Edgar Filing: LOEWS CORP

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
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Loews Corporation
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(Name of Registrant as Specified in Its Charter)

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[LOGO]
LOEWS CORPORATION

667 Madison Avenue
New York, New York 10021-8087

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 11, 2004

To the Shareholders:

The Annual Meeting of Shareholders of Loews Corporation (the "Company") will
be held at the Harmonie Club, 4 East 60th Street, New York, New York, on
Tuesday, May 11, 2004, at 11:00 A.M. New York City time, for the following
purposes:

.. To elect ten directors;

.. To ratify the appointment of the Company's independent auditors for 2004;

.. 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 15, 2004 are
entitled to notice of and to vote at the meeting and any adjournment thereof.

By order of the Board of Directors,

GARY W. GARSON
Secretary

Dated: March 25, 2004

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

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PROXY STATEMENT

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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 11, 2004.
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 25, 2004. The mailing address of the Company is 667 Madison
Avenue, New York, N.Y. 10021-8087.

Voting

The Company has two classes of common stock outstanding and eligible to vote
at the meeting, namely its Common Stock ("Common Stock") and Carolina Group
stock ("Carolina Group stock"). As of March 15, 2004, the record date for
determination of shareholders entitled to notice of and to vote at the
meeting, there were 185,476,300 shares of Common Stock and 57,966,750 shares
of Carolina Group stock outstanding. Each outstanding share of Common Stock is
entitled to one vote and each outstanding share of Carolina Group stock is
entitled to 1/10 of a vote on all matters which may come before the meeting.
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 ten 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 the Annual Meeting 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, at February 29, 2004,
unless otherwise indicated, as to all persons who, to the knowledge of the
Company, were the beneficial owners of 5% or more of the outstanding shares of
any class of the Company's voting securities. All shares reported were owned
beneficially by the persons indicated unless otherwise set forth below.

Amount
Beneficially Percent
Name and Address Title of Class Owned of Class
---------------- -------------- ------------ --------

Wilma S. Tisch (1).................. Common Stock 30,164,996 (2) 16.2%
980 Fifth Avenue
New York, NY 10021-8087

Preston R. Tisch (1) ............... Common Stock 29,983,184 (3) 16.2%
667 Madison Avenue
New York, NY 10021-8087

Dodge & Cox (4)..................... Common Stock 15,794,617 8.5%
One Sansome St., 35th Floor
San Francisco, CA 94104

Davis Selected Advisers, L.P. (5) .. Common Stock 15,535,245 8.4%
2949 Elvira Road, Suite 101
Tucson, AZ 85706

Brandes Investment Partners, LLC (6) Common Stock 10,930,534 5.9%
11988 El Camino Real
Suite 500
San Diego, CA 92130

FMR Corp. ("FMR") (7) .............. Carolina Group Stock 6,304,980 10.9%
82 Devonshire Street
Boston, MA 02109

AXA Financial, Inc. (8) ............ Carolina Group Stock 4,936,290 8.5%
1290 Avenue of the Americas
New York, NY 10104

Ross Financial Corporation (9) ..... Carolina Group Stock 4,171,500 7.2%
P.O. Box 31363-SMB
Grand Cayman, Cayman Islands B.W.I.

Franklin Resources, Inc. (10) ...... Carolina Group Stock 3,565,700 6.2%
One Franklin Parkway
San Mateo, CA 94403

(1) Preston R. Tisch is Chairman of the Board of the Company. Wilma S. Tisch
was the wife of Mr. P.R. Tisch's late brother, Laurence A. Tisch. 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 Mrs. Tisch and nephews of Mr. P.R. Tisch. Jonathan M.
Tisch, Chairman 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.

(2) Includes 15,572,419 shares of Common Stock owned by Mrs. Tisch directly
or as a nominated executrix of the estate of her late husband, Mr. L.A. Tisch.
Also includes an aggregate of 14,592,577 shares of Common Stock beneficially
owned by Andrew H. Tisch, Daniel R. Tisch, James S. Tisch and Thomas J. Tisch,
each of whom is a son of Mrs. Tisch. Because of their family relationships,
Mrs. Tisch and her sons have reported their ownership jointly, solely for
informational purposes, in a statement on Schedule 13D filed with the
Securities and Exchange Commission, but they have not affirmed that they
constitute a "group" for any purpose, and each of them has expressly
disclaimed beneficial ownership of any shares owned by the others.

(3) Includes 4,419,072 shares owned beneficially by Mr. P.R. Tisch's wife,
and 1,776,116 shares held by Mr. P.R. Tisch as trustee of trusts for the
benefit of his wife as to which he has sole voting and investment power.

(4) This information is as of December 31, 2003 and is based on a Schedule
13G report filed by Dodge & Cox. According to the report, the shares covered
by this Schedule 13G are beneficially owned by clients of Dodge & Cox and
Dodge & Cox has sole voting power only with respect to 14,983,667 shares.

(5) This information is as of December 31, 2003 and is based on a Schedule
13G report filed by Davis Selected Advisers, L.P. as an investment adviser.

(6) This information is as of December 31, 2003 and is based on a Schedule
13G report filed by Brandes Investment Partners, LLC. ("Brandes") as an
investment adviser. This Schedule 13G report was filed jointly by Brandes and
the following control persons of Brandes: Brandes Investment Partners, Inc.,
Brandes Worldwide Holdings, L.P., Charles H. Brandes, Glenn R. Carlson and
Jeffrey A. Busby. Each of the control persons disclaims any direct ownership
of the shares reported in the Schedule 13G, except for an amount that is
substantially less than 1% of the Common Stock outstanding.

(7) This information is as of December 31, 2003 and is based on a Schedule
13G report filed by FMR. According to the report, Fidelity Management &
Research Company ("Fidelity"), a subsidiary of FMR, acts as an investment
advisor to various investment companies and is the beneficial owner of the
shares reported. One such investment company, Fidelity Low Priced Stock Fund
("FLPSC"), owns 4,020,530 of the shares, representing 6.9% of the Carolina
Group stock outstanding. This Schedule 13G report was filed jointly by FMR,
Fidelity, FLPSC, Edward C. Johnson 3d and Abigail P. Johnson. Mr. Johnson is
Chairman and Ms. Johnson is a director of FMR. Mr. Johnson owns 12.0% and Ms.
Johnson owns 24.5% of the outstanding voting stock of FMR.

(8) This information is as of December 31, 2003 and is based on a Schedule
13G report filed by AXA Financial, Inc. According to the report, Alliance
Capital Management L.P., a subsidiary of AXA Financial, Inc., acts as an
investment advisor to various unaffiliated third-party client accounts and has
sole voting power with respect to only 1,877,250 shares. This Schedule 13G
report was filed jointly by AXA Financial, Inc., AXA and three French mutual
insurance companies, as a group, as parent holding companies. Each of the
filing parties disclaims beneficial ownership of the shares covered by this
Schedule 13G.

(9) This information is as of December 31, 2003 and is based on a Schedule
13G report filed by Ross Financial Corporation.

(10) This information is as of December 31, 2003 and is based on a Schedule
13G report filed by Franklin Resources, Inc. ("FRI"). According to the
report, the shares reported are beneficially owned by one or more investment
companies or other managed accounts which are advised by subsidiaries of FRI.
One such investment company, Franklin Income Fund, a series of Franklin
Custodian Funds, Inc., has an interest in more than 5% of the Carolina Group
stock outstanding. This Schedule 13G report was filed jointly by FRI, Charles
B. Johnson, Rupert H. Johnson, Jr. and Franklin Advisers, Inc. The Messrs.
Johnson each own in excess of 10% of the outstanding common stock of FRI and
disclaim beneficial ownership of the shares reported hereby. Each of the
filing parties disclaims beneficial ownership of the shares attributable to
the others.

Director and Officer Holdings

The following table sets forth certain information, at February 29, 2004, as
to the shares of the Company's voting securities beneficially owned by each
director and nominee, each executive officer named in the Summary Compensation
Table below and all executive officers and directors of the Company as a
group, based on data furnished by them.

