SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-11(c) or Rule 14a-12
Vector Group Ltd.
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(Name of Registrant as Specified In Its Charter)
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VECTOR GROUP LTD.
100 S.E. SECOND STREET
MIAMI, FLORIDA 33131
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 2, 2003
To the Stockholders of Vector Group Ltd.:
The Annual Meeting of Stockholders of Vector Group Ltd., a Delaware
corporation (the "Company"), will be held at The Hyatt Regency Miami, 400 S.E.
Second Avenue, Miami, Florida 33131 on Monday, June 2, 2003 at 11:00 a.m. local
time, and at any postponement or adjournment thereof, for the following
purposes:
1. To elect five directors to hold office until the next annual
meeting of stockholders and until their successors are elected and
qualified.
2. To transact such other business as properly may come before the
meeting or any adjournments or postponements of the meeting.
Every holder of record of Common Stock of the Company at the close of
business on April 28, 2003 is entitled to notice of the meeting and any
adjournments or postponements thereof and to vote, in person or by proxy, one
vote for each share of Common Stock held by such holder. A list of stockholders
entitled to vote at the meeting will be available to any stockholder for any
purpose germane to the meeting during ordinary business hours from May 23, 2003
to June 2, 2003, at the headquarters of the Company located at 100 S.E. Second
Street, 32nd Floor, Miami, Florida 33131. A proxy statement, form of proxy and
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2002 are enclosed herewith.
By Order of the Board of Directors,
/s/ Bennett S. LeBow
-----------------------------------
BENNETT S. LEBOW
Chairman of the Board of Directors
Miami, Florida
April 29, 2003
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR
NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE PRE-PAID ENVELOPE.
VECTOR GROUP LTD.
100 S.E. SECOND STREET
MIAMI, FLORIDA 33131
---------------------
PROXY STATEMENT
---------------------
INTRODUCTION
The enclosed proxy is solicited on behalf of the board of directors of
Vector Group Ltd., a Delaware corporation (the "Company"). The proxy is
solicited for use at the annual meeting of stockholders to be held at The Hyatt
Regency Miami, 400 S.E. Second Avenue, Miami, Florida 33131 on Monday, June 2,
2003, at 11:00 a.m. local time, and at any postponement or adjournment. The
Company's principal executive offices are located at 100 S.E. Second Street,
32nd Floor, Miami, Florida 33131, and its telephone number is (305) 579-8000.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Every holder of record of common stock of the Company at the close of
business on April 28, 2003 is entitled to notice of the meeting and any
adjournments or postponements and to vote, in person or by proxy, one vote for
each share of Common Stock held by such holder. At the record date, the Company
had outstanding 36,962,073 shares of Common Stock. This proxy statement,
accompanying notice and proxy and the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2002 are first being mailed to stockholders
on or about May 2, 2003.
Any stockholder giving a proxy has the power to revoke the proxy prior to
its exercise. A proxy can be revoked by an instrument of revocation delivered at
or prior to the annual meeting to the secretary of the Company, by a duly
executed proxy bearing a date or time later than the date or time of the proxy
being revoked, or at the annual meeting if the stockholder is present and elects
to vote in person. Mere attendance at the annual meeting will not serve to
revoke a proxy. Abstentions and shares held of record by a broker or its nominee
that are voted on any matter are included in determining the number of votes
present for quorum purposes. Broker shares that are not voted on any matter will
not be included in determining whether a quorum is present.
All proxies received and not revoked will be voted as directed. If no
directions are specified, such proxies will be voted FOR the election of the
board's nominees. The nominees receiving a plurality of the votes cast will be
elected as directors. The affirmative vote of the majority of votes present and
entitled to vote on the matter at the meeting will be necessary for approval of
any other matters to be considered at the annual meeting. With respect to the
election of directors, shares as to which authority is withheld and broker
shares that are not voted will not be included in determining the number of
votes cast. With respect to other matters, abstentions and broker shares that
are not voted are not treated as present and entitled to vote on the matter.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the record date, the beneficial
ownership of the Company's Common Stock, the only class of voting securities,
by:
- each person known to the Company to own beneficially more than five
percent of the Common Stock;
- each of the Company's directors and nominees;
- each of the Company's named executive officers (as such term is defined
in the Summary Compensation Table below); and
- all directors and executive officers as a group.
Unless otherwise indicated, each person possesses sole voting and
investment power with respect to the shares indicated as beneficially owned, and
the business address of each person is 100 S.E. Second Street, Miami, Florida
33131.
NUMBER OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES CLASS
------------------------------------ ---------- ----------
Bennett S. LeBow(1)(5)(7)................................... 13,776,199 34.4%
High River Limited Partnership(2)........................... 8,301,720 22.1%
Barberry Corp.
Carl C. Icahn
767 Fifth Avenue
New York, NY 10153
Richard S. Ressler(3)....................................... 2,218,296 6.0%
Orchard Capital Corporation
10960 Wilshire Boulevard
Los Angeles, CA 90024
Howard M. Lorber(4)(5)(7)................................... 2,142,423 5.7%
Robert J. Eide(5)(6)........................................ 39,390 (*)
Aegis Capital Corp.
70 East Sunrise Highway
Valley Stream, NY 11581
Jeffrey S. Podell(5)(6)..................................... 40,427 (*)
182 Gannet Court
Manhasset, NY 11030
Jean E. Sharpe(5)(6)........................................ 28,282 (*)
28 Old Church Lane
South Salem, NY 10590
Richard J. Lampen(7)(8)..................................... 209,467 (*)
Marc N. Bell(7)(8).......................................... 62,660 (*)
Ronald J. Bernstein(9)...................................... 72,351 (*)
Liggett Vector Brands Inc.
One Park Drive
Research Triangle Park, NC 27709
All directors and executive officers as a group (8
persons).................................................. 16,371,199 40.0%
---------------
(*) The percentage of shares beneficially owned does not exceed 1% of the Common
Stock.
