Document:

Amended and Restated Employment Agreement

 

Exhibit 10.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     This Amended and Restated Employment Agreement is made and entered into as of September
27, 2005 by and between Vector Group Ltd., a Delaware corporation (together with its direct and
indirect successors, the “Company”), and Bennett S. LeBow (“Executive”).

     WHEREAS, Brooke Group Ltd., a predecessor to the Company, previously entered into an
Employment Agreement with Executive dated as of February 21, 1992, as amended as of July 20, 1998
(the “Current Employment Agreement”); and

     WHEREAS, the Company and Executive desire to amend and restate the Current Employment
Agreement, effective as of January 1, 2006 (as so amended and restated, this “Agreement”) to
provide for a continuing relationship. Prior to January 1, 2006, the Current Employment Agreement
will remain in full force and effect.

     NOW THEREFORE, the Company and Executive do hereby agree as follows:

	 	1.	 	EMPLOYMENT. Effective as of January 1, 2006, the Company
agrees to employ Executive as its Executive Chairman of the Board. Executive
shall have in such position all of the duties, responsibilities and powers
afforded to the Executive Chairman of the Board under the Amended and Restated
Certificate of Incorporation and By-laws of the Company, as in effect from time
to time. Executive agrees to devote substantial services to the Company and to
render the best services and efforts that he is capable of in connection with
the performance of such duties and responsibilities. Executive shall at all
times comply with Company policies as established by the Board.
	 
	 	2.	 	PERSONAL ACTIVITIES OF EXECUTIVE. Notwithstanding anything to
the contrary contained in this Agreement, nothing in this Agreement shall
preclude Executive from devoting reasonable periods of time to: (i) serving as
a director or member of a committee of any organization which does not involve
a material conflict of interest with the interests of the Company; (ii)
engaging in charitable and community activities; or (iii) managing his personal
investments; provided, however, that such activities do not
interfere with the performance of his employment duties and responsibilities
under this Agreement.
	 
	 	3.	 	EMPLOYMENT TERM. The employment relationship created by this
Agreement shall commence as of January 1, 2006 and shall continue until
December 30, 2008, unless sooner terminated pursuant to the provisions of
Section 5 below (the “Employment Term”).
	 
	 	4.	 	EMPLOYMENT COMPENSATION.

	 	(a)	 	In consideration for all employment services
rendered to the Company under this Agreement, the Company agrees to pay
to Executive an annual salary at a rate of $3,950,000 minus the base
salary paid to Executive for such year under Executive’s employment
agreement with New Valley Corporation (as in effect from time to time,
“Base Salary”). Such annual salary shall be payable in accordance with
the Company’s regular payroll procedures.
	 
	 	(b)	 	During the Employment Term, Executive shall be
entitled to participate in any and all employee welfare and health
benefit plans (including, but not

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	 	 	 	limited to, life insurance, medical, dental and disability plans)
established by the Company from time to time for the general and
overall benefit of executives of the Company. Nothing herein
contained shall be construed as requiring the Company to establish or
continue any particular benefit plan in discharge of its obligations
hereunder.

	 	(c)	 	The Company will reimburse Executive, upon
receipt of appropriate documentation, for reasonable business expenses,
including first-class air travel and lodging, which he properly incurs
in the performance of his duties hereunder and in accordance with
written policies established from time to time by the Company for such
reimbursements.
	 
	 	(d)	 	During the Employment Term, the Executive’s
principal place of employment shall be New York City or Miami, Florida
and the Company shall provide to Executive (i) a furnished office and
secretarial assistance comparable to Executive’s current arrangements
and (ii) a furnished office at the Company’s executive offices for the
use of personal employees of Executive.
	 
	 	(e)	 	Executive shall be entitled to five weeks per
annum paid vacation during the Employment Term. In addition, Executive
shall be entitled to use certain Company-owned aircraft, in the course
of discharging his responsibilities and obligations hereunder, and for
such other business and personal purposes as Executive, in his sole
discretion, shall deem appropriate; provided, however,
that Executive shall reimburse the Company for any personal use of such
aircraft in accordance with the Company’s Corporate Aircraft Policy in
effect from time to time.
	 
