LOEWS CORP, DEF 14A, 2000-03-29

LOEWS CORP
DEF 14A, 2000-03-29
FIRE, MARINE & CASUALTY INSURANCE

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Reg. S/S240.14a-101
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
------------------

Loews Corporation
- ------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

N/A
- ------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):
|x| No fee required.
| | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: N/A
- ------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies: N/A
- ------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): N/A
- ------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction: N/A
- ------------------------------------------------------------------------------
(5) Total fee paid: N/A
- ------------------------------------------------------------------------------
| | Fee paid previously with preliminary materials.
| | Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount previously paid: N/A
- ------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.: N/A
- ------------------------------------------------------------------------------
(3) Filing party: N/A
- ------------------------------------------------------------------------------
(4) Date filed: N/A
- ------------------------------------------------------------------------------

[LOGO]

LOEWS
CORPORATION

667 Madison Avenue
New York, New York 10021-8087

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 9, 2000

To the Shareholders:

The Annual Meeting of Shareholders of Loews Corporation (the "Company") will
be held at The Regency Hotel, 540 Park Avenue, New York, New York, on Tuesday,
May 9, 2000, at 11:00 A.M. New York City Time, for the following purposes:

. To elect thirteen directors;

. To consider and act upon a proposal to ratify the appointment by the
Board of Directors of Deloitte & Touche LLP as independent certified
public accountants for the Company;

. To consider and act upon a proposal to approve the Loews Corporation 2000
Stock Option Plan;

. To consider and act upon three shareholder proposals; and

. To transact such other business as may properly come before the meeting
or any adjournment thereof.

Shareholders of record at the close of business on March 13, 2000 are
entitled to notice of and to vote at the meeting and any adjournment thereof.

By order of the Board of Directors,

BARRY HIRSCH
Secretary

Dated: March 28, 2000

SHAREHOLDERS ARE URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL
IT PROMPTLY IN THE ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES.

LOEWS
CORPORATION

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

PROXY STATEMENT

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

This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Loews Corporation (the "Company") of proxies to be voted
at the Annual Meeting of Shareholders of the Company to be held May 9, 2000.
All properly executed proxies in the accompanying form received by the Company
prior to the meeting will be voted at the meeting. Any proxy may be revoked at
any time before it is exercised by giving notice in writing to the Secretary
of the Company, by granting a proxy bearing a later date or by voting in
person. The Company expects to mail proxy materials to the shareholders on or
about March 28, 2000.

The mailing address of the Company is 667 Madison Avenue, New York, N.Y.
10021-8087.

As of March 13, 2000, the record date for determination of shareholders
entitled to notice of and to vote at the meeting, there were 99,598,400 shares
of Common Stock of the Company (the "Common Stock") outstanding. Each
outstanding share is entitled to one vote on all matters which may come before
the meeting. In accordance with the Company's by-laws and applicable law, the
election of directors will be determined by a plurality of the votes cast by
the holders of shares present in person or by proxy and entitled to vote.
Consequently, the thirteen nominees who receive the greatest number of votes
cast for election as directors will be elected as directors of the Company.
Shares present which are properly withheld as to voting with respect to any
one or more nominees, and shares present with respect to which a broker
indicates that it does not have authority to vote ("broker non-votes") will
not be counted. The affirmative vote of shares representing a majority of the
votes cast by the holders of shares present and entitled to vote is required
to approve each of the other proposals to be voted on at the Annual Meeting.
Shares which are voted to abstain on these matters will be considered present
at the meeting, but since

they are not affirmative votes for a proposal they will have the same effect
as votes against the proposal. Broker non-votes are not counted as present.

The Board of Directors of the Company has adopted a policy of
confidentiality regarding the voting of shares. Under this policy, all
proxies, ballots and voting tabulations in relation to shareholder meetings
that identify how an individual shareholder has voted will be kept
confidential from the Company and its employees, except where disclosure is
required by applicable law, a shareholder expressly requests disclosure, or in
the case of a contested proxy solicitation. Proxy tabulators and inspectors of
election will be employees of the Company's transfer agent or another third
party, and not employees of the Company.

Principal Shareholders

The following table contains certain information as to all persons who, to
the knowledge of the Company, were the beneficial owners of 5% or more of the
outstanding shares of Common Stock. Except as otherwise noted, this
information is as of February 29, 2000, and each person has sole voting and
investment power with respect to the shares set forth, except as may be noted
below.
<TABLE>
<CAPTION>
Amount Percent
Name and Address Beneficially Owned Of Class
---------------- ------------------ --------

<S> <C> <C>
Laurence A. Tisch ........... 13,308,998 13.3%
667 Madison Avenue
New York, N.Y. 10021-8087

Preston R. Tisch ........... 17,308,998 17.2%
667 Madison Avenue
New York, N.Y. 10021-8087
</TABLE>

Laurence A. Tisch and Preston R. Tisch are each Co-Chairman of the Board of
the Company, and are brothers. James S. Tisch, President and Chief Executive
Officer and a director of the Company, and Andrew H. Tisch, Chairman of the
Executive Committee and a director of the Company, are sons of Mr. L.A. Tisch.
Jonathan M. Tisch, President and Chief Executive Officer of Loews Hotels and a
director of the Company, is the son of Mr. P.R. Tisch. Each of Messrs. J.S.
Tisch, A.H. Tisch and J.M. Tisch are members of the Company's Office of the
President.

Shares of Common Stock beneficially owned include 3,000,000 shares held by
each of Messrs. L.A. Tisch and P.R. Tisch as trustees of trusts for the
benefit of their respective wives. Shares of Common Stock beneficially owned
by Mr. L.A. Tisch include 2,000,000 shares of Common Stock held of record by
his wife.

Director and Officer Holdings

The following table sets forth certain information as to the shares of
Common Stock beneficially owned by each director and nominee, each executive
officer named in the Summary Compensation Table, below, and by all executive
officers and directors of the Company as a group, at February 29, 2000, based
on data furnished by them.

<TABLE>
<CAPTION>
Amount Percent
Name Beneficially Owned (1) of Class
---- ---------------------- --------

<S> <C> <C>
Charles B. Benenson 155,550(2) *
John Brademas 1,110(3) *
Dennis H. Chookaszian 4,000(4) *
Paul J. Fribourg 6,000(5) *
Bernard Myerson 31,500(6) *
Edward J. Noha 1,500(7) *
Arthur L. Rebell 500(8) *
Gloria R. Scott 0 *
Andrew H. Tisch 1,002,000(9) 1.0%
James S. Tisch 1,080,000(10) 1.1%
Jonathan M. Tisch 155,020(11) *
Laurence A. Tisch 13,308,998(12)(13) 13.3%
Preston R. Tisch 17,308,998(12) 17.2%
Fred Wilpon 0 *
All executive officers and directors as a
group 33,055,776 32.9%
(23 persons including those listed above)

* Represents less than 1% of the outstanding shares of Common Stock.
</TABLE>

(1) Except as otherwise indicated the persons listed as beneficial owners of
the shares have sole voting and investment power with respect to those shares.
(2) These shares are owned by a partnership in which a revocable trust
created by Mr. Benenson has a 75% interest and of which Mr. Benenson is
general manager. In addition, Mr. Benenson owns 5,000 shares of common stock
of Diamond Offshore Drilling, Inc., a 52% owned subsidiary of the Company
("Diamond Offshore"). 70,200 shares of Common Stock and 30,000 shares of
common stock of CNA Financial Corporation ("CNA"), an 86% owned subsidiary of
the Company, are held by a charitable foundation. Mr. Benenson has shared
voting and investment power with respect to the Common Stock and CNA common
stock owned by the partnership and the foundation. He disclaims beneficial
interest in the shares held by the foundation.
(3) In addition, Mr. Brademas owns 234 shares of CNA common stock.
(4) In addition, Mr. Chookaszian owns 404,031 shares of CNA common stock.
(5) These shares are owned by an affiliate of ContiGroup Companies, Inc.
("ContiGroup"). Mr. Fribourg is an executive officer of ContiGroup. Mr.
Fribourg disclaims beneficial interest in these shares.
(6) In addition, Mr. Myerson's wife owns 2,500 shares of Common Stock as to
which he disclaims any beneficial interest.
(7) In addition, Mr. Noha owns beneficially 1,350 shares of CNA common
stock.
(8) In addition, Mr. Rebell owns beneficially 6,000 shares of CNA common
stock, including 2,300 shares with respect to which he has shared voting and
investment power.

(9) Includes 1,000,000 shares of Common Stock held by a trust of which Mr.
A.H. Tisch is the managing trustee and beneficiary. In addition, 20,000 shares
of Common Stock are held by a charitable foundation as to which Mr. A.H. Tisch
has shared voting and investment power.
(10) Includes 1,000,000 shares of Common Stock held by a trust of which Mr.
J.S. Tisch is the managing trustee and beneficiary. In addition, 58,000 shares
of Common Stock are held by a charitable foundation as to which Mr. J.S. Tisch
has shared voting and investment power.
(11) In addition, 32,000 shares of Common Stock are held by a charitable
foundation as to which Mr. J.M. Tisch has shared voting and investment power.
(12) Includes 3,000,000 shares of Common Stock held by each of Messrs. L.A.
Tisch and P.R. Tisch as trustees of trusts, as to which they each have sole
voting and investment power, for the benefit of their respective wives.
(13) Includes 2,000,000 shares of Common Stock held of record by the wife of
Mr. L.A. Tisch.

ELECTION OF DIRECTORS
(Proposal No. 1)

Pursuant to the by-laws of the Company, the number of directors constituting
the full Board of Directors has been fixed by the Board at thirteen.
Accordingly, action will be taken at the meeting to elect a Board of thirteen
directors to serve until the next Annual Meeting of Shareholders and until
their respective successors are duly elected and qualified. It is the
intention of the persons named in the accompanying form of proxy, unless
shareholders otherwise specify by their proxies, to vote for the election of
the nominees named below, each of whom is now a director. The Board of
Directors has no reason to believe that any of the persons named will be
unable or unwilling to serve as a director. Should any of the nominees be
unable or unwilling to serve, it is intended that proxies will be voted for
the election of a substitute nominee or nominees selected by the Board of
Directors. Set forth below is the name, age, principal occupation during the
past five years and other information concerning each nominee.

