<PAGE> 1
As filed with the Securities and Exchange Commission on March 31, 1997
REGISTRATION NO. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________
BROOKE GROUP LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 100 S. E. SECOND STREET 51-0255124
(STATE OR OTHER JURISDICTION OF MIAMI, FLORIDA 33131 (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) (305) 579-8000 IDENTIFICATION NUMBER)
(ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE
OFFICES)
</TABLE>
____________________
STOCK OPTIONS
(FULL TITLE OF THE PLAN)
____________________
MARC N. BELL, ESQ.
GENERAL COUNSEL
BROOKE GROUP LTD.
100 S.E. SECOND STREET
MIAMI, FLORIDA 33131
(305) 579-8000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PRICE OFFERING FEE
PER SECURITY PRICE
(1) (1)
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK, PAR 1,422,000 (2) $2.19 $3,110,000 $942
VALUE $.10 PER SHARE
=================================================================================
</TABLE>
<PAGE> 2
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h)(1) under the Securities Act of 1933, based upon the
exercise prices of the options to purchase the Common Stock to which this
Registration Statement relates.
(2) This Registration Statement also relates to such indeterminate number of
additional shares of Common Stock of the Registrant as may be issuable as a
result of stock splits, stock dividends, recapitalizations, mergers,
reorganizations, combinations or exchange of shares or other similar events.
____________________
This Registration Statement shall become effective upon filing with the
SEC in accordance with Section 8(a) of the Securities Act of 1933, as amended,
and Rule 462 promulgated thereunder.
2
<PAGE> 3
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
Not required to be filed with the Securities and Exchange Commission (the
"SEC").
Item 2. Registrant Information and Employee Plan Annual Information.
Not required to be filed with the SEC.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed or to be filed by Brooke Group Ltd. (the
"Registrant") with the SEC (File No. 1-5759) are incorporated herein by
reference:
1. The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996.
2. All other reports filed by the Registrant pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (the "Exchange Act") since the end of
the fiscal year covered by the document referred to in (1) above.
3. The description of the Registrant's Common Stock to be offered upon exercise
of the Stock Options contained in a registration statement filed by the
Registrant, including all amendments and reports filed for the purpose of
updating such descriptions.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such documents.
Any statements contained in this Registration Statement, or in a document
incorporated or deemed to be incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
document which is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Registration Statement.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
None.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law and Article VI of the
Registrant's By-Laws provide for indemnification of the Registrant's directors
and officers in a variety of circumstances, which may include liabilities under
the Securities Act of 1933.
3
<PAGE> 4
Section 102 of the Delaware General Corporation Law allows a corporation
to eliminate the personal liability of a director of a corporation to the
corporation or to any of its stockholders for monetary damage for a breach of
his fiduciary duty as a director, except in the case where the director (i)
breaches his duty of loyalty, (ii) fails to act in good faith, engages in
intentional misconduct or knowingly violates a law, (iii) authorized the
payment of a dividend or approves a stock repurchase in violation of the
Delaware General Corporate Law or (iv) obtains an improper personal benefit.
Article Ninth of the Registrant's Restated Certificate of Incorporation, as
amended, includes a provision which eliminates directors' personal liability to
the full extent permitted under the Delaware General Corporation Law, as the
same exists or may hereafter be amended.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
(a) NO. DESCRIPTION
------- -----------
<S> <C>
4.1 Stock Option Agreement, dated December 16, 1996, between the
Registrant and Howard M. Lorber.
4.2 Stock Option Agreement, dated January 1, 1997, between the
Registrant and Richard J. Lampen.
4.3 Stock Option Agreement, dated January 1, 1997, between the
Registrant and Marc N. Bell.
4.4 Stock Option Agreement, dated January 1, 1997, between the
Registrant and J. Bryant Kirkland III.
5.1 Opinion of Andrew E. Balog, Esq.
23.1 Consent of Coopers and Lybrand, L.L.P.
23.2 Consent of Price Waterhouse LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of Arthur Andersen LLP.
23.5 Consent of Andrew E. Balog, Esq. (included in Exhibit 5.1).
24.1 Power of Attorney (included in the signature page hereof).
</TABLE>
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
4
<PAGE> 5
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-amendment
thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of the securities offered would not exceed
that which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in the volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that paragraphs (i) and (ii) do not apply if the information
required to be included in a post-effective amendment is contained in periodic
reports filed with or furnished to the Commission by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to any provision or arrangement whereby the
Registrant may indemnify any such directors, officers or controlling persons
against such liabilities, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
undersigned registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Miami, and State of Florida, on the
31st day of March, 1997.