Amount
Beneficially Percent
Name Title of Class Owned (1) of Class
---- -------------- ------------ --------

Joseph L. Bower Common Stock 3,600 (2) *
John Brademas Common Stock 5,820 (3) *
Charles M. Diker Common Stock 1,800 (4) *
Paul J. Fribourg Common Stock 16,800 (5) *
Peter W. Keegan Common Stock 37,500 (6) *
Philip A. Laskawy Common Stock 3,600 (7) *
Arthur L. Rebell Common Stock 38,500 (8) *
Gloria R. Scott Common Stock 3,200 (9) *
Andrew H. Tisch Common Stock 2,859,500 (10) 1.5%
James S. Tisch Common Stock 3,075,500 (11) 1.7%
Jonathan M. Tisch Common Stock 898,704 (12) *
Preston R. Tisch Common Stock 29,983,184 (13) 16.2%
Fred Wilpon Common Stock 4,800 (14) *
All executive officers and Common Stock 36,970,508 (15) 19.9%
directors as a group
(15 persons including
those listed above)

* Represents less than 1% of the outstanding shares.

(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) Represents 3,600 shares issuable upon the exercise of options granted
under the Loews Corporation 2000 Stock Option Plan (the "Loews Stock Option
Plan") which are currently exercisable.

(3) Includes 3,600 shares issuable upon the exercise of options granted under
the Loews Stock Option Plan which are currently exercisable.

(4) Includes 800 shares issuable upon the exercise of options granted under
the Loews Stock Option Plan which are currently exercisable.

(5) Includes 12,000 shares 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. Also includes
4,800 shares issuable upon the exercise of options granted under the Loews
Stock Option Plan which are currently exercisable.

(6) Represents 37,500 shares issuable upon the exercise of options granted
under the Loews Stock Option Plan which are currently exercisable. In
addition, Mr. Keegan owns beneficially 1,000 shares of Diamond Offshore
Drilling, Inc., a 54% owned subsidiary of the Company ("Diamond Offshore").

(7) Includes 1,600 shares issuable upon the exercise of options granted under
the Loews Stock Option Plan which are currently exercisable, and 2,000 shares
owned beneficially by Mr. Laskawy's wife.

(8) Includes 37,500 shares issuable upon the exercise of options granted
under the Loews Stock Option Plan which are currently exercisable. In
addition, Mr. Rebell owns beneficially 7,034 shares of CNA Financial
Corporation, a 90% owned subsidiary of the Company ("CNA"), including 2,020
shares with respect to which he has shared voting and investment

power, and 4,000 shares of Diamond Offshore, including 3,500 shares issuable
upon the exercise of options to purchase shares of Diamond Offshore which are
currently exercisable.

(9) Represents 3,200 shares issuable upon the exercise of options granted
under the Loews Stock Option Plan which are currently exercisable.

(10) Includes 50,000 shares issuable upon the exercise of options granted
under the Loews Stock Option Plan which are currently exercisable. Also
includes 1,467,787 shares held by trusts of which Mr. A.H. Tisch is the
managing trustee and 40,000 shares held by a charitable foundation as to which
Mr. A.H. Tisch has shared voting and investment power.

(11) Includes 50,000 shares issuable upon the exercise of options granted
under the Loews Stock Option Plan which are currently exercisable. Also
includes 1,467,787 shares held by trusts of which Mr. J.S. Tisch is the
managing trustee and 100,000 shares held by a charitable foundation as to
which Mr. J.S. Tisch has shared voting and investment power. In addition, Mr.
J.S. Tisch owns beneficially 61,248 shares of Diamond Offshore, including
56,248 shares of Diamond Offshore issuable upon the exercise of options which
are currently exercisable, and 6,100 shares of CNA held by a trust of which
Mr. J.S. Tisch is the managing trustee and beneficiary.

(12) Includes 50,000 shares issuable upon the exercise of options granted
under the Loews Stock Option Plan which are currently exercisable. Also
includes 618,704 shares held by a trust of which Mr. J.M. Tisch is the
managing trustee and beneficiary and 130,000 shares held by a charitable
foundation as to which Mr. J.M. Tisch has shared voting and investment power.

(13) Includes 4,419,072 shares owned beneficially by Mr. P.R. Tisch's wife,
and 1,776,116 held by Mr. P.R. Tisch as trustee of trusts for the benefit of
his wife as to which he has sole voting and investment power.

(14) Represents 4,800 shares issuable upon the exercise of options granted
under the Loews Stock Option Plan which are currently exercisable.

(15) Includes 285,400 shares issuable upon the exercise of options granted
under the Loews Stock Option Plan which are currently exercisable.

Section 16(a) Beneficial Ownership Reporting Compliance

Based upon a review of filings with the Securities and Exchange Commission
and written representations that no other reports were required, the Company
believes that during 2003 all of its directors and executive officers complied
with the reporting requirements of Section 16(a) of the Securities Exchange
Act of 1934.

ELECTION OF DIRECTORS
(Proposal No. 1)

Pursuant to the By-laws of the Company, effective as of the date of the
Annual Meeting, the Board has fixed the number of directors constituting the
full Board of Directors at ten. Accordingly, action will be taken at the
meeting to elect a Board of ten 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 recommended by the Nominating
and Governance Committee and approved 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.

Joseph L. Bower, 66 - Donald K. David Professor of Business Administration
at Harvard University. Professor Bower is also a director of Anika
Therapeutics, Inc., Brown Shoe Company, Inc., ML Lee Acquisition Funds, New
America High Income Fund, Inc., Sonesta International Hotels Corporation and T
H Lee-Putnam EO Fund. He has been a director of the Company since 2001.

John Brademas, 77 - President Emeritus of New York University. Dr. Brademas
is also a director of Kos Pharmaceuticals, Inc. He has been a director of the
Company since 1982.

Charles M. Diker, 69 - Managing Partner of Diker Management LLC, a
registered investment adviser. Mr. Diker is also the Chairman of the Board of
Cantel Medical Corp., a provider of infection prevention and control products
and other medical devices. He has been a director of the Company since 2003.

Paul J. Fribourg, 50 - Chairman of the Board, President and Chief Executive
Officer of ContiGroup, a producer of pork and poultry products and provider of
cattle feeding services. Mr. Fribourg is also a director of Premium Standard
Farms, Inc., Vivendi Universal, S.A. and Wyndham International, Inc. He has
been a director of the Company since 1997.

Philip A. Laskawy, 62 - Retired Chairman and Chief Executive Officer of
Ernst & Young. Mr. Laskawy held the positions of Chairman and Chief Executive
Officer of Ernst & Young until his retirement in 2001. Mr. Laskawy is also a
director of General Motors Corporation, Henry Schein, Inc. and The Progressive
Corporation. He has been a director of the Company since 2003.

Gloria R. Scott, 65 - Owner of consulting services firm G. Randle Services.
Dr. Scott served as President of Bennett College in Greensboro, North Carolina
until 2001. She has been a director of the Company since 1990.

Andrew H. Tisch, 54 - Chairman of the Executive Committee and a member of
the Office of the President of the Company. Mr. Tisch is also the Chairman of
the Board of Bulova Corporation ("Bulova"), a 97% owned subsidiary of the
Company, and a director of Canary Wharf Group plc. He has been a director of
the Company since 1985.

James S. Tisch, 51 - President and Chief Executive Officer and a member of
the Office of the President of the Company. He is also a director of BKF
Capital Group, Inc., CNA and Vail Resorts, Inc. and Chairman of the Board and
Chief Executive Officer of Diamond Offshore. He has been a director of the
Company since 1986.

Jonathan M. Tisch, 50 - Chairman and Chief Executive Officer of Loews Hotels
since 2001 and a member of the Office of the President of the Company. Prior
to 2001, Mr. Tisch had been President and Chief Executive Officer of Loews
Hotels. He has been a director of the Company since 1986.

Preston R. Tisch, 77 - Chairman of the Board of the Company. Prior to 1999,
Mr. Tisch had also been Co-Chief Executive Officer of the Company. Mr. Tisch
is also a director of Bulova and CNA. He has been a director of the Company
since 1960, except for a period from 1986 to 1988 during which he resigned to
serve as Postmaster General of the United States.

