<PAGE>   1

                                                                   EXHIBIT 10.56

                                BROOKE GROUP LTD.

                             STOCK OPTION AGREEMENT

                  THIS AGREEMENT is made and entered into as of the 12th day of
March, 1998, by and between BROOKE GROUP LTD., a Delaware corporation (the
"Company"), and KASOWITZ, BENSON, TORRES & FRIEDMAN LLP, a New York limited
liability partnership, MARC E. KASOWITZ and DANIEL R. BENSON (collectively, the
"Holder").

                  WHEREAS, the Company desires to issue, and the Holder desires
to receive, a nonqualified non-transferable option to purchase shares of the
Common Stock, $.10 par value, of the Company (the "Common Stock"), pursuant to
the terms described herein.

                  NOW, THEREFORE, in consideration of the terms and conditions
contained herein and other good and valuable consideration the receipt of which
is hereby acknowledged, and intending to be legally bound hereby, the parties
agree as follows:

         1. GRANT OF OPTION. The Company hereby grants to the Holder an option
(the "Option") to purchase, in accordance with the terms hereof, at an option
price of $17.50 per share, (i) commencing May 1, 1998, up to 250,000 (two
hundred and fifty thousand) shares of the Common Stock and (ii) commencing on
the earlier of a Change of Control or April 1, 1999, up to an additional
1,000,000 (one million) shares of the Common Stock. The Option will expire at
the close of business on March 31, 2003.

                  For purposes of this Agreement, a "Change of Control" shall
occur if or upon the occurrence of:

                           (i) Any "Person" (as the term person is used for
                  purposes of Section 13(d) or 14(d) of the Securities Exchange
                  Act of 1934, as amended (the "Exchange Act")) acquires
                  "Beneficial Ownership" (within the meaning of Rule 13d-3
                  promulgated under the Exchange Act) of any securities of the
                  Company which generally entitles the holder thereof to vote
                  for the election of directors of the Company (the "Voting
                  Securities"), which, when added to the Voting Securities then
                  "Beneficially Owned" by such person, would result in such
                  Person "Beneficially Owning" forty percent (40%) or more of
                  the combined voting power of the Company's then outstanding
                  Voting Securities; provided, however, that for purposes of
                  this paragraph (i), a Person shall not be deemed to have made
                  an acquisition of Voting Securities if such Person: (a)
                  acquires Voting Securities as a result of a stock split, stock
                  dividend or other corporate restructuring in which all
                  stockholders of the class of such Voting Securities are
                  treated on a pro rata basis: (b) acquires the Voting
                  Securities directly from the Company; (c) becomes the
                  Beneficial Owner of more than the permitted percentage of
                  Voting Securities solely as a result of the acquisition of
                  Voting Securities by the Company which, by 



<PAGE>   2

                  reducing the number of Voting Securities outstanding,
                  increases the proportional number of shares Beneficially Owned
                  by such Person; (d) is the Company or any corporation or other
                  Person of which a majority of its voting power or its equity
                  securities or equity interest is owned directly or indirectly
                  by the Company (a "Controlled Entity"); or (e) acquires Voting
                  Securities in connection with a "Non-Control Transaction" (as
                  defined in paragraph (iii) below); or

                           (ii) The individuals who, as of March 12, 1998, are
                  members of the Board (the "Incumbent Board") cease for any
                  reason to constitute at least two-thirds of the Incumbent
                  Board; provided, however, that if either the election of any
                  new director or the nomination for election of any new
                  director was approved by a vote of more than two-thirds of the
                  Incumbent Board, such new director shall be considered as a
                  member of the Incumbent Board; provided further, however, that
                  no individual shall be considered a member of the Incumbent
                  Board if such individual initially assumed office as a result
                  of either an actual or threatened "Election Contest" (as
                  described in Rule 14a-11 promulgated under the Exchange Act)
                  or other actual or threatened solicitation of proxies or
                  consents by or on behalf of a Person other than the Board (a
                  "Proxy Contest"), including by reason of any agreement
                  intended to avoid or settle any Election Contest or Proxy
                  Contest; or

                           (iii) Shareholder approval of:

                                    (a) A merger, consolidation or
                  reorganization involving the Company (a "Business
                  Combination"), unless

                           (1) the stockholders of the Company immediately
                  before the Business Combination, own, directly or indirectly
                  immediately following the Business Combination, at least
                  fifty-one percent (51%) of the combined voting power of the
                  outstanding Voting Securities of the corporation resulting
                  from the Business Combination (the "Surviving Corporation")
                  in substantially the same proportion as their ownership of
                  the Voting Securities immediately before the Business
                  Combination, and

                           (2) the individuals who were members of the
                  Incumbent Board immediately prior to the execution of the
                  agreement providing for the Business Combination constitute
                  at least a majority of the members of the Board of Directors
                  of the Surviving Corporation, and

                            (3) no Person (other than the Company or any
                  Controlled Entity, a trustee or other fiduciary holding
                  securities under one or more employee benefit plans or
                  arrangements (or any trust forming a part thereof) maintained
                  by the Company, the Surviving Corporation or any Controlled
                  Entity, or any Person who, immediately prior to the Business
                  Combination, had Beneficial Ownership of forty percent (40%)
                  or more of the then outstanding Voting Securities) has
                  Beneficial Ownership of forty percent (40%) or more of the
                  combined voting power 



                                       2
<PAGE>   3
 of the Surviving Corporation's then outstanding voting securities (a
transaction described in this subparagraph (a) shall be referred to as a
"Non-Control Transaction");

         (b) A complete liquidation or dissolution of the Company; or

         (c) The sale or other disposition of all or substantially all of the
assets of the Company to any Person (other than a transfer to a Controlled
Entity).