Charles B. Benenson, 87 - Officer and Director, Benenson Realty Company
(real estate investments). Mr. Benenson has been a director of the Company
since 1960 and is a member of the Audit Review Committee and the Incentive
Compensation Committee.

John Brademas, 73 - President Emeritus since 1992 and, prior thereto,
President of New York University. Mr. Brademas is also a director of Kos
Pharmaceuticals, Inc. Mr. Brademas has been a director of the Company since
1982 and is a member of the Incentive Compensation Committee.

Dennis H. Chookaszian, 56 - Chairman of the Board and Chief Executive
Officer of mPower since November 1999. He has also been Chairman of the
Executive Committee of CNA since February 1999. Prior thereto, he had been
Chairman of the Board and Chief Executive Officer of CNA Insurance Companies.
Mr. Chookaszian is a director of CNA. He has been a director of the Company
since 1995.

Paul J. Fribourg, 46 - Chairman of the Board and Chief Executive Officer of
ContiGroup since 1997. Prior thereto he had been President and Chief Operating
Officer of Continental Grain Company. Mr. Fribourg is also a director of
ContiFinancial Corporation and Wyndham International, Inc. He has been a
director of the Company since 1997 and is a member of the Audit Review
Committee.

Bernard Myerson, 82 - Retired, formerly Chairman Emeritus of Sony Theatre
Management

Corporation. Mr. Myerson has been a director of the Company since 1963 and is
a member of the Executive Committee.

Edward J. Noha, 72 - Chairman of the Board of CNA since 1992. Prior thereto,
Mr. Noha had been Chairman and Chief Executive Officer of the CNA Insurance
Companies. Mr. Noha has been a director of the Company since 1975.

Gloria R. Scott, 61 - President, Bennett College, Greensboro, North
Carolina. Dr. Scott has been a director of the Company since 1990 and is a
member of the Audit Review Committee.

Andrew H. Tisch, 50 - Chairman of the Executive Committee and member of the
Office of the President of the Company since January 1999. Prior thereto he
had been Chairman of the Management Committee of the Company. Mr. Tisch served
as Chairman of the Board and Chief Executive Officer of Lorillard, Inc., a
wholly owned subsidiary of the Company, from September 1989 to May 1995. Mr.
Tisch is Chairman of the Board of Bulova Corporation ("Bulova"), a 97% owned
subsidiary of the Company, and a director of Zale Corporation, Canary Wharf
PLC and Integrated Graphics, Inc. Mr. Tisch has been a director of the Company
since 1985.

James S. Tisch, 47 - President and Chief Executive Officer and a member of
the Office of the President of the Company since January 1999. Prior thereto
he had been President and Chief Operating Officer of the Company since 1994.
He is also a director of CNA and Vail Resorts, Inc and Chairman of the Board
and Chief Executive Officer of Diamond Offshore. Mr. Tisch has been a director
of the Company since 1986 and is a member of the Finance Committee.

Jonathan M. Tisch, 46 - President and Chief Executive Officer of Loews
Hotels and, since January 1999, a member of the Office of the President of the
Company. Mr. Tisch has been a director of the Company since 1986 and is a
member of the Executive Committee.

Laurence A. Tisch, 77 - Co-Chairman of the Board of the Company. Prior to
January 1999 Mr. Tisch had also been Co-Chief Executive Officer of the
Company. Mr. Tisch is Chief Executive Officer of CNA and a director of CNA and
Bulova. In addition, he served as Chairman, President and Chief Executive
Officer and a director of CBS Inc. ("CBS") until November 24, 1995. Mr. Tisch
also serves as a director of Automatic Data Processing, Inc. He has been a
director of the Company since 1959 and is a member of the Finance Committee.

Preston R. Tisch, 73 - Co-Chairman of the Board of the Company. Prior to
January 1999, Mr. Tisch had also been Co-Chief Executive Officer of the
Company. Mr. Tisch had been a director of the Company from 1960 to 1986, when
he resigned to serve as Postmaster General of the United States. He was
re-elected a director of the Company in March 1988. He is a director of
Bulova, CNA, Hasbro, Inc. and Rite Aid Corporation.

Fred Wilpon, 63 - Chairman of the Board of Sterling Equities, Inc. (real
estate investments) and President, Chief Executive Officer and co-owner of
Sterling Doubleday Enterprises, L.P. (New York Mets baseball team). Mr. Wilpon
is also a director of Pathogenesis Corporation and Bear Stearns Companies,
Inc. He has been a director of the Company since February 2000.

Committees

The Company has an Audit Review Committee, a Finance Committee, an Incentive
Compensation Committee and an Executive Committee. The Company has no
nominating committee or compensation committee.

The functions of the Audit Review Committee include recommendation to the
Board of Directors with respect to the engagement of the Company's independent
certified public accountants, review of the scope and effectuation of the
audit engagement and of the Company's internal audit procedures, approval of
each service performed by the independent accountants, and review of the
Company's internal accounting controls.

Attendance at Meetings

During 1999 there were six meetings of the Board of Directors, three
meetings of the Audit Review Committee and one meeting of the Incentive
Compensation Committee. Each director of the Company attended not less than
75% of the total number of meetings of the Board of Directors and committees
of the Board on which that director serves, with the exception of John
Brademas who attended approximately 71% of those meetings.

Director Compensation

Each director who is not an employee of the Company is paid an annual
retainer of $25,000 for serving as a director. In addition, members of the
Audit Review Committee and of the Incentive Compensation Committee are paid
$1,000 for each meeting attended.

EXECUTIVE COMPENSATION

The following table sets forth information for the years indicated regarding
the compensation of the Chief Executive Officer and each of the other five
most highly compensated executive officers of the Company as of December 31,
1999 (the "Named Executive Officers"), for services in all capacities to the
Company and its subsidiaries.

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
---------------------------------
Long-Term
Name and Other Annual Compensation All Other
Principal Position Year Salary (1) Bonus Compensation Payouts(2) Compensation
------------------ ---- ---------- ----- ------------ ------------ ------------

<S> <C> <C> <C> <C> <C> <C>
J.S. Tisch 1999 $1,323,146(3) $325,000(4)(5) $53,812(6)
Chief 1998 1,200,462(3) 180,000(7) 38,258(6)
Executive 1997 873,046 32,275(6)
Officer, Office
of the President

L.A. Tisch 1999 1,051,946 75,520(8)
Co-Chairman 1998 1,003,204 $1,125,000 69,743(8)
of the Board 1997 990,046 1,125,000 60,210(8)

P.R. Tisch 1999 1,051,946 $712,393(9) 75,520(8)
Co-Chairman 1998 1,003,204 469,682(9) 1,125,000 69,743(8)
of the Board 1997 990,046 447,369(9) 1,125,000 60,210(8)

A.H. Tisch 1999 1,021,146 325,000(4) 14,940(10)
Chairman of 1998 983,654 13,932(10)
the Executive 1997 940,142 7,905(10)
Committee,
Office of the
President

J.M. Tisch 1999 1,021,146 325,000(4) 13,016(10)
President and 1998 983,654 12,203(10)
Chief 1997 940,142 6,272(10)
Executive
Officer of
Loews Hotels,
Office of
the President

A.L. Rebell 1999 999,242 477,000(11) 6,400(10)
Senior Vice 1998 402,978 250,000(11) 22,875(12)
President, 1997
Chief
Investment
Officer
</TABLE>

(1) Salary includes payments to the named individual based on benefit
choices under the Company's flexible benefits plan.
(2) Represents payout under the Company's Incentive Compensation Plan for
Executive Officers (the "Incentive Compensation Plan") based upon awards
granted in 1996.
(3) Includes $300,000 and $214,808 paid by Diamond Offshore to Mr. Tisch as
compensation for his services as its Chief Executive Officer in 1999 and 1998,
respectively.
(4) Represents payout under the Incentive Compensation Plan based upon
awards granted in 1999.
(5) Does not include a bonus which may be granted by Diamond Offshore
pursuant to its Management Bonus Program based on service during 1999, the
amount of which is not currently calculable.
(6) Includes the annual contribution under the Company's Employees Savings
Plan and related allocation under the Benefit Equalization Plan aggregating
$13,019, $12,258 and $6,275 for 1999, 1998 and 1997, respectively. Also
includes director's fees paid by CNA amounting to $33,000 for 1999 and $26,000
for each of 1998 and 1997, and $7,793 representing insurance premiums and
retirement plan contributions paid by Diamond Offshore in 1999.
(7) Represents a bonus granted by Diamond Offshore, pursuant to its
Management Bonus Program, based on service during 1998.
(8) Includes the annual contribution under the Company's Employees Savings
Plan and related allocation under the Benefit Equalization Plan aggregating
$42,520, $43,743 and $34,210 for 1999, 1998 and 1997, respectively. Also
includes director's fees paid by CNA amounting to $33,000 for 1999 and $26,000
for each of 1998 and 1997.

(9) Represents the incremental cost of personal benefits provided by the
Company, including $665,000, $437,153 and $400,000 respectively, for 1999,
1998 and 1997 for the use by Mr. P.R. Tisch of an apartment at a Company
operated hotel in New York City for the convenience of the Company and its
Hotel Division.
(10) Represents the annual contribution under the Company's Employees Savings
Plan and related allocation under the Benefit Equalization Plan.
(11) Represents the present value of deferred bonus compensation in the
amounts of $250,000 for 1998 and $477,000 for 1999.
(12) Represents director's fees paid by Diamond Offshore in 1998.