	 	(f)	 	With respect to Executive’s participation in
the Vector Group Ltd. Supplemental Retirement Plan (as in effect on the
date hereof or as amended if more favorable to Executive) (the “SERP”):
(x) Executive’s “normal retirement date” under the SERP shall be the
January 1 following Executive’s completion of 7 “years of
participation” with the Company or an adopting employer (with service
from January 1, 2008 through December 30, 2008 constituting a full year
of participation); (y) notwithstanding Section 6.2 of the SERP, the
Company shall establish a separate trust for the benefit of Executive
that is not subject to the claims of the Company’s creditors and shall
make a contribution to such trust of $125,000 quarterly during each
year of the Employment Term, which contributions shall be invested as
determined by the Company; and (z) a proportionate part of each payment
to or on behalf of the Executive pursuant to Section 5 of the SERP
shall be made from the assets of such trust.

	 	5.	 	TERMINATION OF EMPLOYMENT.

	 	(a)	 	Method of Termination. The employment
relationship created by this Agreement may be terminated prior to
December 30, 2008 as follows:

	 	(i)	 	Immediately upon the death of
Executive.
	 
	 	(ii)	 	By the Company, in the event
Executive becomes disabled. For the purposes of this Agreement,
“disabled” shall mean any mental or physical impairment or
incapacity rendering Executive substantially unable to perform
his duties under this Agreement for a period of longer than 180
days out of any 360-day period

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	 	 	 	during the Employment Term. A determination of whether
Executive is disabled shall be made by the Board of Directors
of Company in its reasonable discretion.

	 	(iii)	 	By the Company, upon the giving
of at least 30 days prior written notice, in the event Executive
resigns or refuses or neglects, in any material respect, to
attend to the performance of his duties and responsibilities in
accordance with the provisions of this Agreement (other than by
reason of illness or disability as described in Section 5(a)(ii)
above); provided, however, that Executive shall
have 30 days after receipt of such notice to cure such refusal
or failure, and if such cure is made no termination shall occur.
	 
	 	(iv)	 	By the Company, for cause
(meaning, for purposes hereof, an act of fraud or dishonesty by
Executive which constitutes a violation of the penal law of the
State of New York and which results in gain or personal
enrichment of Executive at the expense of the Company or any
entity affiliated therewith), effective immediately.
	 
	 	(v)	 	By the Company, upon the giving
of at least 30 days prior written notice, without cause.
	 
	 	(vi)	 	By Executive, upon the giving of
at least 30 days prior written notice, in the event of a
material breach by the Company of any of its material
obligations under this Agreement; provided,
however, that the Company shall have 30 days after
receipt of such notice to cure such breach, and if such cure is
made no termination shall occur.
	 
	 	(vii)	 	By Executive upon a change in
control of the Company. For purposes of this Agreement, a
“change in control” shall mean the acquisition by any person
(other than the Executive) of beneficial ownership of 50% or
more of the common stock of the Company or the sale or transfer
of 50% or more of the assets of the Company; provided,
however, that Executive shall not be entitled to the
benefits of this Section 5(a)(vii) in the event that such a
change in control is caused directly by Executive through the
sale of common stock of which he is the beneficial owner without
the approval of the Board of Directors of the Company.
	 
	 	 	 	Any termination of Executive’s employment pursuant to Sections
5(a)(i), 5(a)(ii), 5(a)(iii), 5(a)(v), 5(a)(vi) or 5(a)(vii) above
shall be deemed a “Retirement” for purposes of this Agreement.

	 	(b)	 	Termination Compensation. The
following provisions shall apply in the event of the termination of the
employment relationship created by this Agreement:

	 	(i)	 	In the event of a termination
pursuant to Section 5(a)(i) above, the Company shall pay to
Executive’s executor or administrator, as the case may be, the
annual Base Salary in effect immediately prior to such
termination through December 30, 2008, and such additional
payments relating to death, retirement or other matters as may
be determined to be appropriate by the

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	 	 	 	Board of Directors of the Company or an authorized committee
thereof. In addition, Executive shall have the rights
regarding Retirement as described in Section 5(b)(vi) below.