BROOKE GROUP LTD.
By: /s/ Joselynn D. Van Siclen
--------------------------------
Joselynn D. Van Siclen
Vice President, Chief Financial
Officer and Treasurer
Each person whose signature appears below hereby authorizes Richard J.
Lampen, Joselynn D. Van Siclen and Marc N. Bell, and each of them individually
(the "Agent"), with full power of substitution and resubstitution, to file one
or more amendments (including post-effective amendments) to the Registration
Statement which amendments may make such changes in the Registration Statement
as such Agent deems appropriate and each such person hereby appoints each such
Agent as attorney-in-fact to execute in the name and on behalf of each such
person, individually and in each capacity stated below, any such amendments to
the Registration Statement.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on March 31, 1997.
/s/ Bennett S. LeBow Chairman of the Board of
-------------------------- Directors, President and
Bennett S. LeBow Chief Executive Officer
(Principal Executive Officer)
/s/ Joselynn D. Van Siclen Vice President, Chief Financial
-------------------------- Officer and Treasurer (Principal
Joselynn D. Van Siclen Financial Officer and Principal
Accounting Officer)
/s/ Robert J. Eide Director
--------------------------
Robert J. Eide
/s/ Jeffrey S. Podell Director
--------------------------
Jeffrey S. Podell
6
<PAGE> 1
Exhibit 4.1
BROOKE GROUP LTD.
100 S.E. SECOND STREET, 32ND FLOOR
MIAMI, FLORIDA 33131
December 16, 1996
Mr. Howard M. Lorber
70 East Sunrise Highway
Suite 411
Valley Stream, New York 11581
Dear Mr. Lorber:
We are pleased to inform you that Brooke Group Ltd. (the "Company") has
granted you a nonqualified option (the "Option") to purchase 1,000,000 shares
of the Company's common stock, par value $.10 per share (the "Common Stock"),
at a price of $1.00 per share (any of the underlying shares of Common Stock to
be issued upon exercise of the Option are referred to hereinafter as the
"Shares"), subject to the following terms and conditions:
1. The Option may be exercised on or prior to July 1, 2006 (at which date
the Option will, to the extent not previously exercised, expire), as follows:
(a) as to 166,666 of the Shares, on and after July 1, 1997; (b) as to 166,666
of the Shares, on and after July 1, 1998; (c) as to 166,667 of the Shares, on
and after July 1, 1999; (d) as to 166,667 of the Shares, on and after July 1,
2000; (e) as to 166,667 of the Shares, on and after July 1, 2001; and (f) as to
the final 166,667 of the Shares, on and after July 1, 2002. Each such
installment shall be cumulative and your right of purchase thereunder shall
continue, unless exercised or terminated as herein provided through the
expiration date of the Option.
2. Any installment of the Option, from and after the date it becomes
exercisable pursuant to Section 1 hereof, may be exercised in whole or in part
by delivering to the Company a written notice of exercise in the form attached
hereto as Exhibit A, specifying the number of the Shares to be purchased,
together with payment of the purchase price of the Shares to be purchased. The
purchase price is to be paid in cash or by delivering shares of Common Stock
already owned by you and having a fair market value on the date of exercise
equal to the exercise price of the Option, or a combination of such shares and
cash.
3. Except to the extent provided in Section 4 hereof, in the event your
consulting arrangement with the Company is terminated for any reason, the
Option shall forthwith terminate, provided that you may exercise any then
unexercised installments of the Option then
<PAGE> 2
Mr. Howard M. Lorber
December 16, 1996
Page 2
exercisable at any time prior to the earlier of three months after the
termination of your consulting arrangement or the expiration of the Option.
