CULBRO CORP
PRE 14A, 1994-03-04
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<PAGE>
                               Culbro Corporation

                                     [LOGO]

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

                            TO BE HELD APRIL 7, 1994

    PLEASE  TAKE  NOTICE  that  the Annual  Meeting  of  Shareholders  of Culbro
Corporation (the "Corporation")  will be  held at  2 Waterside  Crossing of  the
Corporation's Griffin Center Office Park in Windsor, Connecticut, on the 7th day
of April 1994, at 10:00 A.M., local time, to consider and act upon:

    1.  The election of directors of the Corporation;

    2.    The  approval  of  the  selection  of  the  Corporation's  independent
       accountants for 1994;

    3.  The  approval of an  employment agreement with  the Corporation's  chief
       financial officer, Jay M. Green;

    4.  A shareholders' proposal relating to cumulative voting; and

    5.  Such other business as may properly be brought before the Meeting or any
       adjournment thereof.

    WHETHER  OR NOT YOU  PLAN TO ATTEND  THE MEETING, PLEASE  COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE.

    PLEASE NOTE THAT THE  ANNUAL MEETING IS IN  CONNECTICUT, RATHER THAN IN  NEW
YORK  CITY AS HAS BEEN OUR PRACTICE FOR MANY YEARS. IF YOU PLAN TO ATTEND PLEASE
SO SIGNIFY WHERE NOTED ON THE PROXY CARD AND DIRECTIONS WILL BE SENT TO YOU.

    Only shareholders of record  at the close of  business on February 28,  1994
are entitled to notice of, and to vote at, the Annual Meeting.

                                                      A. ROSS WOLLEN
                                                        SECRETARY

Dated: March   , 1994
<PAGE>
                               CULBRO CORPORATION
                             387 Park Avenue South
                         New York, New York 10016-8899

                            ------------------------

                                PROXY STATEMENT

    This  Proxy Statement is furnished to the shareholders of Culbro Corporation
(the "Corporation")  in  connection  with  the  solicitation  by  the  Board  of
Directors  of proxies for the Annual Meeting of Shareholders to be held on April
7, 1994 at 10:00 A.M., local time, at 2 Waterside Crossing of the  Corporation's
Griffin  Center Office Park in Windsor,  Connecticut, for the purposes set forth
in the accompanying notice of meeting.

                                    GENERAL

    This solicitation is being made on behalf  of the Board of Directors of  the
Corporation.  The initial distribution of proxy materials is expected to be made
on or about March 4,  1994. Any proxy received in  the accompanying form may  be
revoked  by the  person executing  it at any  time before  the authority thereby
granted is exercised. Proxies  received by the Board  of Directors in such  form
will  be voted at the meeting or any adjournment thereof as specified therein by
the person giving the proxy; if no specification is made the shares  represented
by  such proxy will be  voted (i) for the election  of directors as described in
this Proxy Statement;  (ii) for  approval of  an employment  agreement with  the
Corporation's  chief financial officer, Jay M.  Green; (iii) for approval of the
selection of Price Waterhouse as independent accountants for the Corporation for
1994; and (iv) against a  shareholders' proposal relating to cumulative  voting.
Management  expects that the  proposal will be presented  by the shareholders at
the meeting. If the  proposal is not presented  by the shareholders,  management
does  not intend to present it and in that event no vote on the proposal will be
taken. Proposals by shareholders  for the Corporation's  1995 Annual Meeting  of
Shareholders must be received by the Corporation before November 15, 1994.

    Management  knows  of no  matters  which may  be  brought before  the Annual
Meeting  or  any  adjournment  thereof   other  than  those  described  in   the
accompanying  notice of meeting and routine matters incidental to the conduct of
the meeting. However, if any other matter should come before the meeting or  any
adjournment   thereof,  it  is  the  intention  of  the  persons  named  in  the
accompanying form of proxy or their substitutes to vote the proxy in  accordance
with their judgment on such matters.

    The  cost of solicitation of proxies by the Board of Directors will be borne
by the Corporation. Such solicitation will be  made by mail and in addition  may
be made by officers and employees of the Corporation personally or by telephone,
facsimile  machine  or  telegram.  Proxies  and  proxy  material  will  also  be
distributed through brokers, custodians and other like parties.

    Each holder of a share of Common  Stock of the Corporation will be  entitled
to  one  vote for  each share  held of  record by  such person  at the  close of
business on February 28, 1994,  which is the record date  fixed by the Board  of
Directors  for the determination  of shareholders entitled to  notice of, and to
vote at, the meeting or any adjournment thereof. As of such date the Corporation
had outstanding 4,308,288 shares  of Common Stock  (excluding 240,902 shares  of
treasury stock).
<PAGE>
                             ELECTION OF DIRECTORS

    At  the 1994  Annual Meeting of  Shareholders, eleven  (11) directors (which
will comprise  the entire  Board) are  to  be elected.  The Board  of  Directors
proposes  the nominees listed below for election as directors to serve until the
1995 Annual Meeting of Shareholders and until their successors are duly  elected
and  qualified. All  of the  nominees have  served as  directors since  the last
Annual Meeting. The directors must be elected  by a plurality of the votes  cast
in  person or by proxy  by shareholders entitled to vote  at the meeting. If for
any reason any nominee  or nominees become unavailable  for election, the  proxy
holders  will vote for such substitute nominee  or nominees as may be designated
by the Board of Directors.