Director Independence

The Board of Directors has determined that the following directors,
constituting a majority of the Company's directors and nominees, are
independent under the listing standards of the New York Stock Exchange
("Independent Directors"): Joseph L. Bower, John Brademas, Charles M. Diker,
Paul J. Fribourg, Philip A. Laskawy and Gloria R. Scott. In addition, the
Board has determined that Fred Wilpon, whose term as a director

will expire on the Annual Meeting date, is also an Independent Director. The
Board considered all relevant facts and circumstances and applied the
independence guidelines described below in determining that none of the
Independent Directors has any material relationship with the Company or its
subsidiaries.

The Board has established guidelines to assist it in determining director
independence. Under these guidelines, a director would not be considered
independent if any of the following relationships existed during the past
three years: (i) the director is an employee, or an immediate family member is
an executive officer, of the Company; (ii) the director or an immediate family
member receives more than $100,000 per year in direct compensation from the
Company, excluding director and committee fees, pension payments and certain
forms of deferred compensation; (iii) the director is affiliated with or
employed by, or an immediate family member is affiliated with or employed in
a professional capacity by, a present or former internal or external auditor
of the Company; (iv) the director or an immediate family member is employed as
an executive officer of another company where any of the Company's present
executives serve on that company's compensation committee; or (v) the director
is an executive officer or employee, or an immediate family member is an
executive officer, of a company that makes payments to, or receives payments
from, the Company for property or services in an amount which exceeded the
greater of $1 million, or 2% of the other company's annual consolidated gross
revenues.

Committees of the Board

The Company's Board of Directors has a standing Audit Committee,
Compensation Committee, Nominating and Governance Committee, Executive
Committee and Finance Committee. Each of the Audit Committee, Compensation
Committee and Nominating and Governance Committee has a written charter which
can be found on the Company's website at www.loews.com and is available in
print to any shareholder who requests a copy by writing to the Company's
Corporate Secretary. In addition, the Audit Committee charter is attached as
Exhibit A to this proxy statement.

Audit Committee. The primary function of the Audit Committee is to assist
the Board of Directors in fulfilling its responsibility to oversee
management's conduct of the Company's financial reporting process, including
review of the financial reports and other financial information of the
Company, the Company's system of internal accounting controls, the Company's
compliance with legal and regulatory requirements, the qualifications and
independence of the Company's independent auditors and the performance of the
Company's internal audit staff and independent auditors. The Audit Committee
has sole authority to appoint, retain, compensate, evaluate and terminate the
independent auditors and to approve all engagement fees and terms for the
independent auditors.

The members of the Audit Committee are Paul J. Fribourg (Chairman), Charles
M. Diker, Philip A. Laskawy and Gloria R. Scott, each of whom is an
Independent Director and satisfies the additional independence and other
requirements for Audit Committee members provided for in the listing standards
of the New York Stock Exchange. The Board has determined that Mr. Laskawy is
a "financial expert" under the rules of the Securities and Exchange Commission
and that his simultaneous service on the audit committees of three public
companies, in addition to the Company's Audit Committee, does not impair his
ability to effectively serve on the Company's Audit Committee.

Compensation Committee. The Compensation Committee's primary function is to
assist the Board of Directors in discharging its responsibilities relating to
compensation of the Company's executives. These responsibilities include
reviewing the Company's general compensation philosophy for executive
officers, overseeing the development and implementation of compensation
programs for executive officers, and reviewing compensation levels, including
incentive and equity-based compensation, for executive officers, directors and
Board committee members. The Compensation Committee determines and approves
compensation for the Company's Chief Executive Officer and administers the
Company's incentive and equity-based compensation

plans. The members of the Compensation Committee are John Brademas
(Chairman), Charles M. Diker, Paul J. Fribourg and Fred Wilpon, each of whom
is an Independent Director.

Nominating and Governance Committee. In January 2004, the Board of
Directors established the Nominating and Governance Committee, the primary
functions of which are to identify individuals qualified to become members of
the Board of Directors of the Company, recommend to the Board a slate of
director nominees for election at the next annual meeting of shareholders, and
develop and recommend to the Board a set of corporate governance principles
applicable to the Company. These corporate governance principles are set
forth in the Company's Corporate Governance Guidelines, which can be found on
the Company's website at www.loews.com and are available in print to any
shareholder who requests a copy by writing to the Company's Corporate
Secretary. The members of the Nominating and Governance Committee are Paul J.
Fribourg (Chairman), Joseph L. Bower, Gloria R. Scott and Fred Wilpon, each of
whom is an Independent Director.

Director Nominating Process

In evaluating potential director nominees, including those identified by
shareholders, for recommendation to the Board of Directors, the Nominating and
Governance Committee seeks individuals with talent, ability and experience
from a wide variety of backgrounds to provide a diverse spectrum of experience
and expertise relevant to a diversified business enterprise such as the
Company. A candidate should represent the interests of all shareholders, and
not those of a special interest group, have a reputation for integrity and be
willing to make a significant commitment to fulfilling the duties of a
director. The Nominating and Governance Committee will screen and evaluate
all recommended director nominees based on the criteria set forth above, as
well as other relevant considerations. The Nominating and Governance
Committee will retain full discretion in considering its nomination
recommendations to the Board.

Executive Sessions of Non-Management Directors

The Company's non-management directors will meet in regular executive
sessions without management participation. The Chairman of the Nominating and
Governance Committee, currently Paul J. Fribourg, will serve as the presiding
director at these meetings.

Director Attendance at Meetings

During 2003 there were nine meetings of the Board of Directors, eleven
meetings of the Audit Committee and three meetings of the Compensation
Committee. During 2003, 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 served. The Board encourages all
directors to attend the Company's annual meeting of shareholders, but
recognizes that circumstances may prevent attendance from time to time. Ten
of the Company's eleven directors attended its 2003 Annual Meeting of
Shareholders.

Director Compensation

Each director who is not an employee of the Company is paid $6,250 and is
granted options to purchase 400 shares of the Company's Common Stock in each
quarter in which such individual serves as a director. In addition, members
of the Audit Committee are paid $2,000 and members of the Compensation
Committee and Nominating and Governance Committee are paid $1,000 for each
committee meeting attended.

Code of Ethics

The Company has a Code of Business Conduct and Ethics which applies to all
of the Company's directors, officers and employees, including the Company's
principal executive officer, principal financial officer and principal
accounting officer. This Code can be found on the Company's website at
www.loews.com and is available in print to any shareholder who requests a copy
by writing to the Company's Corporate Secretary. The Company intends to post
changes to or waivers of this Code for its principal executive officer,
principal financial officer and principal accounting officer on its website.

AUDIT COMMITTEE REPORT

As discussed above under the heading "Committees of the Board - Audit
Committee," the primary role of the Board's Audit Committee is to oversee the
Company's financial reporting process and manage its relationship with the
independent auditors. In fulfilling its responsibilities, the Audit Committee
has reviewed and discussed the Company's audited financial statements for the
year ended December 31, 2003 with the Company's management and independent
auditors. The Audit Committee has also discussed with the Company's
independent auditors the matters required to be discussed by Statement on
Auditing Standards No. 61, "Communication with Audit Committees," as amended.
In addition, the Audit Committee has discussed with the independent auditors
their independence in relation to the Company and its management, including
the matters in the written disclosures provided to the Audit Committee as
required by Independence Standards Board Standard No. 1, "Independence
Discussions with Audit Committees," and has determined that the provision of
non-audit services provided by the auditors is compatible with maintaining the
auditors' independence. (See "Audit Fees and Services," below.)

The members of the Audit Committee rely without independent verification on
the information provided to them by management and the independent auditors
and on management's representation that the Company's financial statements
have been prepared with integrity and objectivity. They do not provide any
expert or special assurance as to the Company's financial statements or any
professional certification as to the independent auditors' work. Accordingly,
the Audit Committee's oversight does not provide an independent basis to
determine that management has applied appropriate accounting and financial
reporting principles or internal controls and procedures, that the audit of
the Company's financial statements has been carried out in accordance with
generally accepted auditing standards, that the Company's financial statements
are presented in accordance with generally accepted accounting principles, or
that the Company's auditors are in fact "independent."

Based upon the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2003, which has been filed with the Securities and
Exchange Commission.

By the Audit Committee:

Paul J. Fribourg, Chairman
Charles M. Diker
Philip A. Laskawy
Gloria R. Scott

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 four
most highly compensated executive officers of the Company as of December 31,
2003 (the "Named Executive Officers"), for services in all capacities to the
Company and its subsidiaries.

