accept for and on behalf of the holders of said shares so deposited, and in exchange therefor, ~, shares of Common Stock of this Company, and # (c) to do or cause to be done all acts and ca things necessary or proper to be done as ~.' Exchange Agent in connection with the making ~ ~a

and consummation of the ExchanRe Offer. (3) That the President, any Vice President, the Secretary or the Treasurer of this Company be and each of them hereby is authorized to give such instructions to the Exchange Agent as in his judgment may be necessary or appro- priate in connection with the making and con- summation of the Exchange Offer, or otherwise in said connection, and the Exchange Agent shall be fully protected in relying and acting upon any such instructions; and further RESOLVED, That the officers of the Company be and they hereby are authorized and directed, with the advice of counsel, to prepare a form of letter of transmittal to accompany the deposi t of share s of C ommon S tock of Benson and Hedges pursuant to the Exchange Offer, as well as such other papers an d documents as they may deem necessary or advisable in connec- tion with the makina and consummation of the Exchange Offer, and to do any and all acts or things in their judgment necessary or advisable to effectuate the Exchange Offer, when made, and the purposes of these resolutions. / RESOLVED: (1) That the resolutions heretofore adopted by the Board of Directors of this Company relating to the appointment, and to the powers and authority, of Guaranty Trust Company of New York as transfer agent for the transfer of shares of Common Stock, 65 par value, of this C ompany, be and they hereby are amended so that the powers and authority of said transfer agent thereunder shall extend to and include an additional 444,325 shares of sai d Common Stock; (2) That, for the purpose of the original issue of certificates representing said addi- tional shares, said transfer agent be and it hereby is authorized and directed (a) upon requisition from time to time by Guaranty Trust Company of New York as exchange agent for this Company and for holders of Common Stock, $4 par value, of Benson and Hedges, a New York corpora- tion, to issue, countersign and recorcl as transfer agent certificates for such number of said addi- tional shares as may be so requisitioned; (b) to deliver such certificates to The National City Bank of New York, as registrar, for registration and countersignature; and (c) to deliver such

certificates when so countersigned by said registrar to said exchange agent; (3) That the President, any Vice-President, the Treasurer or the Secretary of the Company be and each of them hereby is authorized, by written notice to said transfer agent and without further act by this Board, to reduce the number of shares of Common Stock of this Company to which this resolution is applicable, and thereupon the powers and authority conferred upon said transfer agent by this resolution shall be correspondingly reduced, provided, however, that nothing in this resolution contained shall be deemed to limit such powers and authority with respect to any such shares issued, or requisi- tioned by said exchange agent, prior to the re- ceipt of said notice by said transfer agent; (f}) That each officer specified in paragraph (3) of this resolution be and hereby is autho- rized, on behalf of this Company, to do all acts and things, and to give all instructions to said transfer agent, in his judgment necessary or appropriate to effectuate the purposes of this resolution and said transfer agent shall be fully protected in relying upon any such instructions; and (5) That no power or authority conferred by the preceding paragraphs of this resolution shall be exercised by said transfer agent until such time as may be specified in a writing signed on behalf of this Company by any officer re- ferred to in paragrph (3) of this resolution and delivered to said transfer agent, but from and after such time said transfer agent shall have and may exercise every such power and authority with the same force and effect as if this paragraph (5) had not been a part of this resolution. RESOLVED: (1) That the resolutions heretofore adopted by the Board of Directors of this Company relating to the appointment, and to the powers and authority, of The National City Bank of New York as registrar of certificates for shares of Common Stock, $5 par value, of this Company be and they hereby are amended so that the powers and authority of said registrar thereunder shall extend to and include an additional !}44,325 shares of said Common Stock; (2) That said registrar be and it hereby is

authorized and directed to register, as an original issue, certificates for not more than the number of additional shares aforesaid, and, when certificates therefor have been counter- signed and delivered to it for that purpose by Guaranty Trust Company of New York, as transfer agent, to countersign as registrar and to re- deliver said certificates so registered to said transfer agent; (3) That said registrar be and it hereby is authorized to register transfers of said certi- ficates when presented to it for that purpose by said transfer agent and to re-deliver to said transfer agent the certificates so registered and to keep the necessary records in connection therewith; (4) That the President, any Vice-President, the Treasurer or the Secretary of the Company be and each of them hereby is authorized, by written notice delivered to said registrar and without further act by this Board, to reduce the number of shares of Common Stock of this Company specified in paragraph (1) of this resolution, and thereupon the powers and authority conferred upon said registrar by paragraphs (1) and (2) of this resolution shall be correspondingly reduced, provided, however, that nothing in this resolution con- tained shall be deemed to limit such powers and authority with respect to any such shares or certificates therefor registered, or received by said registrar from said transfer agent for registration, prior to the receipt of said notice by said registrar; (5) That each officer specified in paragraph (4) of this resolution be and hereby is authorized on behalf of this Company to do all acts and things, and to give all instructions to said re- gistrar, in his judgment necessary or appropriate to effectuate the purposes of this resolution and said registrar shall be fully protected in rely- ing upon any such instructions; and (6) That no power or authority conferred by the preceding paragraphs of this resolution shall be exercised by said registrar until such time as may be specified in a writing signed on behalf of this Company by any officer referred to in para- graph (4) of this resolution and delivered to said registrar, but from and after such time said re-