                        INFORMATION CONCERNING DIRECTORS

<TABLE>
<CAPTION>
                                (AGE) AND
                             DATE SINCE WHICH
           NAME              HAS CONTINUOUSLY
     (LETTERS REFER TO         SERVED AS A         PRINCIPAL OCCUPATION AND
  COMMITTEE MEMBERSHIPS,     DIRECTOR OF THE         BUSINESS EXPERIENCE            ALSO SERVES AS A DIRECTOR
     IDENTIFIED BELOW)         CORPORATION        DURING PAST FIVE YEARS (1)      OF THE FOLLOWING CORPORATIONS
- ---------------------------  ----------------  --------------------------------  --------------------------------
<S>                          <C>               <C>                               <C>
Bruce A. Barnet              (48) 1990         President and Chief Executive
 (a), (b), (f)                                  Officer of Cowles Magazines --
                                                publishing (1993); Private
                                                investor (1991-1992);
                                                President, Family Media
                                                Publications (1990); President,
                                                Riordan Publishing Company
                                                (1990); Vice President, Time,
                                                Inc.'s Magazine Group
                                                (1987-1990)
John L. Bernbach             (50) 1988         Vice Chairman of DDB Needham      Omnicom Group, Inc., North
 (a), (f)                                       Worldwide, Inc., Director and     American Television, Inc.,
                                                President of DDB Needham          Northbridge Programming, Inc.
                                                Worldwide, Inc. -- advertising
Edgar M. Cullman (2)         (76) 1961         Chairman of the Board of          Centaur Communications Limited,
 (b), (c), (d), (e)                             Directors                         Bloomingdale Properties, Inc.,
                                                                                  The Eli Witt Company
Edgar M. Cullman, Jr.(2)     (48) 1982         President; President of Culbro    First Financial Caribbean
 (c), (d), (f)                                  Land Resources, Inc.              Corporation, Bloomingdale
                                                (1992-1993)                       Properties, Inc., The Eli Witt
                                                                                  Company
Frederick M. Danziger (2)    (54) 1975         Member of the Firm of Mudge Rose  Affinity Bio Tech, Inc., Monro
 (c), (d)                                       Guthrie Alexander & Ferdon --     Muffler/Brake Inc., Ryan
                                                attorneys                         Instruments, L.P. (general
                                                                                  partner), Bloomingdale
                                                                                  Properties, Inc., First
                                                                                  Financial Caribbean
                                                                                  Corporation,
                                                                                  Centaur Communications Limited
</TABLE>

                                       2
<PAGE>

<TABLE>
<CAPTION>
                                (AGE) AND
                             DATE SINCE WHICH
           NAME              HAS CONTINUOUSLY
     (LETTERS REFER TO         SERVED AS A         PRINCIPAL OCCUPATION AND
  COMMITTEE MEMBERSHIPS,     DIRECTOR OF THE         BUSINESS EXPERIENCE            ALSO SERVES AS A DIRECTOR
     IDENTIFIED BELOW)         CORPORATION        DURING PAST FIVE YEARS (1)      OF THE FOLLOWING CORPORATIONS
- ---------------------------  ----------------  --------------------------------  --------------------------------
<S>                          <C>               <C>                               <C>
John L. Ernst (3)            (53) 1983         Chairman of the Board and         First Financial Caribbean
 (b), (c), (e)                                  President of Bloomingdale         Corporation
                                                Properties, Inc. -- investments
                                                and real estate
Thomas C. Israel             (50) 1989         A Director and Chairman of A.C.   Chase N.B.W., Glenayre
 (a), (f)                                       Israel Enterprises, Inc. --       Technologies, Inc., Noel Group,
                                                investments                       Inc.
Dan W. Lufkin                (61) 1976         Private investor                  American Medical International,
 (a), (b), (c), (d), (e)                                                          Syratech, Inc., Savoy Pictures,
                                                                                  Inc., Allen & Co., Inc., London
                                                                                  Fog Industries
Graham V. Sherren            (56) 1987         Chairman and Chief Executive      ARIS, Hundred Acre Securities
 (f)                                            Officer, Centaur Communications   Ltd., Input Type Setting Ltd.,
                                                Limited -- publisher of           Gieves Group Ltd., Vexford
                                                magazines and trade periodicals   Holdings Ltd., Stace-Barr Ltd.
                                                in the United Kingdom
Peter J. Solomon             (55) 1980         Chairman, Peter J. Solomon        Centenniel Cellular Corp.,
 (b), (d)                                       Company Limited -- investment     Century Communications Inc.,
                                                bankers; Vice Chairman of         Bradlee's, Monro Muffler/Brake,
                                                Shearson Lehman Brothers Inc.     Inc., Office Depot, Inc.,
                                                -- investment bankers             Phillips-Van Heusen Corp.,
                                                (1985-1989)                       Ralphs Grocery Co.
Francis T. Vincent, Jr.      (55) 1992         Private investor; senior advisor  The Continental Insurance
 (a), (b), (f)                                  to Peter J. Solomon Company       Company, Oakwood Homes Corp.
                                                Limited -- investment bankers     Time Warner, Inc.
                                                Commissioner, Major League
                                                Baseball (1989-1992)
<FN>
- ------------------------------
    Member  of  the:  (a)  Audit  Committee;  (b)  Compensation  Committee;  (c)
    Executive  Committee; (d)  Finance Committee; (e)  Nominating Committee; and
    (f) Strategic Planning Committee
(1) Except as  otherwise indicated  each  director has  had the  same  principal
    occupation  during the past  five years. Positions  not otherwise identified
    are with the Corporation.
(2) Mr. Cullman is the father of Mr. Cullman, Jr., and the father-in-law of  Mr.
    Danziger.
(3) Mr. Ernst is the nephew of Mr. Edgar M. Cullman.
</TABLE>

    The  Board of Directors held 9 meetings during 1993. The Corporation has the
following Committees of the Board of Directors: Audit, Compensation,  Executive,
Finance,  Nominating and Strategic Planning.  Committee memberships of the Board
of Directors are  indicated in the  above table. Directors  as a whole  attended
approximately  92%  of the  aggregate of  all Board  and Committee  meetings (of
Committees of which  they were members).  Mr. Lufkin attended  less than 75%  of
combined Board and Committee meetings (of Committees of which he is a member).

                                       3
<PAGE>
    Effective  January 1, 1991 the annual retainer  paid to Members of the Board
of Directors and  amounts paid  per meeting were  reduced by  10% from  previous
years.  In 1993  such retainer  and amounts were  not increased.  Members of the
Board of Directors who are not employees of the Corporation received $16,200 per
year and $720 for each Board  and Committee meeting attended in 1993.  Committee
chairmen  received $1,080  for each Committee  meeting attended,  except for the
chairmen of the Audit and  Compensation Committees who received $1,350.  Reduced
amounts  were paid if  more than one  meeting was held  on any day. Non-employee
Directors who  are  not  members  of the  Cullman-Ernst  group  (See  "Principal
Holders") participate in the Stock Option Plan for Non-employee Directors.

    The Audit Committee, whose Chairman is Mr. Israel, reviews audit reports and
the  scope  of audit  by both  the  Corporation's internal  audit staff  and its
independent accountants and  related matters pertaining  to the preparation  and
examination  of the Corporation's  financial statements. From  time to time such
Committee makes recommendations to  the Board of Directors  with respect to  the
foregoing   matters  as  well  as  with   respect  to  the  appointment  of  the
Corporation's independent accountants. The Audit Committee held two meetings  in
1993 and recommended to the Board of Directors the selection of Price Waterhouse
(See "Selection of Independent Accountants").