SUMMARY COMPENSATION TABLE

Long Term
Annual Compensation Compensation
------------------------- -------------

Securities
Underlying All Other
Name and Position Year Salary(1) Bonus Options Compensation(2)
----------------- ---- -------- ----- ---------- ---------------

J.S. Tisch 2003 $1,108,619(3) $250,000(4) 20,000 $48,711(5)
Chief Executive 2002 1,208,711(3) 850,000(4) 20,000 48,336(5)
Officer, Office 2001 1,294,388(3) 20,000 50,955(5)
of the President

A.H. Tisch 2003 808,619 250,000(4) 20,000 8,368
Chairman of 2002 908,711 850,000(4) 20,000 8,547
the Executive 2001 993,388 20,000 8,652
Committee,
Office of the
President

J.M. Tisch 2003 808,619 250,000(4) 20,000 8,276
Chairman and 2002 908,711 850,000(4) 20,000 7,826
Chief Executive 2001 993,388 20,000 8,189
Officer of
Loews Hotels,
Office of
the President

A.L. Rebell 2003 981,696 200,000(7) 15,000 8,000
Senior Vice 2002 982,121 1,650,000(8) 15,000 7,700
President (6) 2001 983,478 1,200,000(7) 15,000 6,513

P.W. Keegan 2003 995,322 150,000(9) 15,000 8,000
Senior Vice 2002 995,672 75,000(8) 15,000 7,677
President, Chief 2001 997,031 50,000(9) 15,000 6,800
Financial Officer

(1) Salary includes payments to the Named Executive Officer based on benefit
choices under the Company's flexible benefits plan.

(2) Except as otherwise noted, represents the annual contribution under the
Company's Employees Savings Plan and any related allocation under the Benefit
Equalization Plan.

(3) Includes annual compensation for services as chief executive officer of
Diamond Offshore of $300,000.

(4) Represents unfunded supplemental retirement credits of $250,000 each
(exclusive of interest and pay-based credits) in 2002 and 2003 pursuant to a
supplemental retirement agreement between the Company and the Named Executive
Officer (see "Employment Agreements" and "Pension Plan" below) and for 2002 a
payout of $600,000 under the Company's Incentive Compensation Plan for
Executive Officers (the "Incentive Compensation Plan").

(5) Also includes director's fees paid by CNA amounting to $33,000, $33,000
and $35,000 for 2003, 2002 and 2001, respectively, and insurance premiums and
retirement plan contributions paid by Diamond Offshore of $7,434, $7,509 and
$7,763 for 2003, 2002 and 2001, respectively.

(6) Prior to July, 2003, Mr. Rebell was also the Company's Chief Investment
Officer.

(7) Represents an unfunded supplemental retirement account credit (exclusive
of interest and pay-based credits) pursuant to a supplemental retirement
agreement between the Company and the Named Executive Officer.

(8) Represents a payout under the Incentive Compensation Plan based upon an
award granted in 2002.

(9) Represents an unfunded supplemental retirement account credit (exclusive
of interest based credits) pursuant to a supplemental retirement agreement
between the Company and the Named Executive Officer.

Stock Option Plan

The following table sets forth information regarding grants of options to
acquire shares of Common Stock under the Loews Stock Option Plan that were
made during the fiscal year ended December 31, 2003 to each of the Named
Executive Officers.

OPTION GRANTS IN LAST FISCAL YEAR

Potential Realizable Value
at Assumed Rates of Stock
Price Appreciation for
Individual Grants(1) Option Term
------------------------------------------------------- --------------------------

No. of Percent of
Securities Total Options
Underlying Granted to Exercise
Options Employees Price Per Expiration
Name Granted in Fiscal Year Share(2) Date 5% 10%
---- ------- -------------- --------- ---------- -- ---

J.S. Tisch 20,000 6.53% $46.84 1/21/2013 $589,474 $1,493,537

A.H. Tisch 20,000 6.53 46.84 1/21/2013 589,474 1,493,537

J.M. Tisch 20,000 6.53 46.84 1/21/2013 589,474 1,493,537

A.L. Rebell 15,000 4.90 46.84 1/21/2013 442,106 1,120,153

P.W. Keegan 15,000 4.90 46.84 1/21/2013 442,106 1,120,153

(1) Options granted in 2003 to each of the Named Executive Officers become
exercisable at a rate of 25% per year beginning on the first anniversary of
the grant date.

(2) Represents 100% of the fair market value of the Common Stock on the grant
date.

The following table sets forth information regarding the exercise of stock
options during the fiscal year ended December 31, 2003 by each of the Named
Executive Officers.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES

Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired Value Options at Fiscal In-the-Money Options
Name on Exercise Realized Year-End at Fiscal Year-End (1)
---- ----------- -------- -------------------------- --------------------------

Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------

J.S. Tisch 0 -- 30,000 50,000 $311,600 $168,500

A.H. Tisch 0 -- 30,000 50,000 311,600 168,500

J.M. Tisch 0 -- 30,000 50,000 311,600 168,500

A.L. Rebell 0 -- 22,500 37,500 233,700 126,375

P.W. Keegan 0 -- 22,500 37,500 233,700 126,375

(1) Fair market value of underlying securities as of December 31, 2003, minus
the exercise price.

Employment Agreements

Effective as of January 1, 2004 the employment agreements which the Company
maintains with each of Messrs. A.H. Tisch, J.S. Tisch and J.M. Tisch were
amended to extend the term to March 31, 2005 and to provide for a basic salary
during that term of $975,000 per annum. These agreements also provide the
right to participate in the Incentive Compensation Plan. In addition,
effective January 1, 2004 the Company entered into amendments to the
supplemental retirement agreements it maintains with each of the Messrs. Tisch
supplementing the retirement benefits to which each is entitled under the
Retirement Plan. These amendments provide that the unfunded supplemental
retirement account previously established for each executive will become
vested with an additional $250,000 on December 31, 2004. Amounts vested in any
year are credited with the pay-based credit established under the Retirement
Plan. In addition, on the last day of each calendar year each account's
balance will be credited with the interest credit established under the
Retirement Plan. (See "Pension Plan," below.)

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.

The Retirement Plan is structured as 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 by a "pay-based credit"
based on a specified percentage of annual earnings (based on the participant's
age) and an "interest credit" based on 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 in the Retirement Plan who met certain age and years of service
requirements at January 1, 1998 (the year that the Retirement Plan was
converted into a cash balance plan) 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, 2004 and a straight life annuity form of pension. Each of the
Named Executive Officers qualifies for the Minimum Benefit except for Messrs.
Rebell and Keegan. It is currently estimated that the balance of the account
maintained under the Retirement Plan for Messrs. Rebell and Keegan will be
approximately $1,208,327 and $1,547,307, respectively, when each reaches the
normal retirement age of 65, based on actual interest credits of 4.3% and
4.05% for 2004 and 2003, respectively, and assuming annual interest credits of
5.0% for 2005 and later and no increases in the amount of each executive's
earnings.

PENSION PLAN TABLE

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

20 25 30 35 40 45
-- -- -- -- -- --

$ 800,000 $192,000 $249,600 $313,600 $ 377,600 $ 441,600 $ 505,600
1,000,000 240,000 312,000 392,000 472,000 552,000 632,000
1,200,000 288,000 374,400 470,400 566,400 662,400 758,400
1,400,000 336,000 436,800 548,800 660,800 772,800 884,800
1,600,000 384,000 499,200 627,200 755,200 883,200 1,011,200
1,800,000 432,000 561,600 705,600 849,600 993,600 1,137,600
2,000,000 480,000 624,000 784,000 944,000 1,104,000 1,264,000
2,200,000 528,000 686,400 862,400 1,038,400 1,214,400 1,390,400
2,400,000 576,000 748,800 940,800 1,132,800 1,324,800 1,516,800

The years of credited service of Messrs. A.H. Tisch, J.M. Tisch and J.S.
Tisch are thirty, twenty-four and twenty-six, respectively.

Amounts paid to Mr. J.S. Tisch by Diamond Offshore included in the Summary
Compensation Table 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 $7,500 in 2003.

