Document:

<PAGE>
                                                                   EXHIBIT 10.7

THE RIGHTS OF THE BENEFICIARY HEREUNDER ARE SUBORDINATED TO THE PRIOR PAYMENT
IN FULL AND ALL OTHER RIGHTS OF CONGRESS FINANCIAL CORPORATION ("CONGRESS") AS
AND TO THE EXTENT PROVIDED IN THAT CERTAIN SUBORDINATION AGREEMENT BETWEEN
CONGRESS AND THE BENEFICIARY OF EVEN DATE HEREWITH.

===============================================================================

                                   GUARANTEE

                           Dated as of April 30, 2002

                                       by

                               LIGGETT GROUP INC.
                                  as Guarantor

                                  in favor of

                             THE BANK OF NEW YORK,
                              as Collateral Agent,

            to the benefit of the Holders of the 10% Senior Secured
                       Notes due March 31, 2006 of VGR Holding Inc.

===============================================================================

<PAGE>

                                   GUARANTEE

                  GUARANTEE, dated as of April 30, 2002 (this "Guarantee"), is
made by LIGGETT GROUP INC., a Delaware corporation (the "Guarantor") in favor
of The Bank of New York as Collateral Agent for the benefit of the holders of
the 10% Senior Secured Notes due March 31, 2006 (the "Notes") of VGR Holding
Inc. (the "Company") and The Bank of New York, as Collateral Agent.

                                   RECITALS:

                  A.       On May 14, 2001, the Company issued $60,000,000 in
aggregate principal amount of Notes to the Purchasers (as defined in the Note
Purchase Agreement, dated as of May 14, 2001, between the Company and the
Purchasers named therein (such agreement, as amended, modified and supplemented
from time to time, the "Note Purchase Agreement").

                  B.       The Company wishes to issue an additional
$30,000,000 in aggregate principal amount of Notes pursuant to the Second
Amendment to Note Purchase Agreement and New Note Purchase Agreement (the
"Amendment and Purchase Agreement"), dated as of April 30, 2002 by and among
the Company, the Majority Holders (as defined in the Note Purchase Agreement)
and the New Purchasers (as defined in the Amendment and Purchase Agreement).

                  C.       It is a condition precedent to both the amendment of
the Note Purchase Agreement pursuant to the Amendment and Purchase Agreement
New Purchasers purchasing the additional Notes that the Guarantor shall have
executed and delivered this Guarantee for benefit of all Holders of Notes,
whenever issued, and the Collateral Agent.

                  D.       The Company indirectly owns 100% of the outstanding
capital stock of the Guarantor.

                  NOW, THEREFORE, in consideration of the foregoing premises
and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Guarantor hereby agrees as follows:

                                   ARTICLE 1
                                  DEFINITIONS

                  Section 1.01      Certain Defined Terms.

                           (a)      Each capitalized term used and not
otherwise defined herein shall have the meaning assigned to such term (whether
directly or by reference to another agreement or document) in the Note Purchase
Agreement.

                           (b)      The term "Guaranteed Obligations" shall
have the meaning ascribed to the term "Secured Obligations" in the BGLS Pledge
Agreement.

<PAGE>

                           (c)      The term "Guaranteed Parties" means,
collectively, the Holders and the Collateral Agent.

                                   ARTICLE 2
                                 THE GUARANTEE

                           (a)      The Guarantor hereby unconditionally and
irrevocably guarantees to the Guaranteed Parties the prompt and complete
payment and performance when due (whether at stated maturity, by acceleration
or otherwise) of all Guaranteed Obligations from time to time owing to the
Guaranteed Parties, in each case strictly in accordance with the terms thereof.
The Guarantor hereby further agrees that if the Company shall fail to pay in
full when due (whether at stated maturity, by acceleration or otherwise) any of
the Guaranteed Obligations, the Guarantor will promptly pay the same to the
Collateral Agent for the benefit of the Guaranteed Parties, without any demand
or notice whatsoever, and that in the case of any extension of time of payment
or renewal of any of the Guaranteed Obligations, the same will be promptly paid
in full when due to the Collateral Agent for the benefit of the Guaranteed
Parties (whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.

                           (b)      The obligations of the Guarantor under
Section 2(a) hereof are absolute and unconditional irrespective of the value,
genuineness, validity, regularity or enforceability of the Note Documents or
any other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 2(b) that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and all
circumstances. The Guarantor hereby expressly waives diligence, presentment,
demand of payment, protest and all notices whatsoever, and any requirement that
any Guaranteed Party exhaust any right, power or remedy or proceed against the
Company under the Note Purchase Agreement or the Company Pledge Agreement or
any other agreement or instrument referred to herein or therein, or against any
other Person under any other guarantee of, or security for, any of the
Guaranteed Obligations.