    The  Nominating Committee, whose Chairman is Mr. Ernst, held two meetings in
1993 and at its December 1993 meeting recommended to the Board of Directors  the
election  of the director-nominees proposed in this Proxy Statement for election
by the shareholders.  The Nominating Committee  reviews incumbent directors  and
the  qualifications of  candidates suggested  from all  sources, including Board
members,  management  and  shareholders.  Shareholders  desiring  to   recommend
candidates for election as directors at the Corporation's 1995 Annual Meeting of
Shareholders should submit names and appropriate biographical information to the
Secretary of the Corporation before November 1, 1994.

    For information about the Compensation Committee, see Compensation Committee
Interlocks and Insider Participation on page 12.

                                       4
<PAGE>
             SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL HOLDERS

MANAGEMENT

    The  following  table lists  the number  of  shares of  Common Stock  of the
Corporation beneficially owned by  the nominees for  election as directors  (who
are  all current directors) and by all directors and officers of the Corporation
collectively:

<TABLE>
<CAPTION>
                                                                      NUMBER OF      PERCENT OF
                               NAME                                   SHARES(1)     OUTSTANDING
- -------------------------------------------------------------------  -----------  ----------------
<S>                                                                  <C>          <C>
Bruce A. Barnet....................................................          100           *
John L. Bernbach...................................................          600           *
Edgar M. Cullman...................................................      996,348          23%(2)
Edgar M. Cullman, Jr...............................................      875,954          20%(2)
Frederick M. Danziger..............................................      164,120           4%(2)
John L. Ernst......................................................      440,463          10%(2)
Thomas C. Israel...................................................        5,000           *
Dan W. Lufkin......................................................       10,000           *
Graham V. Sherren..................................................          500           *
Peter J. Solomon...................................................        1,000           *
Francis T. Vincent, Jr.............................................        1,000           *
All directors and officers collectively, consisting of seventeen       1,817,415          42%(1)
persons............................................................
<FN>
- ------------------------
* Less than 1%
(1) This information reflects the definition of beneficial ownership adopted  by
    the  Securities and Exchange Commission.  Beneficial ownership shown is sole
    investment and voting power, except as  reflected in footnote 2. Where  more
    than  one person shares investment and voting  power in the same shares such
    shares may be  shown more than  once. Such shares  are reflected only  once,
    however,  in the total  for all directors and  officers. Excluded are shares
    held by charitable foundations  and trusts of which  members of the  Cullman
    and  Ernst  families,  including  persons referred  to  in  footnote  2, are
    officers and directors.
(2) See "Principal Holders".  Included within the  shares shown as  beneficially
    owned  by Mr. Cullman are 874,150 shares in which he holds shared investment
    and/or voting power; included within the shares shown as beneficially  owned
    by  Mr. Ernst are 416,321 shares in  which he holds shared investment and/or
    voting power; included within the shares shown as beneficially owned by  Mr.
    Danziger  are  147,578 shares  in which  he  holds shared  investment and/or
    voting power; and included within the shares shown as beneficially owned  by
    Mr.  Cullman, Jr.  are 728,564  shares in  which he  holds shared investment
    and/or voting power.  Excluded in each  case are shares  held by  charitable
    foundations and trusts in which such persons or their families or trusts for
    their  benefit are officers and directors. Messrs. Cullman, Ernst, Danziger,
    and Cullman, Jr. disclaim beneficial interest in all shares over which there
    is shared investment and/or voting power and in all excluded shares.
</TABLE>

                                       5
<PAGE>
PRINCIPAL HOLDERS

    As of  December 31,  1993, a  group consisting  of Messrs.  Cullman,  direct
members  of their families and  trusts for their benefit;  Mr. Ernst, his sister
and direct members of their families and trusts for their benefit; a partnership
in which members of the Cullman  and Ernst families hold substantial direct  and
indirect interests and charitable foundations and trusts of which members of the
Cullman  and Ernst  families are  directors or  trustees, owned  an aggregate of
approximately 2,233,000 shares of the Corporation's Common Stock  (approximately
52%).  Among others, Messrs. Cullman and their  wives, Mr. Ernst and to a lesser
extent Mr. Danziger  (who is  a member  of the  Cullman and  Ernst group),  hold
investment  and voting  power or  shared investment  and voting  power over such
shares. Certain of such shares are  pledged as security for loans payable  under
standard pledge arrangements.

    A  form filed with the  Securities and Exchange Commission  on behalf of the
Cullman and Ernst group states that  there is no formal agreement governing  the
group's  holding  and  voting of  such  shares  but that  there  is  an informal
understanding that the persons and entities included in the group will hold  and
vote  together the  shares owned  by each of  them in  each case  subject to any
applicable fiduciary responsibilities.

    The Gabelli Group,  Inc., One  Corporate Center,  Rye, New  York, NY  10580,
through  certain  wholly-owned subsidiaries,  is the  owner  of an  aggregate of
519,200 shares of  the Corporation's  Common Stock (approximately  12%). A  form
filed  with  the Securities  and Exchange  Commission on  September 18,  1991 by
Gabelli Funds,  Inc. states  that the  securities have  been acquired  by  GAMCO
Investors,  Inc., a wholly-owned  subsidiary of Gabelli  Funds, Inc. and Gabelli
Funds, Inc., on behalf of their investment advisory clients. The Corporation has
been informed that no individual client of The Gabelli Group, Inc. has ownership
of more than 5% of the Corporation's  Common Stock. An affiliate of the  Gabelli
Group  provides investment advisory  services to the  Corporation's pension fund
for which it receives customary advisory fees.

    Heine Securities Corporation, 51 J.F.K. Parkway, Short Hills, N.J. 07078, is
the owner of an  aggregate of 180,200 shares  of the Corporation's Common  Stock
(approximately 4.2%).

    Dimensional  Fund  Advisors  Inc. ("Dimensional"),  a  registered investment
advisor, is  deemed  to have  beneficial  ownership  of 299,900  shares  of  the
Corporation's  Common Stock  (approximately 7%) as  of February 9,  1994. All of
such shares are held  in portfolios of DFA  Investment Dimensions Group Inc.,  a
registered  open-end  investment company,  the DFA  Investment Trust  Company, a
registered open-end  investment company,  or the  DFA Group  Trust and  the  DFA
Participating  Group Trust,  investment vehicles for  qualified employee benefit
plans, all  of  which  Dimensional serves  as  investment  manager.  Dimensional
disclaims beneficial ownership of such shares.