	 	(ii)	 	In the event of a termination
pursuant to Section 5(a)(ii) above, the Company shall pay to
Executive (or his legal guardian, as the case may be) the annual
Base Salary and provide the employee benefits in effect
immediately prior to such termination through December 30, 2008,
and such additional payments relating to disability, retirement
or other matters as may be determined to be appropriate by the
Board of Directors of the Company or an authorized committee
thereof. In addition, Executive shall have the rights and
obligations regarding Retirement as described in Section
5(b)(vi) below.
	 
	 	(iii)	 	In the event of a termination
pursuant to Sections 5(a)(iii) or 5(a)(iv) above or any
termination by Executive other than pursuant to Section 5(a)(vi)
above, the Company shall pay to Executive his annual Base Salary
and provide the employee benefits in effect immediately prior to
such termination through the effective date of such termination.
In addition, in the event of a termination pursuant to Section
5(a)(iii) above, the Executive shall have the rights and
obligations regarding Retirement as described in Section
5(b)(vi) below.
	 
	 	(iv)	 	In the event of a termination
pursuant to Sections 5(a)(v) or 5(a)(vi) above, the Company
shall pay to Executive the annual Base Salary and provide the
employee benefits in effect immediately prior to such
termination through December 30, 2008. In addition, Executive
shall have the rights and obligations regarding Retirement as
described in Section 5(b)(vi) below.
	 
	 	(v)	 	In the event of a termination
pursuant to Section 5(a)(vii) above, the Company shall, within
30 days after such termination, pay to Executive a lump sum
amount in cash equal to his annual Base Salary in effect
immediately prior to such termination through December 30, 2008,
and Executive shall have no obligation to consult with the
Company pursuant to Section 6(a) below. In addition, Executive
shall have the rights and obligations regarding Retirement as
described in Section 5(b)(vi) below.
	 
	 	(vi)	 	If a termination of Executive’s
employment is deemed a Retirement for purposes of this
Agreement, such termination shall constitute one of the
following events, as appropriate, under the SERP: in the event
of a termination under Section 5(a)(i) above, the death of
Executive under Section 4.3 of the SERP; and under Section
5(a)(ii) above, the Disability of Executive under Section 4.2 of
the SERP; and under Sections 5(a)(iii), 5(a)(v), 5(a)(vi),
5(a)(vii) above, the termination of Executive without cause
under Section 4.4 of the SERP. Any payment required to be made
to Executive hereunder upon his termination of employment shall
be made promptly after the six month anniversary of Executive’s
date of termination to the extent necessary to avoid imposition
on Executive of any tax penalty imposed under Section 409A of
the Internal Revenue Code of 1986, as amended.

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	 	(vii)	 	Executive shall not be obligated
to mitigate any payments due from the Company under this
Agreement or any damages he may suffer as a result of a breach
or termination of this Agreement by the Company, and there shall
be no set-off to any of the Company’s obligations of payment
under this Agreement for any reason whatsoever.

	 	6.	 	CONSULTING.

	 	(a)	 	Consulting. Executive agrees that for
a period of five years following his termination of service for any
reason other than pursuant to Sections 5(a)(i), 5(a)(ii), 5(a)(iv),
5(a)(vi) or 5(a)(vii) above, (unless such period is extended by the
parties hereto, or shortened by Executive’s death or his total and
permanent inability to provide the services set forth in this Section
6(a)) (such period, as may be so extended or shortened, the “Consulting
Term”), when and as requested by the Chief Executive Officer of the
Company and subject to his reasonable availability, for up to 15 days
per year, he shall provide consulting services and advice to the
Company and shall assist and provide testimony in legal proceedings
involving the Company or its affiliates.
	 