                           (c)      The obligations of the Guarantor under this
Guarantee shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of the Company in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and the Guarantor agrees that it
will indemnify the Guaranteed Parties on demand for all reasonable costs and
expenses (including, without limitation, reasonable fees of counsel) incurred
by Holders and the Collateral Agent in connection with such rescission or
restoration, including any such costs and expenses incurred in defending
against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.

                                       2
<PAGE>

                           (d)      The Guarantor hereby agrees that until the
payment and satisfaction in full of all Guaranteed Obligations it shall not
exercise any right or remedy arising by reason of any performance by it of its
guarantee in Section 2(a) hereof, whether by subrogation or otherwise, against
the Company or any other guarantor of any of the Guaranteed Obligations or any
security for any of the Guaranteed Obligations.

                           (e)      The Guarantor agrees that, as between (i)
the Guarantor and (ii) the Holders, the obligations of the Company under the
Note Purchase Agreement may be declared to be forthwith due and payable as
provided in Section 12 of the Note Purchase Agreement (and shall be deemed to
have become automatically due and payable in the circumstances provided in said
Section 12) for purposes of Section 2(a) hereof notwithstanding any stay,
injunction or other prohibition preventing such declaration (or such
obligations from becoming automatically due and payable by the Guarantor for
purposes of said Section 2(a)).

                           (f)      The guarantee in this Section 2 is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.

                           (g)      The Guarantor hereby acknowledges that this
Guarantee constitutes an instrument for the payment of money, and consents and
agrees that any Holder, at its sole option, in the event of a dispute by the
Guarantor in the payment of any moneys due hereunder, shall have the right to
bring motion-action under New York CPLR Section 3213.

                           (h)      Anything herein or in any other Note
Document to the contrary notwithstanding, the maximum liability of the
Guarantor hereunder shall in no event exceed the maximum amount which can be
guaranteed by the Guarantor under applicable federal and state laws relating to
the insolvency of debtors without rendering the Guarantor insolvent.

                           (i)      At the request of any Holder, the Guarantor
shall execute the following endorsement on any Note:

                  "Liggett Group Inc. hereby unconditionally and irrevocably
                  guarantees, subject to the Liggett Subordination Agreement,
                  to the holder of the foregoing Note the due and punctual
                  payment of all principal, interest and Prepayment Premium, if
                  any, on said Notes as more fully provided in the Liggett
                  Guarantee."

                                   ARTICLE 3
                        REPRESENTATIONS AND WARRANTIES

                  Section 3.01      The Guarantor represents and warrants that:

                           (a)      the Guarantor is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware;

                           (b)      the Guarantor has the corporate power and
authority and the legal right to execute and deliver, to perform its
obligations under this Agreement and has

                                       3
<PAGE>

taken all necessary corporate action to authorize its execution, delivery and
performance of this Guarantee;

                           (c)      this Guarantee constitutes a legal, valid
and binding obligation of the Guarantor, enforceable in accordance with its
terms, except in each case as enforceability may be affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally;

                           (d)      the execution, delivery and performance by
the Guarantor of this Guarantee will not (i) contravene, result in any breach
of, or constitute a default under, or result in the creation of any Lien in
respect of any property of the Guarantor under, any indenture, mortgage, deed
of trust, loan, purchase or credit agreement, lease, corporate charter or
by-laws, or any other agreement or instrument to which the Guarantor is bound
or by which the Guarantor or any of its properties is bound or affected, (ii)
conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any court, arbitrator
or Governmental or Regulatory Authority applicable to the Guarantor or (iii)
violate any provision of any statute or other rule or regulation of any
Governmental or Regulatory Authority applicable to the Guarantor;

                           (e)      no consent, approval or authorization of,
or registration, filing or declaration with, any Governmental or Regulatory
Authority is required in connection with the execution, delivery or performance
by the Guarantor of this Agreement;

                           (f)      no litigation, proceeding, or, to the
knowledge of Guarantor, investigation of or before any arbitrator or
Governmental or Regulatory Authority is pending or, to the knowledge of the
Guarantor, threatened by or against the Guarantor against any of its properties
or revenues with respect to this Agreement or any of the transactions
contemplated hereby;

                           (g)      after giving effect to the transactions
contemplated in the New Note Purchase Agreement, the Guarantor will be Solvent;
and (h) the Guarantor is not an "investment company", or a company "controlled"
by an "investment company", within the meaning of the Investment Company Act of
1940, as amended.