Employment Agreements

The employment agreements the Company maintains with each of Messrs. A.H.
Tisch, J.S. Tisch and J.M. Tisch expire on December 31, 2001. Each agreement
provides for a basic salary of $975,000 per annum, subject to such increases
as the Board of Directors may from time to time determine in its sole
discretion. These agreements also provide the right to participate in the
Incentive Compensation Plan.

The employment agreements the Company maintains with each of Messrs. L.A.
Tisch and P.R. Tisch expire on December 31, 2000. Each agreement provides for
a basic salary of $975,000 per annum, subject to such increases as the Board
of Directors may from time to time determine in its sole discretion. These
agreements also provide the right to participate in the Incentive Compensation
Plan.

The Company's employment agreements with Messrs. L.A. Tisch and P.R. Tisch
also provide for the payment of supplemental retirement benefits in an amount
equal to the excess, if any, of (i) the retirement benefits payable under the
Company's Retirement Plan without giving effect to benefit limitations imposed
by the Retirement Plan and the Internal Revenue Code, over (ii) retirement
benefits actually paid under the Retirement Plan as limited by those
provisions. These supplemental benefits are equivalent to the benefits
provided under the Benefit Equalization Plan (see "Pension Plan," below).
Incentive compensation awarded the Messrs. Tisch under the Incentive
Compensation Plan are included in the computation of their respective
pensionable earnings in determining supplemental benefits under their
employment agreements, but in no event will those supplemental benefits
duplicate benefits under the Benefit Equalization Plan. The Company's
Retirement Plan requires that pension payments for certain participants,
including Messrs. L.A. Tisch and P.R. Tisch, commence in the year following
the year in which each such participant attains age 70 1/2. Messrs. L.A. Tisch
and P.R. Tisch are currently receiving pension payments under the Retirement
Plan and supplemental retirement benefits under their employment agreements.
Retirement benefits payable to Mr. L.A. Tisch have been reduced in relation to
retirement benefits paid to him under the retirement plan of CBS, of which he
served as president and chief executive officer from January 1987 to November
1995, and retirement benefits payable to Mr. P.R. Tisch have been adjusted to
account for retirement benefits paid to him when he retired from the Company
to serve as Postmaster General of the United States from August 1986 to
February 1988.

The Company has entered into an agreement with Mr. Arthur Rebell
supplementing the retirement benefits to which he is entitled under the
Company's Retirement Plan, pursuant to which Mr. Rebell became vested in an
account credited by the Company with $727,000, representing deferred bonus
compensation of $250,000 for 1998 and $477,000 for 1999. This account will be
credited on the last day of each calendar year with the pay-based and interest
credits which would have otherwise been credited to Mr. Rebell under the
Retirement Plan. Mr. Rebell will receive, upon his retirement, the value

of the account in the form of an annuity or, if he so requests and the
Company's Chief Executive Officer approves, in a single lump sum payment.

Pension Plan

The Company provides a funded, tax qualified, non-contributory retirement
plan for salaried employees, including executive officers (the "Retirement
Plan") and an unfunded, non-qualified, non-contributory Benefit Equalization
Plan (the "Benefit Equalization Plan") which provides for the accrual and
payment of benefits which are not available under tax qualified plans such as
the Retirement Plan. The following description of the Retirement Plan gives
effect to benefits provided under the Benefit Equalization Plan.

Effective January 1, 1998, the Retirement Plan was converted to a cash
balance plan. A cash balance plan is a form of non-contributory, defined
benefit pension plan in which the value of each participant's benefit is
expressed as a nominal cash balance account established in the name of the
participant. Under the cash balance plan each participant's account is
increased annually based on a specified percentage of annual earnings (based
on the participant's age) and a specified interest rate (which is established
annually for all participants). At retirement or termination of employment, a
vested participant is entitled to receive the cash balance account in a lump
sum or to convert the account into a monthly annuity. Compensation covered
under the Retirement Plan consists of salary paid by the Company and its
subsidiaries included under the heading "Salary" in the Summary Compensation
Table above. In addition, awards under the Incentive Compensation Plan are
deemed compensation for purposes of the Benefit Equalization Plan. Pension
benefits are not subject to reduction for Social Security benefits or other
amounts.

Participants with at least five years of service whose combined age and
years of service equaled at least 60, or at least 18 years of service whose
combined age and service equaled at least 58 at January 1, 1998, are entitled
to a minimum retirement benefit ("Minimum Benefit") equal to the benefit they
would have earned under the Retirement Plan before its conversion to a cash
balance plan. This Minimum Benefit is based upon the average final
compensation (i.e., the highest average annual salary during any period of
five consecutive years of the ten years immediately preceding retirement) and
years of credited service with the Company. The following table shows
estimated annual benefits upon retirement under the Retirement Plan, based on
the Minimum Benefit, for various average compensation and credited service
based upon normal retirement at January 1, 2000 and a straight life annuity
form of pension. Each of the Named Executive Officers qualifies for the
Minimum Benefit except for Mr. A.L. Rebell. It is currently estimated that the
cash balance of the account maintained under the Retirement Plan for Mr.
Rebell will be approximately $859,340 when Mr. Rebell reaches the normal
retirement age of 65, assuming annual interest credits of 6% and no increases
in the amount of Mr. Rebell's base salary.

PENSION PLAN TABLE

Average Final Estimated Annual Pension for
Compensation Representative Years of Credited Service
- ------------- ----------------------------------------

<S> <C> <C> <C> <C> <C> <C>
15 20 25 30 35 40
-- -- -- -- -- --

The years of credited service of Messrs. A.H. Tisch, J.M. Tisch, J.S. Tisch,
L.A. Tisch and P.R. Tisch are twenty-six, twenty, twenty-two, thirty-nine and
thirty-seven, respectively.

Amounts paid to Mr. J.S. Tisch by Diamond Offshore listed on the Summary
Compensation Table above are not covered by the Retirement Plan. Diamond
Offshore maintains a tax qualified defined contribution retirement plan which
provides that Diamond Offshore contribute 3.75% of each participant's defined
compensation and match 25% of the first 6% of compensation voluntarily
contributed by each participant. Participants are fully vested immediately
upon enrollment in the plan. Diamond Offshore's 3.75% contribution on behalf
of Mr. J.S. Tisch amounted to $6,000 in 1999.

BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION

General

The Company's policy regarding executive compensation has been adopted by
the Board of Directors. The Board of Directors has no compensation committee.
The Incentive Compensation Committee of the Board of Directors has been
designated by the Board of Directors to administer and award grants under the
Company's Incentive Compensation Plan and the newly adopted Stock Option Plan.
(See Proposal No. 3 for a discussion of the terms and administration of the
Stock Option Plan.)

The overall objective of the Company's executive compensation policy is to
attract and motivate a high level of performance by the Company's executive
officers. To further this objective and provide incentives to motivate
executive officers to achieve long term Company goals, as well as to provide
incentive compensation opportunities to executive officers that are
competitive with those of other companies, on January 18, 2000 the Board of
Directors adopted, subject to shareholder approval, the Stock Option Plan.

The primary component of executive compensation of the Company's executive
officers is cash

salary. Salary levels are based upon an evaluation of the individual's
performance and cash salaries paid to executives in similar positions by
companies with comparable revenues. In determining comparable salaries the
Company participates in and analyzes two management compensation surveys.
These surveys have been selected primarily because of the broad range of
companies of various sizes included in them, the manner in which the
information is presented and, with respect to one survey, the consistency of
the data presented. One survey includes two of the eight companies included in
the Standard & Poor's Financial Diversified Index and the other survey
includes one of the companies included in that index (see "Stock Price
Performance Graph," below). In most cases, the Company seeks to maintain
compensation levels for executive officers (as well as salaried employees
generally) between the 50th and 75th percentiles of cash compensation paid by
companies with comparable revenues. However, as a result of evaluation of job
performance as well as length of service, the compensation levels of a
majority of the Company's executive officers fall above these parameters.

Chief Executive Officer

The compensation of the Company's Chief Executive Officer for 1999 was
established pursuant to the employment agreement negotiated between the
Company and the Chief Executive Officer in 1998. This employment agreement
provides for increases in remuneration as the Board of Directors may from time
to time determine in its sole discretion. Consistent with the compensation
policy with respect to executive officers generally, compensation to the
Company's Chief Executive Officer includes, in addition to the salary provided
in his employment agreement with the Company, awards under the Company's
Incentive Compensation Plan, and subject to shareholder approval, grants of
stock options under the Company's Stock Option Plan.

Internal Revenue Code

Under the Internal Revenue Code, the amount of compensation paid to or
accrued for the Chief Executive Officer and the four other most highly
compensated executive officers which may be deductible by the Company for
federal income tax purposes is limited to $1 million per person per year,
except that compensation which is considered to be "performance-based" under
the Internal Revenue Code and the applicable regulations is excluded for
purposes of calculating the amount of compensation.

To the extent the Company's compensation policy can be implemented in a
manner which maximizes the deductibility of compensation paid by the Company,
the Board of Directors seeks to do so. Accordingly, the Company has adopted
the Incentive Compensation Plan for the purpose of causing the compensation
expense associated with that plan to qualify as performance-based
compensation. Under the Incentive Compensation Plan, the Incentive
Compensation Committee may grant awards to executive officers based on the
attainment of specified performance goals in relation to the after tax net
income of the Company. In addition, compensation resulting from grants of
options under the Company's proposed Stock Option Plan will be considered to
be "performance based" under the applicable provisions of the Internal Revenue
Code.

By the Board of
Directors: Charles B. Benenson Bernard Myerson James S. Tisch
John Brademas Edward J. Noha Jonathan M. Tisch
Dennis H. Chookaszian Gloria R. Scott Laurence A. Tisch
Paul J. Fribourg Andrew H. Tisch Preston R. Tisch

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. A.H. Tisch, J.M. Tisch, J.S. Tisch, L.A. Tisch and P.R. Tisch, each
of whom are directors of the Company, also serve as officers of the Company or
its subsidiaries. In addition, Messrs. D.H. Chookaszian, B. Myerson and E.J.
Noha, each of whom are directors, have formerly served as officers of the
Company or its subsidiaries.