    Section  16(a) of the Securities Exchange  Act of 1934, as amended, requires
the Corporation's officers  and directors,  and persons  who own  more than  ten
percent  of  its Common  Stock,  to file  reports  of ownership  and  changes in
ownership with the  Securities and Exchange  Commission and the  New York  Stock
Exchange.  Such persons  are required by  regulation to  furnish the Corporation
with copies of all Section 16(a) forms they file. Based upon its involvement  in
the  preparation of certain of such forms, a  review of the copies of other such
forms received by it  and the written representation  from one reporting  entity
that  no Form 5 was required for such entity, the Corporation believes that with
respect to  1993 all  such  Section 16(a)  filing requirements  were  satisfied,
except  that Mr. Bernbach failed to file a Form 4 in a timely fashion respecting
his purchase of 500 shares of the Corporation's Common Stock in April 1993.

                                       6
<PAGE>
                       INTERESTS IN CERTAIN TRANSACTIONS

    For the information of  shareholders, attention is  called to the  following
transactions  between the  Corporation and  other parties  in which  the persons
mentioned below might have had a direct or indirect interest.

    1.  Mr. Danziger is a member of the law firm of Mudge Rose Guthrie Alexander
& Ferdon. During  the Corporation's  1993 fiscal  year, such  firm received  for
services   rendered  approximately  $895,394  from  the  Corporation,  including
approximately $365,230  for services  rendered relating  to the  acquisition  of
Certified Grocers of Florida, Inc. by the Corporation's Eli Witt subsidiary.

    2.   The  Corporation has a  Directors and Officers  Liability and Corporate
Reimbursement insurance policy with the Chubb Group of Insurance Companies.  The
policy  period is from February 19, 1993  through February 19, 1994 at a premium
of $122,000.  The  Corporation  maintains a  separate  Pension  Trust  Liability
insurance  policy covering employees acting  in fiduciary capacities. The policy
period is from  February 19,  1993 through  February 19,  1994 at  a premium  of
$22,300.

    See Interlocks and           on page   for certain other interests.

    The  information given in this Proxy Statement with respect to the five-year
business experience of each director, beneficial ownership of stock,  interlocks
and the respective interests of persons in transactions to which the Corporation
or  any of its subsidiaries was a party  (other than as appears from the records
of the Corporation), is  based upon statements furnished  to the Corporation  by
its directors and officers.

                                       7
<PAGE>
                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                             LONG TERM
                                                                                            COMPENSATION
                                                                                               AWARDS
                                                   ANNUAL COMPENSATION(1)           ----------------------------
                                           ---------------------------------------                       (G)
                                                                         (E)                         -----------       (I)
             (A)                              (C)                  ---------------        (F)         STOCK OP-   -------------
- ------------------------------     (B)     ---------      (D)       OTHER ANNUAL    ---------------     TIONS       ALL OTHER
           NAME AND             ---------   SALARY    -----------   COMPENSATION    RSTRICTED STOCK  (NUMBER OF   COMPENSATION
      PRINCIPAL POSITION          YEAR        ($)      BONUS ($)         ($)          AWARDS ($)       SHARES)         ($)
- ------------------------------  ---------  ---------  -----------  ---------------  ---------------  -----------  -------------
<S>                             <C>        <C>        <C>          <C>              <C>              <C>          <C>
Edgar M. Cullman..............       1991    360,000      --             19,038           --             --
  Chairman of the Board              1992    360,000      --             18,465           --             --
                                     1993    360,000      --             17,242           --             --
Edgar M. Cullman, Jr..........       1991    252,000      --             25,290           --             --
  President                          1992    276,523     193,900         25,776           --             --
                                     1993    277,000      75,000         25,510           --             --          75,000(2)
Jay M. Green..................       1991    240,000      --             25,290           --             20,600
  Executive Vice President           1992    264,512     132,500         25,390           --             14,700
  Chief Financial Officer            1993    340,000     120,000         25,510           --             14,900
A. Ross Wollen................       1991    156,000      --             25,020           --             12,300
  Senior Vice President              1992    168,260      58,975         26,415           --              9,400
  General Counsel & Secretary        1993    176,900      55,000         27,573           --             10,000
Peggy L. Kelston..............       1991    116,000      --             22,220           --              6,000
  Vice President                     1992    120,471      31,325         25,325           --              3,900
  Human Resources                    1993    128,500      10,000         25,646           --              4,200
<FN>
- ------------------------------
(1)   In  December  of 1990  the Corporation  changed its  fiscal year  end from
      December to  November. However,  the Annual  Compensation column  reflects
      amounts paid during the calendar year. Amounts shown also include matching
      contributions  made by  the Corporation under  the Savings  Plan and other
      miscellaneous cash benefits, but do not include funding for or receipt  of
      retirement plan benefits (See "Employee Benefit Plans").
(2)   Mr.  Green  is paid  $75,000 as  Chairman  of the  Corporation's wholesale
      tobacco subsidiary, Eli Witt.
</TABLE>

                             EMPLOYEE BENEFIT PLANS

RETIREMENT PLAN

    Retirement benefits are payable under the Corporation's Employees Retirement
Plan for officers and other employees  of the Corporation and its  participating
subsidiaries.  Directors who are not employees  do not participate. Benefits are
accrued under the Plan on a  career-average earnings basis and through 1993  the
pension  credit is 1.1%  for annual compensation up  to the individual's covered
compensation as determined from published  Social Security tables and 1.65%  for
annual  compensation  above  said  amounts. Compensation  is  the  base  rate of
earnings as of  the first business  day of  each Plan Year  payable for  service
during  the Plan  Year, excluding  overtime, bonuses,  incentive compensation or
other additional compensation. An updating formula has been periodically applied
to adjust for inflation. The estimated annual benefits payable as a life annuity
upon retirement at normal  retirement age, which  assumes service will  continue
until  age 65 at 1994 base salaries, for Messrs. Cullman, Jr., Green, Wollen and
Ms. Kelston  are  $99,825,  $54,322,  $63,563  and  $45,538,  respectively.  The
retirement  benefit for Mr.  Cullman, Sr., reflecting the  fact that he deferred
receipt since age 65, is $169,356, which under tax law he was required to  begin
receiving April 1, 1989.

                                       8
<PAGE>
STOCK OPTION PLANS

    In  January of 1991 the Board of Directors approved the adoption of the 1991
Employees Incentive Stock Option  Plan (the "1991 Plan")  which was approved  by
the  Corporation's shareholders on May 9,  1991. Options granted pursuant to the
1991 Plan in 1991  and 1992 have substantially  exhausted the options  available
for  grant thereunder and in  December 1992 the Board  of Directors approved the
adoption of the Culbro Corporation 1992  Stock Plan (the "1992 Plan") which  was
approved by the Corporation's shareholders on April 8, 1993. Options to purchase
a  total of 79,900 shares were granted under the 1992 Stock Plan to 13 employees
on January 27, 1993 at $16.75 per share. Such options are not exercisable  until
three  years from the date of grant. The  Board of Directors has also approved a
stock option  plan  for non-employee  Directors  pursuant to  which  options  to
purchase  2,000  shares  are  granted at  each  Annual  Meeting  to non-employee
Directors who are not members of the Cullman-Ernst group. In April 1993  options
to  purchase  14,000 shares  were  granted to  7  non-employee Directors  at the
exercise price of $16.69 per share.

