Exhibit 3.04

                      Certificate of Amendment of the
         Restated Certificate of Incorporation of Loews Corporation
         under Section 242 of the Delaware General Corporation Law


   Pursuant to Section 242 of the General Corporation Law of the State of
Delaware, Loews Corporation, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:

     First:   The Board of Directors of the Corporation adopted resolutions
              proposing and declaring advisable an amendment to the Restated
              Certificate of Incorporation to establish a new class of common
              stock, Carolina Group stock, having the number, designation,
              relative rights, preferences, and limitations as set forth
              herein.

     Second:  To effect the foregoing, Article FOURTH of the Restated
              Certificate of Incorporation of the Corporation is hereby
              amended as set forth in Exhibit A hereto.

     Third:   At a meeting of stockholders of the Corporation duly held on
              January 4, 2002, a majority of the outstanding stock of the
              Corporation entitled to vote voted to approve the foregoing
              amendment in accordance with the provisions of the Restated
              Certificate of Incorporation of the Corporation and the General
              Corporation Law of the State of Delaware.

     Fourth:  Said amendment was duly adopted in accordance with Section 242
              of the General Corporation Law of the State of Delaware.

   IN WITNESS WHEREOF, Loews Corporation has caused this certificate to be
signed by Barry Hirsch, its Senior Vice President, General Counsel and
Secretary, this 30th day of January, 2002.


                                            LOEWS CORPORATION


                                            By: /s/  Barry Hirsch
                                                -------------------
                                                Name:	Barry Hirsch
                                                Title:	Senior Vice President,
                                                General Counsel and Secretary


                                                                     Exhibit A

                                  Article Fourth

     Article Fourth is hereby amended to read in its entirety as follows:

     Fourth:  The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 1,300,000,000 shares, consisting
of 100,000,000 shares of Preferred Stock, par value $.10 per share ("Preferred
Stock") and 1,200,000,000 common shares, of which 600,000,000 shall be Loews
common stock having a par value of $1.00 per share ("Loews common stock") and
600,000,000 shall be Carolina Group stock having a par value of $0.01 per
share ("Carolina Group stock").

Part A:  Preferred Stock

     The Board of Directors is hereby authorized to issue the Preferred Stock,
from time to time, in one or more series, on such terms and conditions as it
may deem advisable and to fix by resolution the designation of each series and
the powers, preferences, and relative, participating, optional or other
special rights of the shares of each series, and the qualifications,
limitations or restrictions thereof, to the full extent now or hereafter
permitted by law. The authority of the Board of Directors with respect to each
such series shall include, but not be limited to, determination of the
following:

     (a)  the designation and number of shares comprising such series;

     (b)  the dividends, if any, which shall be payable on the shares of such
          series and any preferences and other terms and conditions applicable
          thereto;

     (c)  any rights and preferences of the holders of the shares of such
          series upon the liquidation, dissolution, or winding up of the
          affairs of, or upon any distribution of the assets of, the
          Corporation;

     (d)  the full, limited or special voting rights, if any, of the shares of
          such series, in addition to voting rights provided by law, and the
          terms and conditions applicable thereto;

     (e)  any provision with respect to the conversion of the shares of such
          series into, or the exchange of such shares for, shares of any other
          class or classes, or of any other series of any class, of the
          capital stock of the Corporation and/or any other property or cash,
          and the terms and conditions applicable to any such conversion or
          exchange;

     (f)  any provision with respect to the redemption, purchase, or
          retirement of such shares and the terms and conditions applicable
          thereto;

     (g)  any provision with respect to the issuance of additional shares of
          such series or of any other class or series on a parity with or
          superior to the shares of such series; and

                                       1
     (h)  any other relative, participating, optional or special powers,
          preferences, or rights of, and any other qualifications,
          limitations, or restrictions with respect to, the shares of such
          series as the Board of Directors may deem advisable.

Part B:  Loews common stock and Carolina Group stock

     1.   Voting Rights.
          -------------

     (a)  Subject to paragraph 1(c) of this Part B of this Article Fourth,
holders of Loews common stock shall be entitled to one vote for each share of
such stock held and holders of Carolina Group stock shall be entitled to 1/10
of a vote for each share of such stock held on all matters presented to such
shareholders.

     (b)  Except as may otherwise be required by the laws of the State of
Delaware or, with respect to additional or special voting rights (which may
include, without limitation, rights of any holders of any class or series to
elect one or more directors voting separately as a class) of any class or
series of Preferred Stock or any other class of common shares in this
Certificate of Incorporation as the same may be amended from time to time, the
holders of shares of Loews common stock, the holders of shares of Carolina
Group stock, the holders of shares of each other class of common shares, if
any, entitled to vote thereon, and the holders of shares of each class or
series of Preferred Stock, if any, entitled to vote thereon, shall vote as one
class with respect to all matters to be voted on by shareholders of the
Corporation, and no separate vote or consent of the holders of shares of Loews
common stock, the holders of shares of Carolina Group stock or the holders of
shares of any such class of common shares or any such class or series of
Preferred Stock shall be required for the approval of any such matter.

     (c)  If the Corporation shall in any manner subdivide (by stock split or
otherwise) or combine (by reverse stock split or otherwise) the outstanding
shares of Loews common stock or Carolina Group stock, or pay a stock dividend
in shares of any class to holders of that class, the per share voting rights
of Carolina Group stock specified in paragraph 1(a) of Part B of this Article
Fourth shall be appropriately adjusted so as to avoid any dilution in the
aggregate voting rights of any one class relative to the other class.

     2.   Dividends.
          ---------

     (a)  Dividends on Loews common stock. Dividends on Loews common stock may
be declared and paid only to the extent of (i) the assets of the Corporation
legally available therefor minus (ii) the Carolina Group Available Dividend
Amount (such amount available for the payment of dividends on Loews common
stock is referred to in this Part B of this Article Fourth as the "Loews Group
Available Dividend Amount").

     (b)  Dividends on Carolina Group stock. Dividends on Carolina Group stock
may be declared and paid only out of the lesser of (i) the assets of the
Corporation legally available therefor, and (ii) the Carolina Group Available
Dividend Amount. Concurrently with the payment of any dividend on shares of
Carolina Group stock, at the election of the Board of Directors, either (x)
the Loews Group shall receive from the Carolina Group an aggregate payment of
the same kind of cash and/or property that is the subject of such dividend,
which payment shall be equal to the excess, if any, of (i) the quotient
obtained by dividing (A) the

                                       2

aggregate amount of such dividend, as determined by the Board of Directors, by
(B) the Carolina Group Allocation Fraction, over (ii) the aggregate amount of
such dividend, as so determined, or (y) the Carolina Group Allocation Fraction
will be adjusted as described in paragraph 8 of this Part B of this Article
Fourth. The payment to be made to the Loews Group pursuant to the preceding
sentence may, at the discretion of the Board of Directors, be reflected by an
allocation or by a direct transfer of cash or other property.

     (c) Discrimination between or among classes of common shares. The Board
of Directors, subject to the provisions of paragraphs 2(a) and 2(b) of this
Part B of this Article Fourth, shall have the sole authority and discretion to
declare and pay dividends (or to refrain from declaring or paying the same)
exclusively to the holders of Loews common stock, exclusively to the holders
of Carolina Group stock, exclusively to the holders of any other class of
common shares or to the holders of any two or more of such classes in equal or
unequal amounts, notwithstanding the relationship between the Loews Group
Available Dividend Amount and the Carolina Group Available Dividend Amount,
the respective amounts of prior dividends declared on, or the liquidation
rights of, Loews common stock or Carolina Group stock, or any other factor.

