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:
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1.
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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.
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2.
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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.
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3.
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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”).
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4.
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EMPLOYMENT COMPENSATION.
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(a)
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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.
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(b)
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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.
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(c)
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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.
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(d)
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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.
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(e)
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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.
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(f)
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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.
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5.
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TERMINATION OF
EMPLOYMENT.
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(a)
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Method of Termination
. The employment
relationship created by this Agreement may be terminated prior to
December 30, 2008 as follows:
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(i)
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Immediately upon the death of
Executive.
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(ii)
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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.
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(iii)
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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.
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(iv)
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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.
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(v)
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By
the Company, upon the giving of at least 30 days prior written
notice, without cause.
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(vi)
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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.
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(vii)
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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.
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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.
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(b)
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Termination Compensation
. The following
provisions shall apply in the event of the termination of the
employment relationship created by this Agreement:
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(i)
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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 b
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