(1) Includes 10,032,931 shares of Common Stock held by LeBow Gamma Limited
Partnership, a Nevada limited partnership, 332,911 shares held by LeBow
Alpha LLLP, a Delaware limited liability limited partnership, 371,592 shares
held by The Bennett and Geraldine LeBow Foundation, Inc., a Florida
not-for-profit corporation, 2,279,074 shares acquirable by LeBow Gamma
Limited Partnership, as assignee of Mr. LeBow, upon exercise of currently
exercisable options to purchase Common Stock, and 759,691 shares acquirable
by LeBow Epsilon Investments Trust, as assignee of Mr. LeBow, upon exercise
of currently exercisable options. Mr. LeBow indirectly exercises sole voting
power and sole dispositive power over the shares of Common Stock held or
acquirable by the partnerships and trust. The shares held by LeBow Alpha
LLLP, are pledged to US Clearing Corp. to secure a margin loan to Mr. LeBow.
LeBow Holdings, Inc., a Nevada corporation, is the general partner of LeBow
Alpha LLLP and is the sole stockholder of LeBow Gamma, Inc., a Nevada
corporation, which is the general partner of LeBow Gamma Limited
Partnership. Mr. LeBow is a director, officer and sole shareholder of LeBow
Holdings, Inc., a director and officer of LeBow Gamma, Inc. and the sole
trustee of LeBow Epsilon Investments
2
Trust. Mr. LeBow and family members serve as directors and executive
officers of the foundation, and Mr. LeBow possesses shared voting power and
shared dispositive power with the other directors of the foundation with
respect to the foundation's shares of Common Stock.
(2) Based upon a Form 4, filed by the named entities on November 22, 2002.
Barberry Corp. is the general partner of High River Limited Partnership and
is wholly owned by Mr. Icahn. Includes 664,231 shares of Common Stock
issuable upon conversion of the Company's convertible notes.
(3) Based upon Amendment No. 6 to Schedule 13D dated April 15, 1998, filed by
the named individual.
(4) Includes 1,519,382 shares of Common Stock held by Lorber Epsilon 1999
Limited Partnership, a Delaware limited partnership, 15,289 shares held by
the Lorber Charitable Fund, a New York not-for-profit corporation, and
607,752 shares acquirable by Lorber Epsilon Investments Trust, as assignee
of Mr. Lorber, upon exercise of currently exercisable options to purchase
Common Stock. Mr. Lorber indirectly exercises sole voting power and sole
dispositive power over the shares of Common Stock held or acquirable by the
partnership and the trust. Lorber Epsilon 1999 LLC, a Delaware limited
liability company, is the general partner of Lorber Epsilon 1999 Limited
Partnership. Lorber Alpha II Limited Partnership, a Nevada limited
partnership, is the sole member of, and Mr. Lorber is the manager of, Lorber
Epsilon 1999 LLC. Lorber Alpha II, Inc., a Nevada corporation, is the
general partner of Lorber Alpha II Limited Partnership. Mr. Lorber is a
director, officer and controlling shareholder of Lorber Alpha II, Inc. and
the sole trustee of Lorber Epsilon Investments Trust. Family members serve
as directors and executive officers of the charitable fund, and Mr. Lorber
may be deemed to possess shared voting power and shared dispositive power
with respect to the fund's shares of Common Stock, although Mr. Lorber
disclaims beneficial ownership of these shares.
(5) The named individual is a director of the Company.
(6) Includes 7,717 shares issuable upon exercise of currently exercisable
options to purchase Common Stock.
(7) The named individual is an executive officer of the Company.
(8) Represents shares issuable upon exercise of currently exercisable options to
purchase Common Stock.
(9) The named individual is an executive officer of the Company's subsidiaries
Liggett Vector Brands Inc. and Liggett Group Inc.
In addition, by virtue of his controlling interest in the Company, Mr.
LeBow may be deemed to own beneficially the securities of the Company's
subsidiaries, including VGR Holding Inc., Liggett Group, Vector Tobacco Inc. and
New Valley Corporation. The disclosure of this information should not be
construed as an admission that Mr. LeBow is the beneficial owner of any
securities of the Company's subsidiaries under Rule 13d-3 of the Securities
Exchange Act of 1934 or for any other purpose, and beneficial ownership is
expressly disclaimed. None of the Company's other directors or executive
officers beneficially owns any equity securities of any of the Company's
subsidiaries, except for Mr. Lorber and his affiliates who own 720,037 common
shares of New Valley and 36,112 warrants to purchase New Valley common shares
and hold options to acquire 65,333 New Valley common shares and 584,000
warrants.
NOMINATION AND ELECTION OF DIRECTORS
The by-laws of the Company provide, among other things, that the board,
from time to time, shall determine the number of directors of the Company. The
size of the board is presently set at five. The present term of office of all
directors will expire at the annual meeting. Five directors are to be elected at
the annual meeting to serve until the next annual meeting of stockholders and
until their respective successors are duly elected and qualified.
It is intended that proxies received will be voted FOR election of the
nominees named below unless marked to the contrary. In the event any such person
is unable or unwilling to serve as a director, proxies may be voted for
substitute nominees designated by the present board. The board has no reason to
believe that any of the persons named below will be unable or unwilling to serve
as a director if elected.
The board recommends that stockholders vote FOR election of the nominees
named below.
3
INFORMATION WITH RESPECT TO NOMINEES
The following table sets forth certain information, as of the record date,
with respect to each of the nominees. Each nominee is a citizen of the United
States.
NAME AND ADDRESS AGE PRINCIPAL OCCUPATION
---------------- --- --------------------
Bennett S. LeBow...................... 65 Chairman of the Board and Chief
Vector Group Ltd. Executive Officer
100 S.E. Second Street
Miami, FL 33131
Howard M. Lorber...................... 54 President and Chief Operating
Vector Group Ltd. Officer
100 S.E. Second Street
Miami, FL 33131
Robert J. Eide........................ 50 Chairman and Treasurer, Aegis
Aegis Capital Corp. Capital Corp.
70 E. Sunrise Highway
Valley Stream, NY 11581
Jeffrey S. Podell..................... 62 Chairman of the Board and
182 Gannet Court President, Newsote, Inc.
Manhasset, NY 11030
Jean E. Sharpe........................ 56 Private Investor
28 Old Church Lane
South Salem, NY 10590
Each director is elected annually and serves until the next annual meeting
of stockholders and until his successor is duly elected and qualified.