     3.   Share Distributions.
          -------------------

     Subject to the provisions of paragraph 4 of Part B of this Article
Fourth, the Corporation may declare and pay a distribution consisting of
shares of Loews common stock, Carolina Group stock or any other securities of
the Corporation or any other Person (hereinafter sometimes called a "share
distribution") to holders of Loews common stock or Carolina Group stock only
in accordance with this paragraph 3 of this Part B of this Article Fourth.

     (a)  Distributions on Loews common stock or Carolina Group stock. The
Corporation may declare and pay a share distribution to holders of Loews
common stock, Carolina Group stock or any other class of common shares
consisting of any securities of the Corporation, any Subsidiary of the
Corporation, or any other Person, including, without limitation, a share
distribution consisting of shares of any class or series of Preferred Stock or
shares of Loews common stock, Carolina Group stock or any other class of
common shares (or Convertible Securities convertible into or exercisable or
exchangeable for shares of any class or series of Preferred Stock or shares of
Loews common stock, Carolina Group stock or any other class of common shares).
However, securities of a group may be distributed to holders of another group
only for consideration.

     Concurrently with the making of any share distribution with respect to
Carolina Group stock, at the election of the Board of Directors, either (x)
the Loews Group shall receive from the Carolina Group an aggregate payment of
the same kind of property that is the subject of such distribution, which
payment shall be equal to the excess, if any, of (i) the quotient obtained by
dividing (A) the aggregate amount of such distribution, as determined by the
Board of Directors, by (B) the Carolina Group Allocation Fraction, over (ii)
the aggregate amount of such distribution, as so determined, or (y) the
Carolina Group Allocation Fraction shall be adjusted as described in paragraph
8 of this Part B of this Article Fourth. Any payment to be made to the Loews
Group pursuant to the preceding sentence may, at the discretion of the Board
of Directors, be reflected by an allocation or by a direct transfer of cash or
other property.

                                       3

     (b)  Discrimination between or among classes of common shares. The Board
of Directors, subject to the foregoing provisions of this paragraph 3 of this
Part B of this Article Fourth, shall have the sole authority and discretion to
declare and pay (or to refrain from declaring or paying) share distributions
exclusively to holders of Loews common stock, exclusively to holders of
Carolina Group stock, exclusively to the holders of any other class of common
shares or to holders of any two or more of such classes in equal or unequal
amounts, notwithstanding the relationship between the Loews Group Available
Dividend Amount, the Carolina Group Available Dividend Amount, the respective
amounts of prior share distributions declared on, or the liquidation rights
of, Loews common stock or Carolina Group stock, or any other factor.

     4.   Exchange of Carolina Group stock.
          --------------------------------

     (a)  Exchange at option of Board of Directors following the occurrence of
tax events. At any time following the occurrence of a Tax Event, the Board of
Directors, in its sole discretion, may effect a Board Required Exchange by
declaring that all of the outstanding shares of Carolina Group stock shall be
exchanged for (i) fully paid and nonassessable shares of Loews common stock in
accordance with the Tax Event Equity Exchange Rate or (ii) cash, in accordance
with the Tax Event Cash Exchange Rate.

     (b)  Exchange at option of Board of Directors following the second
anniversary of the Initial Issuance Date. Following the second anniversary of
the Initial Issuance Date until the 90th day following the occurrence of a
Significant Transaction, the Board of Directors, in its sole discretion, may
effect a Board Required Exchange by declaring that all of the outstanding
shares of Carolina Group stock shall be exchanged for (i) fully paid and
nonassessable shares of Loews common stock in accordance with the Regular
Equity Exchange Rate or (ii) cash in accordance with the Regular Cash Exchange
Rate.

     (c)  Exchange for stock of Qualifying Subsidiaries at option of Board of
Directors. At any time following the Initial Issuance Date, so long as all of
the assets and liabilities included in the Carolina Group are held, directly
or indirectly, by one or more Qualifying Subsidiaries of the Corporation that
hold no other material assets or liabilities (the "Carolina Group
Subsidiaries"), the Board of Directors may, in its sole discretion, subject to
the availability of assets of the Corporation legally available therefor,
effect a Board Required Exchange by exchanging, on a pro rata basis, all of
the outstanding shares of Carolina Group stock in exchange for an aggregate
number of outstanding fully paid and nonassessable shares of common stock of
such Carolina Group Subsidiary or Subsidiaries as set forth in Section 4(h) of
this Part B of this Article Fourth, provided that no such exchange may occur
unless the exchange is tax free to the holders of Carolina Group stock (except
with respect to any cash received by such holders in lieu of fractional
shares).

     (d)  Exchange, redemption and/or dividend in connection with certain
Significant Transactions. In the event of a Disposition, other than a Carolina
Group Related Business Transaction, in a transaction or series of related
transactions of all or substantially all of the assets (as defined below) of
the Carolina Group to any Person(s) or group(s) of which the Corporation is
not a majority owner (whether by merger, consolidation, sale of assets or
stock, liquidation, dissolution, winding up or otherwise) (a "Significant
Transaction"), effective upon

                                       4

the consummation of such Disposition, the Corporation may take one of the
actions set forth in clauses (i) through (iii) below (each such action, a
"Significant Transaction Exchange") on or prior to the 90th day following the
consummation of the Significant Transaction; provided, however, that if the
Corporation has received any Net Proceeds from the Disposition, and the
Corporation has determined not to retain all such amounts as Loews Tobacco
Contingency Reserves, the Corporation must effect one of the actions set forth
in clauses (i) through (iii) below on or prior to the 90th calendar day
following the consummation of the Significant Transaction, which action will
be selected in the sole discretion of the Board of Directors:

          (i)   exchange all outstanding shares of Carolina Group stock, at
    the sole discretion of the Board of Directors, for fully paid and
    nonassessable shares of Loews common stock at the Regular Equity
    Exchange Rate;

          (ii)  (x) subject to the limitations described in paragraph 2(b) of
    this Part B of this Article Fourth and to the other provisions described
    in this paragraph 4(d) of this Part B of this Article Fourth, declare and
    pay a dividend in cash and/or in securities (other than Loews common
    stock) or other property (determined as provided below) to holders of the
    outstanding shares of Carolina Group stock equally on a share-for-share
    basis in an aggregate amount equal to the Carolina Group Aggregate
    Distributable Amount of such Significant Transaction; or (y) provided
    that there are assets of the Corporation legally available therefor and
    to the extent the Carolina Group Available Dividend Amount would have
    been sufficient to pay a dividend in lieu thereof as described in clause
    (x) of this paragraph 4(d) of this Part B of this Article Fourth, then
    (A) if such Significant Transaction involves the Disposition of all (not
    merely substantially all) of the assets of the Carolina Group, redeem all
    outstanding shares of Carolina Group stock in exchange for cash and/or
    securities (other than Loews common stock) or other property (determined
    as provided below) in an aggregate amount equal to the Carolina Group Net
    Proceeds; or (B) if such Significant Transaction involves the Disposition
    of substantially all (but not all) of the assets of the Carolina Group,
    apply an aggregate amount of cash and/or securities (other than Loews
    common stock) or other property (determined as provided below) equal to
    the Carolina Group Net Proceeds to the redemption of outstanding shares
    of Carolina Group stock, the number of shares to be redeemed to equal the
    lesser of (1) the whole number nearest the number determined by dividing
    the aggregate amount so allocated to the redemption of Carolina Group
    stock by the average Market Value of one share of Carolina Group stock
    during the 20-Trading Day period ending on the 5th Trading Day
    immediately preceding the date of a public announcement that a definitive
    agreement has been signed for such Disposition, and (2) the number of
    shares of Carolina Group stock outstanding; or

          (iii) subject to the limitations described in paragraph 2(b) of this
    Part B of this Article Fourth and to the other provisions described in
    this paragraph 4(d) of this Part B of this Article Fourth, combine the
    issuance of shares of Loews common stock in exchange for shares of
    Carolina Group stock with the payment of a dividend on or the redemption
    of shares of Carolina Group stock for cash and/or other securities (other
    than Loews common stock) or other property as described below.

