exv10w23






Exhibit 10.23




VECTOR GROUP LTD.

100 S.E. Second Street, 32nd Floor

Miami, Florida 33131




December 3, 2009




Mr. J. Bryant Kirkland III

[Address Redacted]



Dear Mr. Kirkland:




     We are pleased to inform you that Vector Group Ltd. (the “Company”) has granted you a
nonqualified option (the “Option”) to purchase 80,000 shares of the Company’s common stock, par
value $.10 per share (the “Common Stock”), at a purchase price of $14.07 per share, subject to
adjustment (any of the underlying shares of Common Stock to be issued upon exercise of the Option
are referred to hereinafter as the “Shares”), pursuant to the Company’s 1999 Amended and Restated
Long-Term Incentive Plan, as may be and is in effect and as amended from time to time (the “Plan”).
This agreement is subject in all respects to the terms and provisions of the Plan, all of which
terms and provisions are made a part of and incorporated in this agreement as if they were each
expressly set forth herein. In the event of any conflict between the terms of this agreement and
the terms of the Plan, the terms of the Plan shall control.



     1. The Option may be exercised on or prior to the tenth anniversary of the date of grant
(after which date the Option will, to the extent not previously exercised, expire), provided the
Option shall only vest and become exercisable as to all of the aggregate shares covered thereby on
December 3, 2013. However, the Option shall earlier vest and become immediately exercisable upon
(i) the occurrence of a “Change in Control” as defined in Section 6(f) of the Amended and Restated
Employment Agreement dated as of January 27, 2006, by and between Howard M. Lorber and the Company,
regardless of whether the Employment Agreement is then in effect (the “Employment Agreement”),
other than any Change in Control arising by reason of a testamentary bequest by Bennett S. LeBow to
or for the benefit of his surviving spouse of any or all securities of the Company beneficially
owned by him as of the date of death, so long as, following the bequest, the event referenced in
Section 6(f)(ii) of the Employment Agreement shall not have occurred or (ii) the termination of
your employment with the Company due to death or Disability (as defined in Section 2.8 of the
Plan).



 









 





Mr. J. Bryant Kirkland III

December 3, 2009

Page 2




 




     2. The Option, from and after the date it vests and becomes exercisable pursuant to Section 1
hereof, may be exercised in whole or in part by delivering to the Company a written notice of
exercise in the form attached hereto as Exhibit A, specifying the number of the Shares to be
purchased and the purchase price therefor, together with payment of the purchase price of the
Shares to be purchased. The purchase price is to be paid in cash or by delivering shares of Common
Stock already owned by you for at least six months having a fair market value on the date of
exercise equal to the purchase price of the Option being exercised, or a combination of such shares
and cash.



          In addition, payment of the purchase price of the Shares to be purchased may also be made by
delivering a properly executed notice to the Company, together with a copy of the irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds
necessary to pay the purchase price, and, if required, the amount of any federal, state or local
withholding taxes.



          No Shares shall be issued until full payment therefor has been made. You shall have all of
the rights of a stockholder of the Company holding the Common Stock that is subject to the Option
(including, if applicable, the right to vote the Shares and the right to receive dividends
thereon), when you have given written notice of exercise, have paid in full for such Shares and, if
requested, have given the certificate described in Section 9 hereof.



     3. In the event your employment with the Company is terminated for any reason, the Option
shall forthwith terminate, provided that you may exercise any then unexercised portion of the
Option then vested and exercisable pursuant to Section 1 hereof at any time prior to the earlier of
one year from the date of termination or the expiration of the Option.



     4. The Option is not transferable except (i) by will or the applicable laws of descent and
distribution, (ii) as a gift to a foundation, charity or other not-for-profit organization, or
(iii) for transfers to your family members or trusts or other entities whose beneficiaries are your
family members, provided that such transfer is being made for estate, tax and/or personal planning
purposes.



     5. In the event of your death or Disability, the Option may be exercised by your personal
representative or representatives, or by the person or persons to whom your rights under the Option
shall pass by will or by the applicable laws of descent and distribution, within the one year
period following termination due to death or Disability.



     6. In the event of any change in capitalization affecting the Common Stock of the Company,
including, without limitation, a stock dividend or other distribution, stock split, reverse stock
split, recapitalization, consolidation, subdivision, split-up, spin-off, split-off, combination or
exchange of shares or other form of reorganization or recapitalization, or any
other change affecting the Common Stock, the aggregate number of shares of Common Stock covered by
the Option and the exercise price per share of Common Stock subject to the Option shall be
proportionately adjusted by the Company.



 









 





Mr. J. Bryant Kirkland III

December 3, 2009

Page 3




 




     7. The grant of the Option does not confer on you any right to continue in the employ of the
Company or any of its subsidiaries or affiliates or interfere in any way with the right of the
Company or its subsidiaries or affiliates to terminate the term of your employment.



     8. The Company shall require as a condition to the exercise of any portion of the Option that
you pay to the Company, or make other arrangements regarding the payment of, any federal state or
local taxes required by law to be withheld as a result of such exercise.



     9. Unless at the time of the exercise of any portion of the Option a registration statement
under the Securities Act of 1933, as amended (the “Act”), is in effect as to the Shares, the Shares
shall be acquired for investment and not for sale or distribution, and if the Company so requests,
upon any exercise of the Option, in whole or in part, you agree to execute and deliver to the
Company a reasonable certificate to such effect.