    Options currently outstanding were granted either under the 1991 Plan or the
1992 Plan  (collectively  the  "Plans").  The  Plans  are  administered  by  the
Compensation  Committee of  the Board  of Directors  (the "Committee"),  none of
whose members may  hold options  granted pursuant  to the  Plans. The  Committee
determines  the form of the option agreements to be used under the Plans and the
terms and conditions to be included in such option agreements.

    Under the  1992  Plan an  aggregate  300,000  shares of  Common  Stock  were
authorized  to be  made subject  to options; of  such shares  79,900 shares were
subject to unexercised options as  of March 1, 1993. As  of such date no  shares
were  available for grant under  the 1991 Plan since  the 1992 Plan has replaced
the 1991 Plan. Options are  granted under the Plans at  prices equal to 100%  of
the fair market value of the shares of Common Stock on the date of grant.

    Options  granted under the Plans were intended to be incentive stock options
or nonqualified  options.  Options granted  in  1990,  1991 and  1992  are  100%
exercisable  three years after  the date of  grant and not  before such date and
terminate eight years (six in  the case of the 1990  grant) from such date.  All
options  permit the delivery,  with the consent of  the Committee, of previously
owned Common Stock  of the  Corporation in  payment, in  lieu of  cash, for  the
purchase  of shares upon  exercise. The Plans  also contain a  limitation on the
dollar amount of incentive  stock options which may  be granted to any  employee
and  restrictions pertaining to any grant  to a 10% shareholder. Messrs. Cullman
do not participate in the Plans.

    The Plans permit the grant together  with an option of a stock  appreciation
right  payable in cash. If granted, such  a right entitles the holder to receive
in cash upon exercise the difference  between the option exercise price and  the
market  value  of  the Corporation's  Common  Stock  in lieu  of  exercising the
attached option.

    The 1992 Plan also permits the  grant of shares of the Corporation's  Common
Stock. No such grants have been made.

                                       9
<PAGE>
STOCK OPTION INFORMATION

    No  options have been exercised  since 1990 by any  executive officer of the
Corporation. Information  pertaining to  options  granted to  certain  executive
officers  named under "Summary  Compensation Table" since January  1, 1991 is as
follows:

<TABLE>
<CAPTION>
OPTIONS TO PURCHASE
 SHARES OF THE
 CORPORATION'S                                                                         JAY M.     A. ROSS      PEGGY
 COMMON STOCK                                                                           GREEN     WOLLEN      KELSTON
- ------------------------------------------------------------------------------------  ---------  ---------  -----------
<S>                                                                                   <C>        <C>        <C>
Granted on January 31, 1991 at $14.00 per share.....................................     20,600     12,300       6,000
Granted on February 20, 1992 at $18.00 per share....................................     14,700      9,400       3,900
Granted on January 27, 1993 at $16.75 per share.....................................     14,900     10,000       4,200
</TABLE>

                    STOCK OPTION GRANTS IN 1993 FISCAL YEAR

<TABLE>
<CAPTION>
                                                                                                 POTENTIAL REALIZABLE
                                                                                                       VALUE AT
                                                                                                 ASSUMED ANNUAL RATES
                                                                                                       OF STOCK
                                       NUMBER OF      PERCENTAGE OF                               PRICE APPRECIATION
                                        SHARES       TOTAL OPTIONS/                                  FOR TEN YEAR
                                      UNDERLYING     SARS GRANTED TO   EXERCISE OR                   OPTION TERM
                                     OPTIONS/SARS   EMPLOYEES IN 1993  BASE PRICE   EXPIRATION   --------------------
NAME                                  GRANTED (#)      FISCAL YEAR      ($/SHARE)      DATE         5%         10%
- -----------------------------------  -------------  -----------------  -----------  -----------  ---------  ---------
<S>                                  <C>            <C>                <C>          <C>          <C>        <C>
Jay M. Green.......................       14,900             18.6       $    16.75     1/27/01     406,472    647,256
A. Ross Wollen.....................       10,000             12.5       $    16.75     1/27/01     272,280    434,400
Peggy Kelston......................        4,200              5.3       $    16.75     1/27/01     114,576    182,448
</TABLE>

ANNUAL INCENTIVE COMPENSATION PLAN

    The Committee meets  during the  first quarter of  each year  to assess  the
performance  during the preceding fiscal year of the officers of the Corporation
and senior officers of its subsidiaries and to recognize and reward  meritorious
performance  by payment  of incentive  compensation with  respect to  such year.
Pursuant to a  plan approved  for 1993  by the  Board of  Directors such  annual
incentive   compensation  was  limited  to  predetermined  percentages  of  each
recipient's annual  salary  and  depended  upon  the  achievement  of  specified
financial  and  subjective  goals.  Incentive compensation  is  payable  in cash
subject to  deferral under  the  Corporation's Deferred  Incentive  Compensation
Plan.  Amounts  paid  as  annual  incentive  compensation  with  respect  to the
Corporation's 1993 fiscal year  are included in  the Summary Compensation  Table
with  respect  to  the  individuals  listed  thereunder.  Employees  who  do not
participate in the incentive compensation plan may be eligible for annual  bonus
payments  depending  upon  operating  unit results.  Mr.  Cullman,  Sr.  did not
participate in the plan.

LONG TERM PERFORMANCE PLAN

    In 1988 the  Committee and  the Board of  Directors approved  the Long  Term
Performance  Plan which is  intended to provide  additional cash compensation to
certain officers  of the  Corporation and  senior officers  of its  subsidiaries
selected  by the Committee. Payments under the  Plan were based on the financial
performance of the subsidiaries and the Corporation over three-year  performance
cycles,  beginning  in 1989  and every  other  year thereafter.  The performance
measurements which determined

                                       10
<PAGE>
the payments  to subsidiary  officers  were based  generally on  cumulative  net
income  and  cumulative cash  flow  for each  subsidiary.  Target goals  in each
category were set  and incentive compensation,  as a percentage  of salary,  was
paid depending upon percentage of goal achieved. In 1992 the first payment under
this  Plan was  made only to  participants from the  Corporation's General Cigar
Co., Inc. subsidiary based on performance  during the period 1989 through  1991.
Corporate  executives' participation depended upon  consolidated results in both
categories  exceeding  by   10%  subsidiary  targets   and  no  such   incentive
compensation  was paid to any Corporate executive. Approximately eight corporate
executive  officers  and  four  to  nine  senior  officers  at  each  subsidiary
participate  in the  Plan. Mr.  Cullman, Sr.  did not  participate in  the Plan.
Subject to certain conditions,  an employee may  defer all or  a portion of  the
payment pursuant to the Corporation's Deferred Incentive Compensation Plan.