4. In the event of the occurrence of any Change of Control of the Company
or of New Valley Corporation (as the term "Change of Control" is defined in
Section 6(f) of the Employment Agreement entered into between you and New
Valley Corporation dated as of January 1, 1995 and as amended effective as of
January 1, 1996 [the "Employment Agreement"]), other than any Change of Control
arising by reason of a testamentary bequest by Bennett S. LeBow to or for the
benefit of his surviving spouse of any or all securities of the Company or of
New Valley Corporation beneficially owned by him as of his date of death so
long as, following the bequest, the event referenced in Section 6(f)(ii) of the
Employment Agreement shall not have occurred, all installments of the Option
(to the extent not previously exercised) shall become immediately exercisable
at any time prior to the earlier of three months after the termination of your
consulting arrangement or the expiration of the Option.
5. In the event of the payment of any dividends or other distributions in
respect of the Common Stock on or after the date hereof through and including
July 1, 2006, you shall receive, within ten days of the payment of such
dividend or distribution, a payment equal to the amount of any such dividends
or other distributions that would have been paid to you had you been at the
record date for such dividends or other distributions a shareholder of the
Shares, provided that dividends or distributions in respect of Shares that are
not exercisable on such record date shall only be paid to you at the time such
Shares become exercisable.
6. The Option is not transferable otherwise than by will or by the
applicable laws of descent and distribution and may be exercised during your
lifetime only by you (or in the event of your Disability, by your personal
representative or representatives).
7. In the event of your death, the Option may be exercised by your
personal representative or representatives or by the person or persons to whom
your rights under the Option shall pass by will or by the applicable laws of
descent or distribution.
8. In the event of any change in the outstanding Common Stock by reason of
a stock dividend, recapitalization, merger, consolidation, split-up,
subdivision, combination or exchange of shares, or the like, the aggregate
number and kind of shares subject to the Option and the exercise price thereof
shall be proportionately adjusted by the Company.
9. Unless at the time of the exercise of the Option a registration
statement under the Securities Act of 1933, as amended (the "Act"), is in
effect as to the Shares, the Shares shall be acquired for investment and not
for sale or distribution, and if the Company so requests, upon
<PAGE> 3
Mr. Howard M. Lorber
December 16, 1996
Page 3
any exercise of the Option, in whole or in part, you agree to execute and
deliver to the Company a certificate to such effect.
10. You understand and acknowledge that, under existing law, unless at the
time of the exercise of the Option a registration statement under the Act is in
effect as to the Shares so issuable: (i) any Shares purchased by you upon
exercise of the Option may be required to be held indefinitely unless such
Shares are subsequently registered under the Act or an exemption from such
registration is available; (ii) any sales of such Shares made in reliance upon
Rule 144 promulgated under the Act may be made only in accordance with the
terms and conditions of that Rule (which, under certain circumstances, restrict
the number of shares which may be sold and the manner in which shares may be
sold); (iii) in the case of securities to which Rule 144 is not applicable,
compliance with Regulation A promulgated under the Act or some other disclosure
exemption shall be required; (iv) certificates for Shares to be issued to you
hereunder shall bear a legend to the effect that the Shares have not been
registered under the Act and that the Shares may not be sold, hypothecated or
otherwise transferred in the absence of an effective registration statement
under the Act relating thereto or an opinion of counsel satisfactory to the
Company that such registration is not required; and (v) the Company shall place
an appropriate "stop transfer" order with its transfer agent with respect to
such Shares.
11. Promptly following the date hereof, the Company shall use its best
efforts to file and keep in effect a Registration Statement on Form S-8, Form
S-3 or other applicable form to register under the Act the Shares issuable to
you upon exercise of the Option and the resale thereof by you.
<PAGE> 4
Mr. Howard M. Lorber
December 16, 1996
Page 4
Would you kindly evidence your acceptance of the Option and your agreement
to comply with the provisions hereof by executing this letter in the space
provided below.
Very truly yours,
BROOKE GROUP LTD.
By: /s/ Bennett S. LeBow
------------------------------
Bennett S. LeBow
Chairman, President
and Chief Executive Officer
AGREED TO AND ACCEPTED:
/s/ Howard M. Lorber
- ----------------------------
Howard M. Lorber
<PAGE> 5
EXHIBIT A
Brooke Group Ltd.
100 S. E. Second Street, 32nd Floor
Miami, Florida 33131
Gentlemen:
Notice is hereby given of my election to purchase __________ shares of
Common Stock, $.10 par value (the "Shares"), of Brooke Group Ltd., at a price
of $1.00 per Share, pursuant to the provisions of the stock option granted to
me on November _____, 1996. Enclosed in payment for the Shares is:
[ ] my check in the amount of $ ____________________.