                                   ARTICLE 4
                                  [RESERVED]

                                   ARTICLE 5
                         WAIVER OF SURETYSHIP DEFENSES

                  Without limiting the generality of Section 2 of this
Agreement, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Guarantor hereunder which shall
remain absolute and unconditional:

                                       4
<PAGE>

                           (a)      the occurrence of any Event of Default
under, or any lack of validity, legality or enforceability of any provision of
any Note Document or any other agreement or document;

                           (b)      the failure of any Guaranteed Party:

                                    (i)      to assert any claim or demand or
to enforce any right or remedy against any Document Party or any other Person
under the provisions of any Note Document, or otherwise, or

                                    (ii)     to exercise any right or remedy
against any other guarantor of or other Person pledging collateral securing any
of the Guaranteed Obligations;

                           (c)      at any time or from time to time, with or
without notice to the Guarantor, any change in the time, manner or place of
payment of, or in any term of, all or any of the Guaranteed Obligations, or any
other extension, compromise, indulgence, waiver or renewal of any Guaranteed
Obligation;

                           (d)      any reduction, limitation, variation,
impairment, discontinuance or termination of any of the Guaranteed Obligations
for any reason (other than by reason of any payment which is not required to be
rescinded), including any claim of waiver, release, discharge, surrender,
alteration or compromise, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, the Guaranteed Obligations or
otherwise (other than by reason of any payment which is not required to be
rescinded);

                           (e)      any amendment to, rescission, waiver or
other modification of, or any consent to any departure from, any of the terms
of the Guaranteed Obligations or any guarantees or security;

                           (f)      any addition, exchange, release, discharge,
realization or non-perfection of any collateral security in respect of the
Guaranteed Obligations;

                           (g)      any amendment to, rescission, waiver or
other modification of, or release or addition of, or consent to any departure
from, any other guarantee held by the Holders as security for any of the
Guaranteed Obligations;

                           (h)      the loss of or in respect of or the
unenforceability of any guarantee or other security which the Guaranteed
Parties may now or hereafter hold in respect of the Guaranteed Obligations,
whether occasioned by the fault of the Guaranteed Parties or otherwise;

                           (i)      any change in the name of the Company or in
the constitutive documents, capital structure, capacity or constitution of the
Company, the bankruptcy or

                                       5
<PAGE>

insolvency of the Company, the sale of any or all of the Company's business or
assets or the Company being consolidated, merged or amalgamated with any other
Person;

                           (j)      any failure on the part of the Company or
any other Person to perform or comply with any term of the Note Documents or
any of the Guaranteed Obligations or any other agreement or document;

                           (k)      any suit or other action brought by any
beneficiaries or creditors of, or by, the Company or any other Person for any
reason whatsoever, including without limitation any suit or action in any way
attacking or involving any issue, matter or thing in respect of any Note
Document, any of the Guaranteed Obligations or any other agreement or document;

                           (l)      any lack or limitation of status or of
power, incapacity or disability of the Company or any trustee or agent thereof;
or

                           (m)      any other circumstance (other than final
and indefeasible payment in full) which might otherwise constitute a defense
available to, or a legal or equitable discharge of, the Company, Brooke
Holding, NV Holdings or Vector or any surety or any other guarantor of the
foregoing.

                                   ARTICLE 6
                            MISCELLANEOUS PROVISIONS

                  Section 6.01      Notices. All notices and communications
provided for hereunder shall be in writing and sent (a) by telecopy if the
sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered or certified
mail with return receipt requested (postage prepaid), or (c) by a recognized
overnight delivery service (with charges prepaid). Any such notice must be
sent:

                           (a)      if to any Holder, to such Holder at the
address specified for such communications in Schedule A to the Note Purchase
Agreement, or at such other address as it shall have specified to Liggett and
the Collateral Agent in writing,

                           (b)      if to the Collateral Agent, to the
Collateral Agent at such address as is set forth on its signature page to the
Collateral Agency Agreement or at such other address as the Collateral Agent
shall have specified to each Holder and to Liggett in writing, or

                           (c)      if to Liggett, to Liggett at its address
set forth on its signature page hereto, or at such other address as Liggett
shall have specified to each Holder and to the Collateral Agent.

Notices under this Section 6.01 will be deemed given when actually received if
sent by telecopy, upon the succeeding Business Day if sent by overnight courier
and three days after deposit in the U.S. mail if sent by registered or
certified mail.

                                       6
<PAGE>

                  Section 6.02      Amendments. No waiver, amendment,
modification or termination of any provision of this Guarantee, or consent to
any departure by the Guarantor from the terms of this Guarantee, shall in any
event be effective without the prior written consent of the Majority Holders
(acting in accordance with the Note Documents) and the Collateral Agent. Any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.

                  Section 6.03      Successors and Assigns. This Guarantee
shall be binding upon the Guarantor and its respective permitted successors and
assigns and shall inure to the benefit of the Guaranteed Parties and their
respective successors and assigns. Except as expressly permitted by the Note
Documents, the Guarantor may not assign or otherwise transfer any of its
respective rights or obligations under this Guarantee.