BUSINESS EXPERIENCE OF NOMINEES
Bennett S. LeBow has been Chairman of the Board and Chief Executive Officer
of the Company since June 1990 and has been a director of the Company since
October 1986. Since November 1990, he has been Chairman of the Board and Chief
Executive Officer of VGR Holding Inc., a wholly-owned subsidiary of the Company,
which directly or indirectly holds the Company's equity interests in several
private and public companies. Mr. LeBow has served as President and Chief
Executive Officer of Vector Tobacco Inc., a subsidiary of the Company engaged in
the development and marketing of low nicotine, nicotine-free and reduced
carcinogen cigarette products, since January 2001 and as a director since
October 1999. Mr. LeBow has served as a director of Ladenburg Thalmann Financial
Services Inc. since May 2001. Mr. LeBow has been Chairman of the Board of New
Valley, a majority-owned subsidiary of the Company engaged in the real estate
business and seeking to acquire additional operating companies, since January
1988 and Chief Executive Officer since November 1994.
Howard M. Lorber has been President and Chief Operating Officer of the
Company and VGR Holding since January 2001. Since November 1994, Mr. Lorber has
served as President and Chief Operating Officer of New Valley, where he also
serves as a director. Mr. Lorber has been Chairman of the Board of Directors of
Hallman & Lorber Assoc. Inc., consultants and actuaries of qualified pension and
profit sharing plans, and various of its affiliates since 1975; a stockholder
and a registered representative of Aegis Capital Corp., a broker-dealer and a
member firm of the National Association of Securities Dealers, since 1984;
Chairman of the Board of Directors since 1987 and Chief Executive Officer since
November 1993 of Nathan's Famous, Inc., a chain of fast food restaurants; a
consultant to the Company and Liggett from January 1994 to January 2001; a
director of United Capital Corp., a real estate investment and diversified
manufacturing company, since May 1991; a director of Prime Hospitality Corp., a
company doing business in the lodging industry, since May 1994; and the Chairman
of the Board of Ladenburg Thalmann Financial Services since May 2001. He is also
a trustee of Long Island University.
4
Robert J. Eide has been a director of the Company and VGR Holding since
November 1993. Mr. Eide has been the Chairman and Treasurer of Aegis Capital
Corp., a registered broker-dealer, since 1984. Mr. Eide also serves as a
director of Nathan's Famous, Inc., a restaurant chain, Ladenburg Thalmann
Financial Services and Vital Living, Inc., a marketer of nutritional
supplements.
Jeffrey S. Podell has been a director of the Company and VGR Holding since
November 1993. Mr. Podell has been the Chairman of the Board and President of
Newsote, Inc., a privately-held holding company, since 1989.
Jean E. Sharpe has been a director of the Company and VGR Holding since May
1998. Ms. Sharpe is a private investor and has engaged in various philanthropic
activities since her retirement in September 1993 as Executive Vice President
and Secretary of the Company and as an officer of various of its subsidiaries.
Ms. Sharpe previously served as a director of the Company from July 1990 until
September 1993.
BOARD OF DIRECTORS AND COMMITTEES
During 2002, the board held five meetings. During 2002, the executive
committee (composed of Messrs. Eide and LeBow) did not meet, while the
compensation committee (composed of Messrs. Eide and Podell) acted by written
consent nine times during the course of the year and the audit committee
(composed of Messrs. Eide and Podell and Ms. Sharpe) met four times. Each
director attended at least 75% of the aggregate number of meetings of the board
and of each committee of which he was a member held during such period. The
Company does not have a nominating committee.
The executive committee exercises, in the intervals between meetings of the
board, all the powers of the board in the management and affairs of the Company.
The audit committee oversees the Company's financial statements, system of
internal controls, and auditing, accounting and financial reporting processes;
appoints, compensates, evaluates and, where appropriate, replaces the Company's
independent accountants; reviews annually the audit committee charter; and
reviews and pre-approves audit and permissible non-audit services. See "Audit
Committee Report."
The compensation committee reviews, approves and administers management
compensation and executive compensation plans. The compensation committee also
administers the Company's 1998 and 1999 Long-Term Incentive Plans.
5
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation awarded
to, earned by or paid during the past three years to those persons who were, at
December 31, 2002, the Company's Chief Executive Officer and the other four most
highly compensated executive officers (collectively, the "named executive
officers"):
SUMMARY COMPENSATION TABLE(1)
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ------------
---------------------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($) OPTIONS (#) COMPENSATION ($)
--------------------------- ---- ---------- --------- ---------------- ------------ ----------------
Bennett S. LeBow............... 2002 3,739,501(2) 1,043,700(3) 66,975(4) -- 305,970(5)
Chairman of the Board 2001 3,739,501(2) 1,043,700(3) 68,101(4) 551,250 505,858(5)
and Chief Executive 2000 3,527,282(2) 916,369(3) 67,085(4) -- 530,560(5)
Officer
Howard M. Lorber(6)............ 2002 2,257,082(7) 2,000,000(7) 149,905(4) --
President and Chief 2001 2,219,725(7) 500,000(7) 159,759(4) 275,625
Operating Officer
Richard J. Lampen(8)........... 2002 750,000 -- -- -- 6,000(9)
Executive Vice President 2001 750,000 -- -- -- --
2000 750,000 -- -- -- --
Marc N. Bell(10)............... 2002 375,000 -- -- -- 6,000(9)
Vice President, General 2001 375,000 -- -- -- --
Counsel and Secretary 2000 300,000 100,000 -- -- --
Ronald J. Bernstein(11)........ 2002 650,000 -- -- -- 6,000(9)
President and Chief 2001 650,000 650,000 -- 262,500 5,100(9)
Executive Officer of 2000 533,333 81,958 61,853(4) 289,406 4,000,000(12)
Liggett Vector Brands and
Liggett Group
---------------
(1) Unless otherwise stated, the aggregate value of perquisites and other
personal benefits received by the named executive officers are not
reflected because the amounts were below the reporting requirements
established by SEC rules.