CERTAIN TRANSACTIONS

Messrs. L.A. Tisch and P.R. Tisch and their affiliates reimbursed to the
Company approximately $4,130,059 in the aggregate for the utilization by them
of the services of certain employees and facilities of the Company during
1999.

ContiGoup, of which Paul J. Fribourg, a director of the Company, is a
shareholder, director and executive officer, from time to time purchases
marine cargo and other insurance from insurance subsidiaries of CNA, in the
ordinary course of business. Annual premiums for this insurance aggregated
approximately $1.13 million in 1999.

Pursuant to the terms of its Stock Ownership Plan, in October 1998 CNA
provided a loan to Dennis H. Chookaszian to assist him with the purchase of
common stock of CNA. Interest on this loan is 5.39% compounded semi-annually,
and will be added to the principal balance until the loan is settled. The term
of the loan is 10 years. It is unconditional with full recourse against the
maker. As of March 15, 2000, the outstanding amount of this loan was
$15,112,660.

See "Compensation Committees Interlocks and Insider Participation" above,
for information with respect to relationships between certain members of the
Board of Directors and the Company.

STOCK PRICE PERFORMANCE GRAPH

The following graph compares the total annual return of the Company's Common
Stock, the Standard & Poor's 500 Composite Stock Index ("S&P 500 Index") and
the Standard & Poor's Financial Diversified Stock Index ("S&P Financial
Diversified") for the five years ended December 31, 1999. The graph assumes
that the value of the investment in the Company's Common Stock and each Index
was $100 on December 31, 1994 and that all dividends were reinvested.

[GRAPH]

<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
- ------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C>
Loews Corporation 100 182.24 221.85 252.24 236.04 147.78
S&P 500 Index 100 137.58 169.17 225.60 290.08 351.12
S&P Financial Diversified 100 160.61 206.87 326.13 426.86 565.00
</TABLE>

RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
(Proposal No. 2)

The Board of Directors of the Company has selected the firm of Deloitte &
Touche LLP, independent certified public accountants, as the principal
independent auditors of the Company for the year ending December 31, 2000,
subject to ratification by the shareholders. Deloitte & Touche LLP served as
the Company's independent auditors during 1999. If the appointment of the firm
of Deloitte & Touche LLP is not approved or if that firm declines to act or
their employment is otherwise discontinued, the Board of Directors will
appoint other independent auditors. Representatives of Deloitte & Touche LLP
are expected to be present at the Annual Meeting, at which time they will be
available to respond to appropriate questions from shareholders and be given
an opportunity to make a statement if they desire to do so.

The Board of Directors recommends a vote FOR Proposal No. 2.

APPROVAL OF THE LOEWS CORPORATION
2000 STOCK OPTION PLAN
(Proposal No. 3)

On January 18, 2000, the Board of Directors approved the Company's 2000
Stock Option Plan (the "Stock Option Plan"). The purposes of the Stock Option
Plan are to allow the Company and its

subsidiaries to attract and retain qualified employees and consultants and to
allow the Company to attract and retain non-employee directors, to motivate
these individuals to achieve the Company's long term goals and to reward them
upon achievement of those goals.

Under the Internal Revenue Code the amount of compensation paid to each of
the Chief Executive Officer and the four other most highly compensated
executive officers which may be deductible by the Company for federal income
tax purposes is limited to $1 million per person per year, except that
compensation which is considered to be "performance-based" is not subject to
this limitation. Awards under the Stock Option Plan will be considered
performance-based under the Internal Revenue Code if the Stock Option Plan is
approved by the Company's shareholders. As stated above, the Board of
Directors believes that where the Company's compensation policy can be
implemented in a manner which maximizes the deductibility for federal income
tax purposes of compensation paid by the Company, the Company should seek to
do so. Accordingly, the Board of Directors has directed that the Stock Option
Plan be submitted to the Company's shareholders for approval at the Annual
Meeting. If the Company's shareholders fail to approve the Stock Option Plan,
options previously granted under the Stock Option Plan will never become
exercisable and no further options will be granted thereunder.

The following is a summary of certain terms of the Stock Option Plan. It is
qualified in its entirety by the full text of the Stock Option Plan, which is
set forth in Exhibit A attached to this Proxy Statement.

Eligibility and Types of Grants. Those persons who are responsible for or
contribute to the management, growth or profitability of the businesses of the
Company and its subsidiaries may receive grants under the Stock Option Plan.
Optionees will be selected from time to time by the Incentive Compensation
Committee (the "Committee") from a pool of all employees and consultants of
the Company and its subsidiaries and the non-employee directors of the
Company, an estimated 26,000 people. The Stock Option Plan provides for the
grant of both incentive stock options ("ISOs"), within the meaning of Section
422 of the Internal Revenue Code, and nonqualified stock options ("NQOs"),
which do not meet, or are not intended to meet, the requirements of Section
422 of the Internal Revenue Code. (See "Federal Income Tax Consequences"
below.)

Shares Subject to the Stock Option Plan. The aggregate number of shares of
Common Stock for which options may be granted under the Stock Option Plan is
1,000,000; and the maximum number of shares of Common Stock with respect to
which options may be granted to any individual in any calendar year is
200,000. These shares of Common Stock may consist either in whole or in part
of authorized but unissued shares of Common Stock or shares of Common Stock
held in the treasury of the Company. Shares of Common Stock subject to an
option which has expired or been canceled or terminated will become available
for the granting of additional options under the Stock Option Plan.

Administration. The Stock Option Plan will be administered by the Committee.
Subject to the terms of the Stock Option Plan, the Committee has broad
authority to administer and interpret the Stock Option Plan, including the
authority to determine who will receive a grant and to determine the specific
provisions of that grant. The Committee also has the authority to accelerate
the exercisability of an outstanding option and extend the option term of an
outstanding option.

Exercise. The exercise price for the purchase of shares of Common Stock
under each option will be determined by the Committee; provided, however, that
the exercise price per share may not be

less than 100% of the fair market value of the Common Stock on the date of
grant. The full exercise price of these shares shall be paid at the time of
exercise. The Committee may permit an optionee to elect to pay the exercise
price of an option by irrevocably authorizing a third party to sell the shares
of Common Stock (or a sufficient portion of the shares) acquired upon exercise
of the option and remit to the Company a sufficient portion of the sale
proceeds to pay the entire exercise price and any applicable tax withholding.
In addition, the Committee may permit full or partial payment to be made in
the form of unrestricted shares of Common Stock that have been owned by the
optionee for at least six months based on the fair market value of those
shares on the date of exercise.

Vesting. Unless otherwise provided by the Committee at the time of grant or
thereafter, each option granted under the Stock Option Plan will vest and
become exercisable in four equal annual installments, commencing on the first
anniversary of the date of grant of the option, and shall thereafter remain
exercisable for the duration of the option's term.

Term. Unless otherwise provided by the Committee at the time of grant or
thereafter, the term of each option granted under the Stock Option Plan will
end on the earliest to occur of (i) the date the optionee's employment,
directorship or consultancy with the Company or its subsidiaries, as
applicable, is terminated for cause or voluntarily by the optionee, (ii) the
first anniversary of the optionee's death or disability, (iii) the third
anniversary of the optionee's retirement (if the optionee is an employee),
(iv) the ninetieth day after the optionee's employment, directorship or
consultancy terminates for any other reason. In no event may the term of any
option granted under the Stock Option Plan exceed ten years from the option's
date of grant. Unless otherwise provided by the Committee, any outstanding
option that is unvested following a termination of employment, directorship or
consultancy shall be forfeited immediately.

Transferability. Options granted under the Stock Option Plan are not
transferable, except by will or the laws of descent and distribution or, in
the case of an NQO, to the optionee's immediate family, if expressly permitted
by the Committee.

Adjustments. In the event of a stock dividend, stock split, extraordinary
cash dividend, recapitalization, reorganization, merger, split-up, spin-off,
combination or exchange of shares, the Committee may make adjustments to
preserve the benefits or potential benefits of the Stock Option Plan and
outstanding stock options. These adjustments may include adjustments to (i)
the number and kind of shares deliverable under the Stock Option Plan, (ii)
the number and kind of shares that may be covered by options granted to any
individual optionee, (iii) the number and kind of shares covered by
outstanding options, (iv) the exercise price of outstanding options, (v)
settlement of outstanding options in cash or Common Stock, and (vi) other
adjustments that the Committee determines to be equitable.

Amendments and Termination. The Stock Option Plan will be unlimited in
duration. The Board of Directors may, at any time, amend or terminate the
Stock Option Plan, provided that no such amendment or termination may
adversely affect the rights of any optionee under any option granted under the
Stock Option Plan prior to the date of such amendment or termination without
the prior written consent of that optionee. The Stock Option Plan may not be
amended without shareholder approval to the extent such approval is required
by law or the rules of any exchange on which the Common Stock is traded.

Registration of Common Stock issued under the Stock Option Plan. The Company
intends

that the 1,000,000 shares of Common Stock covered by the Stock Option Plan
will be registered under the Securities Act of 1933, as amended. Such
registration, if completed, would in most cases permit the unrestricted resale
in the public market of shares issued pursuant to the Stock Option Plan.

New Plan Benefits. The following table sets forth certain information as to
options to purchase shares of Common Stock granted under the Stock Option Plan
on January 18, 2000 to each of the Named Executive Officers, to all of the
Company's executive officers as a group, and to all of the Company's
non-executive employees as a group. Each such option remains subject to
shareholder approval of the Stock Option Plan and becomes exercisable
thereafter at a rate of 25% per year beginning on the first anniversary of the
grant date. No grants have been made to any of the Company's non-executive
directors. All grants under the Stock Option Plan have been and will be made
in consideration of services rendered or to be rendered to the Company or any
of its subsidiaries by optionees. As of the date hereof, there has been no
determination by the Committee with respect to future awards under the Stock
Option Plan.