                  Section 6.04      Survival. All agreements, statements,
representations and warranties made by the Guarantor herein or in any
certificate or other instrument delivered by the Guarantor or on its behalf
under this Guarantee shall be considered to have been relied upon by the
Holders and the Collateral Agent and shall survive the execution and delivery
of this Agreement and the Note Documents until termination thereof or the
indefeasible payment in full in cash of all Guaranteed Obligations regardless
of any investigation made by or on behalf of any Holder or the Collateral
Agent.

                  Section 6.05      No Waiver; Remedies Cumulative. No failure
or delay on the part of any Guaranteed Party in exercising any right, power or
privilege hereunder and no course of dealing between the Guarantor and any
Guaranteed Party shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege hereunder or thereunder. The rights and remedies herein expressly
provided are cumulative and not exclusive of any rights or remedies which the
Guaranteed Parties would otherwise have.

                  Section 6.06      Counterparts. This Guarantee may be
executed in any number of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. Delivery of an executed counterpart hereof by facsimile or e-mail
transmission shall be effective as delivery of a manually executed counterpart
hereof.

                  Section 6.07      Captions. The headings of the several
articles and sections and sub-sections of this Guarantee are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Guarantee.

                  Section 6.08      Severability. In case any provision
contained in or obligation under this Guarantee shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

                                       7
<PAGE>

                  Section 6.09      Governing Law; Submission to Jurisdiction
and Venue; Waiver of Jury Trial.

                  THIS GUARANTEE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK INCLUDING, WITHOUT
LIMITATION, ss.ss. 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW
AND NYCPLR 327(b). TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, THE GUARANTOR IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION
OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK
CITY OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY
IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING, WHETHER IN TORT, CONTRACT OR
OTHERWISE, ARISING OUT OF OR RELATING TO THIS AND IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING SHALL BE HEARD AND
DETERMINED ONLY IN ANY SUCH COURT. THE GUARANTOR IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY
GUARANTEED PARTY OR ITS AGENTS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE
GUARANTOR OR ANY OF ITS AFFILIATES IN ANY OTHER JURISDICTION.

                  Section 6.10      Entire Agreement. This Guarantee, together
with any other document executed in connection with this Guarantee, is intended
by the parties as a final expression of their agreement as to the matters
covered by this Guarantee and is intended as a complete and exclusive statement
of the terms and conditions of such agreement.

                  Section 6.11      Independent Obligations. The Guarantor's
obligations under this Agreement shall be in addition to and shall be
independent of every other guarantee or security which the Guaranteed Parties
may at any time hold for any of the Guaranteed Obligations. Any Guaranteed
Party may bring a separate action against the Guarantor without first
proceeding against the Company or any other guarantor or any other Person or
any other security provided by any Person and without pursuing any other
remedy.

                  Section 6.12      Expenses. The Guarantor agrees to pay or to
reimburse the Guaranteed Parties for all reasonable costs and expenses
(including reasonable attorney's fees and expenses) that may be incurred by any
Guaranteed Party in any effort to enforce any of the provisions of this
Guarantee or any of the obligations of the Guarantor under this Guarantee ,
including all such reasonable costs and expenses (and reasonable attorney's
fees and expenses) incurred in any bankruptcy, reorganization, workout or other
similar proceeding.

                                       8
<PAGE>

                  IN WITNESS WHEREOF, Liggett Group Inc. has caused this
Guarantee to be duly executed and delivered as of the date first above written.

                                    LIGGETT GROUP INC.

                                    By: /s/ John R. Long
                                        ---------------------------------------
                                    Name:      John R. Long
                                    Title:     Vice President

                                    Address for Notices:

                                    Liggett Group Inc.
                                    100 Maple Lane
                                    Mebane, North Carolina  27302
                                    Facsimile: (919) 304-7839
                                    Attention: Charles M. Kingan, Jr.

                                    with a copy to:

                                    Vector Group Ltd.
                                    100 S.E. Second Street
                                    Miami, Florida  33131
                                    Telephone:  (305) 579-8000
                                    Facsimile:  (305) 579-8009

                                    Attention:  Richard J. Lampen
                                                Executive Vice President<PAGE>
                                                                   EXHIBIT 10.8

                               VECTOR GROUP LTD.
                          SUPPLEMENTAL RETIREMENT PLAN

                  VECTOR GROUP LTD., a Delaware corporation (the "Company"),
hereby adopts as of the date set forth below the Vector Group Ltd. Supplemental
Retirement Plan for the purpose of providing certain select management
employees of the Company and its affiliates unfunded deferred compensation
benefits payable upon retirement, death or other termination of employment.