	 	(b)	 	Fees and Expenses. In return for
Executive’s willingness to continue to help create value for the
Company’s shareholders during his Retirement, and in return for the
foregoing commitments by Executive, the Company shall pay Executive,
for consulting services performed at the request of the Chief Executive
Officer of the Company, a daily fee of $17,000 for each day, or portion
thereof, that Executive so renders services, and, in the course of
providing such services, Executive shall be entitled to use certain
Company-owned aircraft in accordance with the Company’s Corporate
Aircraft Policy. The Company shall also reimburse Executive, upon the
receipt of appropriate documentation, for reasonable business expenses,
including first class air travel and lodging, which he properly incurs
in providing such services and in accordance with written policies
established by the Company for such reimbursements.
	 
	 	(c)	 	Status. In providing the services
under Section 6(a) above, Executive shall be acting in the capacity of
an independent contractor and not as an employee or agent of the
Company. During the Consulting Term, Executive shall not be eligible
to participate in any employee benefit plan or program maintained by
the Company or any of its affiliates for its or their employees.

	 	7.	 	COVENANTS.

	 	(a)	 	Covenants. During the Employment Term
and, except as explicitly provided below, for the five-year period
following the end of the Employment Term, Executive agrees to the
following covenants:

	 	(i)	 	Not to engage in any business in
which the Company or its affiliates is engaged (including by
performing services for or soliciting to perform services for,
directly or indirectly, either personally or as an employee,
agent, partner, service member, stockholder, investor, officer
or director of, or consultant to, any entity or person) and not
to otherwise engage in conduct that is in material competition
with the Company or its affiliates; it being
understood that (x) for purposes of this Section 7(a)(i),
Executive

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	 	 	 	shall not be deemed to be a stockholder or investor in a
competing entity if his record and beneficial ownership
amount to not more than 5% of the outstanding capital stock
of any company subject to the periodic and other reporting
requirements of the Securities Exchange Act of 1934, as
amended, and (y) after the end of the Employment Term, the
requirements of this Section 7(a)(i) shall apply only to the
U.S. tobacco business and to residential real estate
brokerage activities in New York;

	 	(ii)	 	For the 3 years after the end of
the Employment Term, not to, directly or indirectly hire or
attempt to hire or induce any employee of the Company or its
affiliates to be employed or perform services elsewhere (or
solicit to perform services elsewhere);
	 
	 	(iii)	 	Not to engage in conduct that is
materially injurious to the Company or its affiliates,
monetarily or otherwise; and
	 
	 	(iv)	 	Not to disclose or misuse any
confidential information pertaining to the Company or its
affiliates, except as is required to be disclosed by Executive
(x) pursuant to judicial process, (y) to any government or
agency or department of any government or (z) pursuant to
applicable law;
	 
	 	 	 	provided, however, that a departure from any of the
foregoing covenants where such departure is inadvertent and isolated
and is promptly cured upon written notice (if such departure is
susceptible to cure) shall not constitute a breach of such covenant
for purposes of this Agreement.

	 	(b)	 	Effect of a Breach. If it is
determined that Executive has breached any covenant set forth in
Section 7(a) above, then, in addition to any right or remedy that the
Company has available, the Company shall have the right to obtain an
injunction from any court of competent jurisdiction restraining such
breach and to specific performance of such covenant. Executive further
agrees that no bond or other security will be required in obtaining
such equitable relief, and he hereby consents to the issuance of such
injunction and to the ordering of specific performance;
provided, however, that such consent shall neither
limit the right of Executive to contest the validity or propriety of
any such determination nor create any presumption that he has, in fact,
breached such covenant.
	 
	 	(c)	 	Determination of a Breach. For
purposes of Section 7(b) above, determination that a breach of any of
the covenants set forth in Section 7(a) above has occurred may only be
made (x) by the Board of Directors of the Company and (y) after
Executive is afforded the opportunity to be heard with counsel.
	 