<TABLE>
<CAPTION>
No. of
Securities Market Value
Dollar Underlying Exercise of Underlying
Value Options Price Expiration Securities
Name and Position ($)(1) Granted ($/Share) Date ($)(1)
- ----------------- ------ ---------- --------- ---------- -------------

<S> <C> <C> <C> <C> <C>
James s. Tisch $0 10,000 $60.28 1/18/10 $ 402,500
Chief Executive Officer, Office of
the President, Director

Andrew H. Tisch 0 10,000 60.28 1/18/10 402,500
Chairman of the Executive
Committee, Office of the President,
Director

Jonathan M. Tisch 0 10,000 60.28 1/18/10 402,500
President and Chief Executive
Officer of Loews Hotels, Office of
the President, Director

Arthur L. Rebell 0 7,500 60.28 1/18/10 301,875
Senior Vice President, Chief
Investment Officer

Executive Group 0 69,650 60.28 1/18/10 2,803,413

Non-Executive Officer Employee 0 62,350 60.28 1/18/10 2,509,588
Group

(1) Calculated as of the close of business on March 13, 2000.
</TABLE>

Federal Income Tax Consequences. The following is a brief summary of the
principal federal income tax consequences of transactions under the Stock
Option Plan based on current federal income tax laws. This summary is not
intended to be exhaustive and, among other things, does not describe state,
local or foreign tax consequences.

Nonqualified Stock Options. In general, (i) an optionee will not be subject
to tax at the time an NQO is granted, and (ii) an optionee will include in
ordinary income in the taxable year in which he or she exercises an NQO an
amount equal to the difference between the exercise price and the fair market
value of the Common Stock on the date of exercise. Upon disposition of the
Common Stock acquired

upon exercise, appreciation or depreciation after the date ordinary income is
recognized will be treated as capital gain (or loss). The Company generally
will be entitled to a deduction in an amount equal to a recipient's ordinary
income in the Company's taxable year in which the optionee includes that
amount in income. The exercise of NQO's is subject to withholding of all
applicable taxes.

Incentive Stock Options. No taxable income will be realized by an option
holder upon the grant or exercise of an ISO. If shares are issued to an
optionee pursuant to the exercise of an ISO granted under the Stock Option
Plan and if no disposition of those shares is made by that optionee within two
years after the date of grant of the ISO or within one year after the receipt
of those shares by that optionee, then (i) upon a sale of those shares, any
amount realized in excess of the exercise price of the ISO will be taxed to
that optionee as a long-term capital gain and any loss sustained will be a
long-term capital loss, and (ii) no deduction will be allowed to the Company.
However, if shares acquired upon the exercise of an ISO are disposed of prior
to the expiration of either holding period described above, generally (i) the
optionee will realize ordinary income in the year of disposition in an amount
equal to the excess (if any) of the fair market value of the shares at
exercise (or, if less, the amount realized on the disposition of the shares)
over the exercise price thereof, and (ii) the Company will be entitled to
deduct that amount. Any additional gain or loss recognized by the option
holder will be taxed as a short-term or long-term capital gain or loss, as the
case may be, and will not result in any deduction by the Company. If an ISO is
exercised at a time when it no longer qualifies as an incentive stock option
under the Internal Revenue Code, it will be treated as an NQO.

The Board of Directors recommends a vote FOR Proposal No. 3.

SHAREHOLDER PROPOSALS

The Company has been advised that the three shareholder proposals described
below will be presented at the Annual Meeting. For the reasons set forth
below, the Board of Directors recommends a vote against each proposal.

SHAREHOLDER PROPOSAL RELATING TO
REPORTING OF EXECUTIVE COMPENSATION
(Proposal No. 4)

Evelyn Y. Davis, 2600 Virginia Avenue, N.W., Washington, D.C. 20037, owner
of 122 shares of Common Stock, has notified the Company in writing that she
intends to present the following resolution at the Annual Meeting for action
by the shareholders:

"RESOLVED: That the shareholders recommend that the Board take the necessary
steps that Loews Corporation specifically identify by name and corporate title
in all future proxy statements those executive officers, not otherwise so
identified, who are contractually entitled to receive in excess of $250,000
annually as a base salary, together with whatever other additional
compensation bonuses and other cash payments were due them.

"REASONS: In support of such proposed Resolution it is clear that the
shareholders have a right to comprehensively evaluate the management in the
manner in which the Corporation is being operated and its resources utilized.
At present only a few of the most senior executive officers are so identified,
and not the many other senior executive officers who should contribute to the
ultimate success

of the Corporation. Through such additional identification the shareholders
will then be provided an opportunity to better evaluate the soundness and
efficacy of the overall management.

"Last year the owners of 9,675,573 shares, representing approximately 9.3%
of the shares voting, voted FOR this proposal.

"If you AGREE, please mark your proxy FOR this proposal."

The Board of Directors recommends a vote AGAINST Proposal No. 4.

The disclosure of executive compensation has been required by the rules of
the Securities and Exchange Commission for many years. In accordance with
these rules, this Proxy Statement includes detailed information regarding the
compensation of the six highest paid executive officers of the Company. This
proposal seeks to impose on the Company a unique, overly broad disclosure
obligation to which, to the best knowledge of the Company, no other public
company is subject. The Board believes that a public rule-making proceeding
before the Securities and Exchange Commission is the appropriate forum for the
consideration of proposals such as this. Furthermore, this proposal was
overwhelmingly defeated at last year's annual meeting of shareholders.
Accordingly, the Board of Directors recommends a vote against this proposal.

SHAREHOLDER PROPOSAL RELATING TO YOUTH-FRIENDLY
TOBACCO ADVERTISING
(Proposal No. 5)

The Congregation of the Sisters of Charity of the Incarnate Word, 6510
Lawndale, Houston, Texas 77223, owner of 100 shares of Common Stock, and the
Minnesota State Board of Investment, Capitol Professional Office Building,
Suite 200, 590 Park Street, St. Paul, MN 55103, owner of 31,079 shares of
Common Stock, have notified the Company in writing that they intend to present
the following resolution at the Annual Meeting for action by the shareholders:

"WHEREAS our Company insists its tobacco ads and ad campaigns are not geared
to underage youth and has even taken some actions that would indicate it is
serious about ensuring that youth do not use our tobacco products;

"Furthermore various studies independent of our company's own research have
shown that teens have not been influenced not to buy our company's cigarettes
by ad campaigns that have been run and/or supported by our company.

"As concerned shareholders, we are aware that the future viability of our
company's tobacco divisions is based on ensuring new users, most of whom will
continue to use our brands because they began as underage youth;

"A 1996 University of British Columbia study found that teenagers are three
times as likely as adults to respond to cigarette ads and, on average,
whenever a cigarette brand increased its advertising budget by 10%, its share
of the adult smoking market grew only 3% but its share of teen smokers grew
9%.

"Cigarettes are the most heavily advertised product in the U.S.A. However,
unlike adults, whose consumption patterns do not reflect advertising dollars,
the three-most advertised cigarettes in the U.S. are the three used most by
underage youth.

"Further evidence presented in the New England Journal of Medicine, American
Journal of Public Health, and the Journal of Pediatrics, among other
publications, had demonstrated that tobacco advertising plays a significant
role in stimulating illegal consumption of tobacco by minors.

"Such data seems to undermine the stated stance of our company that it is
not advertising in ways that influence young people to use our products
verses. This leaves some shareholders confused as to how to be sure they are
not invested in a company whose activities may possibly be illegal at the
worst and immoral at the least.

"RESOLVED: Shareholders request the Board to implement the following, or a
similar policy for our Company: That, within six months of this annual
meeting, before any promotional, marketing, and/or advertising campaign
presently running is allowed to continue or is inaugurated in the future, it
must be submitted to independent and certifiable testing to ensure that it is
not equally or more appealing to the 12-to-17-age group than groups 18 and
over.

"SUPPORTING STATEMENT: We suggest that, in creating this approach to
testing, that the testing entity be independent of the company and the tobacco
industry, eliminating any possible conflict of interest. Its task will be to
determine the effectiveness of the advertising campaign in making a positive
impression on two age groups: those under 18 and those spread evenly between
18 and 45. If the test results on the young focus group show the campaign is
equal to or exceeds the effectiveness on the older group the (proposed)
campaign shall be terminated.

"If you agree for the need of independent data to show our company does not
advertise in ways that overly-impact underage minors vs. adults, please vote
"yes" for this resolution."

The Board of Directors recommends a vote AGAINST proposal No. 5.

On November 23, 1998, Lorillard Tobacco Company ("Lorillard"), together with
other companies in the U.S. tobacco industry, entered into a Master Settlement
Agreement ("MSA") with a group of State Attorneys General, designed to provide
a comprehensive framework to resolve many of the issues affecting the United
States tobacco industry. This framework prohibits Lorillard, and the other
participating companies, from targeting youth in its advertising and
marketing. It also provides for the establishment of a foundation designed to,
among other things, research, identify and implement effective means of
reducing underage smoking, to be funded by approximately $1.45 billion
supplied by the participating companies, including Lorillard, over a five year
period.

The MSA requires corporate culture commitments in relation to full
compliance with the MSA, including furthering its goal of preventing underage
tobacco use. Lorillard and other cigarette manufacturers would be subject to
state enforcement actions for breaching their obligations concerning the
development, implementation and enforcement of these corporate principles. As
a consequence, Lorillard has advised the Company that all current and future
promotional, marketing and/or advertising campaigns will be closely reviewed
by Lorillard with the aim of complying with both the MSA, and Lorillard's
continuing commitment to reduce youth smoking.