                                   SECTION 1
                                  DEFINITIONS

                  Except as otherwise provided herein, the following terms
shall be defined in accordance with this Section 1:

                  1.1      "Accrued Benefit" shall mean that amount of
projected annual retirement benefit set forth on Exhibit A hereto that a
Participant who fulfills the terms and conditions of the Plan would receive at
his Normal Retirement Date.

                  1.2      "Actuarial Equivalent" shall mean a form of benefit
differing in time, period or manner of payout from the normal form of
retirement benefit provided under the Plan but having the same value when
computed using post-retirement mortality table 1983-A (M, F) and pre- and
post-retirement interest rates of 7.5%.

<PAGE>

                  1.3      "Adopting Employer" means (a) any business entity in
which the Company owns a majority interest upon the Effective Date or (b) any
other business entity, which, following the Effective Date, is authorized by
the Board to adopt the Plan.

                  1.4      "Anniversary Date" shall mean the Effective Date and
each anniversary thereof while the Plan remains in effect.

                  1.5      "Board" shall mean the Board of Directors of the
Company.

                  1.6      "Committee" shall mean the person, persons or entity
designated by the Company to administer the Plan on behalf of the Company and
the Adopting Employers.

                  1.7      "Company" shall mean Vector Group Ltd., a Delaware
corporation.

                  1.8      "Disability" shall mean the total inability of a
Participant to perform all of the material duties of the Participant's regular
occupation on a full-time basis due to sickness or injury.

                  1.9      "Disability Retirement Date" shall mean the date
selected by the Committee occurring no later than 30 days following the finding
by the Committee that a Participant who has incurred a Disability is unlikely
to return to active Service prior to attainment of his Normal Retirement Date.

                  1.10     "Effective Date" shall mean the date set forth in
Section 8.1 of the Plan.

                                      -2-
<PAGE>

                  1.11     "Employer" shall mean the Company and any Adopting
Employer for which a Participant renders service.

                  1.12     "Employer Contribution" shall mean the contribution
by an Employer to the Fund for each Plan Year described in Section 3.1 hereof.

                  1.13     "Fiscal Year" shall mean the fiscal year of the
Company.

                  1.14     "Fund" shall mean the fund established under the
Trust Fund Agreement.

                  1.15     "Normal Retirement Date" shall mean the January 1
following the Participant's attainment of the later of age 60 or the completion
of 8 Years of Service with the Company or an Adopting Employer following the
Effective Date.

                  1.16     "Participant" shall mean any key employee of an
Employer who from time to time may be designated on Exhibit A hereto as a
participant in the Plan by the Board and who is an active participant in the
Plan.

                  1.17     "Participant Payment Date" shall mean the date on
which a Participant's Accrued Benefit shall be paid either in whole or in part
to the Participant. Except as set forth in Section 6.4, such date shall be: (a)
the Disability Retirement Date of a Participant who has incurred a Disability,
(b) that date which falls 30 days following the Normal Retirement Date of a
Participant (as such date may be extended pursuant to Section 5.2 hereof), (c)
that date selected by the Board occurring no later than 6 months following the

                                      -3-
<PAGE>

death of a Participant, if the Participant's death takes place prior to any
date described in clauses (a), (b) or (d) of this Section 1.17, or (d) that
date that falls 30 days following the termination of the Service of a
Participant without cause (as defined in Section 4.4 hereof).

                  1.18     "Participation Ratio" shall mean that percentage
equal to a fraction, the numerator of which consists of that number of full
Years of Participation of the Participant in the Plan that were completed by
the Participant prior to the Participant's termination of Service or incurrence
of a Disability and the denominator of which consists of that total number of
Years of Participation that would have been required on the part of the
Participant for the Participant to attain the Participant's Normal Retirement
Date.

                  1.19     "Plan" shall mean the Vector Group Ltd. Supplemental
Retirement Plan, as set forth herein and as the same may be amended from time
to time hereafter.

                  1.20     "Service" shall mean the period of full time
continuous employment of the Participant by the Company or an Adopting
Employer, following the Effective Date.

                  1.21     "Trust Fund Agreement" shall mean the Vector Group
Ltd. Supplemental Retirement Plan Trust, the purpose of which agreement is to
hold the Fund.

                  1.22     "Trustee" shall mean the trustee serving in such
capacity under the Trust Fund Agreement.

                  1.23     "Year of Participation" shall mean a Year of Service
in which the Participant participated in the Plan.

                                      -4-
<PAGE>

                  1.24     "Year of Service" shall mean a 12 consecutive month
period, in each month of which a Participant is entitled to Compensation by
reason of Service.