	 	(d)	 	Continued Perquisites. In
consideration of and subject to Executive’s compliance with his
commitments set forth in Section 6(a) above and with the covenants set
forth in Section 7(a) above, commencing upon Retirement and for the
remainder of the Consulting Term, Executive shall have access to and
use of each of the following Company facilities and services comparable
to those provided to him prior to his Retirement, and on the same basis
as such facilities and services were provided to him prior to his
Retirement: office (in a location reasonably selected by

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	 	 	 	the Board of Directors of the Company) and secretarial assistance.
The Company’s obligations set forth in this Section 7(d) shall apply
irrespective of Executive’s lack of capacity subsequent to his
Retirement to perform services under this Agreement.

	 	8.	 	MISCELLANEOUS.

	 	(a)	 	Amendment; Entire Agreement. Except as
maybe explicitly provided for in any other agreement between the
Company and Executive which specifically references this Agreement and
explicitly expresses an intention to amend, supplement or clarify this
Agreement, this Agreement constitutes the entire understanding between
the parties to this Agreement with respect to the subject matter of
this Agreement and supersedes all previous oral and written
negotiations, commitments, writings and understandings of the parties
hereto with respect to the matters described in this Agreement,
including, without limitation, the Current Employment Agreement, but
excluding to the extent not expressly modified by the provisions of
this Agreement, the SERP.
	 
	 	(b)	 	Governing law. This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of
the state of New York (disregarding any choice of law rules which might
look to the laws of any other jurisdiction).
	 
	 	(c)	 	Notices. All notices to be delivered
pursuant to the provisions of this Agreement shall be given by notice
in writing, hand delivered or sent by registered or certified mail, to
the parties hereto at the following addresses:

To the Company:

Vector Group Ltd.

100 SE Second Street

Miami, FL 33131

Attention: Office of the General Counsel

To Executive:

Bennett S. LeBow

[                                ]

[                                ]

	 	 	 	Addresses may be changed by notice in writing signed by the
addressee and delivered to the other party.
	 
	 	(d)	 	Severability. Each provision of this
Agreement is intended to be severable. If any term or provision of this
Agreement shall be determined by a court of competent jurisdiction to
be illegal or invalid for any reason whatsoever then such provision
shall be severed from this Agreement, shall not affect the validity of
the remainder of this Agreement and shall be replaced by a provision
reflecting, to the extent legally permissible, the original intent of
the parties hereto.

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	 	(e)	 	No Waiver. No course of dealing and no
delay on the part of either party hereto in exercising any right, power
or remedy under or relating to this Agreement shall operate as a waiver
thereof or otherwise prejudice such party’s rights, powers and
remedies. No single or partial exercise of any rights, powers or
remedies under or relating to this Agreement shall preclude any other
or further exercise thereof or the exercise of any other right, power
or remedy.
	 
	 	(f)	 	Counterparts. This Agreement may be
executed by the parties hereto in counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together
constitute one and the same instrument, and all signatures need not
appear on any one counterpart.
	 
	 	(g)	 	Legal Fees. The Company shall promptly
reimburse Executive for reasonable attorneys’ fees and expenses
incurred by the Executive in connection with the negotiation and
execution of this Agreement, subject to a limit of $50,000.
	 
	 	(h)	 	Withholding. All payments required to
be made to Executive by the Company hereunder (other than amounts paid
pursuant to Section 6(a)) shall be subject to any applicable
withholding under any applicable Federal, state or local law.

     IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Employment
Agreement as of the day and year first above written.

	 	 	 
	 	 	
VECTOR GROUP LTD.
	/s/Bennett S. LeBow
 

Bennett S. LeBow	 	
/s/ Howard M. Lorber
 

By:  Howard M. Lorber

Title:  President and Chief Operating Officer
	 	 	
WITNESS
	 	 	
/s/ Robert J. Eide
 

Robert J. Eide

8Restricted Share Award Agreement

 

Exhibit 10.2

RESTRICTED SHARE AWARD AGREEMENT

PURSUANT
TO THE VECTOR GROUP LTD.

AMENDED AND RESTATED 1999 LONG-TERM INCENTIVE PLAN

     THIS RESTRICTED SHARE AWARD AGREEMENT, effective as of September 27, 2005, by and between
Vector Group Ltd., a Delaware corporation (the “Company”), and Howard M. Lorber (the “Executive”).