[ ] ___________________ Shares having a total value of $
______________, such value being based on the closing price(s)
of the Shares on the date hereof.
The following information is supplied for use in issuing an registering
the Shares purchased hereby:
<TABLE>
<S> <C>
Number of Certificates
and Denominations _________________________________
Name _________________________________
Address _________________________________
_________________________________
_________________________________
Social Security _________________________________
</TABLE>
Dated:
Very truly yours,
Howard M. Lorber
<PAGE> 1
Exhibit 4.2
BROOKE GROUP LTD.
100 S.E. SECOND STREET, 32ND FLOOR
MIAMI, FLORIDA 33131
January 1, 1997
Mr. Richard J. Lampen
350 Costa Brava Court
Coral Gables, Florida 33143
Dear Mr. Lampen:
We are pleased to inform you that Brooke Group Ltd. (the "Company") has
granted you a nonqualified option (the "Option") to purchase 260,000 shares of
the Company's common stock, par value $.10 per share (the "Common Stock"), at a
price of $5.00 per share (any of the underlying shares of Common Stock to be
issued upon exercise of the Option are referred to hereinafter as the
"Shares"), subject to the following terms and conditions:
1. The Option may be exercised on or prior to December 31, 2006 (at which
date the Option will, to the extent not previously exercised, expire), as
follows: (a) as to 43,333 of the Shares, on and after January 1, 1998; (b) as
to 43,333 of the Shares, on and after January 1, 1999; (c) as to 43,333 of the
Shares, on and after January 1, 2000; (d) as to 43,333 of the Shares, on and
after January 1, 2001; (e) as to 43,334 of the Shares, on and after January 1,
2002; and (f) as to the final 43,334 of the Shares, on and after January 1,
2003. Each such installment shall be cumulative and your right of purchase
thereunder shall continue, unless exercised or terminated as herein provided,
through the expiration date of the Option.
2. Any installment of the Option, from and after the date it becomes
exercisable pursuant to Section 1 hereof, may be exercised in whole or in part
by delivering to the Company a written notice of exercise in the form attached
hereto as Exhibit A, specifying the number of the Shares to be purchased,
together with payment of the purchase price of the Shares to be purchased. The
purchase price is to be paid in cash or by delivering shares of Common Stock
already owned by you and having a fair market value on the date of exercise
equal to the exercise price of the Option, or a combination of such shares and
cash.
3. Except to the extent provided in Section 4 hereof, in the event your
employment with the Company is terminated for any reason, the Option shall
forthwith terminate, provided that you may exercise any then unexercised
installments of the Option then exercisable at any time prior to the earlier of
three months after the termination of your employment or the expiration of the
Option.
<PAGE> 2
Mr. Richard J. Lampen
January 1, 1997
Page 2
4. In the event of the occurrence of any Change of Control of the Company
or of New Valley Corporation (as the term "Change of Control" is defined in
Section 6(f) of the Employment Agreement, dated as of January 1, 1995, as
amended as of January 1, 1996, between Howard M. Lorber and New Valley
Corporation), other than any Change of Control arising by reason of a
testamentary bequest by Bennett S. LeBow to or for the benefit of his surviving
spouse of any or all securities of the Company or of New Valley Corporation
beneficially owned by him as of his date of death so long as, following the
bequest, the event referenced in Section 6(f)(ii) of such Employment Agreement
shall not have occurred, all installments of the Option (to the extent not
previously exercised) shall become immediately exercisable at any time prior to
the earlier of three months after the termination of your employment or the
expiration of the Option.
5. The Option is not transferable otherwise than by will or by the
applicable laws of descent and distribution and may be exercised during your
lifetime only by you (or in the event of your Disability, by your personal
representative or representatives).
6. In the event of your death, the Option may be exercised by your
personal representative or representatives or by the person or persons to whom
your rights under the Option shall pass by will or by the applicable laws of
descent or distribution.
7. In the event of any change in the outstanding Common Stock by reason of
a stock dividend, recapitalization, merger, consolidation, split-up,
subdivision, combination or exchange of shares, or the like, the aggregate
number and kind of shares subject to the Option and the exercise price thereof
shall be proportionately adjusted by the Company.