                                       5

     In the event that the Board of Directors elects the option described in
clause (iii) of the preceding paragraph, the outstanding shares of Carolina
Group stock exchanged for fully paid and nonassessable shares of Loews common
stock shall be exchanged at the Regular Equity Exchange Rate and a dividend
shall be paid on all the remaining shares of Carolina Group stock equally on a
share-for-share basis, or some or all of the remaining outstanding shares of
Carolina Group stock shall be redeemed for cash and/or other securities (other
than Loews common stock) or other property, as follows:  the aggregate amount
of such dividend, in the case of a dividend, shall equal (A) an amount equal
to the total Carolina Group Aggregate Distributable Amount multiplied by (B)
one minus a fraction, the numerator of which shall be the number of shares of
Carolina Group stock exchanged for shares of Loews common stock and the
denominator of which shall be the total number of outstanding shares of
Carolina Group stock prior to such exchange; the portion of the Carolina Group
Net Proceeds to be applied to such a redemption, in the case of a redemption,
shall equal (A) an amount equal to the total Carolina Group Net Proceeds
multiplied by (B) one minus a fraction, the numerator of which shall be the
number of shares of Carolina Group stock exchanged for shares of Loews common
stock and the denominator of which shall be the total number of outstanding
shares of Carolina Group stock prior to such exchange. In the event of a
redemption, if the Significant Transaction involves the Disposition of all
(not merely substantially all) of the assets of the Carolina Group, then all
remaining outstanding shares of Carolina Group stock will be redeemed in
exchange for cash and/or securities (other than Loews common stock) or other
property in an aggregate amount equal to the portion of the Carolina Group Net
Proceeds to be applied to the redemption. In the event of a redemption, if the
Significant Transaction involves the Disposition of substantially all (but not
all) of the assets of the Carolina Group, then the portion of the Carolina
Group Net Proceeds to be applied to the exchange will be used to redeem a
number of shares equal to the lesser of (1) the whole number nearest the
number determined by dividing the aggregate amount so allocated to the
redemption of Carolina Group stock by the average Market Value of one share of
Carolina Group stock during the 20-Trading Day period ending on the 5th
Trading Day immediately preceding the date of a public announcement that a
definitive agreement has been signed for such Disposition, and (2) the number
of shares of Carolina Group stock outstanding.

     Notwithstanding the foregoing, the Corporation shall be under no
obligation to effect any of the actions described in clauses (i) through (iii)
above that it might otherwise be required to effect (x) if the underlying
Significant Transaction is conditioned upon the affirmative vote of a majority
of the holders of Carolina Group stock, voting as a separate class, (y) in
connection with a spin-off or similar disposition of the Carolina Group to the
holders of Carolina Group stock and to the Loews Group in respect of its
intergroup interest in the Carolina Group, if any, including any such
disposition that is made in connection with a Board Required Exchange, or (z)
in connection with the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary.

     (e)  Incremental dividend/final redemption in connection with certain
Significant Transactions. In the event of a Significant Transaction, if, on
the 91st day following consummation of the Significant Transaction, the
Corporation has not redeemed all of the outstanding shares of Carolina Group
stock and either (x) Lorillard, Inc. has not distributed to the Corporation
100% of the Net Proceeds, or (y) the Corporation has received from Lorillard,
Inc. some or all of the Net Proceeds but has determined to retain some or all
of such Net Proceeds as Loews Tobacco Contingency Reserves (the "Trigger
Event"), the following principles will

                                       6

govern: Each time, following the Trigger Event, that the Corporation receives
any distributions from Lorillard, Inc. (each such distribution, a "Lorillard
Dividend"), the Corporation shall be required to pay a dividend in cash and/or
in securities (other than Loews common stock) or other property to holders of
the outstanding shares of Carolina Group stock equally on a share-for-share
basis in an aggregate amount equal to the Carolina Group Incremental Dividend
(less any increase in Carolina Group Tobacco Contingency Reserves made in
connection with any new Lorillard Dividend). If, and when, the Corporation
determines that it can release some or all of the Loews Tobacco Contingency
Reserves (such released amounts, "Released Reserves"), the Corporation is
required promptly to pay a dividend in cash and/or in securities (other than
Loews common stock) or other property to holders of the outstanding shares of
Carolina Group stock equally on a share-for-share basis in an aggregate amount
equal to the Carolina Group Released Reserves. In no event will the
Corporation be required to make dividend payments pursuant to this paragraph
4(e) of this Part B of this Article Fourth more frequently than once per
fiscal quarter. Any unpaid amounts in any fiscal quarter will be accumulated
for payment in the next fiscal quarter. Notwithstanding the foregoing, and
whether or not the conditions set forth in clause (x) or (y) of the first
sentence of this paragraph 4(e) of this Part B of this Article Fourth are
satisfied, at any time after (i) the Corporation has received 100% of the Net
Proceeds from the Disposition giving rise to the Significant Transaction
Exchange, (ii) there are no remaining Loews Tobacco Contingency Reserves, and
(iii) the remaining assets of the Carolina Group consist solely of cash and/or
cash equivalents, such amount, the "Final Cash Amount," Loews may redeem all
of the outstanding shares of Carolina Group stock for the greater of (x) the
Carolina Group Allocated Portion of the Final Cash Amount, divided equally
among the outstanding shares of Carolina Group stock, and (y) $.001 per share
of Carolina Group stock.

     (f)  Consummation; convertible securities. For purposes of this paragraph
4 of this Part B of this Article Fourth, in the case of a Significant
Transaction involving a Disposition of assets in a series of related
transactions, such Disposition shall not be deemed to have been consummated
until the consummation of the last of such transactions. Any exchange
described in this paragraph 4 of this Part B of this Article Fourth shall be
effected in accordance with the applicable provisions set forth in paragraph 5
of this Part B of this Article Fourth. In the event that, at the time of any
Significant Transaction, there are outstanding any Convertible Securities
convertible into or exercisable for shares of Carolina Group stock that would
give the holders rights to receive any dividend or exchange consideration
related to the Significant Transaction upon exercise, conversion or otherwise,
or would adjust as a result of such dividend or exchange to give the holder
equivalent economic rights, then the shares of Carolina Group stock underlying
such Convertible Securities will be taken into account for purposes of
determining the terms of any dividend payment or exchange effected in lieu of
a Significant Transaction Exchange.