WITNESSETH:

          A. WHEREAS, the Executive serves as President and Chief Operating Officer of the Company,
pursuant to an employment agreement dated as of January 17, 2001 (the “Employment Agreement”);

          B. WHEREAS, on the date hereof, the Board of Directors of the Company has elected the
Executive to serve as President and Chief Executive Officer of the Company effective January 1,
2006; and

          C. WHEREAS, the Company wishes to retain the Executive by awarding him a proprietary interest
in the Company through ownership of an equity interest therein, which interest shall be subject to
the restrictions on vesting and transferability hereinafter set forth;

          NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the Company and the
Executive hereby agree as follows:

     1. Share Award.

          Subject to the terms and conditions of this Agreement, the Company hereby grants to the
Executive 500,000 shares (collectively, the “Award Shares”) of its Common Stock, $.10 par value per
share (the “Common Stock”), pursuant to the Company’s Amended and Restated 1999 Long-Term Incentive
Plan as in effect and amended from time to time (the

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“Plan”). Except to the extent otherwise provided herein, the Award Shares shall vest in the
Executive to the extent of 125,000 shares on September 15, 2006 and an additional 125,000 shares
shall so vest on each of the three succeeding one-year anniversaries thereof through and including
September 15, 2009.

     2. Issuance; Transfer Restrictions.

          Certificates for the Award Shares shall be issued in the name of the Executive as soon as
practicable after the date hereof, provided the Executive has (i) executed appropriate blank stock
powers and any other documents which the Company may reasonably require and (ii) delivered to the
Company a check for $50,000.00, representing the par value of the Award Shares. The certificates
for the unvested Award Shares shall be deposited, together with the stock powers, or other
documents required by the Company, with the Company. Except to the extent provided in Section 7
hereof or as otherwise provided by the terms of this Agreement, upon deposit of such unvested Award
Shares with the Company, the Executive shall have all of the rights of a shareholder with respect
to such shares, including the right to vote the shares and to receive all dividends or other
distributions, if any, paid or made with respect to such shares. Upon vesting of any portion of
the Award Shares, the Company shall cause a stock certificate for such shares to be delivered to
the Executive. No interest in this Agreement or in any portion of the Award Shares may be sold,
transferred, assigned, pledged, encumbered or otherwise alienated or hypothecated, nor shall
certificates for any Award Shares be delivered to the Executive, except to the extent of any
portion of the Award Shares that has vested in the Executive in accordance with the terms hereof.

     3. Certificates Legended.

          In addition to any legend required by Section 8.1 of the Plan, the Executive acknowledges that
certificates for the Award Shares shall bear a legend to the following effect:

     “THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THEY MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SUCH ACT, AN AVAILABLE
EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED.”

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          The Company shall enter in its records a notation of the foregoing legend and of the
restrictions on transfer provided therein.

     4. Termination of Employment.

          Except to the extent provided in Section 5 hereof, in the event the Executive’s employment
with the Company is terminated for any reason, any remaining balance of the Award Shares not
theretofore vested shall be forfeited by the Executive and transferred back to the Company, without
payment of any consideration by the Company.

     5. Vesting.

          In the event of (i) the death or Disability of the Executive or (ii) the occurrence of a
Change of Control of the Company, any remaining balance of the Award Shares not theretofore vested
in the Executive shall vest immediately in the Executive. For purposes of this Agreement, the term
“Change of Control” is as defined in Section 6(f) of the Employment Agreement, other than any
Change of 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 his 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.

     6. Adjustment of Award Shares.

          In the event of any change in the outstanding shares of the same class of shares of the
Company as the Award Shares by reason of a stock dividend, recapitalization, merger, consolidation,
split-up, subdivision, contribution or exchange of shares, or the like, the aggregate number and
kind of Award Shares shall be proportionately adjusted by the Company.

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     7. Dividend Payments.

