<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 10-K/A
(AMENDMENT NO. 1)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
COMMISSION FILE NUMBER 1-2493
NEW VALLEY CORPORATION
(Exact name of registrant as specified in its charter)
New York 13-5482050
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
100 S.E. Second Street, Miami, Florida 33131
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (305) 579-8000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
$15.00 Class A Increasing Rate Cumulative Senior
Preferred Shares ($100 Liquidation
Value), $.01 par value
$3.00 Class B Cumulative Convertible Preferred Shares
($25 Liquidation Value), $.10 par value
Common Shares, $.01 par value
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
- -
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 Regulation S-K is not contained herein, and will not be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statement incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates
of the registrant as of March 29, 1996 was $131,205,846 (based on the shares of
voting stock of the registrant outstanding at March 29, 1996 and the last
reported sales price on such date for each class of voting stock of the
registrant, which includes the Class A Senior Preferred Shares, Class B
Preferred Shares and Common Shares). Directors and officers and ten percent or
greater stockholders are considered affiliates for purposes of this calculation
but should not necessarily be deemed affiliates for any other purposes.
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No
- -
At March 29, 1996, there were 191,552,476 Common Shares outstanding.
Documents Incorporated by Reference: None.
<PAGE> 2
Part III of the Annual Report on Form 10-K of New Valley Corporation
(the "Company") for the fiscal year ended December 31, 1995 is amended in its
entirety to add the following information:
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information, as of April 24,
1996, with respect to each person who is a director of the Company. Each
director is a citizen of the United States of America. For information
concerning the executive officers of the Company, see Item 4, "Submission of
Matters to a Vote of Security-Holders; Executive Officers of the Registrant".
<TABLE>
<CAPTION>
DIRECTOR
NAME AND ADDRESS AGE PRINCIPAL OCCUPATION SINCE
- ---------------- --- -------------------- --------
<S> <C> <C> <C>
Bennett S. LeBow 58 Chairman of the Board and Chief December
New Valley Corporation Executive Officer of the Company 1987
100 S.E. Second Street
Miami, FL 33131
Howard M. Lorber 47 President and Chief Operating January
New Valley Corporation Officer of the Company 1991
100 S.E. Second Street
Miami, FL 33131
Arnold I. Burns 66 Partner, Proskauer Rose November
Proskauer Rose Goetz & Goetz & Mendelsohn LLP 1994
Mendelsohn LLP
1585 Broadway
New York, NY 10036
Ronald J. Kramer 37 Chairman and Chief Executive November
Ladenburg Thalmann Officer of Ladenburg, Thalmann 1994
Group Inc Group Inc.
1209 Orange Street
Wilmington, Delaware 19801
Paul L. McDermott 42 Managing Director, Nomura Securities November
Nomura Securities International, Inc. 1994
International, Inc.
2 World Financial Center
New York, NY 10281
Richard S. Ressler 37 President and Chief Executive Officer, August
Orchard Capital Corporation Orchard Capital Corporation 1990
11100 Santa Monica Boulevard
Los Angeles, CA 90025
Gerald E. Sauter 52 Vice President, Chief Financial November
New Valley Corporation Officer and Treasurer 1994
100 S.E. Second Street
Miami, FL 33131
</TABLE>
2
<PAGE> 3
<TABLE>
<CAPTION>
DIRECTOR
NAME AND ADDRESS AGE PRINCIPAL OCCUPATION SINCE
- ---------------- --- -------------------- --------
<S> <C> <C> <C>
Henry C. Beinstein 53 Managing Director, November
Milbank, Tweed, Hadley & McCloy Milbank, Tweed, 1994
1 Chase Manhattan Plaza Hadley & McCloy
New York, NY 10005-1413
Barry W. Ridings 44 Managing Director, November
Alex. Brown & Sons, Incorporated Alex. Brown & Sons, 1994
787 Seventh Avenue Incorporated
New York, NY 10019
</TABLE>
The Board of Directors of the Company consists of the foregoing nine
directors, each of whom was appointed pursuant to the Joint Plan and
subsequently elected by the Company's shareholders at the last Annual Meeting
of Shareholders held on May 15, 1995: Messrs. LeBow, Lorber and Ressler, all
of whom were directors of the Company prior to confirmation of the Joint Plan
(the "Prior Directors"); Messrs. McDermott, Kramer and Burns, three new
independent directors who were identified in the Disclosure Statement relating
to the Joint Plan; Mr. Sauter, who was designated by the Prior Directors
pursuant to the terms of the Joint Plan; and Messrs. Beinstein and Ridings
(together, the "Shareholder Designees"), who were selected as a result of
negotiations with the Official Committee of Equity Security Holders. The
Shareholder Designees are deemed to be directors elected pursuant to the
Company's Certificate of Incorporation by holders of the Class A Senior
Preferred Shares, voting as a class, and by the holders of the Class A Senior
Preferred Shares and the Class B Preferred Shares, voting together as a single
class, in each case as a result of dividend arrearages thereon. See Item 1,
"Business - Agreements with Equity Representatives".