(2) Includes salary paid by New Valley of $2,000,000 per year.
(3) Includes payments equal to 10% of Mr. LeBow's base salary from the Company
($173,950 in 2002 and 2001 and $152,728 in 2000) in lieu of certain other
executive benefits.
(4) Includes for Mr. LeBow an allowance paid by New Valley to an entity
affiliated with him for lodging and related business expenses of $59,503,
$68,101 and $67,085 for 2002, 2001 and 2000, respectively. Includes for Mr.
Lorber an allowance paid by New Valley for lodging and related business
expenses of $90,000 for 2002 and 2001 and an automobile allowance paid by
New Valley of $41,973 for 2002 and $49,514 for 2001. Includes for Mr.
Bernstein payment of relocation expenses of $55,575 for 2001.
(5) Represents premiums paid by the Company under collateral assignment
split-dollar insurance agreements covering the life of Mr. LeBow entered
into by the Company commencing in December 1998 and $6,000 of 401(k) plan
contributions for 2002. Upon surrender of the policies or payment of the
death benefits, the Company is entitled to repayment of all premiums paid
by it. Effective August 2002, no further premiums have been paid by the
Company under the split-dollar insurance agreements.
(6) Effective January 17, 2001, Mr. Lorber was appointed President and Chief
Operating Officer of the Company. Mr. Lorber had previously served as a
consultant to the Company and Liggett Group and as President and Chief
Operating Officer of New Valley, a position he continues to hold.
(7) Includes salary of $1,769,004 and bonus of $2,000,000 paid by New Valley
for 2002 and salary of $1,739,725 and bonus of $500,000 paid by New Valley
for 2001.
6
(8) The table reflects 100% of Mr. Lampen's salary and bonus, all of which are
paid by New Valley. Of Mr. Lampen's salary from New Valley, $187,500 per
year has been reimbursed to New Valley by the Company.
(9) Represents 401(k) plan contributions.
(10) The table reflects 100% of Mr. Bell's salary and bonus, all of which are
paid by the Company. Of Mr. Bell's salary and bonus from the Company,
$187,500 in 2002 and 2001 and $150,000 in 2000 have been reimbursed to the
Company by New Valley.
(11) Mr. Bernstein has served as President and Chief Executive Officer of
Liggett Group since September 2000 and of Liggett Vector Brands since March
2002. Previously Mr. Bernstein had served as President of Western Tobacco
Investments LLC which held the Company's ownership interests in
Liggett-Ducat Ltd.
(12) Represents a commission paid to Mr. Bernstein in connection with the sale
of Western Tobacco Investments equal to one-percent of the aggregate sales
price.
The following table sets forth certain information concerning option
exercises during 2002 by the named executive officers and the status of their
options as of December 31, 2002.
AGGREGATED OPTION EXERCISES DURING LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
NUMBER OF VALUE OPTIONS AT IN-THE-MONEY OPTIONS
SHARES REALIZED DECEMBER 31, 2002 AT DECEMBER 31, 2002*
ACQUIRED ON UPON --------------------------- ---------------------------
NAME EXERCISE EXERCISE EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
Bennett S. LeBow........ -- -- 3,038,765 2,287,687 $10,917,675 --
Howard M. Lorber........ 1,519,382 $17,490,123 607,752 854,437 $ 2,183,531 --
Richard J. Lampen....... -- -- 156,795 168,434 $ 1,176,292 $395,151
Marc N. Bell............ -- -- 62,660 57,881 $ 470,082 --
Ronald J. Bernstein..... -- -- 72,351 479,555 -- --
---------------
* Calculated using the closing price of $11.62 per share on December 31, 2002
less the option exercise price.
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes information about the options, warrants and
rights and other equity compensation under the Company's equity plans as of
December 31, 2002.
NUMBER OF SECURITIES REMAINING
NUMBER OF SECURITIES TO AVAILABLE FOR FUTURE ISSUANCE
BE ISSUED UPON EXERCISE WEIGHTED-AVERAGE EXERCISE UNDER EQUITY COMPENSATION
OF OUTSTANDING OPTIONS, PRICE OF OUTSTANDING PLANS (EXCLUDING SECURITIES
WARRANTS AND RIGHTS OPTIONS, WARRANTS AND RIGHTS REFLECTED IN COLUMN (A))
PLAN CATEGORY (A) (B) (C)
------------- ----------------------- ---------------------------- ------------------------------
Equity compensation plans
approved by security
holders(1).............. 9,144,661 $13.21 2,359,208
Equity compensation plans
not approved by security
holders(2).............. 1,116,111 $ 4.88 --
Total................ 10,260,772 $12.31 2,359,208
---------------
(1) Includes options to purchase shares of the Company's Common Stock under the
following stockholder-approved plans: 1998 Long-Term Incentive Plan and 1999
Long-Term Incentive Plan.
7
(2) Includes (i) options for 34,728 shares of Common Stock at an exercise price
of $14.47 granted in December 1999 to the Company's three outside directors,
which vested over three years; (ii) options for 620,845 shares of Common
Stock at an exercise price of $4.93 granted in March 1998 to a law firm that
represents Liggett Group and New Valley, which options were all exercised in
March 2003; (iii) warrants for 127,331 shares of Common Stock at an exercise
price of $3.98 granted in March 1998 to holders of VGR Holding's senior
secured notes, which warrants were all exercised in March 2003; and (iv)
options for 333,207 shares of Common Stock granted at an exercise price of
$4.11 in 1997 and 1998 to employees of the Company, which vested in equal
annual installments through January 1, 2003.
COMPENSATION OF DIRECTORS
Outside directors of the Company receive $7,000 per annum as compensation
for serving as director, $2,500 ($5,000 for the chair) per annum for membership
on each of the audit and compensation committees, $1,000 per meeting for each
board meeting attended, and $500 per meeting for each committee meeting
attended. In addition, each outside director of VGR Holding receives $28,000 per
annum as compensation for serving as director, $500 per meeting for each board
meeting attended, and $500 for each committee meeting attended. Each director is
reimbursed for reasonable out-of-pocket expenses incurred in serving on the
board of the Company and/or VGR Holding. The Company also makes available health
and dental insurance coverage to its directors.