     (g)  Payment to Loews Group. Concurrently with the payment of any
dividend to holders of Carolina Group stock referred to in paragraph 4(d) or
4(e) of this Part B of this Article Fourth, at the election of the Board of
Directors, either (A) the Loews Group shall receive from the Carolina Group an
aggregate payment of the same kind of property that is the subject of such
dividend, which payment shall be equal to the excess of (i) the quotient
obtained by dividing (x) the aggregate amount of such dividend, as determined
by the Board of Directors, by (y) the Carolina Group Allocation Fraction, over
(ii) the aggregate amount of such dividend, as so determined, or (B) the
Carolina Group Allocation Fraction will be adjusted as described in

                                       7

paragraph 8 of this Part B of this Article Fourth. Any payment to be made to
the Loews Group pursuant to the preceding sentence may, at the discretion of
the Board of Directors, be reflected by an allocation or by a direct transfer
of cash or other property.

     (h)  Exchange rates. For purposes of this paragraph 4 of this Part B of
this Article Fourth:

     The term "Tax Event Equity Exchange Rate" shall mean the number of
Exchange Shares for which each share of Carolina Group stock shall be
exchangeable pursuant to a Board Required Exchange, determined as follows:
Each share of Carolina Group stock shall be exchangeable for such number of
shares of Loews common stock (calculated to the nearest 1/10,000), subject to
paragraph 5 below, equal to 100% of the ratio of the Average Market Price Per
Share of such Carolina Group stock to the Average Market Price Per Share of
Loews common stock. For purposes of computing the Tax Event Equity Exchange
Rate, the "Average Market Price Per Share" of Loews common stock or Carolina
Group stock, as the case may be, shall mean the average of the daily Market
Value per share for such Loews common stock or Carolina Group stock for the 20
consecutive Trading Days ending on the 5th Trading Day prior to the date an
Exchange Notice is mailed.

     The term "Tax Event Cash Exchange Rate" shall mean such amount of cash
for which each share of Carolina Group stock shall be exchangeable pursuant to
a Board Required Exchange, determined as follows: Each share of Carolina Group
stock shall be exchangeable for such amount of cash (calculated to the nearest
$.01), subject to paragraph 5 below, equal to 105% of the Average Market Price
Per Share of such Carolina Group stock. For purposes of computing the Tax
Event Cash Exchange Rate, the "Average Market Price Per Share" of Carolina
Group stock, as the case may be, shall mean the average of the daily Market
Value per share for such Carolina Group stock for the 20 consecutive Trading
Days ending on the 5th Trading Day prior to the date an Exchange Notice is
mailed.

     The term "Regular Equity Exchange Rate" shall mean the number of Exchange
Shares for which each share of Carolina Group stock shall be exchangeable
pursuant to a Board Required Exchange or a Significant Transaction Exchange,
determined as follows:  If the shares of Carolina Group stock are to be
exchanged for shares of Loews common stock, each share of Carolina Group stock
shall be exchangeable for such number of shares of Loews common stock
(calculated to the nearest 1/10,000), subject to paragraph 5 below, equal to
115% of the ratio of the Average Market Price Per Share of such Carolina Group
stock to the Average Market Price Per Share of Loews common stock. For
purposes of computing the Regular Equity Exchange Rate, the "Average Market
Price Per Share" of Loews common stock or Carolina Group stock, as the case
may be, shall mean (i) in the case of a Board Required Exchange, the average
of the daily Market Value per share for such Loews common stock or Carolina
Group stock for the 20 consecutive Trading Days ending on the 5th Trading Day
prior to the date an Exchange Notice is mailed, or (ii) in the case of a
Significant Transaction Exchange, the average of the daily Market Value per
share for such Loews common stock or Carolina Group stock for the 20
consecutive Trading Days ending on the 5th Trading Day immediately preceding
the date of a public announcement that a definitive agreement has been signed
for the Disposition giving rise to the Significant Transaction Exchange.

                                       8

     The term "Regular Cash Exchange Rate" shall mean such amount of cash for
which each share of Carolina Group stock shall be exchangeable pursuant to a
Board Required Exchange, determined as follows:  If the shares of Carolina
Group stock are to be exchanged for cash, each share of Carolina Group stock
shall be exchangeable for such amount of cash (calculated to the nearest
$.01), subject to paragraph 5 below, equal to 120% of the Average Market Price
Per Share of such Carolina Group stock. For purposes of computing the Regular
Cash Exchange Rate, the "Average Market Price Per Share" of Carolina Group, as
the case may be, shall mean the average of the daily Market Value per share
for such Carolina Group stock for the 20 consecutive Trading Days ending on
the 5th Trading Day prior to the date an Exchange Notice is mailed.

     If the shares of Carolina Group stock are to be exchanged for shares of
one or more Carolina Group Subsidiaries, such shares of Carolina Group stock
shall be exchanged, on a pro rata basis, for an aggregate number of
outstanding fully paid and nonassessable shares of common stock of each such
Carolina Group Subsidiary equal to the number of outstanding shares of common
stock of such Subsidiary held by the Corporation multiplied by the Carolina
Group Allocation Fraction and, if the Board of Directors so determines, the
remaining shares of such Subsidiary shall be distributed on a pro rata basis
to the holders of shares of Loews common stock (or shares of Loews common
stock shall be exchanged for such remaining shares of such Subsidiary);
provided that no such distribution (or mandatory exchange) may occur unless
the distribution (or mandatory exchange) is tax free to the holders of Loews
common stock (except with respect to any cash received by such holders in lieu
of fractional shares). If at the time of such an exchange for shares of one or
more Carolina Group Subsidiaries, there are outstanding any Convertible
Securities convertible into or exercisable for shares of Carolina Group stock
that would become exercisable or convertible for shares of one or more
Carolina Group Subsidiaries as a result of such exchange, and the obligation
to issue such shares under such options, warrants, convertible securities or
similar rights is not assumed or otherwise provided for by one or more
Carolina Group Subsidiaries, then the shares of Carolina Group stock
underlying such Convertible Securities will be taken into account for purposes
of determining the Carolina Group Allocation Fraction for such exchange.

     The phrase "substantially all of the assets" of the Carolina Group as of
any date shall mean a portion of such assets that represents at least 80% of
the Fair Value of the assets attributed to the Carolina Group as of such date.

     The term "Exchange Shares" shall mean the shares of Loews common stock or
shares of one or more Carolina Group Subsidiaries, as the case may be, into
which shares of Carolina Group stock may be exchanged pursuant to a Board
Required Exchange or a Significant Transaction Exchange.

     5.   Certain Procedures Relating to Exchanges.
          ----------------------------------------

    (a)   The Board of Directors may, in its sole discretion, elect to issue
fractional Exchange Shares in connection with an exchange or to make a cash
payment in lieu of fractional shares, as described below. If the Board of
Directors elects not to issue fractional Exchange Shares, then no such
fractional shares shall be issued in connection with the exchange of shares of
Carolina Group stock into Exchange Shares, and, in lieu thereof, each holder
of Carolina

                                       9

Group stock who would otherwise be entitled to a fractional interest of an
Exchange Share shall, upon surrender of such holder's certificate or
certificates representing shares of Carolina Group stock, receive a cash
payment (without interest) (the "Fractional Payment") equal to (i) in the case
of an exchange for shares of Loews common stock, the product resulting from
multiplying (A) the fraction of a share of Loews common stock to which such
holder would otherwise have been entitled by (B) the Average Market Price Per
Share of Loews common stock on the Exchange Date, or (ii) in the case of an
exchange for shares of one or more Carolina Group Subsidiaries, such value as
is determined by the Board of Directors.