BUSINESS EXPERIENCE OF DIRECTORS (OTHER THAN EXECUTIVE OFFICERS)
ARNOLD I. BURNS has been a partner of Proskauer Rose Goetz &
Mendelsohn LLP ("Proskauer"), a New York-based law firm, since September
1988. Mr. Burns was an Associate Attorney General at the United States
Department of Justice in 1986 and Deputy Attorney General from 1986 to 1988.
RONALD J. KRAMER has been Chairman and Chief Executive Officer of
Ladenburg, Thalmann Group Inc. since 1995 and an employee of Ladenburg,
Thalmann & Co. Inc. ("Ladenburg"), an investment banking firm, for more than
the past five years. On May 31, 1995, the Company acquired all of the capital
stock of Ladenburg. For additional information on the Company's acquisition of
Ladenburg and Mr. Kramer's interest therein, see Item 13, "Certain
Relationships and Related Transactions." Mr. Kramer currently serves on the
Boards of Directors of Griffon Corporation and Grand Casinos, Inc.
PAUL L. MCDERMOTT has been a Managing Director of Nomura Securities
International, Inc., an investment banking firm, since December 1986. Mr.
McDermott served on the Board of Directors of VTX Corporation from January 1992
until December 1995. Mr. McDermott currently serves on the Boards of Directors
of Perceptron, Inc. and Apparel Marketing Corp.
RICHARD S. RESSLER has been President and Chief Executive Officer of
Orchard Capital Corporation, an investment and consulting firm, since January
1994. Mr. Ressler has also been President and Chief Executive Officer of MAI
since October 1994 and a director thereof since February 1995. From July 1988
until January 1, 1994, Mr. Ressler held various executive positions at Brooke
and Brooke's predecessor company, Brooke Partners, L.P. and their various
respective subsidiaries and affiliates, including Liggett. From July 1990 to
April 1993, he was a director, and from November 1990 to April 1993, he was
Executive President of Brooke.
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<PAGE> 4
Mr. Ressler owns 10.8% of the outstanding common stock of Brooke and has been
a consultant to Brooke since January 1994.
HENRY C. BEINSTEIN has been the Managing Director of Milbank, Tweed,
Hadley & McCloy ("Milbank"), a New York-based law firm, since November 1995.
Mr. Beinstein was the Executive Director of Proskauer from April 1985 through
October 1995. Mr. Beinstein is a certified public accountant in the States of
New York and New Jersey and prior to joining Proskauer was a partner and
National Director of Finance and Administration at Coopers & Lybrand. Mr.
Beinstein currently serves on the Board of Directors of Dyson Kissner Moran
Corporation.
BARRY W. RIDINGS has been a Managing Director of Alex. Brown & Sons,
Incorporated, an investment banking firm, since March 1990. Mr. Ridings
currently serves on the Board of Directors of TransCor Waste Services Corp.,
SubMicron Systems, Inc., Norex America, Inc., Noodle Kidoodle Inc. and
Telemundo Group Inc.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, as
well as persons who own more than 10% of a registered class of the Company's
equity securities (the "Reporting Persons"), to file reports of initial
beneficial ownership and changes in beneficial ownership on Forms 3, 4 and 5
with the SEC. Such Reporting Persons are also required by SEC regulations to
furnish the Company with copies of all such reports that they file.