EMPLOYMENT AGREEMENTS
Bennett S. LeBow is a party to an employment agreement with the Company
dated February 21, 1992, as amended July 20, 1998. The agreement has a one-year
term with automatic renewals for additional one-year terms unless notice of
non-renewal is given by either party six months prior to the termination date.
As of January 1, 2003, Mr. LeBow's annual base salary from the Company was
$1,739,501. He is also entitled to an annual bonus for 2003 of $869,750 and an
annual payment equal to 10% of his base salary in lieu of certain other
executive benefits such as club memberships, company-paid automobiles and other
similar perquisites. Following termination of his employment without cause, he
would continue to receive his then current base salary and bonus for 24 months.
Following termination of his employment within two years of a change of control
or in connection with similar events, he would receive a lump sum payment equal
to 2.99 times his then current base salary and bonus.
Mr. LeBow is a party to an employment agreement with New Valley dated as of
June 1, 1995, as amended effective as of January 1, 1996. The agreement had an
initial term of three years effective as of January 18, 1995, with an automatic
one year extension on each anniversary of the effective date unless notice of
non-extension is given by either party within the 60-day period before such
anniversary date. As of January 1, 2003, Mr. LeBow's annual base salary from New
Valley was $2,000,000. Following termination of his employment without cause, he
would continue to receive his base salary for a period of 36 months commencing
with the next anniversary of the effective date following the termination
notice. Following termination of his employment within two years of a change of
control, he would receive a lump sum payment equal to 2.99 times his then
current base salary.
Howard M. Lorber is a party to an employment agreement with the Company
dated January 17, 2001. The agreement has an initial term of three years from
January 17, 2001, with an automatic one-year extension on each anniversary of
the effective date unless notice of non-extension is given by either party
within 60 days before this date. As of January 1, 2003, Mr. Lorber's annual base
salary was $503,192. Mr. Lorber's salary is subject to an annual cost of living
adjustment. In addition, the Board must periodically review this base salary and
may increase but not decrease it from time to time in its sole discretion. The
Board may also award an annual bonus to Mr. Lorber in its sole discretion.
Following termination of his employment without cause, he would continue to
receive his base salary for a period of 36 months commencing with the next
anniversary of the effective date following the termination notice. Following
termination of his employment within two years of a change of control, he would
receive a lump sum payment equal to 2.99 times the sum of his then current base
salary and the bonus amounts earned by him for the twelve-month period ending
with the last day of the month immediately before the month in which the
termination occurs.
8
Mr. Lorber is a party to an employment agreement with New Valley dated June
1, 1995. The agreement has an initial term of three years effective as of
January 18, 1995, with an automatic one-year extension on each anniversary of
the effective date unless notice of non-extension is given by either party
within 60 days before this date. As of January 1, 2003, Mr. Lorber's annual base
salary was $1,822,587. Mr. Lorber's salary is subject to an annual cost of
living adjustment. In addition, the Board must periodically review this base
salary and may increase but not decrease it from time to time in its sole
discretion. The Board may also award an annual bonus to Mr. Lorber in its sole
discretion. The Board awarded Mr. Lorber a bonus of $2,000,000 for 2002.
Following termination of his employment without cause, he would continue to
receive his base salary for a period of 36 months commencing with the next
anniversary of the effective date following the termination notice. Following
termination of his employment within two years of a change of control, he would
receive a lump sum payment equal to 2.99 times the sum of his then current base
salary and the bonus amounts earned by him for the twelve-month period ending
with the last day of the month immediately before the month in which the
termination occurs.
Richard J. Lampen is a party to an employment agreement with New Valley
dated September 22, 1995. The agreement had an initial term of two and a quarter
years from October 1, 1995 with automatic renewals after the initial term for
additional one-year terms unless notice of non-renewal is given by either party
within the 90-day period prior to the termination date. As of January 1, 2003,
his annual base salary was $750,000. In addition, the New Valley board of
directors may award an annual bonus to Mr. Lampen in its sole discretion. The
New Valley Board may increase but not decrease Mr. Lampen's base salary from
time to time in its sole discretion. Following termination of his employment
without cause, Mr. Lampen would receive severance pay in a lump sum equal to the
amount of his base salary he would have received if he was employed for one year
after termination of his employment term.
Marc N. Bell is a party to an employment agreement with the Company dated
April 15, 1994. The agreement had an initial term of two years from April 15,
1994 with automatic renewals after the initial term for additional one-year
terms unless notice of non-renewal is given by either party within the 60-day
period prior to the termination date. As of January 1, 2003, his annual base
salary was $375,000. In addition, the board of directors may award an annual
bonus to Mr. Bell in its sole discretion. The board may increase but not
decrease Mr. Bell's base salary from time to time in its sole discretion.
Following termination of his employment without cause, Mr. Bell would receive
severance pay in a lump sum equal to the amount of his base salary he would have
received if he was employed for one year after termination of his employment
term.
Ronald J. Bernstein, President and Chief Executive Officer of Liggett, is a
party to an employment agreement with Liggett dated September 1, 2000. As of
January 1, 2003, Mr. Bernstein's annual salary was $650,000. Bonus payments are
at the sole discretion of the board of Liggett. In case of termination, Mr.
Bernstein is covered by Liggett's executive termination policy which provides
for 24 months of termination pay at the current salary of the executive, if a
senior executive officer's employment is terminated without cause.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2002, Messrs. Eide and Podell were members of the Company's
compensation committee. Messrs. Eide and Podell serve as directors of VGR
Holding. Mr. Eide is a stockholder, and serves as the Chairman and Treasurer, of
Aegis Capital Corp., a registered broker-dealer, that has performed services for
New Valley since before January 1, 2002. During 2002, Aegis received commissions
and other income in the aggregate amount of approximately $87,000 from New
Valley.