    The  second three-year  performance cycle began  with fiscal  year 1991. The
award of compensation for officers of the Corporation's subsidiaries under  this
second three-year performance cycle is based upon achievement of a predetermined
formula  based upon the return on  net assets for their respective subsidiaries.
Officers of the Corporation  selected by the Committee  will participate in  the
Plan  at the discretion of the  Committee. The second performance cycle resulted
in no incentive compensation being paid. A similar third three-year  performance
cycle  began with fiscal year 1993. Mr. Cullman, Sr. will not participate in the
Plan.

DEFERRED INCENTIVE COMPENSATION PLAN

    In 1982 the Board of  Directors adopted the Deferred Incentive  Compensation
Plan  to  be administered  by  the Committee,  pursuant  to which  recipients of
incentive compensation and directors' fees  may elect to defer receipt  thereof.
Under  a  defined  contribution  arrangement  amounts  deferred  earn  interest,
compounded quarterly, at the prime rate  less 1%. Such amounts are not  intended
to  be recognized for  tax purposes until  receipt. Participating recipients may
designate the amount  and the  time periods  of deferral.  Participants have  no
vested  rights in  deferred amounts credited  to their accounts  and are general
creditors of the Corporation until such amounts are actually paid.

SAVINGS PLAN

    The Board of  Directors adopted  a Savings Plan  in 1982.  The Savings  Plan
covers  salaried and hourly  employees of the  Corporation and its participating
subsidiaries who are employed in the United States, are over age 21 and have six
months of service. In 1993 a participating  employee could have (i) saved up  to
5%  of  annual  base salary  through  payroll deductions,  with  the Corporation
contributing $0.40 on each dollar contributed; and (ii) saved an additional  10%
of   annual   base  salary   without   receiving  any   matching  contributions.
Contributions made in 1992  through payroll deductions not  in excess of  $8,994
per  year may  have been accumulated  as before-tax savings  pursuant to Section
401(k) of the  Internal Revenue Code.  Participants are permitted  to choose  to
allocate their contributions among several alternative investment options.

    During   the  period  from  January  1,   1993  to  December  31,  1993  the
Corporation's matching contributions under the Savings Plan for the accounts  of
the  individuals named  under "Summary Compensation  Table" are  included in the
Summary Compensation Table.

INSURANCE AND HEALTH PROGRAMS

    The Corporation  maintains  a  variety of  employee  welfare  benefit  plans
providing  life, hospitalization, medical and long-term disability insurance for
its salaried and certain hourly paid employees. In

                                       11
<PAGE>
addition the Corporation  provides life, hospitalization  and medical  insurance
for  certain of its retired employees. The Corporation's aggregate contributions
for such employee welfare  benefit plans through November  27, 1993 amounted  to
approximately $7,484,000.

    In  1976 the  Corporation adopted an  Executive Life  Insurance Program (the
"Program") pursuant to which insurance was purchased for middle and senior level
officers and  employees. Insurance  coverage of  $20,000 was  provided for  each
$10,000 salary increment in excess of $50,000 and additional coverage of $10,000
was  provided for each  $10,000 salary increment  in excess of  $100,000 up to a
maximum insurance  coverage of  $250,000. As  of July  1, 1988  the Program  was
suspended  and  all  benefits  remain as  they  were  as of  that  date.  No new
participants have been offered benefits under this Program since its suspension.
The aggregate  face  amount of  such  coverage  through November  30,  1993  was
approximately  $3,600,000. The amounts  paid by the Corporation  in such year as
premiums totaled approximately  $122,000, which  was paid  in part  from a  loan
against the cash value of said insurance and the balance in cash.

COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION

    The   Compensation  Committee,  whose  Chairman  is  Mr.  Ernst,  supervises
management compensation and employee benefits and administers the  Corporation's
pension,  stock  option,  savings,  health,  incentive  compensation  and  other
employee benefit plans. It held five meetings in 1993.

         BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

GENERAL

    Pursuant to  Article  III, Section  11  of the  Corporation's  By-Laws,  the
Compensation  Committee of  the Board of  Directors annually  recommends "to the
Board compensation  for officers  and principal  employees and  agents, and  its
recommendations  for their participation  in any compensation  or other plan for
the benefit of employees... and shall administer all such plans...". It has been
the  practice   of  the   Committee  to   review,  consider   and  approve   the
recommendations of management as to all compensation paid by the Corporation and
its subsidiaries exceeding $75,000 per annum.

    The chief executive officer and president, Messrs. Cullman, Sr. and Cullman,
Jr.,  respectively,  are  members of  the  Cullman  and Ernst  Group  which owns
approximately 52% of the Corporation's  Common Stock (see "Principal  Holders").
They  have declined to  participate in the Corporation's  Stock Option Plans and
Mr. Cullman, Sr. also does not participate  in the Annual Plan or the Long  Term
Plan (see below).

POLICIES

    The  Committee intends that stock options  and cash performance awards serve
as a significant  part of  executives' (other  than the  chief executive)  total
compensation  package, and thus they are granted and awarded in consideration of
present and anticipated performance as  well as past performance. Moreover,  the
stock  options  and  cash  performance  awards are  intended  to  offer  the top
executives significant long-term incentives to increase their efforts on  behalf
of  the  Corporation and  its subsidiaries  and to  focus managerial  efforts on
enhancing shareholder value.  As indicated above,  the Committee's  compensation
philosophy   is  to  have  long-term  incentives  that  pay  more  for  superior
performance and less if performance does not achieve that level. The  Committee,
in making its

                                       12
<PAGE>
determinations  with respect  to stock option  and performance  award grants and
awards to the individual senior executives, was guided by the percentage of  the
individual's  base salary that the estimated value of the stock options and cash
performance awards would comprise. In the case of the Messrs. Cullman incentives
are to be  achieved through  potential payments of  incentive compensation.  Mr.
Cullman,  Jr. participates  in the annual  and long-term  performance plans. Mr.
Cullman, Sr.'s incentive compensation could be substantial, based upon  results,
through appropriate ad hoc recognition for significant accomplishment.