Lorillard believes that the carefully balanced framework already provided by
the MSA, including the establishment of a well-funded research foundation
which, among other things, is intended to develop and implement programs
designed to reduce underage tobacco use, is the most appropriate manner by
which to assure a substantial meaningful reduction in youth smoking and that
any effort to impose a single method of achieving that goal is inappropriate.
Furthermore, the method specifically advanced in Proposal No. 5, requiring
"independent and certifiable testing," would impose a vague and ill-defined
burden on Lorillard's marketing efforts. Accordingly, the Board of Directors
recommends a vote against this proposal.

SHAREHOLDER PROPOSAL RELATING TO NEWPORT ADVERTISING
(Proposal No. 6)

Mercy Health Services, 34605 Twelve Mile Road, Farmington Hills, Michigan
48331, owner of 1,300 shares of Common Stock, has notified the Company in
writing that it intends to present the following resolution at the Annual
Meeting for action by the shareholders:

"WHEREAS our Company's Newport cigarette, in 1998, was the second largest
selling cigarette in the U.S.A. According to John C. Maxwell, as U.S.
cigarette sales continued to fall between 1997 and 1998, Newport was one of
two brands to register increases in sales and market share.

"A significant percentage of those smoking our Newport cigarettes are people
of African descent. Over 75% of African American smokers smoke menthol
cigarettes as compared to 23% of white smokers. 61.3% of African American
adolescents who smoke smoke Newports.

"Health risks associated with smoking among African Americans are greater
than those of their white counterparts. African American men have a lung
cancer death rate 50% higher than whites while over 80% of African American
men who smoke and have contracted lung cancer die from the disease, compared
with 54% of their white counterparts.

"Our company, along with the other U.S. tobacco companies, have inundated
the African American community with various media campaigns. Nearly 66% of
cigarette advertisements in African American magazines are for menthol
cigarettes, compared to 15.4% of those in general population magazines.
African American communities have had 2.6 times as many billboards advertising
cigarettes as white communities.

"Smoking rates among African American high school students rose 80% from
1991 to 1997. The smoking rate for African American males doubled in that time
from 14.1% to 28.2%.

"The Surgeon General of the United States, Dr. David Satcher, warned in 1998
that, if the pattern of African American youth who take up smoking continues,
an estimated 1.6 million black children will become regular smokers and
500,000 will die as a result.

"In 1998 a civil rights suit was filed against the tobacco industry for
targeting African Americans with menthol brands. Building on documents
released as a result of Minnesota's Medicaid trial, the suit charges that our
Company and others targeted African American communities in their marketing of
mentholated products and asserts that menthol may be a factor in the
disproportionate

smoking-related death and disease in the African American community.

"RESOLVED: that shareholders request the Board of Directors to prepare a
special Report detailing our company's promotion of Newport cigarettes to
African Americans. Using 1999 as the base year, this Report, produced at a
reasonable cost and excluding proprietary information, shall be made available
within six months of the annual meeting. We recommend that it include:

1. An comparison of the total number of advertisements place in both
Black-oriented and 'general public' media.
2. A description of the programs and monies expended for our Company's
Newport brand in:
a. Promotions and sponsorships of events allowed by the Master
Settlement Agreement that are oriented to African-Americans, as well
as the extent of point-of-purchasing advertising.
b. Making African-American youth aware of the health-hazards related to
smoking.

"Supporting Statement: The possibility that our Company might be targeting
the African American community leaves it open to accusations of racism in our
marketing programs, please vote 'yes' for this resolution."

The Board of Directors recommends a vote AGAINST proposal No. 6.

The Board of Directors is opposed to this proposal as not being in the
interest of the Company and its shareholders. Lorillard advertises and
promotes its cigarettes, including Newport, only to adult smokers, and
maintains its rights to communicate with all of its consumers in all legally
and contractually permissible ways. Lorillard's advertising is reviewed for
compliance with legal requirements and Lorillard's Corporate Principles
Concerning Marketing, Promotion and Youth Smoking. Those principles expand
upon commitments embodied in the tobacco industry's Cigarette Advertising and
Promotion Code, which Lorillard has adhered to for many years, and in the MSA.
Furthermore, the lawsuit referred to in the proposal was dismissed by a
federal court judge in Philadelphia who concluded that plaintiffs' claims in
the case were without legal merit. Accordingly, the Board of Directors
recommends a vote against this proposal.

OTHER MATTERS

The Company knows of no other matters to be brought before the meeting. If
other matters should properly come before the meeting, proxies will be voted
on such matters in accordance with the best judgment of the persons appointed
by the proxies.

The Company will bear all costs in connection with the solicitation of
proxies for the meeting. The Company intends to request brokerage houses,
custodians, nominees and others who hold stock in their names to solicit
proxies from the persons who own stock, and such brokerage houses, custodians,
nominees and others, will be reimbursed for their out-of-pocket expenses and
reasonable clerical expense. In addition to the use of the mails, solicitation
may be made by employees of the Company and its subsidiaries personally or by
mail or telephone.

Shareholder Proposals for the 2001 Annual Meeting

Shareholder proposals for the Annual Meeting to be held in the year 2001
must be received by the Company at its principal executive offices not later
than November 28, 2000 in order to be included in the Company's proxy
materials. Proxies solicited by the Company for the year 2001 Annual Meeting
may confer discretionary authority to vote on any proposals submitted after
February 13, 2001 without a description of them in the proxy materials for
that meeting. Shareholder proposals should be addressed to Loews Corporation,
667 Madison Avenue, New York, New York 10021-8087, Attention: Corporate
Secretary.

By order of the Board of Directors,

BARRY HIRSCH
Secretary

Dated: March 28, 2000

PLEASE COMPLETE, DATE, SIGN AND
RETURN YOUR PROXY PROMPTLY

LOEWS CORPORATION Proxy
- ------------------------------------------------------------------------------
This Proxy is Solicited on Behalf of the Board of Directors

The undersigned hereby constitutes and appoints Bernard Myerson, Barry
Hirsch and Gary W. Garson and each of them, each with full power of
substitution, true and lawful attorneys, agents and proxies with all the
powers the undersigned would possess if personally present, to vote all shares
of Common Stock of the undersigned in Loews Corporation at the Annual Meeting
of Shareholders to be held at The Regency Hotel, 540 Park Avenue, New York,
New York, on May 9, 2000, at 11:00 A.M., New York City Time, and at any
adjournments thereof, upon the matters set forth in the Notice of Meeting and
accompanying Proxy Statement and, in their judgment and discretion, upon such
other business as may properly come before the meeting.

This Proxy when properly executed will be voted in the manner directed by
the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" THE ELECTION OF DIRECTORS, "FOR" PROPOSALS 2 AND 3, AND "AGAINST"
PROPOSALS 4, 5 AND 6.

THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY

The Board of Directors recommends a vote The Board of Directors recommends a vote AGAINST Please mark
FOR Items 1, 2 and 3 Items 4, 5 and 6 your votes
like this [ X ]

<S> <C> <C>
Item 1-ELECTION OF DIRECTORS WITHHELD
Nominees: C.B. Benenson, FOR FOR ALL FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
J. Brademas, ITEM 3-APPROVAL [ ] [ ] [ ] ITEM 4-SHAREHOLDER [ ] [ ] [ ]
D.H. Chookaszian, OF STOCK PROPOSAL-
P. Fribourg, OPTION PLAN EXECUTIVE
B. Myerson, COMPENSATION
E.J. Noha, [ ] [ ]
G.R. Scott, ITEM 5-SHAREHOLDER [ ] [ ] [ ]
A.H. Tisch, PROPOSAL-
J.S. Tisch, YOUTH-FRIENDLY
J.M. Tisch, TOBACCO
L.A. Tisch, ADVERTISING
P.R. Tisch
and F. Wilpon. ITEM 6-SHAREHOLDER [ ] [ ] [ ]
PROPOSAL-
NEWPORT
ADVERTISING

WITHHELD FOR: (Write that Nominee's name
in the space provided below.)

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

ITEM 2-RATIFY DELOITTE FOR AGAINST ABSTAIN
& TOUCHE LLP AS
INDEPENDENT [ ] [ ] [ ]
ACCOUNTANTS

Signature(s) Date:
------------------------------------------------------------------- -----------------------------------------
</TABLE>

EXHIBIT A

LOEWS CORPORATION
2000 STOCK OPTION PLAN
----------------------

SECTION 1
---------

GENERAL
-------

1.1 Purpose. The Loews Corporation 2000 Stock Option Plan (the "Plan")
-------
has been established by Loews Corporation (the "Company") to (i) attract and
retain persons eligible to participate in the Plan, (ii) motivate
Participants, by means of appropriate incentives, to achieve long-term Company
goals, and reward Participants for achievement of those goals, and (iii)
provide incentive compensation opportunities that are competitive with those
of other similar companies, and thereby promote the financial interest of the
Company and its Subsidiaries.

1.2 Operation and Administration. The operation and administration of
----------------------------
the Plan shall be subject to the provisions of Section 3 (relating to
operation and administration). Capitalized terms in the Plan shall be defined
as set forth in the Plan (including the definition provisions of Section 6 of
the Plan).

SECTION 2
---------

OPTIONS
-------

2.1 Option Grant. The Committee may grant Options in accordance with
------------
this Section 2.

2.2 Definitions. The grant of an "Option" permits the Participant to
-----------
purchase shares of Stock at an Exercise Price established by the Committee.
Any Option granted under the Plan may be either an incentive stock option (an
"ISO") or a non-qualified option (an "NQO"), as determined in the discretion
of the Committee. An "ISO" is an Option that is intended to be an "incentive
stock option" described in section 422(b) of the Code and does in fact satisfy
the requirements of that section. An "NQO" is an Option that is not intended
to be an "incentive stock option" as that term is described in section 422(b)
of the Code, or that fails to satisfy the requirements of that section.

2.3 Exercise Price. The "Exercise Price" of each Option granted under
--------------
this Section 2 shall be established by the Committee or shall be determined by
a method established by the Committee at the time the Option is granted;
except that the Exercise Price shall not be less than 100% of the Fair Market
Value of a share of Stock on the date of grant (or, if greater, the par value
of a share of Stock).