Mr. LeBow is Chairman of the Board and Chief Executive Officer of New
Valley and VGR Holding. Mr. Lorber, an executive officer and director of the
Company and VGR Holding, and Mr. Lampen, an executive officer of the Company and
VGR Holding, are executive officers and directors of New Valley. Prior to
October 2002, New Valley's board of directors did not have a separate
compensation committee and acted on compensation matters as an entire board. No
executive officer of the Company currently serves on the New Valley compensation
committee.
9
DEFINED BENEFIT OR ACTUARIAL PLAN DISCLOSURE
Liggett sponsors the Retirement Plan For Salaried Non-Bargaining Unit
Employees of Liggett, which is a noncontributory, defined benefit plan. Each
salaried employee of the participating companies becomes a participant on the
first day of the month following one year of employment with 1,000 hours of
service and the attainment of age 21. A participant becomes vested as to
benefits on the earlier of his attainment of age 65, or upon completion of five
years of service. Benefits become payable on a participant's normal retirement
date, age 65, or, at the participant's election, at his early retirement after
he has attained age 55 and completed ten years of service. A participant's
annual benefit at normal retirement date is equal to the sum of: (A) the product
of: (1) the sum of: (a) 1.4% of the participant's average annual earnings during
the five-year period from January 1, 1986 through December 31, 1990 not in
excess of $19,500 and (b) 1.7% of his average annual earnings during such
five-year period in excess of $19,500 and (2) the number of his years of
credited service prior to January 1, 1991; (B) 1.55% of his annual earnings
during each such year after December 31, 1990, not in excess of $16,500; and (C)
1.85% of his annual earnings during such year in excess of $16,500. The maximum
years of credited service is 35. If an employee was hired prior to January 1,
1983, there is no reduction for early retirement. If hired on or after January
1, 1983, there is a reduction for early retirement equal to 3% per year for the
number of years prior to age 65 (age 62 if the participant has at least 20 years
of service) that the participant retires. The plan also provides benefits to
disabled participants and to surviving spouses of participants who die before
retirement. Benefits are paid in the form of a single life annuity, with
optional actuarially equivalent forms of annuity available. Payment of benefits
is made beginning on the first day of the month immediately following
retirement. As of December 31, 1993, the accrual of benefits under the plan was
frozen.
As of December 31, 2002, none of the named executive officers was eligible
to receive any benefits under the retirement plan, except for Mr. Bernstein who
is entitled to a monthly benefit of $372 at age 65.
Under some circumstances, the amount of retirement benefits payable under
the retirement plan to some employees may be limited by the federal tax laws.
Any benefit lost due to such a limitation will be made up by Liggett through a
non-qualified supplemental retirement benefit plan. Liggett has accrued, but not
funded, amounts to pay benefits under this supplemental plan.
Effective January 1, 2002, the Company adopted a Supplemental Executive
Retirement Plan ("SERP"). The SERP is a defined benefit plan pursuant to which
the Company will pay pension benefits to certain key employees, including
Messrs. LeBow, Lorber and Bernstein. The SERP is intended to be unfunded for tax
purposes, and payments under the SERP will be made out of the general assets of
the Company.
Under the SERP, the projected annual benefit payable to a participant at
his normal retirement date is a predetermined amount set by the Company's board
of directors ($2,524,163 for Mr. LeBow, $1,051,875 for Mr. Lorber and $438,750
for Mr. Bernstein). Normal retirement date is defined as the January 1 following
the attainment by the participant of the later of age 60 or the completion of 8
years of service following January 1, 2002 for the Company or a subsidiary. In
the case of a participant who becomes disabled prior to his normal retirement
date or whose service is terminated without cause, the participant's benefit
consists of a fractional portion of the full projected retirement benefit to
which he would have been entitled had he remained employed through his normal
retirement date, as actuarially discounted back to the date of payment. A
participant who dies while working for the Company or a subsidiary (and before
becoming disabled or attaining his normal retirement date) will be paid an
actuarially discounted equivalent of his projected retirement benefit;
conversely, a participant who retires beyond his normal retirement date will
receive an actuarially increased equivalent of his projected retirement benefit.
No participant whose employment is terminated upon his own volition, or for any
reason other than death, disability or attainment of normal (or late)
retirement, will be entitled to any benefits under the SERP.
Benefits under the SERP are generally payable in the form of a joint and
survivor annuity (in the case of a married participant) or a single life annuity
(in the case of an unmarried participant), with either such form of distribution
representing the actuarial equivalent of the benefits due the participant. A
participant may also request that his benefits be paid in a lump sum, but the
Company may approve or disapprove such request in its discretion.
10
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation arrangements for the Company's executive officers are usually
negotiated on an individual basis between Mr. LeBow and each executive. The
Company's executive compensation philosophy is:
- to base management's pay, in part, on achievement of the Company's goals;
- to provide incentives to enhance stockholder value;
- to provide competitive levels of compensation, to recognize individual
initiative and achievement; and
- to assist the Company in attracting talented executives to a challenging
and demanding environment and to retain such executives for the benefit
of the Company and its subsidiaries.
Compensation arrangements for the Company's executive officers are
determined initially by evaluating the responsibilities of the position held and
the experience of the individual, and by reference to the competitive
marketplace for management talent. Annual salary adjustments are determined by
evaluating the competitive marketplace, the performance of the Company, the
performance of the executive, and any increased responsibilities assumed by the
executive. Bonus arrangements of certain executive officers are fixed by
contract and are not contingent. The Company, from time to time, considers the
payment of discretionary bonuses to its executive officers. Bonuses are
determined based, first, upon the level of achievement by the Company of its
goals and, second, upon the level of personal achievement by such executive
officers.
The compensation package of Mr. LeBow was negotiated and approved by the
independent members of the board of directors of the Company in February 1992.
The compensation of Mr. LeBow is set forth in an employment agreement between
Mr. LeBow and the Company. See "Employment Agreements", above.
The compensation package of Mr. Lorber was negotiated and approved by the
board of directors of the Company in January 2001 when Mr. Lorber was elected
President and Chief Operating Officer of the Company. At that time, Mr. Lorber's
base salary from the Company was established at the same level as the consulting
payments he had previously received from the Company and Liggett. See
"Employment Agreements", above.