          With respect to any unvested portion of the Award Shares, the Executive shall be entitled to
receive a payment equal to the amount that would otherwise have been paid on or after the date
hereof as dividends or other distributions on the Award Shares had such unvested portion been
vested in the Executive as of the record date for such dividend or other distribution, provided
such payment shall only be made to the Executive at the time of vesting of the unvested portion of
the Award Shares on which such dividend or other distribution was paid.

     8. Limitations.

          Nothing in this Agreement shall be construed to provide the Executive any rights whatsoever
with respect to the Award Shares except as specifically provided herein, or constitute evidence of
any agreement or understanding, express or implied, that the Company shall employ the Executive
other than as provided in the Employment Agreement.

     9. Investment Intent.

          The Executive is acquiring the Award Shares solely for his own account for investment and not
with a view to or for sale in connection with any distribution of the Award Shares or any portion
thereof and not with any present intention of selling, offering to sell or otherwise disposing of
or distributing the Award Shares or any portion thereof in any transaction other than a transaction
registered under or exempt from registration under the Securities Act of 1933, as amended. The
Executive further represents that the entire legal and beneficial interest of the Award Shares
shall be held (subject to the terms hereof) for the Executive’s account only and neither in whole
or in part for any other person.

     10. Tax Withholding.

          The Company may, in its discretion, require the Executive to pay to the Company, at the time
any portion of the Award Shares vests in the Executive or any amounts are paid under Section 7, an
amount that the Company deems necessary to satisfy its obligations to withhold federal, state or
local income or other taxes incurred by reason thereof.

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     11. Incorporation by Reference; Plan Document Receipt.

          This Agreement is subject in all respects to the terms and provisions of the Plan (including,
without limitation, any amendments thereto adopted at any time and from time to time unless such
amendments are expressly intended not to apply to the award provided hereunder), all of which terms
and provisions are made a part of and incorporated in this Agreement as if they were expressly set
forth herein. Any capitalized term not defined in this Agreement shall have the same meaning as is
ascribed thereto in the Plan. The Executive hereby acknowledges receipt of a true copy of the Plan
and that the Executive has read the Plan carefully and fully understands its content. In the event
of a conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan
shall control.

     12. Miscellaneous.

          a. The parties agree to execute such further instruments and to take such further action as
may reasonably be necessary to carry out the intent of this Agreement.

          b. All notices, requests, demands and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered by hand or overnight delivery service or
mailed within the continental United States by first class, certified mail, return receipt
requested, to the applicable party and addressed as follows:

if to the Company:

Vector Group Ltd.

100 S.E. Second Street, 32nd Floor

Miami, Florida 33131

Attn: Vice President

and General Counsel

if to the Executive:

Howard M. Lorber

[                                ]

[                                ]

[                                ]

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Addresses may be changed by notice in writing signed by the addressee.

          c. This Agreement shall not entitle the Executive to any preemptive rights to subscribe to any
securities of any kind hereinafter issued by the Company.

          d. This Agreement shall inure to the benefit of the successors and assigns of the Company and,
subject to the restrictions on the Executive herein set forth, be binding upon and inure to the
benefit of the Executive, his heirs, executors, administrators, successors and assigns.

          e. This Agreement contains the entire agreement between the parties hereto with respect to the
subject matter contained herein, and supersedes all prior agreements or prior understandings,
whether written or oral, between the parties relating to such subject matter. The Board or the
Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time
to time in accordance with and as provided in the Plan; provided, however, that no
such modification or amendment shall materially adversely affect the rights of the Executive under
this Agreement without the consent of the Executive. The Company shall give notice to the
Executive of any such modification or amendment of this Agreement as soon as practicable after the
adoption thereof. This Agreement may also be modified or amended by a writing signed by both the
Company and the Executive.

6

 

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

	 	 	 	 	 
	 	VECTOR GROUP LTD.

 	 
	 	By:  	/s/ Richard J. Lampen
 	 
	 	 	Richard J. Lampen 	 
	 	 	Executive Vice President 	 
	 
	 	 	 
	 	                                  /s/ Howard M. Lorber
 	 
	 	Howard M. Lorber 	 
	 	 	 

7

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