         Notwithstanding the foregoing, (x) a Change in Control shall not be
deemed to occur solely because forty percent (40%) or more of the then
outstanding Voting Securities is Beneficially Owned by (A) a trustee or other
fiduciary holding securities under one or more employee benefit plans or
arrangements (or any trust forming a part thereof) maintained by the Company or
any Controlled Entity or (B) any corporation which, immediately prior to its
acquisition of such interest, is owned directly or indirectly by the
stockholders of the Company in the same proportion as their ownership of stock
in the Company immediately prior to such acquisition; and (y) a Change of
Control shall not be deemed to occur 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 his date of death.

         2. ACCEPTANCE OF GRANT OF OPTION. The Holder accepts the grant of the
Option confirmed hereby and agrees to be bound by the terms and conditions of
this Agreement.

         3. INVESTMENT PURPOSE. The Holder represents to the Company that the
Holder is acquiring the Option and any securities which may be acquired pursuant
to the Option for investment and not with a view to or for sale in connection
with any distribution thereof. The Holder represents that it will not sell or
transfer any securities acquired pursuant to the Option in violation of the
Securities Act of 1933, as amended (the "Act"), or the rules and regulations
promulgated thereunder. Without limiting the scope of the foregoing
representation and warranty, the Holder agrees that it will not sell or transfer
any such securities unless either (a) a registration statement under the Act
shall be in effect with respect to such securities and the Holder shall comply
with the provisions of the Act in connection with the sale of such securities;
or (b) the Holder has, prior to any transfer or attempt to transfer such
securities, obtained an opinion of counsel satisfactory to the Company, stating
that such transfer may be effected without registration of such securities under
the Act.

         4. LEGEND. The Holder of the Option agrees that the Company may place a
legend reflecting the provisions of Section 3 on each certificate evidencing any
securities delivered to the Holder pursuant to the Option and the Company may
place an appropriate "stop transfer" order with its transfer agent with respect
to such securities.

         5. RECAPITALIZATION, ETC. In the event of any change in the outstanding
Common Stock by reason of a stock dividend, recapitalization, merger,
consolidation, split-up, subdivision, combination or exchange of shares, or the
like, the aggregate number and kind of shares subject to the Option and the
exercise price thereof shall be proportionately adjusted by the Company.



                                       3

<PAGE>   4

         6. REGISTRATION. The Company agrees to use its best efforts to file and
keep effective during the entire term of the Option, a Registration Statement on
Form S-8, Form S-3 or other applicable form with respect to the shares of Common
Stock issuable upon the exercise of the Option.

         7. PROCEDURE FOR EXERCISE OF OPTION. The Option may be exercised only
by (a) delivery by the Holder to the Company of written notice of exercise and
(b) surrender of this Agreement to the Company. Each exercise notice must set
forth the number of shares of Common Stock for which the Option is exercised and
must be dated and signed on behalf of the Holder by both Marc E. Kasowitz and
Daniel R. Benson. Upon partial exercise hereof, a new Agreement containing the
same provisions as this Agreement shall be issued by the Company to the Holder
for the number of shares of Common Stock with respect to which the Option shall
not have been exercised.

         Subject to the last paragraph of this Section 7, the exercise is not
effective until the Company receives payment of the full option price for the
number of shares of Common Stock for which the Option is exercised. The option
price shall be paid to the Company in full in cash.

         The date of exercise of the Option is the date on which notice of
exercise and payment of the option price are received by the Company.

         8. ISSUANCE OF CERTIFICATES. Subject to Section 7 above and this
Section 8, the Company will issue, without transfer or issue tax or other
incidental expense, a certificate or certificates representing the number of
shares of Common Stock for which the Option is exercised as soon as practicable
after the date of exercise. Unless otherwise directed, the certificate(s) will
be registered in the name of the person exercising the Option and delivered to
such person.

         9. NON-TRANSFERABILITY OF OPTION. Without the prior written consent of
the Company, the Option is not transferable.

         10. BINDING EFFECT. This Agreement shall be binding upon the successors
and assigns of the Company and inure to and be binding upon the legal
representatives, heirs and legatees of the Holder.

         11. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings, oral
or written, between the parties with respect to the subject matter of this
Agreement.

         12. AMENDMENT. This Agreement may be amended only a written instrument
signed by the Company and the Holders.


                                       4
<PAGE>   5

         13. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York.

         IN WITNESS WHEREOF, the Company and the Holder have executed this
Agreement as of the date first written above.


BROOKE GROUP LTD.                            KASOWITZ, BENSON, TORRES &
                                                FRIEDMAN LLP




By: /s/ Bennett S. LeBow                     By: /s/ Marc E. Kasowitz
   ---------------------------------             ------------------------------
   Name: Bennett S. LeBow                        Name: Marc E. Kasowitz
   Title: Chairman, President and                Title:
            Chief Executive Officer



                                             By: /s/ Daniel R. Benson
                                                -------------------------------
                                                Name: Daniel R. Benson
                                                Title:



                                              /s/ Marc E. Kasowitz
                                              ---------------------------------
                                              Marc E. Kasowitz



                                              /s/ Daniel R. Benson
                                              ---------------------------------
                                              Daniel R. Benson





                                       5