    (b)   No adjustments in respect of dividends shall be made upon the
exchange of any shares of Carolina Group stock; provided, however, that, if
the Exchange Date with respect to Carolina Group stock shall be subsequent to
the record date for the payment of a dividend or other distribution thereon or
with respect thereto but prior to the payment or distribution thereof, the
registered holders of such shares at the close of business on such record date
shall be entitled to receive the dividend or other distribution payable on
such shares on the date set for payment of such dividend or other
distribution, notwithstanding the exchange of such shares or the Corporation's
default in payment of the dividend or distribution due on such date.

    (c)   At such time or times as the Corporation exercises its right to
cause a Board Required Exchange, and at the time of any Significant
Transaction Exchange, the Corporation shall give notice of such exchange to
the holders of Carolina Group stock whose shares are to be exchanged, by
mailing by first-class mail a notice of such exchange (an "Exchange Notice"),
in the case of an exchange at the discretion of the Board of Directors, not
less than 30 nor more than 60 days prior to the date fixed for such exchange
(the "Exchange Date"), and, in the case of any other required exchange, as
soon as practicable before or after the Exchange Date, in either case, to
their last addresses as they appear upon the Corporation's books. Each such
Exchange Notice shall specify the Exchange Date and the exchange rate
applicable to such exchange, and may be conditioned on or otherwise subject to
such terms as the Board of Directors may determine.

    (d)   In the case of certificated shares, before any holder of shares of
Carolina Group stock shall be entitled to receive certificates representing
such Exchange Shares, such holder must surrender, at such office as the
Corporation shall specify, certificates for such shares of Carolina Group
stock duly endorsed to the Corporation or in blank or accompanied by proper
instruments of transfer to the Corporation or in blank, unless the Corporation
shall waive such requirement. The Corporation shall, as soon as practicable
after such surrender of certificates representing such shares of Carolina
Group stock, issue and deliver, at the office of the transfer agent for the
Exchange Shares, to the holder for whose account such shares of Carolina Group
stock were so surrendered, or to such holder's nominee or nominees,
certificates representing the number of Exchange Shares to which such holder
shall be entitled, together with the Fractional Payment, if any.

    (e)   From and after any Exchange Date, all rights of a holder of shares
of Carolina Group stock shall cease except for the right, upon surrender of
the certificates representing such shares of Carolina Group stock, to receive
certificates representing Exchange Shares together with a Fractional Payment,
if any, as described in paragraphs 5(a) and 5(d) of this Part B of this
Article fourth and rights to dividends as described in paragraph 5(b) of this
Part B of this Article

                                       10

Fourth. No holder of a certificate that immediately prior to the applicable
Exchange Date represented shares of Carolina Group stock shall be entitled to
receive any dividend or other distribution with respect to Exchange Shares
until surrender of such holder's certificate for a certificate or certificates
representing Exchange Shares. Upon surrender, the holder shall receive the
amount of any dividends or other distributions (without interest) that were
payable with respect to a record date after the Exchange Date, but that were
not paid by reason of the foregoing with respect to the number of Exchange
Shares represented by the certificate or certificates issued upon such
surrender. From and after an Exchange Date applicable to Carolina Group stock,
the Corporation shall, however, be entitled to treat certificates for Carolina
Group stock that have not yet been surrendered for exchange as evidencing the
ownership of the number of Exchange Shares for which the shares of Carolina
Group stock represented by such certificates have been exchanged,
notwithstanding the failure to surrender such certificates.

    (f)   If any certificate for Exchange Shares is to be issued in a name
other than that in which the certificate representing shares of Carolina Group
stock surrendered in exchange therefor is registered, it shall be a condition
of such issuance that the person requesting the issuance pays any transfer or
other taxes required by reason of the issuance of certificates for such
Exchange Shares in a name other than that of the record holder of the
certificate surrendered, or establishes, to the satisfaction of the
Corporation or its agent, that such tax has been paid or is not applicable.
Under no circumstances shall the Corporation be liable to a holder of shares
of Carolina Group stock for any Exchange Shares or dividends or distributions
thereon delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.

    (g)   At the time an Exchange Notice is delivered with respect to any
shares of Carolina Group stock, or at the time of the Exchange Date, if
earlier, the Corporation shall have reserved and kept available, solely for
the purpose of issuance upon exchange of the outstanding shares of Carolina
Group stock, such number of Exchange Shares as shall be issuable upon the
exchange of the number of shares of Carolina Group stock specified or to be
specified in the applicable Exchange Notice, provided that the Corporation
shall not under any circumstances be precluded from satisfying its obligation
in respect of the exchange of the outstanding shares of Carolina Group stock
by delivery of purchased Exchange Shares that are held in the treasury of the
Corporation.

    (h)   The Board of Directors may adjust the foregoing procedures as may be
appropriate to reflect any ownership of shares through book-entry accounts or
otherwise in non-certificated form.

    (i)   The Corporation will effect any dividend, exchange or redemption on
a pro rata basis with respect to each holder of record of Carolina Group
stock.

     6.   Liquidation.
          -----------
    In the event of a liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, after payment or provision for
payment of the debts and other liabilities of the Corporation and subject to
the prior payment in full of the preferential amounts to which any class or
series of Preferred Stock is entitled, (a) the holders of the shares of Loews
common
                                       11

stock shall share in the aggregate in a percentage of the funds of the
Corporation remaining for distribution to its common shareholders equal to
100% multiplied by the average daily ratio (expressed as a decimal) of X/Z for
the 20-Trading Day period ending on the fifth Trading Day immediately prior to
the date of the public announcement of such liquidation, dissolution or
winding up of the Corporation, (b) the holders of the shares of Carolina Group
stock shall share in the aggregate in a percentage of the funds of the
Corporation remaining for distribution to its common shareholders equal to
100% multiplied by the average daily ratio (expressed as a decimal) of W/Z for
such 20-Trading Day period, and (c) if applicable, the holders of the shares
of any other class of common shares of the Corporation (other than Loews
common stock or Carolina Group stock), on the basis that may be set forth in
this Certificate of Incorporation with respect to any such shares, shall share
in the aggregate in a percentage of the funds of the Corporation remaining for
distribution to its common shareholders equal to 100% multiplied by the
average daily ratio (expressed as a decimal) of V/Z for such 20-Trading Day
period, where X is the aggregate Market Capitalization of the Loews common
stock, W is the aggregate Market Capitalization of the Carolina Group stock, V
is the aggregate Market Capitalization, if applicable, of any other class of
common shares (other than Loews common stock and Carolina Group stock), and Z
is the aggregate Market Capitalization of (i) the Loews common stock, (ii) the
Carolina Group stock and (iii) any other class of common shares of the
Corporation (other than Loews common stock and Carolina Group stock). Neither
the consolidation or merger of the Corporation with or into any other
corporation or corporations nor the sale, transfer or lease of all or
substantially all of the assets of the Corporation shall itself be deemed to
be a liquidation, dissolution or winding up of the Corporation within the
meaning of this paragraph 6 of this Part B of this Article Fourth.
Notwithstanding the foregoing, any transaction or series of related
transactions that results in all of the assets and liabilities included in the
Carolina Group being held by one or more Carolina Group Subsidiaries, and the
distribution of some or all of the shares of such Carolina Group Subsidiaries
(and no other material assets or liabilities) to the holders of the
outstanding Carolina Group stock shall not constitute a voluntary or
involuntary liquidation, dissolution or winding up of the Corporation for
purposes of this paragraph 6 of this Part B of this Article Fourth, but shall
be subject to paragraph 4 of this Part B of this Article Fourth.