In addition to the foregoing, the Company maintains a supplemental
retirement account for each Named Executive Officer pursuant to supplemental
retirement agreements with each such individual. Each such account is
credited annually with the interest credit established under the Retirement
Plan. Upon retirement, each of the Named Executive Officers will receive the
value of his account in the form of an annuity or, subject to certain
conditions, in a single lump sum payment. As of December 31, 2003, the
aggregate amounts credited to the supplemental retirement accounts of each of
Messrs. J.S. Tisch, A.H. Tisch, J.M. Tisch, A.R. Rebell and P.W. Keegan were
$573,156, $578,257, $573,156, $2,907,814, and $461,348, respectively.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

General

The overall objective of the Company's executive compensation policy is to
attract and retain highly qualified executive officers and motivate them to
provide a high level of performance for the benefit of the Company and its
shareholders. The Committee believes that to accomplish these objectives
compensation packages should provide executive officers with market
competitive base salaries and the opportunity to earn additional compensation
based upon the Company's financial performance and the performance of the
Company's stock. In considering compensation for the Company's executive
officers, the Compensation Committee relies primarily on the assessment of the
individual's performance and contribution to the Company, in addition to
qualitative factors such as the Company's performance and compensation trends
generally. The principal components of the Company's compensation policy for
its executive officers are base salary, incentive compensation awards, stock
option grants and benefits.

The primary component of compensation for the Company's executive officers
is base salary. Base salary levels for the Company's executive officers are
determined based upon an evaluation of a number of factors, including the
individual's level of responsibility, experience, performance and competitive
market practices as determined by the Company's participation in and analysis
of management compensation surveys, and a review of other published data
relating to executive compensation. The Company targets base salary levels
for its executive officers (as well as salaried employees generally) between
the 50th and 75th percentiles of those paid by companies with comparable
revenues. However, as a result of job performance evaluations and length of
service, the base salary levels of a majority of the Company's executive
officers fall above these parameters.

The second principal component of the Company's compensation policy for
executive officers consists of awards under its Incentive Compensation Plan.
Under this plan, cash awards may be granted to the Company's highest paid
executive officers based on the attainment of specified performance goals in
relation to the after tax net income of the Company. For information with
respect to awards earned and paid to the Chief Executive Officer and the other
Named Executive Officers, see the Summary Compensation Table, above.

The third principal component of the Company's compensation policy for
executive officers consists of grants under the Loews Stock Option Plan.
Under this plan, stock options may be granted to executive officers at
exercise prices equal to not less than the fair market value of the Company's
Common Stock as of the date of grant. This element of the Company's
compensation policy provides the opportunity for the Company's executive
officers to be compensated based upon increases in the market price of the
Company's Common Stock. Information with respect to stock options granted
under this plan to the Company's Chief Executive Officer and the other Named
Executive Officers in 2003 is described under "Stock Option Plan," above.

The Company's executive officers also participate in benefit programs
available to salaried employees generally, including the Company's Employees
Savings Plan, Retirement Plan and Benefit Equalization Plan, discussed above.
In addition, from time to time, the Company's compensation of executive
officers has included unfunded supplemental retirement benefits credited
pursuant to supplemental retirement agreements. Such benefits granted to the
Company's Chief Executive Officer and other Named Executive Officers in 2003
are described in the Summary Compensation Table, above.

Chief Executive Officer

In determining the compensation of the Company's Chief Executive Officer for
2003, the Compensation Committee took into account the overall objectives of
the Company's executive compensation policy and other factors described above
in relation to the various components of the Company's executive compensation.
Based upon the foregoing, in 2003 James S. Tisch was paid a base salary of
$800,000, a reduction from the prior year implemented in order to maintain his
2003 non-performance-based compensation from the Company, including previously
deferred compensation paid to him in 2003, below the $1 million limit for
deductibility under Section 162(m) of the Internal Revenue Code. In addition,
Mr. Tisch received a grant of 20,000 options under the Loews

Stock Option Plan, an $800,000 award under the Company's Incentive
Compensation Plan which was not earned or paid since the Company did not
achieve sufficient net income under the Plan, and a supplemental retirement
benefit of $250,000 in the form of a credit to his unfunded supplemental
retirement account. (See "Employment Agreements," above.)

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 designed
both the Incentive Compensation Plan and the Loews Stock Option Plan so that
compensation in the form of awards or grants made under either plan will be
considered to be "performance-based" under the applicable provisions of the
Internal Revenue Code.

By the Compensation Committee:

John Brademas, Chairman
Charles M. Diker
Paul J. Fribourg
Fred Wilpon

CERTAIN TRANSACTIONS

The Company provides an apartment at a Company operated hotel in New York
City for the use of Preston R. Tisch, for the convenience of the Company and
its hotel subsidiary, at an incremental cost to the Company of approximately
$695,000 in 2003.

TFMG, LLC, an entity affiliated with Messrs. P.R. Tisch, A.H. Tisch, J.S.
Tisch and J.M. Tisch, and certain related persons occupy Company office space
and utilize certain services and facilities of the Company. The Company's cost
for these items is fully reimbursed and the reimbursement methodology and
procedures have been reviewed and approved by the Company's Audit Committee.
The total reimbursement paid in 2003 was approximately $313,000.

COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee are John Brademas, Charles M.
Diker, Paul J. Fribourg and Fred Wilpon, each of whom is an Independent
Director and, consequently, none of whom is or has been an officer or employee
of the Company or its subsidiaries. No executive officer of the Company has
served on the board of directors or compensation committee of any other entity
that has or has had an executive officer who served as a member of the Board
of Directors or Compensation Committee of the Company during 2003.

STOCK PRICE
PERFORMANCE GRAPHS

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"), the
Standard & Poor's Diversified Financial Services Index ("S&P Diversified
Financial Services") and the Company's peer group ("Loews Peer Group")* for
the five years ended December 31, 2003. The graph assumes that the value of
the investment in the Company's Common Stock and each index was $100 on
December 31, 1998 and that all dividends were reinvested. In the future, the
Company will replace the S&P Diversified Financials with the Loews Peer Group
because Standard & Poor's no longer publishes its Diversified Financial
Services Index.

[GRAPH]

1998 1999 2000 2001 2002 2003
---------------------------------------------------

Loews Corporation 100.00 62.61 108.53 117.28 95.25 107.40
S&P 500 100.00 121.04 110.02 96.95 75.52 97.18
Loews Peer Group 100.00 85.41 133.05 120.50 96.99 120.83
S&P Financial Diversified
Services 100.00 132.11 167.30 146.62 115.83 158.85

* The Loews Peer Group consists of the following companies that are industry
competitors of the Company's principal operating subsidiaries: Ace Limited,
American International Group Inc., The Chubb Corporation, Cincinnati Financial
Corporation, Hartford Financial Services Group, Inc., Safeco Corporation, The
St. Paul Companies, Inc., Travelers Property Casualty Corp., XL Capital Ltd.,
Altria Group, Inc., UST Inc. and R.J. Reynolds Tobacco Holdings, Inc.

The Company's Carolina Group stock commenced trading on February 1, 2002.
Accordingly, the following graph compares the total return of the Carolina
Group stock, the S&P 500 Index and the Standard & Poor's Tobacco Index ("S&P
Tobacco") for the period from February 1, 2002 to December 31, 2003. The graph
assumes that the value of the investment in the Company's Carolina Group stock
and each index was $100 on February 1, 2002 and that all dividends were
reinvested.

[GRAPH]

2/1/02 3/02 6/02 9/02 12/02 3/03 6/03 9/03 12/03
---------------------------------------------------------

Carolina Group Stock 100.00 103.06 94.24 66.66 73.56 68.53 101.83 88.48 99.01
S&P 500 100.00 102.48 88.75 73.42 79.62 77.11 88.98 91.33 102.45
S&P Tobacco 100.00 107.45 90.52 80.81 86.36 65.55 98.85 97.42 122.01

RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT AUDITORS

(Proposal No. 2)

The Audit Committee of the Board of Directors has selected Deloitte & Touche
LLP to serve as independent auditors for 2004. Although it is not required to
do so, the Board of Directors wishes to submit the selection of Deloitte &
Touche LLP for ratification by the Company's shareholders at the meeting. Even
if this selection is ratified by shareholders at the Annual Meeting, the Audit
Committee may in its discretion change the appointment at any time during the
year if it determines that such a change would be in the best interests of the
Company and its shareholders. If the Company's shareholders do not ratify the
selection of Deloitte & Touche LLP, the Audit Committee will reconsider its
selection. Representatives of Deloitte & Touche LLP are expected to be at the
Annual Meeting to answer appropriate questions and, if they choose to do so,
to make a statement.

