LORILLARD, INC.

Robert C. Almon became a director of Lorillard in November 2008. Mr. Almon has served as Executive Vice President and Chief Financial Officer at Pace University in New York since September 2013 and from May 2010 through January 2012. From January 2012 to August 2013, he served as Senior Adviser to the President for Enterprise Finance and Long-range Financial Planning at Pace University. From 1998 until 2007, Mr. Almon was a principal of Ernst & Young LLP where he established and served as National Director of the Center for Strategic Transactions, a strategy consulting practice focused on enhancing shareholder value, and subsequently he served on Ernst & Young’s Partner Advisory Council. Prior to 1998, Mr. Almon was a Managing Director in Corporate Finance at Salomon Brothers (now Citigroup) and previously at Lehman Brothers. Before becoming an investment banker he held strategic and treasury positions with General Motors Corporation and General Motors Acceptance Corporation (“GMAC”) (now Ally Financial). From May 2009 to June 2014, Mr. Almon served as the independent trustee of GMAC Common Equity Trust I (“Trust”) with absolute discretion to manage approximately 10% of the common equity interests of GMAC and/or proceeds therefrom held by the Trust for the benefit of General Motors Company as sole beneficiary. As a result of these and other professional experiences, Mr. Almon has particular knowledge of and extensive experience in strategic consulting, capital structure, finance and risk management.

Richard W. Roedel became a director of Lorillard in June 2008. He is also a director and member of the Audit Committee and Chairman of the Risk Committee of IHS, Inc., a director and member of the Audit Committee of Six Flags Entertainment Corporation, and a director and non-executive chairman of Luna Innovations Incorporated. From 1985 through 2000, Mr. Roedel was employed by the accounting firm BDO Seidman LLP (now BDO USA, LLP), the United States member firm of BDO International, as an Audit Partner, being promoted in 1990 to Managing Partner in Chicago, and then to Managing Partner in New York in 1994, and finally in 1999 to Chairman and Chief Executive. Mr. Roedel joined the Board of Directors of Take-Two Interactive Software, Inc., a publisher of video games, in November 2002 and served in various capacities with that company through June 2005, including Chairman and Chief Executive Officer. Mr. Roedel served on the Boards of Directors of Brightpoint, Inc. from 2002 to 2012 and Sealy Corporation from 2006 to March 2013. He also served as a director and chairman of the audit committee of Broadview Network Holdings, Inc., a private company, until 2012. Mr. Roedel was appointed to the Public Accounting Oversight Board’s Standing Advisory Group for a three-year term commencing January 1, 2014. He is also a director of the Association of Audit Committee Members, Inc., a non-profit association of audit committee members dedicated to strengthening the audit committee by developing best practices. Mr. Roedel is a certified public accountant. As a result of these and other professional experiences, Mr. Roedel has particular knowledge of and extensive experience in finance, accounting and risk management and in public company board and committee practices.

The following table sets forth the estimated payments and benefits that would be provided to each Named Executive Officer who was employed by us on December 31, 2014, pursuant to the terms of any contract, agreement, plan or arrangement that provides for such payments and benefits following, or in connection with, a termination of the Named Executive Officer’s employment, including by involuntary termination not for cause, involuntary termination for cause, retirement, death or disability, or in connection with a Change in Control (as defined in the Severance Agreements) with or without a termination of the Named Executive Officer’s employment. For purposes of calculating the amounts in the table, we have assumed that the Change in Control event and/or termination took place in that sequence on December 31, 2014 (the last business day of our most recently completed fiscal year) using the closing price of our Common Stock on such date ($62.94) for purposes of calculating the value of any stock awards in accordance with the rules and regulations under the Exchange Act. The “Involuntary Termination not for Cause” column includes termination by the Named Executive Officer for Good Reason, as such term is defined under the Severance Plan. The “Change in Control with Termination” column provides for payments as a result of a qualified termination pursuant to the Severance Agreements. The amounts shown in the table include estimates of what would have been paid to the Named Executive Officers upon the occurrence of the specified event. The actual amounts that would be paid to the Named Executive Officers can only be determined at the time of such an event. See the discussion that follows the table for additional information regarding the estimated payments and benefits.

The adjustments to reported results summarized below remove the following items: (1) the favorable impact of the 2003 non-participating manufacturer award as a result of the September 2013 arbitration panel determination that six states failed to diligently enforce escrow provisions applicable to non-participating manufacturers included as an offset to tobacco settlement expense in cost of sales; (2) the favorable impact of the reduction in Lorillard’s MSA payments as a result of the settlement with two more states in June 2014 to resolve certain MSA payment adjustment disputes approved by the arbitration panel in March 2013 included as an offset to tobacco settlement expense in cost of sales; (3) the favorable impact of the mark-to-market pension adjustment recorded by Reynolds American in the fourth quarter of 2014 on Lorillard’s tobacco settlement expense; (4) amortization of the SKYCIG brand included in selling, general and administrative expenses; (5) costs related to the RAI merger agreement included in selling, general and administrative expenses; (6) costs to satisfy the Alexander final judgment including statutory interest and related fees included in selling, general and administrative expenses; (7) fair value adjustment to the blu (U.K.) earn out liability included in selling, general and administrative expenses; (8) the unfavorable impact of the resolution of a SKYCIG purchase price dispute; (9) the unfavorable impact of an income tax valuation allowance recorded related to blu (U.K.) deferred tax assets for SKYCIG brand amortization; (10) the blu (U.K.) operating loss for fiscal 2014; (11) the favorable impact of the reduction in Lorillard’s April 15, 2013 MSA payment as a result of the settlement to resolve certain MSA payment adjustment disputes approved by the arbitration panel in March 2013 included as an offset to tobacco settlement expense in cost of sales (including the addition of two more states in the second quarter of 2013); (12) estimated costs to comply with the U.S. Government Case judgment included in selling, general and administrative expenses; (13) accrued costs related to compensatory damages and statutory interest to dismiss the Evans case included in selling, general and administrative expenses; (14) expenses incurred in conjunction with the acquisition of SKYCIG included in selling, general and administrative expenses and (15) accrued costs related to certain Engle Progeny cases included in selling, general and administrative expenses.

The annual non-executive director cash retainer, the Lead Independent Director and the Committee Chair stipends set forth in the table above are paid in equal quarterly installments in the first week of each calendar quarter. The annual non-executive director equity retainer is granted in the form of restricted stock annually on January 1 of each calendar year. The number of shares of restricted stock is determined by dividing the amount of the annual non-executive director equity retainer by the closing price of our Common Stock on the date of grant (rounding up to the nearest whole share). The restricted stock vests in full on the first anniversary of the date of grant, subject to the director’s continued service through such date (or on the earlier of the death or disability of such director). Directors may use Company leased or fractionally-owned aircraft for travel to and from Board meetings and are reimbursed for other travel-related expenses for Board and committee meetings. Spouses may accompany the directors on such flight. For any non-business use, the cost of such travel is imputed as income to the director, who is fully responsible for the associated tax liability without gross up payments from the Company. The Company does not incur any incremental costs when additional passengers accompany directors on the aircraft. The Board has also adopted a reimbursement policy for director attendance at third-party director education programs (up to $7,500 per year). In addition, the Company has established Stock Ownership Guidelines requiring non-executive directors to hold shares of Company Common Stock at least equal to five times the annual non-executive director cash retainer. In 2014, the Company maintained a matching gifts program, by which the Company matches contributions by a director to approved charitable organizations up to $15,000 per calendar year. We do not maintain a pension plan, incentive plan or deferred compensation arrangements for non-executive directors. Non-executive directors did not receive any other compensation for 2014.