                                   SECTION 2
                          DESIGNATION OF PARTICIPANTS
                          AND ELIGIBILITY FOR BENEFITS

                  2.1      Designation of Participants. The Participants shall
be those key employees of the Company or an Adopting Employer that the Board
designates to participate in the Plan.

                  2.2      Eligibility for Benefits. Except as otherwise
provided herein, benefits under the Plan shall be payable in respect of a
Participant at the Participant Payment Date applicable to the Participant and
only by reason of the circumstances provided in Sections 4.1 through 4.4
hereof.

                                   SECTION 3
                                  CONTRIBUTION

                  3.1      Amount of Employer Contribution. For the Fiscal Year
ending with the Effective Date or within which falls the Effective Date and
thereafter for each Fiscal Year (or portion thereof) that the Plan remains in
effect, an Employer may, in the discretion of the Board, make an Employer
Contribution to the Fund in that amount that the Employer shall determine to be
necessary or appropriate to provide the benefits under the Plan.

                                      -5-
<PAGE>

                                   SECTION 4
                     CIRCUMSTANCES OF PAYMENT; EXCLUSIVITY

                  4.1      Attainment of Normal Retirement Date. Upon the
attainment of a Participant of the Participant's Normal Retirement Date, the
Participant shall be vested in the Participant's Accrued Benefit, which shall
be paid in the manner set forth in Section 5 hereof to the Participant at the
Participant Payment Date of such Participant, as provided in Section 1.16(b)
hereof.

                  4.2      Disability. A Participant in the Service of an
Employer who incurs a Disability prior to the attainment of the Participant's
Normal Retirement Date shall be vested at the Participant's Disability
Retirement Date in that amount equal to: (i) the Actuarial Equivalent of the
Participant's Accrued Benefit, multiplied by (ii) the Participant's
Participation Ratio, which amount shall be paid in the manner set forth in
Section 5 hereof to the Participant at the Participant Payment Date of such
Participant, as provided in Section 1.16(a) hereof.

                  4.3      Death. In the event a Participant in the Service of
an Employer dies prior to incurring a Disability or attaining his Normal
Retirement Date, such Participant's beneficiary shall be vested in the
Actuarial Equivalent of the Participant's Accrued Benefit, which shall be paid
in the manner set forth in Section 5 hereof at the Participant Payment Date
provided in Section 1.16(c) hereof.

                  4.4      Termination of Service. In the event of the
termination of the Service of a Participant hereunder by an Employer without
"cause" (as defined herein)

                                      -6-
<PAGE>

such Participant shall be vested upon the effective date of such termination of
Service in that, amount equal to: (i) the Actuarial Equivalent of the
Participant's Accrued Benefit, multiplied by (ii) the Participant's
Participation Ratio, which amount shall be paid in the manner set forth in
Section 5 hereof at the Participant Date provided in Section 1.16(d) hereof.
For purposes of this Section 4.4, the term "cause" shall mean solely an act of
fraud or dishonesty by the Participant which constitutes a violation of the
penal law of the State of New York and which results in gain or personal
enrichment of the Participant at the expense of an Employer or any entity
affiliated therewith.

                  4.5      Exclusivity. A Participant whose Service is
terminated upon the Participant's own initiative or for any reason other than
as set forth in the foregoing provisions of this Section 4 shall be entitled to
no benefits whatsoever under the Plan.

                                   SECTION 5
                       METHOD AND RECIPIENTS OF PAYMENTS;
                              PLAN ADMINISTRATION

                  5.1      Normal Payment Method and Recipients of Payments.
The normal form of distribution of the benefit payable to a Participant
pursuant to this Section 5.1, commencing upon the Participant Payment Date of
the Participant, shall be a monthly pension, payable, in the case of a
Participant who is married on such date, under a joint and survivor annuity
that represents the Actuarial Equivalent of a single life annuity, and in the
case of a Participant who is unmarried on such date, under a single life
annuity. In the event of the death of a Participant prior to the applicable
Participant Payment Date of the Participant, the amount of the death benefit
payable in accordance with Section 4.3 hereof

                                      -7-
<PAGE>

shall be paid in a lump sum to the Participant's beneficiary or beneficiaries
theretofore designated by the Participant by filing with the Participant's
Employer or the Committee a notice in writing in such form as the Committee may
prescribe, and in the absence of such designation, shall be paid to the
executors or administrators of the estate of the Participant. The beneficiaries
named as aforesaid may be changed at any time by the Participant by amending
and forwarding to the Participant's Employer or the Committee a further written
designation.