Audit Fees and Services

The following table presents fees billed by Deloitte & Touche LLP and its
affiliates for professional services rendered to the Company and its
subsidiaries in 2003 and 2002, by category as described in the notes to the
table.

2003 2002
---- ----
(in thousands)
------------

Audit Fees (1) $10,189 $ 8,572
Audit Related Fees (2) 4,117 1,507
Tax Fees (3) 590 484
All Other Fees (4) 3,162 11,972
------- -------
Total $18,058 $22,535
======= =======

(1) Includes the aggregate fees and expenses for the audit of the Company's
annual financial statements and the reviews of the Company's quarterly
financial statements.

(2) Includes the aggregate fees and expenses for services that were
reasonably related to the performance of the audit or reviews of the Company's
financial statements and not included under "Audit Fees" above, including,
principally, consents and comfort letters, audits of employee benefits plans
and accounting consultations.

(3) Includes the aggregate fees and expenses for tax compliance and tax
planning services.

(4) Includes the aggregate fees and expenses for products and services
provided, other than the services described above, including, principally,
human capital advisory services, risk consulting services and other consulting
or advisory services performed primarily for CNA and its subsidiaries.

Auditor Engagement Pre-Approval Policy

In order to assure the continued independence of the Company's independent
auditor, currently Deloitte & Touche LLP, the Audit Committee has adopted a
policy requiring its pre-approval of all audit and non-audit services
performed by the independent auditor. Under this policy, the Audit Committee
annually pre-approves certain limited, specified recurring services which may
be provided by Deloitte & Touche, subject to maximum dollar limitations. All
other engagements for services to be performed by Deloitte & Touche must be
specifically pre-approved by the Audit Committee, or a designated committee
member to whom this authority has been delegated. Since its adoption of this
policy in May 2003, the Audit Committee, or a designated member, has pre-
approved all engagements by the Company and its subsidiaries, other than CNA
and Diamond Offshore, for services of Deloitte & Touche, including the terms
and fees thereof, and the Audit Committee concluded that all such engagements
were compatible with the continued independence of Deloitte & Touche in
serving as the Company's independent auditor. Engagements of Deloitte &
Touche by CNA and Diamond Offshore are reviewed and approved by the
independent audit committees of those subsidiaries pursuant to pre-approval
policies adopted by such committees.

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

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
CUMULATIVE VOTING
(Proposal No. 3)

Evelyn Y. Davis, 2600 Virginia Avenue, N.W., Washington, D.C. 20037, owner
of 244 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 stockholders of Loews Corporation, assembled in Annual
Meeting in person and by proxy, hereby request the Board of Directors to take
the necessary steps to provide for cumulative voting in the election of
directors, which means each stockholder shall be entitled to as many votes as
shall equal the number of shares he or she owns multiplied by the number of
directors to be elected, and he or she may cast all of such votes for a single
candidate, or any two or more of them as he or she may see fit.

"REASONS: Many states have mandatory cumulative voting, so do National
Banks.

"In addition, many corporations have adopted cumulative voting.

"Last year the owners of 51,158,696 shares representing approximately 32% of
shares voting, voted FOR this proposal.

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

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

The Board of Directors believes that the present system of voting for
directors, in which all directors are elected by a plurality of the votes
cast, is the fairest and most preferable method for selecting directors. The
Board is opposed to cumulative voting because cumulative voting could make it
possible for a special interest group, which may not represent the interests
of all shareholders, to elect one or more directors beholden only to that
special interest group. The aims of such special interest group may be
adverse to those of the Company and its shareholders as a whole and therefore
could impede the Board's power to act on behalf of the Company and all of its
shareholders. Accordingly, the Board of Directors recommends a vote against
this proposal.

SHAREHOLDER PROPOSAL RELATING TO
ENVIRONMENTAL TOBACCO SMOKE
(Proposal No. 4)

The following shareholders have indicated in writing that they intend to
present the resolution set forth below at the Annual Meeting for action by the
shareholders: the Congregation of Sisters of St. Agnes, 320 County Road K,
Fond du Lac, Wisconsin 54935, owner of 45 shares of Common Stock; Sinsinawa
Dominicans, Inc., 7200 W. Division, River Forest, Illinois 60305, owner of 80
shares of Common Stock; Catholic Health Initiatives, 1999 Broadway, Suite
2600, Denver, Colorado 80202, owner of 100 shares of Common Stock; and
Trinity Health System, 766 Brady Avenue, Apt. 635, Bronx, New York 10462,
owner of 7,207 shares of Common Stock:

"WHEREAS in 2003, an increasing number of municipalities and corporations,
including restaurants, have made the workplace smoke-free to protect the
health of employees and customers;

"-- in June, 2002, a Miami, Florida court awarded $5.5 million to a flight
attendant harmed by environmental tobacco smoke [ETS] exposure;
"-- Our Company was sued by a class of flight attendants claiming their
exposure to ETS increased their risk of contracting lung cancer from ETS.
So far we have paid millions of dollars to settle that lawsuit;
"-- Our Company admits smoking causes lung cancer. Yet we fail to accept
overwhelming scientific evidence that involuntary exposure to ETS causes
lung cancer. Also, the Company funds efforts to block regulatory and
legislative attempts to prohibit smoking in the workplace;
"-- A 2002 summary of findings by the United Nations' International Agency
for Research on Cancer [IARC] stated that scientific evidence on the
carcinogenic effects of passive smoking was conclusive. It noted ETS
increases by 20% the risk for lung cancer;
"-- An August 2002 study in CHEST, the journal of the American College of
Chest Physicians, confirmed that asthmatic children exposed to ETS are more
likely to have increased respiratory symptoms, decreased lung function and
school absences;
"-- The Journal of the American Medical Association reported in 2001 (436-
41): 'Before exposure to environmental tobacco smoke, coronary flow
velocity reserve was significantly higher in nonsmokers than in smokers.
After exposure . [it] decreased and was not significantly different from
that of smokers.' Commenting on this study, a JAMA editorial stated: 'The
investigators demonstrated that, in healthy young volunteers, just 30
minutes of exposure to secondhand smoke compromised the endothelial function
in coronary arteries of nonsmokers in a way that made the endothelial
response of nonsmokers indistinguishable from that of habitual smokers';
"-- A 2001 Canadian study (in International Journal of Cancer) conclusively
showed that the more people smoke in the workplace, the greater the risks
for nonsmokers. The Globe and Mail reported (07/12/01) that people
routinely exposed to significant ETS (ie, workers in bars and restaurants),
face a three-times greater risk for lung cancer;
"-- In May 2000, the U.S. National Institute of Environmental Health
Sciences added directly inhaled tobacco smoke (i.e., ETS) to its 'known
human carcinogens' list;
"--In a 1999 report, researchers discovered that breathing other people's
cigarette smoke makes nonsmokers 82% more likely to suffer a stroke,
increasing the risk of heart disease, heart attack, lung, and breast cancer,
and breathing-related diseases (Tobacco Control, August, 1999);
"-- Our Company has funded numerous restaurant and hospitality associations
in their effort to oppose laws prohibiting smoking in restaurants and bars.
The Company also has sponsored events in bars wherein we have provided
cigarettes for patrons;

"RESOLVED: shareholders request the Company to encourage regulations and
legislation to prohibit smoking in all public and private workplaces, and
publish public statements regarding the health dangers of ETS."

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

Many federal, state and local governmental bodies have adopted laws and
regulations intended to prohibit or restrict smoking in public places, stores
and restaurants and the workplace, and other governmental agencies and bodies
are considering similar laws and regulations. Accordingly, the Company's
subsidiary, Lorillard Tobacco Company ("Lorillard"), believes that proposals
for new or additional legislation or regulations concerning environmental
tobacco smoke should be considered by the appropriate governmental bodies.