    7.  Determinations by the Board of Directors.
        ----------------------------------------

    Any determinations made by the Board of Directors under any provision of
this Part B of this Article Fourth shall be final and binding on all
shareholders of the Corporation, except as may otherwise be required by law.
The Corporation shall prepare a statement of any determination by the Board of
Directors, respecting the fair market value of any properties, assets or
securities, and shall file such statement with the Secretary of the
Corporation.

    8.  Adjustment of the Carolina Group Allocation Fraction.
        ----------------------------------------------------

   (a)  The denominator of the Carolina Group Allocation Fraction shall be
adjusted from time to time as deemed appropriate by the Board of Directors (i)
to reflect subdivisions (by stock split or otherwise) and combinations (by
reverse stock split or otherwise) of Carolina Group stock and stock dividends
payable in shares of Carolina Group stock, (ii) to reflect the fair market
value of contributions or allocations by the Corporation of cash or property
or other assets or liabilities from the Loews Group to the Carolina Group (or
vice versa), or of cash or

                                       12

property or other assets or liabilities of the Loews Group to, or for the
benefit of, employees of businesses attributed to the Carolina Group in
connection with employee benefit plans or arrangements of the Corporation or
any of its subsidiaries (or vice versa), (iii) to reflect the number of shares
of capital stock of the Corporation contributed to, or for the benefit of,
employees of businesses attributed to the Carolina Group in connection with
benefit plans or arrangements of the Corporation or any of its Subsidiaries,
(iv) to reflect repurchases by the Corporation of shares of Carolina Group
stock for the account of the Loews Group or the Carolina Group, (v) to reflect
issuances of Carolina Group stock for the account of the Carolina Group or the
Loews Group, (vi) to reflect dividends or other distributions to holders of
the Carolina Group stock to the extent a pro rata payment is not made to the
Loews Group, and (vii) under such other circumstances as the Board of
Directors determines appropriate to reflect the economic substance of any
other event or circumstance, provided that, in each case, the adjustment shall
be made in a manner that the Board of Directors determines is fair and
equitable to holders of Loews common stock and Carolina Group stock (and
intended to reflect the relative deemed economic ownership interest, if any,
of the Loews Group in the Carolina Group). Any adjustment made by the Board of
Directors pursuant to the preceding sentence shall, subject to the foregoing,
be at the sole discretion of the Board of Directors, and all such
determinations shall be final and binding on all shareholders of the
Corporation. For purposes of this paragraph 8 of this Part B of this Article
Fourth, the consideration paid by the Loews Group to acquire any assets or
other property contributed or allocated to the Carolina Group shall be
presumed to be the "fair market value" as of its acquisition.

    (b)  Without duplication of any adjustment pursuant to paragraph 8(a) of
this Part B of this Article Fourth, in the event that the Corporation shall
issue shares of Carolina Group stock for the account of the Carolina Group,
then the denominator of the Carolina Group Allocation Fraction shall be
increased by the number of shares of Carolina Group stock so issued.

    (c)  Without duplication of any adjustment pursuant to paragraph 8(a) of
this Part B of this Article Fourth, if, in connection with any share issuance
described in paragraph 8(b) of this Part B of this Article Fourth, or
otherwise, the Corporation contributes or allocates cash or other property or
assets from the Loews Group to the Carolina Group, the denominator of the
Carolina Group Allocation Fraction shall be increased (or further increased)
by an amount obtained by dividing (i) the fair market value of such cash,
property or assets (as determined by the Board of Directors) by (ii) the net
per share offering price of the Carolina Group stock.

     9.  Certain Definitions.
         -------------------

     Unless the context otherwise requires, the terms defined in this
paragraph 9 of this Part B of this Article Fourth shall have, for all purposes
of this Part B of this Article Fourth, the meanings herein specified:

     "Board Required Exchange" shall mean any exchange effected pursuant to
paragraph 4(a), 4(b) or 4(c) of this Part B of this Article Fourth.

     "Carolina Group" shall mean, as of any date that any shares of Carolina
Group stock have been issued and continue to be outstanding, without
duplication, the direct or indirect interest of the Corporation (either itself
or through direct or indirect subsidiaries, affiliates, joint ventures or

                                          13

other investments, or any of their predecessors or successors) in, and the
direct or indirect liability of the Corporation (or any such subsidiary,
affiliate, joint venture or other investment) for:

          (a)  Lorillard, Inc.,

          (b)  any dividend or distribution paid by Lorillard, Inc. following
    the Initial Issuance Date,

          (c)  all assets, liabilities and businesses acquired by a member of
    the Carolina Group or acquired by the Corporation or any of its
    Subsidiaries for the account of, or contributed, allocated or otherwise
    transferred to, the Carolina Group (including the net proceeds of any new
    issuance for the account of the Carolina Group of any new shares of
    Carolina Group stock or Convertible Securities), in each case, after the
    Initial Issuance Date and as determined by the Board of Directors in
    accordance with the provisions of this Part B of this Article Fourth,

          (d)  all net income or net losses arising after the Initial Issuance
    Date from the assets and liabilities that are reflected in the Carolina
    Group and the proceeds of any Disposition of any such assets following
    the Initial Issuance Date,

          (e)  notional, intergroup debt owed from the Carolina Group to the
    Loews Group, in an amount and with terms to be determined by the Board of
    Directors prior to the Initial Issuance Date, and

          (f)  any and all liabilities, costs and expenses of the Corporation
    and Lorillard, Inc. and the subsidiaries and predecessors of Lorillard,
    Inc., arising out of or related to tobacco or otherwise arising out of
    the past, present or future business of Lorillard, Inc. or its
    subsidiaries or predecessors, or claims arising out of or related to the
    sale of any businesses previously sold by Lorillard, Inc. or its
    subsidiaries or predecessors, in each case, whether grounded in tort,
    contract, statute or otherwise, whether pending or asserted in the
    future.

    Notwithstanding the foregoing, the Carolina Group shall not include (1)
any assets, liabilities or businesses disposed of after the Initial Issuance
Date or (2) any assets, liabilities or businesses allocated to the Loews Group
or otherwise distributed, paid or transferred from the Carolina Group, whether
to the Loews Group, to holders of shares of Carolina Group stock or otherwise,
in each case after the Initial Issuance Date and as determined by the Board of
Directors in accordance with the provisions of this Part B of this Article
Fourth. Accordingly, the assets of the Carolina Group shall be reduced by,
among other things, (x) payments of dividends or distributions to holders of
Carolina Group stock or to the Loews Group in respect of its interest in the
Carolina Group in connection with any such dividend or distribution, (y)
payments of interest or principal on the notional, intergroup debt owed to the
Loews Group, and (z) payments in respect of any costs, expenses or other
liabilities allocated to the Carolina Group.