SALARY AND CASH BONUSES

    The  chief executive officer's salary has  not been increased since 1990 and
will not  be increased  in 1994.  The salaries  of the  four next  highest  paid
executive  officers have increased an  average of 8.2% per  annum since 1990 and
will not increase in 1994. Special cash bonuses were paid in 1993 (other than to
the chief executive officer)  to the four next  highest paid executive  officers
aggregating  $260,000,  all  in  connection  with  the  merger  of  one  of  the
Corporation's subsidiaries which  resulted in  a payment of  $89,000,000 to  the
Corporation.  The Committee does not  believe it need now  adopt any policy with
respect to the  recently enacted  $1,000,000 deduction cap  of Internal  Revenue
Code Section 162.

STOCK OPTION PLANS

    The Committee administers the Plans described under "Stock Option Plans". In
recent  years options have been granted  to approximately 15 employees including
the Corporation's  senior  management  (other  than  Messrs.  Cullman  who  have
declined  to  participate)  and  one  or two  senior  officers  at  each  of the
Corporation's operating companies. The Committee has determined that options  be
granted  to Messrs. Green and Wollen and operating company presidents at 100% of
their annual  salaries. Effective  in  1994, Mr.  Green's compensation  will  be
determined in accordance with his employment contract (See "Employment Agreement
of Jay M. Green" on page   ). He will no longer participate in the Corporation's
regular  Stock  Option  Plans.  Other  corporate  staff  and  operating  company
executive officers are awarded options at 60% and 40% of annual salary depending
upon relative seniority  and responsibilities.  No options  have been  exercised
since 1990 by any executive officer of the Corporation.

LONG TERM PERFORMANCE PLAN

    The Committee administers the Long Term Performance Plan which is based upon
financial  performance  of  the  operating companies  and  the  Corporation over
three-year cycles. The performance measurements which determined the payments to
subsidiary officers were based generally on cumulative net income and cumulative
cash flow  for each  subsidiary. Target  goals  in each  category were  set  and
incentive  compensation,  as a  percentage of  salary,  was paid  depending upon
percentage of goal achieved. The first  cycle (1989-91) resulted in payments  to
the  officers of only one operating company. The second cycle (1991-93) resulted
in no incentive compensation being paid.

ANNUAL INCENTIVE COMPENSATION PROGRAM

    The Committee established and administers the Annual Incentive  Compensation
Program which is designed to recognize and reward meritorious performance during
the  previous  fiscal  year.  Such  compensation  is  limited  to  predetermined
percentages of each recipient's annual  salary and depends upon the  achievement
of  specified  financial  and  subjective  goals.  Mr.  Cullman,  Sr.  does  not
participate

                                       13
<PAGE>
in this Program. A  total of $416,700  was paid in 1993  with respect to  fiscal
year  1992 to the  four next highest  paid executive officers.  No such payments
were made to any of the Corporation's executive officers with respect to  fiscal
year 1993.

INTERLOCKS AND INSIDER PARTICIPATION

    Mr.  Cullman, Chairman and chief executive  officer of the Corporation, is a
member of the Compensation Committee. Messrs.  Cullman are members of the  Board
of   Bloomingdale  Properties,  Inc.,  of  which  Mr.  Ernst,  Chairman  of  the
Corporation's Compensation Committee,  is Chairman and  President. Mr.  Cullman,
Sr. is Chairman of the Compensation Committee of Centaur Communications Limited,
of  which Mr. Sherren is chief executive officer. Mr. Sherren is a Member of the
Corporation's Board but does not serve on its Compensation Committee.

    Mr. Solomon is Chairman of Peter  J. Solomon Company Limited which  provides
the  Corporation strategic planning and  long-range financial advice pursuant to
an engagement  letter  effective  June  1, 1989.  Such  agreement  provides  for
payments  of  $18,750 per  quarter, plus  expenses,  and additional  amounts for
specified projects. In 1993  such firm was paid  $601,306 for services  rendered
relating  to  the  acquisition of  Certified  Grocers  of Florida,  Inc.  by the
Corporation's Eli Witt subsidiary. Mr. Vincent  is a senior advisor to Peter  J.
Solomon Company Limited.

    Real  estate  management and  advisory services  have  been provided  to the
Corporation by an affiliate of Bloomingdale Properties, Inc., with which members
of the Cullman and Ernst group  (see "Principal Holders") are associated. A  fee
of  approximately $193,321 was paid by the Corporation in 1993 for management of
the Corporation's New York  office building and for  other real estate  advisory
services. Mr. Ernst is Chairman and President of Bloomingdale Properties, Inc.

   COMPENSATION COMMITTEE

   John L. Ernst, Chairman
    Bruce A. Barnet
    Edgar M. Cullman
    Dan W. Lufkin
    Peter J. Solomon
    Francis T. Vincent, Jr.

    The  Board Compensation Committee Report on Executive Compensation shall not
be deemed incorporated by  reference by any  general statement incorporating  by
reference  this proxy statement into any filing under the Securities Act of 1933
or the  Securities  Exchange  Act  of  1934,  except  to  the  extent  that  the
Corporation  specifically incorporates this information  by reference, and shall
not otherwise be deemed filed under such Acts.

                                       14
<PAGE>
                            STOCK PERFORMANCE GRAPHS

    The following graph compares the yearly percentage changes in the cumulative
total shareholder return on Culbro Stock with the cumulative total return of the
Standard and Poor's 500 Composite Index and the Russell 2000 Index from December
1983 to November 1993. It is assumed  that the value of each investment is  $100
at December 1988.

                                       15
<PAGE>
                  PROPOSAL TO APPROVE THE EMPLOYMENT AGREEMENT
               BY AND BETWEEN CULBRO CORPORATION AND JAY M. GREEN

    On  February 10, 1994 the  Board of Director approved  for submission to the
Corporation's shareholders the Employment Agreement (the "Employment Agreement")
by and  between  the Corporation  and  Jay  M. Green,  the  Corporation's  chief
financial officer.

EMPLOYMENT AGREEMENT OF JAY M. GREEN

    The  Corporation has  approved the  Employment Agreement,  whereby Mr. Green
will be employed by the Corporation  as Executive Vice President -- Finance  and
Administration  and Treasurer  for a period  of five  years at a  base salary of
$340,000 (subject  to  increases  annually as  determined  by  the  Compensation
Committee)  and will be  eligible for a  bonus of up  to 50% of  his annual base
salary (to be determined at the sole discretion of the Compensation  Committee).
If  Mr. Green  should be  terminated by the  Corporation without  cause, he will
receive a cash severance payment of 150% of his annual salary.