The compensation package of Mr. Bernstein, as President and Chief Executive
Officer of Liggett, was negotiated and approved by the board of directors of
Liggett in September 2000. See "Employment Agreements", above.
In 1993, Section 162(m) was added to the Internal Revenue Code of 1986.
This section generally provides that no publicly held company may deduct
compensation in excess of $1,000,000 paid in any taxable year to its chief
executive officer or any of its four other highest paid officers unless:
- the compensation is payable solely on account of the attainment of
performance goals;
- the performance goals are determined by a compensation committee of two
or more outside directors;
- the material terms under which compensation is to be paid are disclosed
to and approved by the stockholders of the Company; and
- the compensation committee certifies that the performance goals were met.
This limitation is applicable to the cash compensation paid by the Company
to Mr. LeBow and the other named executives officers in 2002.
The foregoing information is provided by the compensation committee of the
Company.
Robert J. Eide, Chairman
Jeffrey S. Podell
11
AUDIT COMMITTEE REPORT
The audit committee report shall not be deemed incorporated by reference by
any general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
Composition and Independence. The audit committee of the board of
directors is composed of three independent directors, as defined by the current
New York Stock Exchange rules. The members of the audit committee are Robert J.
Eide, Chairman, Jeffrey S. Podell and Jean E. Sharpe.
Responsibilities. The audit committee of the board of directors oversees
the Company's financial reporting on behalf of the board. Management is
responsible for the system of internal controls and for preparing financial
statements. The independent accountants are responsible for expressing an
opinion on the fair presentation of the audited financial statements in
conformity with generally accepted accounting principles. The audit committee
operates in accordance with a charter approved by the board of directors.
Review with Management and Independent Accountants. In fulfilling its
oversight responsibilities, the audit committee reviewed the audited December
31, 2002 financial statements of the Company with management and
PricewaterhouseCoopers LLP, the Company's independent accountants. Management
represented to the audit committee that these statements were prepared in
accordance with generally accepted accounting principles. The audit committee
also discussed accounting policies, significant judgments inherent in the
financial statements, disclosures and other matters required by generally
accepted auditing standards with management and the independent accountants. In
addition, the audit committee has received from the independent accountants the
annual independence disclosures required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees) and discussed
with them their independence from management and the Company. In that
connection, the audit committee considered the compatibility of all non-audit
services with the auditors' independence.
During 2002, the audit committee met with management and the independent
accountants to discuss:
- the annual audit scope and plans for the audit,
- the independent accountants' review of the quarterly financial
statements,
- the adequacy of the independent accountants' staffing and related fees,
- the results of the independent accountants' examinations, and
- the adequacy and effectiveness of the Company's accounting and financial
controls.
The audit committee also met with the independent accountants without
management present.
In reliance on the reviews and discussions with management and the
independent accountants, the audit committee recommended to the board of
directors, and the board approved, the inclusion of the audited financial
statements in the Annual Report on Form 10-K for the year ended December 31,
2002 filed with the Securities and Exchange Commission.
This report is submitted by the audit committee of the Company.
Robert J. Eide, Chairman
Jeffrey S. Podell
Jean E. Sharpe
AUDIT AND RELATED FEES
The audit committee reviews and approves audit and permissible non-audit
services performed by PricewaterhouseCoopers LLP, as well as the fees charged by
PricewaterhouseCoopers LLP for such services. In its review of non-audit service
fees and its appointment of PricewaterhouseCoopers LLP as the Company's
12
independent accountants, the audit committee considered whether the provision of
such services is compatible with maintaining PricewaterhouseCoopers LLP's
independence.
Audit Fees. The aggregate fees billed by PricewaterhouseCoopers LLP for
professional services for the audit of the annual financial statements of the
Company and its consolidated subsidiaries and the reviews of the financial
statements included in the Company's quarterly reports on Form 10-Q for the last
fiscal year were $623,422.
Financial Information Systems Design and Implementation Fees. There were
no fees billed by PricewaterhouseCoopers LLP to the Company for financial
information systems design and implementation.
All Other Fees. Aggregate fees billed for all other services rendered by
PricewaterhouseCoopers LLP for the last fiscal year, mainly for tax and human
resources services, were $219,132.
PERFORMANCE GRAPH
The following graph compares the total annual return of the Company's
Common Stock, the S&P 500 Index, the S&P MidCap 400 Index and the S&P Tobacco
Index for the five years ended December 31, 2002. The graph assumes that $100
was invested on December 31, 1997 in the Common Stock and each of the indices,
and that all cash dividends and distributions were reinvested. Information for
the Company's Common Stock includes the value of the December 20, 2001
distribution to the Company's stockholders of shares of Ladenburg Thalmann
Financial Services common stock and assumes such stock was held by the
stockholders until December 31, 2002.
(PERFORMANCE GRAPH)
-------------------------------------------------------------------------------------
12/97 12/98 12/99 12/00 12/01 12/02
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Vector Group Ltd. 100 291 195 236 548 223
S&P 500 100 128 155 141 124 97
S&P MidCap 100 118 136 160 160 136
S&P Tobacco 100 97 63 109 145 138
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1995, the Company and New Valley entered into an expense sharing
agreement pursuant to which lease, legal and administrative expenses are
allocated to the entity incurring the expense. The Company was reimbursed
approximately $236,000 in 2002 under this agreement. The arrangement with New
Valley has continued in 2003.
13
In connection with the Company's convertible note offering in July 2001,
the placement agent for the offering required that Bennett S. LeBow, the
principal stockholder and Chairman of the Company, grant the placement agent the
right, in its sole discretion, to borrow up to 3,307,500 shares of Common Stock
from the principal stockholder or any entity affiliated with him during the
three-year period ending June 29, 2004 and that he agree not to dispose of such
shares during the three-year period, subject to limited exceptions. In
consideration for the principal stockholder agreeing to lend his shares in order
to facilitate the Company's offering and accepting the resulting liquidity risk,
the Company agreed to pay him or an affiliate designated by him an annual fee,
payable on a quarterly basis at his election in cash or shares of Common Stock,
equal to 1% of the aggregate market value of 3,307,500 shares of Common Stock.