    "Carolina Group Aggregate Distributable Amount" shall mean the Carolina
Group Allocated Portion of the excess of (1) the Net Proceeds received by the
Corporation over (2) the Loews Tobacco Contingency Reserves.

                                       14

    "Carolina Group Allocated Portion" shall mean, with respect to the
Carolina Group as a whole, or any dividend, distribution, payment,
consideration or other amount or allocation requiring apportionment between
the holders of Carolina Group stock (other than the Corporation and its
Subsidiaries), on the one hand, and the Loews Group, on the other hand, the
following:  (a) in the case of the Carolina Group as a whole, the proportion
of such Group represented by the Carolina Group Allocation Fraction, and (b)
in the case of any other amount or allocation, the product of (i) such amount
or allocation and (ii) the Carolina Group Allocation Fraction.

    "Carolina Group Allocation Fraction" shall mean, as of any date of
determination, a fraction, the numerator of which shall be the number of
shares of Carolina Group stock outstanding on such date and the denominator of
which shall be a number initially determined by the Board of Directors, in its
sole discretion, prior to the Initial Issuance Date, subject to adjustment
from time to time as described in this Part B of this Article Fourth, provided
that such fraction shall in no event be greater than one. If the holders of
any securities of the Corporation or any other Person that are convertible
into or exercisable or exchangeable for shares of Carolina Group stock are
entitled to participate in any dividend or other distribution with respect to
the Carolina Group stock, such shares so issuable upon such conversion,
exercise or exchange shall be taken into account in calculating the Carolina
Group Allocation Fraction and any amount payable to the Loews Group in such
manner as the Board of Directors determines to be appropriate.

    "Carolina Group Available Dividend Amount" shall mean, as of any date, the
Carolina Group Allocated Portion of (1) the excess of (a) the amount by which
the total assets of the Carolina Group exceed the total liabilities of the
Carolina Group as of such date over (b) the sum of (i) the par value of all
issued shares of Carolina Group stock and each class or series of Preferred
Stock attributed to the Carolina Group, (ii) the amount of the consideration
received for any shares of Preferred Stock attributed to the Carolina Group
without par value that have been issued, except such part of the consideration
therefor as may have been allocated to surplus in a manner permitted by law,
and (iii) any amount not included in subclauses (i) and (ii) above that the
Corporation (by appropriate action of the Board of Directors) has transferred
to stated capital specifically in respect of Carolina Group stock, minus (c)
all reductions from such sums set forth in clauses (i), (ii) and (iii) above
as have been effected in a manner permitted by law, or (2) in case there shall
be no excess under clause (1), the net profits of the Carolina Group for the
fiscal year in which the dividend is declared and/or the preceding fiscal
year; provided, however, that, in the event that the law governing the
Corporation changes from that governing the Corporation on the date the
adoption of the Amendment to this Certificate of Incorporation pursuant to
which the Carolina Group stock was authorized (whether because of amendment of
the applicable law or because of a change in the jurisdiction of incorporation
of the Corporation through merger or otherwise), the Carolina Group Available
Dividend Amount shall mean the amount of dividends, as determined by the Board
of Directors, that could be paid by a Corporation (governed under such
applicable law) having the assets and liabilities of the Carolina Group, an
amount of outstanding common stock (and having an aggregate par value) equal
to the amount (and aggregate par value) of the outstanding Carolina Group
stock and of each class or series of Preferred Stock attributed to the
Carolina Group and having an amount of earnings or loss or other relevant
corporate attributes as reasonably determined by the Board of Directors in
light of all factors deemed relevant by the Board of Directors.

                                       15

    "Carolina Group Incremental Dividend" shall mean, as of any date, with
respect to any Lorillard Dividend, an amount equal to the Carolina Group
Allocated Portion of the Lorillard Dividend.

    "Carolina Group Net Proceeds" shall mean, as of any date, with respect to
any Disposition of any of the assets of the Carolina Group, an amount, if any,
equal to the Carolina Group Allocated Portion of the Net Proceeds.

    "Carolina Group Related Business Transaction" shall mean any Disposition
of all or substantially all the assets attributed to the Carolina Group in a
transaction or series of related transactions that results in the Corporation
or one or more of its Subsidiaries receiving in consideration of such assets
primarily equity securities (including, without limitation, capital stock,
debt securities convertible into or exchangeable for equity securities or
interests in a general or limited partnership or limited liability company,
without regard to the voting power or other management or governance rights
associated therewith) of any entity that (a) acquires such properties or
assets or succeeds (by merger, formation of a joint venture or otherwise) to
the business conducted with such properties or assets or controls such
acquiror or successor, and (b) which the Board of Directors determines is
primarily engaged or proposes to engage primarily in one or more businesses
similar or complementary to the businesses conducted by the Carolina Group
prior to such Disposition.

    "Carolina Group Released Reserves" shall mean, as of any date, with
respect to any Released Reserves, an amount equal to the Carolina Group
Allocated Portion of the Released Reserves.

    "Carolina Group Tobacco Contingency Reserves" shall mean, as of any date,
with respect to any Loews Tobacco Contingency Reserves, an amount equal to the
Carolina Group Allocated Portion of the Loews Tobacco Contingency Reserves.

    "Convertible Securities" shall mean any securities of the Corporation or
any Subsidiary of the Corporation that are convertible into, exchangeable for
or evidence the right to purchase any shares of Loews common stock or Carolina
Group stock, whether upon conversion, exercise or exchange, or pursuant to
anti-dilution provisions of such securities or otherwise.

    "Disposition" shall mean the sale, transfer, assignment or other
disposition (whether by merger, consolidation, sale or contribution of assets
or stock, or otherwise) by the Corporation or Lorillard, Inc. (or their
respective successors) of any of its respective Subsidiaries or properties or
assets. Disposition shall not include a merger, consolidation, exchange of
shares or other business combination transaction involving the Corporation or
Lorillard, Inc. or Lorillard Tobacco Company in which the Corporation or
Lorillard, Inc. or Lorillard Tobacco Company (or their respective successors)
continues, immediately following such transaction, to hold the same, direct
and indirect, interest in the business, assets and liabilities comprising the
Carolina Group that it held immediately prior to such transaction (other than
as a result of any action by any Person included in the Carolina Group).

"Fair Value" shall mean, in the case of equity securities or debt securities
of a class that has previously been publicly traded for a period of at least
three months, the Market Value

                                       16

thereof (if such Market Value, as so defined, can be determined) or, in the
case of an equity security or debt security that has not been publicly traded
for at least such period, means the fair value per share of stock or per other
unit of such other security, on a fully distributed basis, as determined by an
independent investment banking firm experienced in the valuation of securities
selected in good faith by the Board of Directors; provided, however, that, in
the case of property other than securities, the "Fair Value" thereof shall be
determined in good faith by the Board of Directors based upon such appraisals
or valuation reports of such independent experts as the Board of Directors
shall in good faith determine to be appropriate in accordance with good
business practice. Any such determination of Fair Value shall be described in
a statement filed with the records of the actions of the Board of Directors.

    "Fixed Tobacco-Related Liabilities" shall mean noncontingent tobacco-
related costs or liabilities in fixed and determinable amounts directly
arising from (a) a final and nonappealable award or order of a court of
competent jurisdiction or (b) a contractual obligation.

    "Group" shall mean the Loews Group or the Carolina Group.

    "Initial Issuance Date" shall mean the date of first issuance of any
shares of Carolina Group stock.