To the Company's knowledge, based solely on a 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,
1995, all Reporting Persons have timely complied with all filing requirements
applicable to them.
ITEM 11. 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, 1995, the Company's (i) Chief Executive Officer and
(ii) the other four executive officers whose cash compensation exceeded
$100,000 (of which there are only three individuals whose compensation
exceeded the threshold amount) (collectively, the "named executive officers").
4
<PAGE> 5
SUMMARY COMPENSATION TABLE(1)(2)
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
- --------------------------- ---- ------ ----- ------------
<S> <C> <C> <C> <C>
Bennett S. LeBow 1995 $1,894,823 -- --
Chairman and Chief Executive Officer(3) 1994 71,045 -- --
1993 -- -- --
Howard M. Lorber 1995 $ 956,376 $500,000 --
President and Chief Operating Officer(3) 1994 56,008 -- --
1993 -- -- --
Richard J. Lampen 1995 $ 150,000 $100,000 --
Executive Vice President and 1994 -- -- --
General Counsel(4) 1993 -- -- --
Gerald E. Sauter 1995 $ 278,534(5) -- --
Vice President, Treasurer and Chief 1994 41,131 $57,500 --
Financial Officer 1993 -- -- --
</TABLE>
- --------------------------------------
(1) 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 the rules
of the SEC.
(2) No restricted stock or stock options were granted in 1993, 1994 or
1995 to the named executive officers.
(3) The Chairman and Mr. Lorber received no compensation or other payments
for services rendered to the Company for any period prior to November
15, 1994 other than compensation (not included in the table) which was
received in their capacities as directors and certain expense
reimbursements.
(4) Mr. Lampen commenced employment with the Company in October 1995.
(5) In 1995, all of Mr. Sauter's salary was paid by the Company, 25% (or
$69,633) of which was subsequently reimbursed to the Company by
Brooke. The table reflects 100% of Mr. Sauter's 1995 salary.
COMPENSATION OF DIRECTORS
In 1995, each non-employee director of the Company received an annual
fee of $35,000 for serving on the Board of Directors as well as a $1,000 fee
for attendance at each meeting of the Board of Directors or a committee thereof.
EMPLOYMENT AGREEMENTS
The Chairman is a party to an employment agreement with the Company
dated as of June 1, 1995, as amended effective as of January 1, 1996. The
agreement has an initial term of three years effective as of January 18, 1995
(the "Effective Date"), 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 sixty-day period prior to such anniversary date. As
of January 18, 1995, the Chairman's annual base salary was $2,000,000. The
Board shall periodically review such base salary and may increase (but not
decrease) it from time to time in its sole discretion. Following termination
of his employment without cause (as defined therein), he would continue to
receive his base salary for a period of 36 months commencing
5
<PAGE> 6
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 (as defined therein), he is entitled to 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 June 1, 1995, as amended effective as of January 1, 1996. The
agreement has an initial term of three years effective as of January 18, 1995
(the "Effective Date"), 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 sixty-day period prior to such anniversary date. As
of January 18, 1995, Mr. Lorber's annual base salary was $1,000,000 and
commencing January 1, 1996, his annual base salary was $1,250,000. The Board
shall periodically review such base salary and may increase (but not decrease)
it from time to time, in its sole discretion. Following termination of his
employment without cause (as defined therein), 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 (as defined therein), he
is entitled to receive a lump sum payment equal to 2.99 times the sum of (i)
his then current base salary and (ii) the Bonus Amounts (as defined therein)
earned by him for the twelve-month period ending with the last day of the month
immediately preceding the month in which the termination occurs.