     10. You understand and acknowledge that: (i) any Shares purchased by you upon exercise of the
Option may be required to be held indefinitely unless such Shares are subsequently registered under
the Act or an exemption from such registration is available; (ii) any sales of such Shares made in
reliance upon Rule 144 promulgated under the Act may be made only in accordance with the terms and
conditions of that Rule (which, under certain circumstances, restrict the number of shares which
may be sold and the manner in which shares may be sold); (iii) certificates for Shares to be issued
to you hereunder shall bear a legend to the effect that the Shares have not been registered under
the Act and that the Shares may not be sold, hypothecated or otherwise transferred in the absence
of an effective registration statement under the Act relating thereto or an opinion of counsel
satisfactory to the Company that such registration is not required; and (iv) the Company shall
place an appropriate “stop transfer” order with its transfer agent with respect to such Shares.



     11. In the event of the payment of any dividends or other distributions in respect of the
Common Stock on or after the date hereof, through and including the tenth anniversary of the date
of grant, you shall receive, within ten days of the payment of such dividend or distribution, a
payment equal to the amount of any such dividends or other distributions that would have been paid
to you had you been at the record date for such dividends or other distributions a shareholder of
the Shares issuable upon exercise of any then unexercised portion of the Option, whether vested or
unvested (the “Dividend Equivalent”), provided, that in the event that the payment of such dividend
or distribution occurs within the last ten days of a calendar year, the Dividend Equivalent shall
be paid by the Company within the first ten days of the subsequent calendar year.



 









 





Mr. J. Bryant Kirkland III

December 3, 2009

Page 4




 




     12. The Company represents and warrants to you as follows: (i) this letter agreement and the
grant of the Option hereunder have been authorized by all necessary corporate action by the Company
and this letter agreement is a valid and binding agreement of the Company enforceable against the
Company in accordance with its terms; (ii) the grant of the Option to you on the terms set forth
herein will be exempt from the provisions of Section 16(b) of the Securities Exchange Act of 1934,
as amended, pursuant to Rule 16b-3(d) thereunder; (iii) the Company will obtain, at its expense,
any regulatory approvals necessary or advisable in connection with the grant of the Option or the
issuance of the Shares; and (iv) the Company currently has reserved and available, and will
continue to have reserved and available during the term of the Option, sufficient authorized and
issued shares of its Common Stock for issuance upon exercise of the Option.



     13. Promptly following the date hereof, the Company shall use its best efforts to file and
keep in effect a Registration Statement on Form S-8, Form S-3 or other applicable form to register
under the Act the Shares issuable to you upon exercise of the Option and the resale thereof by you.



     14. This letter agreement contains all the understandings between the Company and you
pertaining to the matters referred to herein, and supercedes all undertakings and agreements,
whether oral or in writing, previously entered into by the Company and you with respect hereto. No
provision of this letter agreement may be amended or waived unless such amendment or waiver is
agreed to in writing signed by you and a duly authorized officer of the Company. No waiver by the
Company or you of any breach by the other party hereto of any condition or provision of this letter
agreement to be performed by such other party shall be deemed a waiver of a similar or dissimilar
condition or provision at the same time, any prior time or any subsequent time. If any provision
of this letter agreement or the application of any such provision to any party or circumstances
shall be determined by any court of competent jurisdiction to be invalid and unenforceable to any
extent, the remainder of this letter agreement or the application of such provision to such person
or circumstances other than those to which it is so determined to be invalid and unenforceable,
shall not be affected thereby, and each provision hereof shall be validated and shall be enforced
to the fullest extent permitted by law. This letter agreement will be governed by and construed in
accordance with the laws of the State of Delaware, without regard to its conflicts of laws
principles. This letter agreement may be executed in counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument.



 









 





Mr. J. Bryant Kirkland III

December 3, 2009

Page 5




 




     Would you kindly evidence your acceptance of the Option and your agreement to comply with the
provisions hereof by executing this letter agreement in the space provided below.



	 	 	 	 	 
	 	Very truly yours,





VECTOR GROUP LTD.

 	 
	 	By:  	/s/ Howard M. Lorber
 	 
	 	 	Howard M. Lorber 	 
	 	 	President and Chief Executive Officer 	 
	 



	 	 	 	 	 
	AGREED TO AND ACCEPTED:

 	 
	/s/ J. Bryant Kirkland III
 	 
	J. Bryant Kirkland III 	 
	 	 
	 




 









 








EXHIBIT A




Vector Group Ltd.

100 S. E. Second Street, 32nd Floor

Miami, Florida 33131




Gentlemen:





     Notice is hereby given of my election to purchase
          
                 shares of Common Stock, $.10 par
value (the “Shares”), of Vector Group Ltd., at a price of $                            per Share, pursuant to the
provisions of the stock option granted to me on December 3, 2009. Enclosed in payment for the
Shares is:




			
	                    o	 	my check in the amount of $                           .






			
	                    o	 	                            Shares having a total value of $                           , such value
being based on the closing price(s) of the Shares on the date hereof.





     The following information is supplied for use in issuing and registering the Shares purchased
hereby:



	 	 	 
	Number of Certificates

     and Denominations

	 	
 


	 
	 	 
	Name

	 	
 

	 
	 	 
	Address

	 	
 


 


 

	 
	 	 
	Social Security No.

	 	
 







Dated:




	 	 	 	 	 
	 	Very truly yours,





J. Bryant Kirkland III