SMOKING LAWSUIT SETTLED

SAN FRANCISCO -- Lorillard Tobacco Co. has paid more than $1.5 million to
the family of a California smoker who died of cancer, the first time a U.S.
cigarette maker has ever paid a smoking- related personal injury claim,
lawyers said Wednesday.

Milton Horowitz, a Beverly Hills psychoanalyst, died in 1996 from a type of
lung cancer attributed to the asbestos found in the filters of Kent
cigarettes that Lorillard manufactured in the early 1950s. Kent eventually
replaced them with cheaper, non- asbestos filters in 1956.

A San Francisco jury in 1995 awarded the family $1.3 million in
compensatory damages for medical and other expenses and $700,000 in
punitive damages. On Tuesday, Lorillard paid the compensatory portion of
the award, plus interest: $1,556,851.

William Ohlemeyer, Lorillard's attorney, said Wednesday the company likely
would continue to appeal the punitive portion of the award to the U.S.
Supreme Court.

He also contested the Horowitz description of the case as
cigarette-related, noting that the crucial factor leading to Horowitz's
death was asbestos, not tobacco.