Richard J. Lampen is a party to an employment agreement with the
Company dated September 22, 1995. The agreement has 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 ninety-day period prior to the termination date. As of
October 1, 1995, his annual base salary was $600,000. The Board shall review
such base salary annually and may increase (but not decrease) it from time to
time, in its sole discretion. Following termination of his employment without
cause (as defined therein), he shall receive severance pay in a lump sum equal
to the amount of his base salary he would have received if he was employed
until the later of December 31, 1997 or one year after termination of his
employment term.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company does not currently have a Compensation Committee. The
Board of Directors acts on compensation matters as a Committee of the whole.
The Chairman has been Chairman of the Board of the Company since 1988 and Chief
Executive Officer since November 1994, Mr. Lorber was named President and Chief
Operating Officer of the Company in November 1994 and Mr. Sauter was named Vice
President, Treasurer and Chief Financial Officer of the Company in November
1994. For information on the interests of the Chairman and others in Brooke
and the securities of the Company and for information on certain other
relationships and transactions, see Item 1, "Business - Agreements with Equity
Representatives", Item 12, "Security Ownership of Certain Beneficial Owners
and Management", and Item 13, "Certain Relationships and Related Transactions".
In 1995, the Chairman was Chairman of the Board, President, Chief
Executive Officer and a member of the Compensation Committee of Brooke, a
director of Liggett, and was the Chairman of the Board of MAI until May 1995
and a director thereof until October 1995; Mr. Lorber was a member of the
Compensation Committee of SkyBox until May 1995, and was Chairman of the Board
of Directors of SkyBox until May 1995; Mr. Ressler was Chief Executive Officer
of MAI; Mr. Sauter was Vice President, Chief Financial Officer and Secretary of
Brooke; and Mr. Kramer was a director of SkyBox until March 1995.
6
<PAGE> 7
During 1995, the Chairman was a director, President and Treasurer of
each of BGLS, NV Holdings and BMI; and Mr. Sauter was Vice President, Chief
Financial Officer and Secretary of each of BGLS, NV Holdings and BMI.
PENSION PLANS
In connection with the Company's sale of FSI to FFMC, on November 15,
1994, the Western Union Pension Plan (the "Pension Plan") was assumed by FSI
and the Company was released from all obligations thereunder.
None of the current employees of the Company are entitled to any
benefits under the Pension Plan.
STOCK OPTION GRANTS AND STOCK OPTION EXERCISES
There were no stock options granted to, or exercised by, the named
executive officers during 1995.
7
<PAGE> 8
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding all
persons known by the Company to own beneficially more than 5% of any class of
its voting securities as of April 24, 1996.
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE
NAME AND ADDRESS TITLE OF CLASS SHARES (1) OF CLASS (1)
- ---------------- -------------- ---------- ------------
<S> <C> <C> <C>
Bennett S. LeBow Class A Senior 618,326(2) 59.7%
Brooke Group Ltd. Preferred Shares
BGLS Inc.
100 S.E. Second Street
Miami, FL 33131
New Valley Holdings, Inc.
204 Plaza Centre
3505 Silverside Road
Wilmington, DE 19810
Bennett S. LeBow Class B 250,885(2) 8.9%
Brooke Group Ltd. Preferred Shares
BGLS Inc.
100 S.E. Second Street
Miami, FL 33131
Bennett S. LeBow Common Shares 79,794,229(2) 41.6%
Brooke Group Ltd.
BGLS Inc.
100 S.E. Second Street
Miami, FL 33131
New Valley Holdings, Inc.
204 Plaza Centre
3505 Silverside Road
Wilmington, DE 19810
ITT Corporation Common Shares 14,391,437(3) 7.6%
1330 Avenue of the Americas
New York NY 10019
</TABLE>
- --------------------------
(1) The number of shares beneficially owned by each beneficial
owner listed above is based upon the numbers reported by such owner in
documents publicly filed with the SEC, publicly available information or
information available to the Company. The percentage of each class is
calculated based on the total number of shares of each class outstanding on
April 24, 1996. The number of shares and percentage of class include shares
with respect to which such beneficial owner has the right to acquire
beneficial ownership as specified in Rule 13d-3(d)(1) of the Exchange Act.