                  5.2      Extension of Participant Payment Date. With the
prior approval of the Company or an Adopting Employer, a Participant may elect
to defer the Participant's applicable Participant Payment Date described in
Section 1.16(b) to a date no later than 30 days following the Participant's
actual termination of Service with the Company or an Adopting Employer,
provided such election is entered into prior to the commencement of that
calendar year in which would occur such otherwise applicable Participant
Payment Date. In the case of any extension of a Participant's applicable
Participant Payment Date authorized by this Section 5.2, the Participant shall
be entitled upon his actual Participant Payment Date to the Actuarial
Equivalent of the Participant's Accrued Benefit.

                  5.3      Exception to Normal Payout Method. Within the
three-month period ending 30 days prior to the applicable Participant Payment
Date of a Participant, a Participant may submit a request to the Committee in
writing to be paid the Accrued Benefit payable to the Participant commencing
upon the applicable Participant Payment Date in the form of a lump sum. The
Committee shall approve or disapprove such request

                                      -8-
<PAGE>

in its discretion and notify the Participant of its decision prior to the
applicable Participant Payment Date of the Participant.

                  5.4      Plan Administration. The general administration of
the Plan shall be the responsibility of the Committee, which is hereby
authorized, in its discretion, to delegate said responsibilities to an
administrator or administrative committee.

                                   SECTION 6
                              SOURCE OF BENEFITS;
                          NO GUARANTEE OF EMPLOYMENT;
                        NO FUNDING; CONSTRUCTIVE RECEIPT

                  6.1      Source of Benefits. Benefits payable under the Plan
shall be payable either from the general assets of the Company or an Adopting
Employer or, in the discretion of the Board, from the Fund. No one of the
Trustees, officers, agents or shareholders of the Company or an Adopting
Employer, or of the Committee or of any administrator or administrative
committee to which any function is delegated pursuant to Section 5.4 hereof,
assumes any personal liability for obligations incurred on behalf of the
Company or an Adopting Employer or under the Trust Agreement. No Participant's
or beneficiary's interest in a Participant's benefits under the Plan shall be
greater than that of an unsecured creditor of the Company or an Adopting
Employer.

                  6.2      No Guarantee of Employment. Nothing contained herein
shall be construed as a contract of employment or deemed to give any
Participant the right to be retained in the employ of any Employer.

                                      -9-
<PAGE>

                  6.3      Unfunded Plan. In adopting the Plan and entering
into the Trust Fund Agreement, it is the intention of the Company and the
Adopting Employers that any benefits to be provided under the Plan shall be
deemed unfunded for tax and pension law purposes and that any assets acquired
by or held within the Trust shall not be deemed to constitute funding for the
benefit of the Participant, or the Participant's beneficiary or estate.
Consequently, at all times while the Plan is in effect, the Accrued Benefit of
a Participant shall be understood to reflect only a means for the measurement
and determination of the amounts to be paid to the Participant pursuant to the
terms of the Plan, and a Participant's Accrued Benefit shall not constitute or
be treated as a trust fund of any kind, nor shall any assets held under the
Trust be deemed to represent security for the performance of any obligation of
the Company or an Adopting Employer hereunder but shall at all times be, and
remain, their general, unpledged and unrestricted assets.

                  6.4      Constructive Receipt. In the event that a final
determination shall be made by the Internal Revenue Service or any court of
competent jurisdiction that by reason of elections made or actions taken
hereunder a Participant has recognized gross income for federal, state or local
income tax purposes prior to the actual payment of benefits to such Participant
to which such gross income is attributable, the Committee shall authorize the
payment to the Participant in one lump sum, within 90 days following such final
determination, of an amount equal to such recognized income. Thereafter, the
Participant may be paid any remaining benefits available to the Participant
under the normal terms and conditions hereof, provided, however, that a
Participant who receives a distribution

                                     -10-
<PAGE>

pursuant to the immediately preceding sentence of this Section 6.4 shall have
his future benefits reduced in an amount equal to the Actuarial Equivalent of
such distribution in such manner and at such time as the Committee may
determine.

                                   SECTION 7
                               NONASSIGNABILITY

                  7.1      No benefit payable hereunder may be assigned,
pledged, mortgaged or hypothecated and, except to the extent required by
applicable law, no such benefit shall be subject to legal process or attachment
for the payment of any claims of a creditor of a Participant or the beneficiary
of such Participant.

                                   SECTION 8
                   EFFECTIVE DATE; AMENDMENT AND TERMINATION

                  8.1      Effective Date. This Plan shall be effective as of
January 1, 2002 and shall remain in effect through its termination, subject to
the provisions of Section 8.2 hereof.