2.4 Vesting and Exercise. An Option shall be exercisable in accordance
--------------------
with such terms and conditions and during such periods as may be established
by the Committee.

(a) Unless otherwise provided by the Committee at the time of grant or
thereafter, each Option shall vest and become exercisable in four equal
annual installments beginning on the first anniversary of the date of
grant, and shall thereafter remain exercisable during the Option Term.

(b) Unless otherwise provided by the Committee at the time of grant or
thereafter, the Option Term of each Option shall end on the earliest of
(1) the date on which such Option has been exercised in full, (2) the date
on which the Participant experiences a Termination for Cause or a
voluntary Termination, (3) the one-year anniversary of the date on which
the Participant experiences a Termination due to death or Disability, (4)
the three-year anniversary of the date on which the Participant
experiences a Termination due to such person's Retirement, and (5) the
90th day after the Participant experiences a Termination for any other
reason; provided, that in no event may the Option Term exceed ten (10)
--------
years from the date of grant of the Option. Except as otherwise determined by
the Committee at the time of grant or thereafter, upon the occurrence of a
Termination of a Participant for any reason, the Option Term of all
outstanding Options held by the Participant that are unvested as of the date
of such Termination shall thereupon end and such unvested Options shall be
forfeited immediately; provided, however, that the Committee may,
-------- -------
in its sole discretion, accelerate the vesting of any Option and/or extend
the exercise period of any Option (but not beyond the ten-year anniversary of
the grant date).

(c) An Option may be exercised and the underlying shares purchased in
accordance with this Section 2 at any time after the Option with respect
to those shares vests and before the expiration of the Option Term. To
exercise an Option, the Participant shall give written notice to the
Company stating the number of shares with respect to which the Option is
being exercised.

(d) The full Exercise Price for shares of Stock purchased upon the exercise of
any Option shall be paid at the time of such exercise (except that, in the
case of an exercise arrangement approved by the Committee and described in
the last sentence of this paragraph (d), payment may be made as soon as
practicable after the exercise). The Exercise Price shall be payable by
check, or such other instrument as the Committee may accept. The Committee
may permit a Participant to elect to pay the Exercise Price upon the
exercise of an Option by irrevocably authorizing a third party to sell
shares of Stock (or a sufficient portion of the shares) acquired upon
exercise of the Option and remit to the Company a sufficient portion of
the sale proceeds to pay the entire Exercise Price and any tax withholding
resulting from such exercise. In the case of any ISO such permission must
be provided for at the time of grant and set forth in an Option
Certificate. In addition, if approved by the Committee, payment, in full
or in part, may also be made in the form of unrestricted Mature Shares,
based on the Fair Market Value of the Mature Shares on the date the Option
is exercised; provided, however, that, in the case of an ISO
-------- -------
the right to make a payment in such Mature Shares may be authorized only at
the time the Option is granted.

SECTION 3
---------

OPERATION AND ADMINISTRATION
----------------------------

3.1 Effective Date. Subject to the approval of the shareholders of the
--------------
Company at the Company's 2000 annual meeting of its shareholders, the Plan
shall be effective as of January 18, 2000 (the "Effective Date"); provided,
--------
however, that to the extent that Options are granted under the Plan prior to
- -------
its approval by shareholders, the Options shall be contingent on approval of
the Plan by the shareholders of the Company at such annual meeting. The Plan
shall be unlimited in duration and, in the event of Plan termination, shall
remain in effect as long as any Options under it are outstanding.

3.2 Shares Subject to Plan. The shares of Stock for which Options may
----------------------
be granted under the Plan shall be subject to the following:

(a) The shares of Stock with respect to which Options may be granted under the
Plan shall be shares currently authorized but unissued or currently held
or subsequently acquired by the Company as treasury shares, including
shares purchased in the open market or in private transactions.

(b) Subject to the following provisions of this subsection 3.2, the maximum
number of shares of Stock that may be delivered to Participants and their
beneficiaries under the Plan shall be 1,000,000 shares of Stock.

(c) To the extent any shares of Stock covered by an Option are not delivered
to a Participant or beneficiary because the Option is forfeited or
canceled, or the shares of Stock are used to pay the Exercise Price or
satisfy the applicable tax withholding obligation, such shares shall not
be deemed to have been delivered for purposes of determining the maximum
number of shares of Stock available for delivery under the Plan.

(d) Subject to paragraph 3.2(e), the maximum number of shares that may be
covered by Options granted to any one individual during any one calendar
year period shall be 200,000 shares.

(e) In the event of a corporate transaction involving the Company (including,
without limitation, any stock dividend, stock split, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation,
split-up, spin-off, combination or exchange of shares), the Committee may
make adjustments to preserve the benefits or potential benefits of the
Plan and outstanding Options. Action by the Committee may include: (i)
adjustment of the number and kind of shares which may be delivered under
the Plan; (ii) adjustment of the number and kind of shares referred to in
Section 3.2(d); (iii) adjustment of the number and kind of shares subject
to outstanding Options; (iv) adjustment of the Exercise Price of
outstanding Options; (v) settlement in cash or Stock in an amount equal to
the excess of the value of the Stock subject to such Option over the
aggregate Exercise Price (as determined by the Committee) of such Options;
and (vi) any other adjustments that the Committee determines to be
equitable.

3.3 General Restrictions. Delivery of shares of Stock or other amounts
--------------------
under the Plan shall be subject to the following:

(a) Notwithstanding any other provision of the Plan, the Company shall have no
liability to deliver any shares of Stock under the Plan or make any other
distribution of benefits under the Plan unless such delivery or
distribution would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act of 1933), and the
applicable requirements of any securities exchange or similar entity.

(b) To the extent that the Plan provides for issuance of stock certificates to
reflect the issuance of shares of Stock, the issuance may be effected on a
non-certificated basis, to the extent not prohibited by applicable law or
the applicable rules of any stock exchange.

3.4 Tax Withholding. All distributions under the Plan are subject to
---------------
withholding of all applicable taxes, and the delivery of any shares or other
benefits under the Plan shall be conditioned on

satisfaction of the applicable withholding obligations. The Committee, in its
discretion, and subject to such requirements as the Committee may impose prior
to the occurrence of such withholding, may permit such withholding obligations
to be satisfied through cash payment by the Participant, through the surrender
of shares of Stock which the Participant already owns, or through the
surrender of shares of Stock to which the Participant is otherwise entitled
under the Plan; provided that surrender of shares may be used only to satisfy
--------
the minimum withholding required by law.

3.5 Grant and Use of Options. In the discretion of the Committee, more
------------------------
than one Option may be granted to a Participant. Options may be granted as
alternatives to or replacements of Options granted or outstanding under the
Plan, or any other plan or arrangement of the Company or a Subsidiary
(including a plan or arrangement of a business or entity, all or a portion of
which is acquired by the Company or a Subsidiary). Subject to the overall
limitation on the number of shares of Stock that may be delivered under the
Plan, the Committee may use available shares of Stock as the form of payment
for compensation, grants or rights earned or due under any other compensation
plans or arrangements of the Company or a Subsidiary, including the plans and
arrangements of the Company or a Subsidiary assumed in business combinations.
Notwithstanding the foregoing, the assumption by the Company of options in
connection with the acquisition of a business or other entity and the
conversion of such options into options to acquire Stock shall not be treated
as a new grant of Options under the Plan unless specifically so provided by
the Committee.

3.6 Settlement of Options. The Committee may from time to time
---------------------
establish procedures pursuant to which a Participant may elect to defer, until
a time or times later than the exercise of an Option, receipt of all or a
portion of the shares of Stock subject to such Option and/or to receive cash
at such later time or times in lieu of such deferred shares, all on such terms
and conditions as the Committee shall determine. If any such deferrals are
permitted, then a Participant who elects such deferral shall not have any
rights as a stockholder with respect to such deferred shares unless and until
shares are actually delivered to the Participant with respect thereto, except
to the extent otherwise determined by the Committee.

3.7 Other Plans. Amounts payable under this Plan shall not be taken
-----------
into account as compensation for purposes of any other employee benefit plan
or program of the Company or any of its Subsidiaries, except to the extent
otherwise provided by such plans or programs, or by an agreement between the
affected Participant and the Company.

3.8 Heirs and Successors. The terms of the Plan shall be binding upon,
--------------------
and inure to the benefit of, the Company and its successors and assigns, and
upon any person acquiring, whether by merger, consolidation, purchase of
assets or otherwise, all or substantially all of the Company's assets and
business.

3.9 Transferability. Options granted under the Plan are not
---------------
transferable except (i) as designated by the Participant by will or by the
laws of descent and distribution or (ii) in the case of an NQO, as otherwise
expressly permitted by the Committee including, if so permitted, pursuant to a
transfer to such Participant's immediate family, whether directly or
indirectly or by means of a trust or partnership or otherwise. If any rights
exercisable by a Participant or benefits deliverable to a Participant under
any Option Certificate under the Plan have not been exercised or delivered,
respectively, at the time of the Participant's death, such rights shall be
exercisable by the Designated Beneficiary, and such benefits shall be
delivered to the Designated Beneficiary, in accordance with the provisions of
the

applicable terms of the Option Certificate and the Plan. The "Designated
Beneficiary" shall be the beneficiary or beneficiaries designated by the
Participant to receive benefits under the Company's group term life insurance
plan or such other person or persons as the Participant may designate by
notice to the Company. If a deceased Participant fails to have designated a
beneficiary, or if the Designated Beneficiary does not survive the
Participant, any rights that would have been exercisable by the Participant
and any benefits distributable to the Participant shall be exercised by or
distributed to the legal representative of the estate of the Participant. If a
deceased Participant designates a beneficiary and the Designated Beneficiary
survives the Participant but dies before the Designated Beneficiary's exercise
of all rights under the Option Certificate or before the complete distribution
of benefits to the Designated Beneficiary under the Option Certificate, then
any rights that would have been exercisable by the Designated Beneficiary
shall be exercised by the legal representative of the estate of the Designated
Beneficiary, and any benefits distributable to the Designated Beneficiary
shall be distributed to the legal representative of the estate of the
Designated Beneficiary. All Options shall be exercisable, subject to the terms
of this Plan, only by the Participant or any person to whom such Option is
transferred pursuant to this paragraph, it being understood that the term
Participant shall include such transferee for purposes of the exercise
provisions contained herein.