(2) According to Amendment No. 16 to Schedule 13D dated January
30, 1996, relating to the Common Shares and Class A Senior Preferred Shares,
filed jointly by Brooke, BGLS
8
<PAGE> 9
NV Holdings and Bennett S. LeBow, the beneficial owner of 56.5% of the common
stock of Brooke and the Chairman of the Board and Chief Executive Officer of
the Company (the "Chairman"), and Amendment No. 1 to Schedule 13D dated
January 30, 1996, relating to the Class B Preferred Shares, filed jointly by
the foregoing persons (except for NV Holdings), BGLS exercises sole voting
power and sole dispositive power, subject to the Pledge (as defined
below) over: (i) 394,975 Common Shares (less than 1% of such class); and (ii)
250,885 Class B Preferred Shares (approximately 8.9% of such class)
(collectively, the "BGLS Shares"), and NV Holdings exercises sole voting power
and sole dispositive power over, subject to the Pledge: (i) 79,399,254 Common
Shares (approximately 41.4% of such class); and (ii) 618,326 Class A Senior
Preferred Shares (approximately 59.7% of such class) (collectively, the
"NV Holdings Shares"). Each of BGLS and NV Holdings disclaims beneficial
ownership of the shares beneficially owned by the other under Rule 13d-3
promulgated under the Exchange Act ("Rule 13d-3"), or for any other purpose.
Each of Brooke and the Chairman disclaims beneficial ownership of the BGLS
Shares and NV Holdings Shares under Rule 13d-3, or for any other purpose.
According to the Schedules 13D referred to above, on or about January
30, 1996, BGLS, among other things, exchanged (i) its 15.75% Series A Senior
Secured Notes due 2001 (the "Series A Notes") for all of its outstanding 13.75%
Series 2 Senior Secured Notes due 1997 and (ii) its 15.75% Series B Senior
Secured Notes due 2001 (the "Series B Notes") for substantially all of its
outstanding 14.500% Subordinated Debentures due 1998. Pursuant to a registered
exchange offer under the Securities Act of 1933, as amended, as of March 21,
1996, all of the Series A Notes were exchanged for an equal principal amount of
registered Series B Notes. Pursuant to the indenture relating to the Series A
Notes and Series B Notes, BGLS pledged, among other security interests, the
BGLS Shares, and NV Holdings pledged the NV Holdings Shares (such pledges being
referred to herein collectively as the "Pledge") to secure the Series B Notes.
For information on interests in and positions held with Brooke and its
affiliates by the Chairman and other directors of the Company as well as voting
and other provisions applicable to Brooke pursuant to the terms of the Joint
Plan, see Item 1, "Business - Agreements with Equity Representatives" and
Item 11, "Executive Compensation - Compensation Committee Interlocks and
Insider Participation".
(3) ITT Corporation has reported that, as of May 15, 1991, it had
sole power to vote or to direct the voting and sole power to dispose or direct
the disposition of 14,391,437 Common Shares.
The following table sets forth, as of April 24, 1996, the
beneficial ownership of the Company's voting securities by (i) each director of
the Company, (ii) each of the named executive officers and (iii) all
directors and executive officers as a group.
9
<PAGE> 10
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
NAME TITLE OF CLASS SHARES(1) CLASS(1)
- ---- -------------- --------- ----------
<S> <C> <C> <C>
Bennett S. LeBow(2) ..................... Class A Senior Preferred Shares 618,326 59.7%
Class B Preferred Shares 250,885 8.9%
Common Shares 79,794,229 41.6%
Howard M. Lorber(3) ..................... Common Shares 7,500 --(5)
Henry C. Beinstein(4) ................... Class B Preferred Shares 34,500 1.3%
All directors and executive officers
as a group (10 persons) ............... Class A Senior Preferred Shares 618,326 59.7%
Class B Preferred Shares 285,385 10.2%
Common Shares 79,801,729 41.6%
</TABLE>
- -------------------------------
(1) The percentage of each class is calculated based on the total number
of shares of each class outstanding on April 24, 1996. Includes
shares with respect to which such person has the right to acquire
beneficial ownership as specified in Rule 13d-3(d)(1) of the Exchange
Act.