    "Loews Group" shall mean, as of any date, the interest of the Corporation
in all of the businesses in which the Corporation is or has been engaged,
directly or indirectly (either itself or through direct or indirect
subsidiaries, affiliates, joint ventures or other investments or any of their
predecessors or successors), and the respective assets and liabilities of the
Corporation therein, other than the Carolina Group Allocated Portion of the
Carolina Group.

    "Loews Tobacco Contingency Reserves" shall mean an amount retained by the
Corporation, which the Board of Directors from time to time determines in good
faith should be retained for tobacco-related contingencies or other tobacco-
related costs or liabilities of any kind (by way of contract, tort, indemnity,
guarantee or otherwise), whether or not any such contingency, cost or
liability would be deductible as a cost or expense or would qualify for
treatment as a reserve under generally accepted accounting principles, in each
case, other than any Fixed Tobacco-Related Liabilities.

    "Market Capitalization" of any class or series of capital stock of the
Corporation on any Trading Day shall mean the product of (a) the Market Value
of one share of such class or series on such Trading Day and (b) the number of
shares of such class or series outstanding on such Trading Day.

    "Market Value" of any class or series of capital stock of the Corporation
on any day shall mean the average of the daily closing price of a share of
such class or series on such day (if such day is a Trading Day, and, if such
day is not a Trading Day, on the Trading Day immediately preceding such day)
on the New York Stock Exchange or, if the shares of such class or series are
not quoted on the New York Stock Exchange on such Trading Day, on the Nasdaq
National Market, or, if the shares of such class or series are not quoted on
the Nasdaq National Market on such Trading Day, the average of the closing bid
and asked prices of a share of such class or series in the over-the-counter
market on such Trading Day as furnished by any New York Stock

                                       17

Exchange member firm selected from time to time by the Corporation, or, if
such closing bid and asked prices are not made available by any such New York
Stock Exchange member firm on such Trading Day (including, without limitation,
because such securities are not publicly held), the market value of a share of
such class or series as determined by the Board of Directors; provided that,
for purposes of determining the ratios set forth in paragraph 6 of this Part B
of this Article Fourth, (a) the "Market Value" of any share of Loews common
stock or Carolina Group stock on any day prior to the "ex" date or any similar
date for any dividend or distribution paid or to be paid with respect to Loews
common stock or Carolina Group stock, as applicable, shall be reduced by the
fair market value of the per share amount of such dividend or distribution as
determined by the Board of Directors, and (b) the "Market Value" of any share
of Loews common stock or any share of Carolina Group stock on any day prior to
(i) the effective date of any subdivision (by stock split or otherwise) or
combination (by reverse stock split or otherwise) of outstanding shares of
Loews common stock or Carolina Group stock, as applicable, or (ii) the "ex"
date or any similar date for any dividend or distribution with respect to the
Loews common stock or Carolina Group stock in shares of Loews common stock or
Carolina Group stock, as applicable, shall be appropriately adjusted to
reflect such subdivision, combination, dividend or distribution.

    "Net Proceeds" shall mean, as of any date, with respect to any Disposition
of any of the assets of the Carolina Group, an amount, if any, equal to the
gross proceeds of such Disposition after any payment of, or reasonable
provision for, (without duplication) (a) any taxes payable by the Corporation
or any other member of the Loews Group in respect of such Disposition or in
respect of any mandatory dividend or redemption resulting from such
Disposition (or that would have been payable but for the utilization of tax
benefits attributable to the Loews Group), (b) any transaction costs borne by
the Loews Group in connection with such Disposition, including, without
limitation, any legal, investment banking and accounting fees and expenses
borne by the Loews Group in connection with such Disposition, (c) any Fixed
Tobacco-Related Liabilities, (d) any liabilities and other obligations
(contingent or otherwise) of the Carolina Group (other than tobacco-related
contingencies or other tobacco-related costs or liabilities of any kind (by
way of contract, tort, indemnity, guarantee or otherwise) which are not Fixed
Tobacco-Related Liabilities, whether or not any such contingency, cost or
liability would be deductible as a cost or expense or would qualify for
treatment as a reserve under generally accepted accounting principles),
including, without limitation, any indemnity or guarantee obligations incurred
by the Loews Group in connection with the Disposition or any liabilities
assumed by the Loews Group for future purchase price adjustments, (e) any
preferential amounts, accumulated and unpaid dividends and other obligations
in respect of Preferred Stock attributed to the Carolina Group and (f)
repayment of any notional, intergroup debt owed by the Carolina Group to the
Loews Group. To the extent the proceeds of any Disposition include any
securities (other than Loews common stock) or other property other than cash,
the Board of Directors shall determine the value of such securities or
property; provided that the value of any marketable securities included in
such proceeds shall be the average of the daily Market Value of such
securities for the 20-Trading Day period ending on the 5th Trading Day
immediately preceding the date of a public announcement that a definitive
agreement has been signed for such Disposition.

    "Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, government

                                        18

or agency or political subdivision thereof, or other entity, whether acting in
an individual, fiduciary or other capacity.

    "Qualifying Subsidiary" of a Person shall mean a Subsidiary of such Person
in which such Person's ownership and voting interest is sufficient to satisfy
the ownership and voting requirements of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder, for a distribution of such Person's
interest in such Subsidiary to the holders of Carolina Group stock and, in the
event that the Carolina Group Allocation Fraction is less than one, the
holders of Loews common stock (or any such securities into which the Carolina
Group stock or the Loews common stock may have been converted, reclassified or
changed or for which they may have been exchanged), as the case may be, to be
tax free to such holders.

    "Subsidiary" shall mean, with respect to any Person, any corporation,
limited liability company or partnership 50% or more of whose outstanding
voting securities or membership or partnership interests, as the case may be,
are, directly or indirectly, owned by such Person.

    "Tax Event" shall mean receipt by the Corporation of an opinion of tax
counsel of the Corporation's choice, to the effect that, as a result of any
amendment to, clarification of, or change (including a prospective change) in,
the laws (or any interpretation or application of the laws) of the United
States or any political subdivision or taxing authority thereof or therein
(including enactment of any legislation and the publication of any judicial or
regulatory decision, determination or pronouncement), which amendment,
clarification or change is effective, announced, released, promulgated or
issued on or after the date of initial issuance of the Carolina Group stock,
regardless of whether such amendment, clarification or change is issued to or
in connection with a proceeding involving the Corporation, the Loews Group or
the Carolina Group and whether or not subject to appeal, there is more than an
insubstantial risk that:

          (i)   for tax purposes, any issuance of Carolina Group stock would
    be treated as a sale or other taxable disposition by the Corporation or
    any of its Subsidiaries of any of the assets, operations or relevant
    subsidiaries to which the Carolina Group stock relates,

          (ii)  the existence of the Carolina Group stock would subject the
    Corporation, its Subsidiaries or affiliates, or any of their respective
    successors or shareholders to the imposition of tax or to other adverse
    tax consequences, or

         (iii)  for tax purposes, either Loews common stock or Carolina Group
    stock is not or, at any time in the future, would not be treated solely
    as common stock of the Corporation.

    "Trading Day" shall mean each weekday other than any day on which any
relevant class or series of capital stock of the Corporation is not available
for trading on the New York Stock Exchange or the Nasdaq National Market or in
the over-the-counter market.

                                       19