3.10 Notices. Any written notices provided for in the Plan or under any
-------
Option Certificate shall be in writing and shall be deemed sufficiently given
if either hand delivered or if sent by confirmed fax or overnight courier, or
by postage paid first class mail. Notice and communications shall be effective
when actually received by the addressee. Notices shall be directed, if to the
Participant, at the Participant's address indicated in the Option Certificate,
or if to the Company, at the Company's principal executive office to the
attention of the Company's Secretary.

3.11 Action by Company. Any action required or permitted to be taken by
-----------------
the Company shall be by resolution of the Board, or by action of one or more
members of the Board (including a committee of the Board) who are duly
authorized to act for the Board, or by a duly authorized officer of the
Company.

3.12 Limitation of Implied Rights.
----------------------------

(a) Neither a Participant nor any other person shall, by reason of
participation in the Plan, acquire any right in or title to any assets,
funds or property of the Company whatsoever, including, without
limitation, any specific funds, assets, or other property which the
Company, in its sole discretion, may set aside in anticipation of a
liability under the Plan. A Participant shall have only a contractual
right to the amounts, if any, payable under the Plan, unsecured by any
assets of the Company, and nothing contained in the Plan shall constitute
a guarantee that the assets of the Company shall be sufficient to pay any
benefits to any person.

(b) The Plan does not constitute a contract of employment, and selection as a
Participant will not give any Participant the right to be retained in the
employ of, or as a director or consultant to, the Company or any
Subsidiary, nor any right or claim to any benefit under the Plan, unless
such right or claim has specifically accrued under the terms of the Plan.

3.13 Gender and Number. Where the context admits, words in any gender
-----------------
shall include any other gender, words in the singular shall include the plural
and the plural shall include the singular.

3.14 Laws Applicable to Construction. The interpretation, performance
-------------------------------
and enforcement of this Plan and all Option Certificates shall be governed by
the laws of the State of Delaware without reference to principles of conflict
of laws, as applied to contracts executed in and performed wholly within the
State of Delaware.

3.15 Evidence. Evidence required of anyone under the Plan may be by
--------
certificate, affidavit, document or other information which the person acting
on it considers pertinent and reliable, and signed, made or presented by the
proper party or parties.

SECTION 4
---------

COMMITTEE
---------

4.1 Administration. The authority to control and manage the operation
--------------
and administration of the Plan shall be vested in the Compensation Committee
of the Board or such other committee of the Board as the Board may from time
to time designate (the "Committee") in accordance with this Section 4. In
addition, the Board may exercise any power given to the Committee under the
Plan.

4.2 Powers of Committee. The Committee's administration of the Plan
-------------------
shall be subject to the following:

(a) Subject to the provisions of the Plan, the Committee will have the
authority and discretion to select from among the Eligible Grantees those
persons who shall receive Options, to determine the grant date of, the
number of shares subject to and the Exercise Price of those Options, to
establish all other terms and conditions of such Options, and (subject to
the restrictions imposed by Section 5) to cancel or suspend Options.

(b) The Committee will have the authority and discretion to interpret the
Plan, to establish, amend, and rescind any rules and regulations relating
to the Plan, and to make all other determinations that may be necessary or
advisable for the administration of the Plan.

(c) Any interpretation of the Plan by the Committee and any decision made by
it under the Plan is final and binding on all persons.

(d) In controlling and managing the operation and administration of the Plan,
the Committee shall take action in a manner that conforms to the articles
and by-laws of the Company, and applicable state corporate law.

4.3 Delegation by Committee. Except to the extent prohibited by
-----------------------
applicable law or the applicable rules of a stock exchange, the Committee may
allocate all or any portion of its responsibilities and powers to any one or
more of its members and may delegate all or any part of its responsibilities
and powers to any person or persons selected by it. Any such allocation or
delegation may be revoked by the Committee at any time.

4.4 Information to be Furnished to Committee. The Company and
----------------------------------------
Subsidiaries shall furnish the Committee with such data and information as it
determines may be required for it to discharge its

duties. The records of the Company and Subsidiaries as to an employee's or
Participant's employment, engagement, termination, leave of absence,
reemployment and compensation shall be conclusive on all persons unless
determined to be incorrect. Participants and other persons eligible for
benefits under the Plan must furnish the Committee such evidence, data or
information as the Committee considers desirable to carry out the terms of the
Plan.

SECTION 5
---------

AMENDMENT AND TERMINATION
-------------------------

The Board may, at any time, amend or terminate the Plan; provided that no
--------
amendment or termination may, in the absence of written consent to the change
by the affected Participant (or, if the Participant is not then living, the
affected beneficiary), adversely affect the rights of any Participant or
beneficiary under any Option granted under the Plan prior to the date such
amendment is adopted by the Board; and further provided that adjustments
----------------
pursuant to paragraph 3.2(e) shall not be subject to the foregoing limitations
of this Section 5.

SECTION 6
---------

DEFINED TERMS
-------------

In addition to the other definitions contained herein, the following
definitions shall apply:

(a) Board. The term "Board" means the Board of Directors of the Company.
-----

(b) Cause: The term "Cause" shall have the meaning set forth in the
-----
employment or engagement agreement between a Participant and the Company or
any Subsidiary thereof, if such an agreement exists and contains a definition
of Cause; otherwise Cause shall mean (1) conviction of the Participant for
committing a felony under Federal law or the law of the state in which such
action occurred, (2) dishonesty in the course of fulfilling a Participant's
employment, engagement or directorial duties, (3) willful and deliberate
failure on the part of a Participant to perform the Participant's employment,
engagement or directorial duties in any material respect or (4) such other
events as shall be determined in good faith by the Committee. The Committee
shall, unless otherwise provided in the Option Certificate or an employment
agreement with the Participant, have the sole discretion to determine whether
Cause exists, and its determination shall be final.

(c) Code. The term "Code" means the Internal Revenue Code of 1986, as
----
amended. A reference to any provision of the Code shall include reference to
any successor provision of the Code.

(d) Committee. The term "Committee" shall have the meaning set forth in
---------
Section 4.1.

(e) Company. The term "Company" shall have the meaning set forth in Section
-------
1.1.

(f) Designated Beneficiary. The term "Designated Beneficiary" shall have the
----------------------
meaning set forth in

Section 3.9.

(g) Disability. The term "Disability" shall mean, unless otherwise provided by
----------
the Committee, (1) "Disability" as defined in any individual Option
Certificate to which the Participant is a party, or (2) if there is no
such Option Certificate or it does not define "Disability," permanent and
total disability as determined under the Company's long-term disability
plan applicable to the Participant.

(h) Effective Date. The term "Effective Date" shall have the meaning set forth
--------------
in Section 3.1.

(i) Eligible Grantee. The term "Eligible Grantee" shall mean any individual
----------------
who is employed on a full-time or part-time basis, or who serves as a
consultant to, by the Company or a Subsidiary and any non-employee
director of the Company. An Option may be granted to an individual in
connection with such individual's hiring or engagement prior to the date
the individual first performs services for the Company or the
Subsidiaries, provided that the individual will be an Eligible Grantee
--------
upon his hiring or engagement, and further provided that such Options
----------------
shall not become vested prior to the date the individual first performs
such services.

(j) Exercise Price. The term "Exercise Price" shall have the meaning set forth
--------------
in Section 2.3.

(k) Fair Market Value. The "Fair Market Value" of a share of Stock shall be,
-----------------
as of any given date, the mean between the highest and lowest reported
sales prices on the immediately preceding date (or, if there are no
reported sales on such immediately preceding date, on the last date prior
to such date on which there were sales) of the Stock on the New York Stock
Exchange Composite Tape or, if not listed on such exchange, on any other
national securities exchange on which the Stock is listed or on NASDAQ.
If there is no regular public trading market for such Stock, the Fair
Market Value of the Stock shall be determined by the Committee in good
faith.

(l) ISO. The term "ISO" shall have the meaning set forth in Section 2.2.
---

(m) Mature Shares. The term "Mature Shares" shall mean shares of Stock that
-------------
have been owned by the Participant in question for at least six months.

(n) NQO. The term "NQO" shall have the meaning set forth in Section 2.2.
---

(o) Option. The term "Option" shall have the meaning set forth in Section 2.2.
------

(p) Option Certificate: The term "Option Certificate" shall mean a written
------------------
Option certificate setting forth the terms and conditions of an Option, in
the form attached hereto as Exhibit A or such other form as the Committee
may from time to time prescribe.

(q) Option Term: The term "Option Term" shall mean the period beginning on
-----------
the date of grant of an Option and ending on the date the Option expires
pursuant to the Plan and the relevant Option Certificate.

(r) Plan: The term "Plan" shall have the meaning set forth in Section 1.1.
----

(s) Retirement: The term "Retirement" shall mean retirement from active
----------
employment with the Company pursuant to any retirement plan or program of
the Company or any Subsidiary in which the Participant participates. A
Termination by a consultant or non-employee director shall in no event be
considered a Retirement.

(t) Stock. The term "Stock" shall mean shares of common stock of the Company.
-----

(u) Subsidiary. The term "Subsidiary" means any business or entity in which at
----------
any relevant time the Company holds at least a 50% equity (voting or
non-voting) interest.

(v) Termination. A Participant shall be considered to have experienced a
-----------
Termination if he or she ceases, for any reason, to be an employee,
consultant or non-employee director of the Company or any of its
Subsidiaries, including, without limitation, as a result of the fact that
the entity by which he or she is employed or engaged or of which he or she
is a director has ceased to be affiliated with the Company.