In addition, for many years public health agencies have issued well-
publicized reports concerning the asserted health risks to non-smokers of
environmental tobacco smoke. It is Lorillard's belief that any new or
additional public statements with respect to environmental tobacco smoke
should be considered by appropriate public health agencies. Publishing its
own statements, as requested by this proposal, would, in the opinion of

Lorillard, be confusing, could conflict with various governmental laws and
regulations and could expose Lorillard to further risk of litigation.
Accordingly, the Board of Directors believes that this proposal would not be
in the best interests of the Company, and recommends a vote against this
proposal.

SHAREHOLDER PROPOSAL RELATING TO
CHARITABLE CONTRIBUTIONS
(Proposal No. 5)

Mr. Raymond B. Ruddy, 26 Rolling Lane, Dover, Massachusetts 02030, owner of
103 shares of Common Stock, has notified the Company in writing that he
intends to present the following resolution at the Annual Meeting for action
by the shareholders:

"Resolved, the shareholders recommend to the board of directors of Loews
Corporation to cease making charitable contributions.

"Supporting Statement: Thomas Jefferson once wrote, 'To compel a man to
furnish contributions of money for propagation of opinions which he
disbelieves is sinful and tyrannical.' Choice is a popular word in our
culture. Noble prize winning economist and long time critic of corporate
charitable contributions, Milton Friedman, writes about the importance of
choice in his book, Free to Choose. By making charitable contributions at the
corporate level we have usurped the right and duty of individuals to support
the charities of their choice. We may also be forcing thousands of people to
support causes they may disagree with on a most profound level. For example,
abortion rights advocates often use the word choice, without mentioning what
the choice is all about, i.e., abortion. Today there are a number of
prominent charities advocating for abortion and, in at least one case, Planned
Parenthood, actually performing abortions. Other charities, often times
involved in research for cures of disease, may advocate the destruction of
human embryos for research purposes. These may be more controversial
examples, but they illustrate the point today, many charities are involved in
activities that are divisive and not universally supported. Loews Corporation
employees and shareholders represent a broad range of interests. It is truly
impossible to be sensitive to the moral, religious and cultural sensitivities
of so many people. Rather than compel our stakeholders to support potentially
controversial charitable groups we should refrain from giving their money away
for them. Let each person choose. The importance of individual choice and
the importance of each individual cannot be underestimated."

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

The Company is proud of its commitment to community and its charitable
giving history. The Board of Directors believes that the Company's support of
deserving charitable causes is not only a worthwhile end in itself, but that
its charitable donations contribute to the Company's role as a good corporate
citizen, generate goodwill and enhance its reputation among investors,
consumers and employees alike. As a consequence, charitable giving benefits
all of the Company's constituencies, including its shareholders. Accordingly,
the Board of Directors believes that it would not be in the Company's best
interests to cease making charitable contributions and 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 voting stock of the Company in their
names to solicit proxies from the persons who beneficially own such stock, and
such brokerage

houses, custodians, nominees and others, will be reimbursed for their out-of-
pocket expenses and reasonable clerical expense. The Company has engaged
Innisfree M&A Incorporated ("Innisfree") to solicit proxies on its behalf, at
an anticipated cost of approximately $8,000. In addition to the use of the
mails, solicitation may be made by Innisfree or employees of the Company
personally or by telephone, facsimile or electronic transmission.

Communications with the Company by Shareholders and Others

Interested parties, including shareholders, wishing to communicate directly
with the presiding director, other non-management directors or the Board as a
whole may do so by writing to Loews Corporation, 667 Madison Avenue, New York,
New York 10021-8087, Attention: Corporate Secretary. All such communications
will be delivered to the director or directors to whom they are addressed.

Shareholders wishing to propose an individual to be considered by the
Nominating and Governance Committee for possible recommendation to the Board
of Directors must do so by writing to Loews Corporation, 667 Madison Avenue,
New York, New York 10021-8087, Attention: Corporate Secretary. Shareholder
recommendations must include the candidate's name, a brief biographical
description, a statement of the candidate's qualifications, a description of
any relationship between the candidate and either the recommending shareholder
or the Company, and the candidate's signed consent to serve as a director, if
elected. Recommendations for director nominees to be considered for the
Company's 2005 Annual Meeting must be received by the Corporate Secretary not
later than October 1, 2004.

Shareholder proposals for the 2005 Annual Meeting must be received by the
Company's Corporate Secretary not later than November 30, 2004 in order to be
included in the Company's proxy materials. Proxies solicited by the Company
for the 2005 Annual Meeting may confer discretionary authority to vote on any
proposals submitted after February 14, 2005 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,

GARY W. GARSON
Secretary

Dated: March 25, 2004

PLEASE COMPLETE, DATE, SIGN AND
RETURN YOUR PROXY PROMPTLY

Exhibit A

LOEWS CORPORATION

AUDIT COMMITTEE CHARTER

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

Purpose

The Audit Committee's primary function is to assist the Board of Directors of
Loews Corporation (the "Company") with its responsibility of overseeing the
integrity of the Company's financial statements, the Company's compliance with
legal and regulatory requirements, the qualifications and independence of the
Company's independent accountants and the performance of the Company's
internal audit staff and independent accountants. The Committee shall prepare
the Audit Committee Report for the Company's annual proxy statement.

The Company is a holding company. Currently, two subsidiaries of the Company,
CNA Financial Corporation and Diamond Offshore Drilling, Inc., have common
stock registered under the Securities Exchange Act of 1934 and listed for
trading on the New York Stock Exchange. Each of CNA and Diamond Offshore
maintains an audit committee comprised of independent directors in compliance
with stock exchange rules and applicable laws and regulations. The Committee
will review periodically the reports of the audit committees of CNA and
Diamond Offshore and may meet with such audit committees if and whenever it
considers meetings to be necessary or advisable.

Committee Membership

The Committee shall be comprised of three or more directors, as determined by
the Board from time to time, except to the extent that temporary vacancies are
created by the resignation or removal of a Committee member. The Board has
authority to appoint the Committee members, who serve at the pleasure of the
Board, and to designate the Committee Chairperson. Each member of the
Committee must satisfy the independence, experience, financial expertise and
other requirements of the New York Stock Exchange and applicable laws and
regulations. Committee members may not serve on the audit committees of more
than two other public companies unless approved by the Board and such approval
is disclosed in the Company's proxy statement. No member of the Committee may
receive, directly or indirectly, any consulting, advisory or other
compensatory fee from the Company other than (i) director's fees, which may be
received in cash, stock options or other in-kind consideration ordinarily
available to directors; (ii) a pension or other deferred compensation for
prior services that is not contingent on future service; and (iii) any other
regular benefits that other directors receive.

Meetings

The Committee shall meet as often as it determines, but not less frequently
than quarterly. The Committee shall periodically meet separately with
management, the internal auditors and the independent accountants. The
Committee shall also meet periodically in executive sessions without Company
management present. The Committee may request any employee or officer of the
Company or its outside counsel or independent accountants to attend a meeting
or to meet with the Committee or its advisors. The Committee may fix its own
rules of procedure, subject to the requirements of this Charter, stock
exchange rules and applicable laws and regulations.

A-1

Authority And Responsibilities

Company management is responsible for preparing financial statements. The
Committee's primary responsibility is oversight. To carry out this
responsibility, the Committee shall undertake the common recurring activities
described below, but may diverge from this list as appropriate under the
circumstances. The Committee may form and delegate authority to sub-
committees consisting of one or more members when appropriate.