(2) Includes the BGLS Shares and NV Holding Shares, as to which shares the
Chairman disclaims beneficial ownership. See footnote (2) to the
preceding table.
(3) Mr. Lorber's Common Shares are held in a Keogh Plan for his benefit.
(4) Includes 2,500 Class B Preferred Shares held in an individual
retirement account for his spouse, as to which shares Mr. Beinstein
disclaims any beneficial interest.
(5) Less than one percent.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Lorber, a director and executive officer of the Company, is a
shareholder of Aegis Capital Corp. ("Aegis"), a broker-dealer that has
performed services for the Company and its subsidiaries since January 1, 1995.
During 1995, Aegis received commission and other income in the aggregate amount
of approximately $584,466. Mr. Lorber is also Chairman of the Board and Chief
Executive Officer of Hallman & Lorber and a consultant to Brooke. During 1995,
Hallman & Lorber received ordinary and customary insurance commissions
aggregating approximately $11,719 on various insurance policies issued for the
Company.
Mr. Burns, a director of the Company, is a partner of Proskauer, a
law firm which has been engaged to perform legal services for the Company in
the past and which may be so engaged in the future. The fees received for such
legal services in 1995 did not exceed five percent of the law firm's revenues.
Mr. Beinstein, a director of the Company, was the Executive Director
of Proskauer from 1985 until October 1995. He is currently the Managing
Director of Milbank, a law firm which has been engaged to perform legal
services for the Company in the past and which may be so engaged in the
future. The fees received for such legal services in 1995 did not exceed five
percent of either law firm's revenues.
Brooke has paid, among others, Messrs. Burns and Ridings, directors of
the Company, $30,000 each in connection with their agreeing to be a Brooke
nominee at RJR Holdings' 1996 annual stockholders' meeting. Brooke also
entered into an agreement with each Brooke nominee including Messrs. Burns and
Ridings, whereby it has agreed to indemnify such
10
<PAGE> 11
nominees from and against any losses incurred by such nominees resulting from,
relating to or arising out of any claim in connection with the solicitation of
proxies in support of the nominees' election at such annual meeting, including
the right to be advanced by Brooke for any expenses incurred in connection with
any such claim.
During 1995, the Company and Brooke entered into an expense sharing
agreement whereby the Company agreed to reimburse Brooke for its portion of
certain operating expenses, rent and utitlization of personnel. Expense
reimbursements amounted to $571,000 for the year ended December 31, 1995.
Mr. Kramer, a director of the Company, is Chairman of Ladenburg,
Thalmann Group Inc. and an employee of its subsidiary, Ladenburg, an
investment banking firm that was acquired by the Company in May 1995. Prior
to May 1995, Ladenburg provided, from time to time, financial services to the
Company and/or its affiliates.
On May 31, 1995, pursuant to a purchase agreement (the "Ladenburg
Agreement"), the Company acquired all of the outstanding shares of common stock
and other equity interests of Ladenburg for $26.75 million in cash, subject to
adjustment. The purchase price was based on the book value of Ladenburg's
assets at January 31, 1995. Pursuant to the Ladenburg Agreement, Mr. Kramer
received approximately $101,000 for his shares of common stock and other equity
interests in Ladenburg, and he was paid a finder's fee at closing of $800,000,
half of which was paid by the Company. The foregoing is qualified in its
entirety by reference to the Ladenburg Agreement, which is incorporated by
reference as an exhibit to this report.
For information concerning certain agreements and transactions between
the Company and Brooke relating to RJR Nabisco Holdings Corp., see Item 7,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Recent Developments - Certain Matters Relating to RJR Holdings"
and Note 5 (Investment Securities) and Note 17 (Related Party Transactions) to
the Company's Consolidated Financial Statements.
See, also, Item 11, "Executive Compensation - Compensation Committee
Interlocks and Insider Participation".
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned thereunto duly authorized.
NEW VALLEY CORPORATION
(REGISTRANT)
By: /s/ Gerald E. Sauter
--------------------------------
Gerald E. Sauter
Vice President and
Chief Financial Officer
Date: April 29, 1996
12