                  8.2      Amendment and Termination. The Board may at
any time, or from time to time, amend this Plan in any respect on a prospective
basis or terminate this Plan without restriction and without the consent of any
Participant or beneficiary, provided that any such amendment or termination
shall not impair the right of any Participant or any beneficiary to be paid
benefits earned and vested hereunder prior to such amendment or termination. In
the event of the termination of the Plan, each Participant shall be deemed to
have attained the Participant's Normal Retirement Date as of the date of such

                                     -11-
<PAGE>

termination, and the Participant's Accrued Benefit shall be paid to the
Participant in accordance with the terms of Sections 4 and 5 hereof.

                  8.3      Plan Sponsor. The Company shall be the sponsor and
named fiduciary of the Plan, which the Company and Adopting Employers have
adopted for the benefit of certain designated highly compensated and key
management personnel.

                                   SECTION 9
                               CLAIMS PROCEDURES

                  9.1      Initial Claim. If the Participant or the
Participant's beneficiary (hereinafter referred to as a "Claimant") is denied
all or any portion of an expected benefit under this Plan for any reason, the
Claimant may file a claim with the Committee. The Committee shall notify the
Claimant within 60 days of its allowance or denial of the claim, unless the
Claimant receives written notice from the Committee prior to the end of the
60-day period stating that special circumstances require an extension of the
time for decision for an additional period not to exceed an additional 60 days.
The notice of the Committee's decision shall be in writing, sent by mail to the
Claimant's last known address, and, if a denial of the claim, must contain the
following information:

                           (a)      the specific reasons for denial;

                           (b)      specific reference to pertinent provisions
of the Plan on which the denial is based; and

                                     -12-
<PAGE>

                           (c)      if applicable, a description of any
additional information or material necessary to perfect the claim, an
explanation of why such information or material is necessary, and an
explanation of the claims review procedure.

                  9.2      Review. A Claimant may request a review by the
Committee of any denial of the Claimant's claim by submitting in writing such a
request within 60 days of the mailing of notice of the denial. The Claimant or
the Claimant's representative shall be entitled to review all pertinent
documents, and to submit issues and comments in writing. Absent a request for
review within such 60-day period, the claim shall be deemed to be conclusively
denied.

                                  SECTION 10
                                 MISCELLANEOUS

                  10.1     Payment to Representatives. If an individual
entitled to receive any benefits hereunder is determined by the Committee or is
otherwise adjudged to be legally incompetent, they shall be paid to such
individual's duly appointed and acting guardian, if any, and if no such
guardian is appointed and acting, to such persons as the Committee may
designate for the benefit of such individual. Such payment shall, to the extent
made, be deemed a complete discharge for such payments under the Plan.

                  10.2     Timing of Payments. If the Committee is unable to
make the determinations required under the Plan in sufficient time for payments
to be made when due, the Committee shall make such payments upon the completion
of such determinations with interest at a reasonable rate from such due date
and may, at its option, make

                                     -13-
<PAGE>

provisional payments, subject to adjustment, pending the completion of such
determinations.

                  10.3     Withholding, etc. The Employer shall deduct from
each payment under the Plan any Federal, state or local withholding or other
taxes or charges which an Employer would be required to deduct under applicable
law, and any amount so deducted shall be treated as a payment hereunder to the
Participant or the Participant's beneficiaries.

                  10.4     Governing Law. The provisions of this Plan shall be
construed according to the laws of the United States and the State of New York,
excluding the provisions of any such laws that would require the application of
the laws of another jurisdiction.

                  10.5     Gender and Number. The masculine pronoun wherever
used shall include the feminine. Wherever any words are used herein in the
singular, they shall be construed as though they were also used in the plural
in all cases where they shall so apply.

                  10.6     Binding Effect. This Agreement shall be binding upon
the Company and the Adopting Employers and their successors or assigns.

                  10.7     Captions. The captions at the head of an article,
section or a paragraph of the Plan are designed for convenience of reference
only and are not to be resorted to for the purposes of interpreting any
provision of the Plan, and in the case of any conflict with the text of the
Plan, the text of the Plan shall control.

                                     -14-
<PAGE>

                  10.8     Severability. The invalidity of any portion of the
Plan shall not invalidate the remainder thereof, which shall continue in full
force and effect.

                  10.9     Communications. Any election, application, claim,
notice, or other communication required or permitted to be made by a
Participant pursuant to the Plan shall be made in writing and in such form as
the Committee shall prescribe. Such communication or notice shall be effective
upon receipt, if sent by first class mail, postage prepaid, and addressed to
the Committee, c/o the Company's offices at 712 Fifth Avenue, New York, New
York 10019-4108.

                  IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed in its name by its duly authorized officers, effective as set forth
above.

                                    VECTOR GROUP LTD.

                                    /s/ Richard J. Lampen
                                    -------------------------------------------
                                    By:  Authorized Signatory

                                    Richard J. Lampen
                                    Executive Vice President

                                     -15-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}]]