1. Oversight of the Independent Accountants. The Committee shall:

(a) have sole authority to directly appoint, retain, compensate, evaluate
and terminate the independent accountants and to approve all
engagement fees and terms, including mandatory pre-approval of all
engagements of the independent accountants in accordance with policies
and procedures adopted by the Committee from time to time or as
required by stock exchange rules or applicable laws or regulations;

(b) oversee the work of the independent accountants, including resolution
of disagreements between management and the independent accountants
regarding financial reporting, and the independent accountants shall
report directly to the Committee;

(c) at least annually, review reports from the independent accountants
regarding their internal quality-control procedures, any material
issues raised by the most recent internal quality-control review or
peer review or any regulatory or professional inquiry within the
preceding five years, and all relationships between the independent
accountants and the Company;

(d) annually evaluate the qualifications, performance and independence of
the independent accountants and the lead partner, taking into account
the opinions of management and the internal auditors, and present its
conclusions to the Board;

(e) annually seek assurances that partners of the independent accountants
who are directly involved in the audit are rotated as required by
regulations or stock exchange rules and that no partner earns or
receives compensation based on the performance of any services for the
Company other than audit, review or attest services;

(f) consider annually whether, in order to assure continuing auditor
independence, the Company should rotate its independent accounting
firm on a regular basis;

(g) set policies for the Company's hiring of current or former employees
of the independent accountants;

(h) instruct the independent accountants that such firm is ultimately
accountable to the Board of Directors of the Company and the
Committee, as representatives of the shareholders;

(i) instruct the independent accountants to submit to the Committee
annually a formal written statement of the fees billed in each of the
last two fiscal years for each of the following categories of services
rendered by the independent accountants to the Company and each of its
subsidiaries: (i) the audit of their annual financial statements and
the reviews of their quarterly financial statements or services that
are normally provided by the independent accountants in connection
with statutory and regulatory filings or engagements; (ii) assurance
and related services not included in clause (i) that are reasonably
related to the performance of the audit or review of financial
statements, in the aggregate and by each service; (iii) tax
compliance, tax advice and tax planning services, in the aggregate and
by each service; and (iv) all other products and services rendered by
the independent accountants, in the aggregate and by each service; and

A-2

(j) obtain from the independent accountants assurance that each audit is
conducted in a manner consistent with Section 10A of the Securities
Exchange Act of 1934, which sets forth certain procedures to be
followed in any audit of financial statements required under that Act.

2. Oversight of Financial Reporting and Controls. The Committee shall:

(a) meet with the independent accountants prior to any audit to discuss
the planning and staffing of the audit;

(b) review and discuss with management and the independent accountants the
annual audited financial statements and quarterly financial statements
to be included in the Company's reports filed with the Securities and
Exchange Commission, including Management's Discussion and Analysis of
Financial Condition and Results of Operations;

(c) review and discuss the following with management and the independent
accountants, in connection with the Committee's review of the
Company's annual financial statements and, as appropriate, quarterly
financial statements and related disclosures:

. critical accounting policies and financial statement presentation,
including key accounting decisions and judgments, significant
changes in the selection or application of accounting principles,
the rationale for such choices and the alternatives available under
generally accepted accounting principles (GAAP);

. material written communications between the independent accountants
and management, including any "management" or "internal control"
letter issued or proposed to be issued by the independent
accountants and management's responses;

. any problems encountered in the audit or review of the financial
statements, including any disagreements between management and the
independent accountants or limitations on the activities of the
independent accountants, and management's responses;

. the effect of regulatory and accounting initiatives, as well as off-
balance sheet structures, on the financial statements;

. any accounting adjustments that were noted or proposed by the
independent accountants but were "passed" (as immaterial or
otherwise);

. communications between the audit team and the independent
accountants' national office respecting auditing or accounting
issues presented by the engagement;

. the certifications made by the principal executive officer and
principal financial officer with respect to the Company's periodic
reports filed with the SEC;

. management's report on internal control over financial reporting and
the independent accountants' related attestation report and any
material changes in the Company's internal control over financial
reporting;

. any appointment and replacement of the director of the internal
auditing department; and

. major financial risk exposures and the steps management has taken to
monitor and control such exposures, including the Company's risk
assessment and risk management policies;

A-3

(d) review the type and presentation of information to be included in
earnings press releases (particularly any "pro forma" or "adjusted"
non-GAAP information), as well as financial information and earnings
guidance which management may provide to analysts and rating agencies;
provided, however, that such review need not take place in advance of
each earnings release or each instance in which guidance may be
provided;

(e) annually review and discuss with the independent accountants and
management the Company's internal audit department and its audit plan,
responsibilities, budget and staffing;

(f) establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal
accounting controls or auditing matters and the confidential,
anonymous submission by employees of the Company of concerns regarding
questionable accounting or auditing matters;

(g) advise management, the internal auditing department and the
independent accountants that they are expected to provide to the
Committee a timely analysis of significant financial reporting issues
and practices;

(h) consider any reports or communications (and management's and/or the
internal audit department's responses thereto) submitted to the
Committee by the independent auditors required by or referred to in
Statement of Accounting Standards 61; and

(i) inquire of the Company's Chief Executive Officer and Chief Financial
Officer as to the existence of any significant deficiencies in the
design or operation of internal controls that could adversely affect
the Company's ability to record, process, summarize and report
financial data, any material weakness in internal controls, and any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal
controls.

3. Compliance with Legal and Regulatory Requirements. The Committee shall
periodically discuss with the Company's General Counsel any significant
legal, compliance or regulatory matters that may have a material effect on
the Company's business, financial statements or compliance policies
including material notices to or inquiries received from governmental
agencies.

4. Additional Responsibilities of the Committee. The Committee shall make
regular reports to the Board. The Committee shall annually review and
evaluate the Committee's own performance and review and reassess the
adequacy of this Charter and recommend any proposed changes to the Board
for approval.

5. Additional Powers of the Committee. The Committee shall have the
authority, to the extent it deems necessary or appropriate, to retain
special legal, accounting or other experts to advise the Committee and
carry out its duties, and to conduct or authorize investigations into any
matters within its scope of responsibilities. The Committee shall be
provided with the funding and other resources required to discharge its
duties and responsibilities, including payment of reasonable compensation
to the independent accountants and to any advisors employed by the
Committee.

Limitations of the Committee's Role

While the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to prepare financial statements,
plan or conduct audits or determine that the Company's financial statements
and disclosures are complete or accurate or in accordance with GAAP or
applicable laws or regulations. The Committee's job is one of review and it
recognizes that the Company's management is responsible for preparing the
Company's financial statements and that the independent accountants are
responsible for auditing or reviewing those financial statements, as
applicable. The Committee recognizes that management and the independent
accountants have more time, knowledge and detailed information concerning

A-4

the Company than do Committee members. Consequently, in performing its
functions, the Committee is not providing any expert or special assurance as
to the Company's financial statements or any professional certification as to
the independent accountants' work.

A-5

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

The undersigned hereby constitutes and appoints Gary W. Garson, Peter W.
Keegan and Kenneth J. Zinghini 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 Harmonie Club, 4 East 60th Street, New York,
New York, on May 11, 2004, 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" PROPOSAL 2, AND "AGAINST" PROPOSALS 3,
4 and 5.

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

Please mark
your votes
like this [ X ]

The Board of Directors recommends a vote The Board of Directors recommends a vote AGAINST
FOR Items 1 and 2 Items 3, 4 and 5

Item 1-ELECTION OF DIRECTORS WITHHELD
Nominees: FOR FOR ALL FOR AGAINST ABSTAIN

[ ] [ ] ITEM 3-SHAREHOLDER [ ] [ ] [ ]
01) J.L. Bower PROPOSAL-CUMULATIVE
02) J. Brademas VOTING
03) C.M. Diker
04) P.J. Fribourg
05) P.A. Laskawy ITEM 4-SHAREHOLDER [ ] [ ] [ ]
06) G.R. Scott PROPOSAL-ENVIRONMENTAL
07) A.H. Tisch TOBACCO SMOKE
08) J.S. Tisch
09) J.M. Tisch
10) P.R. Tisch ITEM 5-SHAREHOLDER [ ] [ ] [ ]
PROPOSAL-CHARITABLE
CONTRIBUTIONS

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

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

Signature(s) Date:
-------------------------------------------------------------- ------------------------------------------
COMMON STOCK

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

The undersigned hereby constitutes and appoints Gary W. Garson, Peter W.
Keegan and Kenneth J. Zinghini 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 Carolina Group Stock of the undersigned in Loews Corporation at the Annual
Meeting of Shareholders to be held at the Harmonie Club, 4 East 60th Street,
New York, New York, on May 11, 2004, 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 IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY

Please mark
your votes
like this [ X ]

The Board of Directors recommends a vote The Board of Directors recommends a vote AGAINST
FOR Items 1 and 2 Items 3, 4 and 5

Item 1-ELECTION OF DIRECTORS WITHHELD
Nominees: FOR FOR ALL FOR AGAINST ABSTAIN

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

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

Signature(s) Date:
-------------------------------------------------------------- ------------------------------------------
CAROLINA GROUP STOCK