    The Employment  Agreement  also provides  for  a  grant of  an  option  (the
"Option")  to purchase  125,000 shares  of the  Corporation's Common  Stock at a
fixed exercise price of $4 per  share. The Option vests and becomes  exercisable
with  respect to  25,000 shares of  common stock per  year, on each  of the five
anniversaries of the  date of the  grant. The  Option expires on  and after  the
tenth  anniversary date of  the Employment Agreement,  on or after  the date Mr.
Green ceases to be  an employee of the  Corporation or its subsidiaries,  within
one  year  following Mr.  Green's  death or  a  disability, within  three months
following a voluntary termination, immediately upon a termination for cause  and
within 30 days following a termination without cause. If Mr. Green is terminated
without cause during the first 30 months of the Employment Agreement, the Option
shall  immediately become  exercisable with respect  to 87,500  shares (less the
number of  shares which  had already  vested)  and if  Mr. Green  is  terminated
without  cause during the last 30 months of the Employment Agreement, the Option
shall immediately become exercisable with respect to all shares of stock covered
thereby. The shares purchased pursuant to the Option may be paid for in cash, or
at the discretion  of the Compensation  Committee of the  Board, by delivery  of
outstanding  shares of  the Corporation's  Common Stock  owned by  Mr. Green and
endorsed to the Corporation,  or by such other  arrangement as the  Compensation
Committee  deems  advisable. No  further options  will be  granted to  Mr. Green
during the period of  the Employment Agreement;  however any options  previously
granted will be retained by Mr. Green.

    The  Board of Directors urges approval by the shareholders of the Employment
Agreement with Jay M. Green. An affirmative vote of the holders of a majority of
the shares of  the Corporation's  Common Stock entitled  to vote  at the  Annual
Meeting  either in  person or  by proxy  is required  to approve  the Employment
Agreement. Proxies will be  voted in favor of  the Employment Agreement,  unless
otherwise instructed by the shareholder.

                      SELECTION OF INDEPENDENT ACCOUNTANTS

    The  Board  of  Directors  has  selected the  firm  of  Price  Waterhouse as
independent accountants to audit the financial statements of the Corporation for
the fiscal year ending November 26, 1994. This selection was recommended by  the
Audit  Committee  of  the Board  of  Directors.  Price Waterhouse  has  been the
independent accountants for  the Corporation  for many  years. Price  Waterhouse
fees  approximated $554,100  for all services  rendered to  the Corporation with
respect to its 1993 fiscal year.

                                       16
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE SELECTION OF PRICE
                                  WATERHOUSE.

    The submission of  this proposal to  a vote of  shareholders is not  legally
required.  If this selection of  Price Waterhouse is not  approved, the Board of
Directors will reconsider its selection. A vote of the majority of the shares of
Common Stock of the Corporation represented  (in person or by proxy) and  voting
at  the meeting, provided that at least  a majority of such stock is represented
at the meeting, is required to adopt this proposal.

    A representative of Price Waterhouse is expected to be present at the Annual
Meeting and will be given an opportunity  to make a statement if so desired  and
to respond to appropriate questions.

                             SHAREHOLDERS' PROPOSAL

    John J. Gilbert, 1165 Park Avenue, New York, N.Y., who owns or represents in
the  aggregate 400  shares of the  Corporation's Common Stock,  has notified the
Corporation that  he intends  to present  at the  Annual Meeting  the  following
resolution:

    "RESOLVED.  That the stockholders of Culbro Corporation, assembled in annual
meeting in person and by  proxy, hereby request the  Board of Directors to  take
the  steps  necessary  to  provide  for cumulative  voting  in  the  election of
directors, which means each  stockholder shall be entitled  to as many votes  as
shall  equal the  number of shares  he or she  owns multiplied by  the number of
directors to be elected, and he or she  may cast all of such votes for a  single
candidate, or any two or more of them as he or she may see fit."

REASONS

    Continued  very strong support along the lines  we suggest were shown at the
last annual meeting when 21%, 127 owners  of 768,658 shares, were cast in  favor
of this proposal.

    Many  successful corporations have cumulative  voting. For example, Pennzoil
having cumulative voting defeated Texaco  in that famous case. Another  example,
in  spite of still having a stagger system, Ingersoll-Rand, which has cumulative
voting, won two awards. In FORTUNE  magazine it was ranked second as  "America's
Most  Admired  Corporations" and  WALL STREET  TRANSCRIPT  noted "on  almost any
criteria used to evaluate management, Ingersoll-Rand excels." We believe  Culbro
should follow their example.

    In  urging  cumulative  voting from  the  floor  of the  Campbell  Soup 1984
meeting, Sr. Margaret Dewey, representing  the Adrian Dominican Sisters and  the
Conference of Corporate Responsibility of Indiana, Michigan observed:

    "I  think it is important for shareholders  to use their voting power in the
most effective way."

    If you agree, please  mark your proxy for  this resolution; otherwise it  is
automatically cast against it, unless you have marked to abstain.

    THE  BOARD OF DIRECTORS RECOMMENDS A  VOTE AGAINST ADOPTION OF THIS PROPOSAL
FOR THE FOLLOWING REASONS:

    In the  opinion of  the Board  of Directors  and its  Nominating  Committee,
cumulative  voting may  well benefit a  particular special  interest by electing
directors with  a specific  bias,  allegiance or  loyalty. Directors  should  be
chosen  based upon their capacity and commitment to represent the best interests
of the Corporation and of its shareholders  as a whole. Contrary to the  opinion
of  the proponents of this proposal, cumulative voting does not protect everyone
but favors the minority over the majority.

                                       17
<PAGE>
    In recognition of this proposal's adverse potential to their interests,  the
shareholders  of the  Corporation have continued  to reject  this proposal every
time it has been proposed.

    A vote of the  holders of a majority  of the shares of  Common Stock of  the
Corporation  represented  (in person  or by  proxy) and  voting at  the meeting,
provided that at least a majority of  such stock is represented at the  meeting,
is  required to adopt the  proposed resolution. Your proxy  in the enclosed form
will be voted as  you specify or,  if you do  not specify a  choice, it will  be
voted AGAINST the proposal.
                            ------------------------

    A  copy of the Corporation's Annual Report on Form 10-K is available without
charge to the Corporation's shareholders. A written request should be sent to:

                               Culbro Corporation
                               387 Park Avenue South
                               New York, New York 10016-8899
                               Attention: Corporate Secretary

Dated: March   , 1994

                                       18
<PAGE>

                         Culbro Corporation
CULBRO CORPORATION       NOTICE OF
                         ANNUAL MEETING
                         OF SHAREHOLDERS,
                         THURSDAY,
                         APRIL 7, 1994
387 Park Avenue South    AND PROXY STATEMENT
New York, N.Y. 10016-8899


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