For the year ended December 31, 2002, the Company paid an entity affiliated with
Mr. LeBow an aggregate of $616,000 in cash under this agreement.
As of the record date, High River Limited Partnership, an investment entity
owned by Carl C. Icahn, was the beneficial owner of 22.1% of the Common Stock.
High River owns $20,000,000 of the Company's 6.25% convertible notes due 2008,
convertible into 664,231 shares of Common Stock on the record date. High River
received interest payments on the notes of $1,250,000 during 2002.
Various executive officers and directors of the Company and New Valley
serve as members of the Board of Directors of Ladenburg Thalmann Financial
Services Inc., which is indebted to New Valley. For additional information
concerning these borrowings, see note 21 to the Company's consolidated financial
statements in the accompanying 2002 annual report to stockholders, which note
should be deemed part of this proxy statement.
Howard M. Lorber, the President and a director of the Company, is Chairman
of Hallman & Lorber. During 2002, Mr. Lorber and Hallman & Lorber and its
affiliates received ordinary and customary insurance commissions aggregating
approximately $606,000 on various insurance policies issued for the Company and
its subsidiaries and investees. Mr. Lorber and Hallman & Lorber and its
affiliates have continued to provide services to the Company in 2003.
See also "Compensation Committee Interlocks and Insider Participation."
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP has been the independent accountants for the
Company since December 1986 and will serve in that capacity for the 2003 fiscal
year unless the audit committee deems it advisable to make a substitution. It is
expected that one or more representatives of such firm will attend the annual
meeting and be available to respond to any questions. These representatives will
be given an opportunity to make statements at the annual meeting if they desire.
MISCELLANEOUS
ANNUAL REPORT
The Company has mailed, with this proxy statement, a copy of the annual
report to each stockholder as of the record date. If a stockholder requires an
additional copy of the annual report, the Company will provide one, without
charge, on the written request of any such stockholder addressed to the
Company's secretary at Vector Group Ltd., 100 S.E. Second Street, 32nd Floor,
Miami, Florida 33131.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires directors and executive officers
of the Company, as well as persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of initial beneficial
ownership and changes in beneficial ownership on Forms 3, 4 and 5 with the SEC
and The New York Stock Exchange. These persons are also required by SEC
regulations to furnish the Company with copies of all reports that they file.
14
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and representations that no other reports were
required, during and with respect to the fiscal year ended December 31, 2002,
all reporting persons have timely complied with all filing requirements
applicable to them.
STOCKHOLDER PROPOSALS FOR THE 2004 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 2004 annual
meeting of stockholders of the Company and included in the Company's proxy
statement for that meeting pursuant to Rule 14a-8 of the Exchange Act must be
received by the Company at its principal executive offices, 100 S.E. Second
Street, 32nd Floor, Miami, Florida 33131, Attention: Marc N. Bell, Secretary, on
or before December 31, 2003 in order to be eligible for inclusion in the
Company's proxy statement relating to that meeting. Notice of a stockholder
proposal submitted outside the processes of Rule 14a-8 will be considered
untimely unless submitted by March 18, 2004.
OTHER MATTERS
All information in this proxy statement concerning the Common Stock has
been adjusted to give effect to the 5% stock dividends paid to the stockholders
of the Company on September 30, 1999, September 28, 2000, September 28, 2001 and
September 27, 2002.
The cost of this solicitation of proxies will be borne by the Company. In
addition to the use of the mails, some of the directors, officers and regular
employees of the Company may, without additional compensation, solicit proxies
personally or by telephone. The Company will reimburse brokerage houses, banks
and other custodians, nominees and fiduciaries for customary and reasonable
expenses incurred in forwarding soliciting material to the beneficial owners of
Common Stock.
The board knows of no other matters which will be presented at the annual
meeting. If, however, any other matter is properly presented at the annual
meeting, the proxy solicited by this proxy statement will be voted in accordance
with the judgment of the person or persons holding such proxy.
By Order of the Board of Directors,
/s/ Bennett S. LeBow
-----------------------------------
BENNETT S. LEBOW
Chairman of the Board of Directors
Dated: April 29, 2003
15
VECTOR GROUP LTD.
PROXY
SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE 2003 ANNUAL MEETING OF
STOCKHOLDERS OF VECTOR GROUP LTD.
The undersigned stockholder of Vector Group Ltd. (the "Company") hereby
constitutes and appoints each of Joselynn D. Van Siclen and Marc N. Bell
attorney and proxy of the undersigned, with power of substitution, to attend,
vote and act for the undersigned at the 2003 Annual Meeting of Stockholders of
the Company, a Delaware corporation, to be held at The Hyatt Regency Miami, 400
S.E. Second Avenue, Miami, Florida 33131 on Monday, June 2, 2003, at 11:00 a.m.
local time, and at any adjournments or postponements thereof, with respect to
the following on the reverse side of this proxy card and, in their discretion,
on such other matters as may properly come before the meeting and at any
adjournments or postponements thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS. PLEASE
SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE
IN BLUE OR BLACK INK AS SHOWN HERE [X]
Item 1. Election of Directors:
[ ] FOR ALL NOMINEES [ ] WITHHOLD AUTHORITY FOR [ ]
ALL NOMINEES
[ ] FOR ALL EXCEPT (See
instructions below)
Nominees: Robert J. Eide, Bennett S. LeBow, Howard M. Lorber, Jeffrey S.
Podell and Jean E. Sharpe
(INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you wish to
withhold, as shown here: [X]
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
If not otherwise directed, this proxy will be voted FOR the election of the
nominees.
The Board of Directors recommends a vote FOR all nominees in Item 1.
PLEASE DATE, SIGN AND MAIL AT ONCE IN THE ENCLOSED POSTPAID ENVELOPE.
Dated: , 2003
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Signature of Stockholder
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Dated: , 2003
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Signature of Stockholder
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NOTE: This proxy must be signed exactly as the name appears hereon. When shares
are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as such. If
the signer is a corporation, please give fill corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.