8. Unless at the time of the exercise of the Option a registration
statement under the Securities Act of 1933, as amended (the "Act"), is in
effect as to the Shares, the Shares shall be acquired for investment and not
for sale or distribution, and if the Company so requests, upon any exercise of
the Option, in whole or in part, you agree to execute and deliver to the
Company a certificate to such effect.
9. You understand and acknowledge that, under existing law, unless at the
time of the exercise of the Option a registration statement under the Act is in
effect as to the Shares so issuable: (i) any Shares purchased by you upon
exercise of the Option may be required to be held indefinitely unless such
Shares are subsequently registered under the Act or an exemption from such
registration is available; (ii) any sales of such Shares made in reliance upon
Rule 144 promulgated under the Act may be made only in accordance with the
terms and conditions of that Rule (which, under certain circumstances, restrict
the number of shares which may be sold and the manner in which shares may be
sold); (iii) in the case of securities to which Rule 144 is not
<PAGE> 3
Mr. Richard J. Lampen
January 1, 1997
Page 3
applicable, compliance with Regulation A promulgated under the Act or some
other disclosure exemption shall be required; (iv) certificates for Shares to
be issued to you hereunder shall bear a legend to the effect that the Shares
have not been registered under the Act and that the Shares may not be sold,
hypothecated or otherwise transferred in the absence of an effective
registration statement under the Act relating thereto or an opinion of counsel
satisfactory to the Company that such registration is not required; and (v) the
Company shall place an appropriate "stop transfer" order with its transfer
agent with respect to such Shares.
10. Promptly following the date hereof, the Company shall use its best
efforts to file and keep in effect a Registration Statement on Form S-8, Form
S-3 or other applicable form to register under the Act the Shares issuable to
you upon exercise of the Option and the resale thereof by you.
<PAGE> 4
Mr. Richard J. Lampen
January 1, 1997
Page 4
Would you kindly evidence your acceptance of the Option and your agreement
to comply with the provisions hereof by executing this letter in the space
provided below.
Very truly yours,
BROOKE GROUP LTD.
By: /s/ Bennett S. LeBow
----------------------------
Bennett S. LeBow
Chairman, President
and Chief Executive Officer
AGREED TO AND ACCEPTED:
/s/ Richard J. Lampen
- ----------------------------
Richard J. Lampen
<PAGE> 5
EXHIBIT A
Brooke Group Ltd.
100 S. E. Second Street, 32nd Floor
Miami, Florida 33131
Gentlemen:
Notice is hereby given of my election to purchase __________ shares of
Common Stock, $.10 par value (the "Shares"), of Brooke Group Ltd., at a price
of $5.00 per Share, pursuant to the provisions of the stock option granted to
me on January 1, 1997. Enclosed in payment for the Shares is:
[ ] my check in the amount of $ ____________________.
[ ] ___________________ Shares having a total value of $
______________, such value being based on the closing price(s)
of the Shares on the date hereof.
The following information is supplied for use in issuing an registering
the Shares purchased hereby:
Number of Certificates
and Denominations _________________________________
Name _________________________________
Address _________________________________
_________________________________
_________________________________
Social Security _________________________________
Dated:
Very truly yours,
Richard J. Lampen
<PAGE> 1
Exhibit 4.3
BROOKE GROUP LTD.
100 S.E. SECOND STREET, 32ND FLOOR
MIAMI, FLORIDA 33131
January 1, 1997
Mr. Marc N. Bell
3047 Lakewood Drive
Ft. Lauderdale, FL 33332
Dear Mr. Bell:
We are pleased to inform you that Brooke Group Ltd. (the "Company") has
granted you a nonqualified option (the "Option") to purchase 100,000 shares of
the Company's common stock, par value $.10 per share (the "Common Stock"), at a
price of $5.00 per share (any of the underlying shares of Common Stock to be
issued upon exercise of the Option are referred to hereinafter as the
"Shares"), subject to the following terms and conditions:
1. The Option may be exercised on or prior to December 31, 2006 (at which
date the Option will, to the extent not previously exercised, expire), as
follows: (a) as to 16,666 of the Shares, on and after the date hereof; (b) as
to 16,666 of the Shares, on and after January 1, 1998; (c) as to 16,667 of the
Shares, on and after January 1, 1999; (d) as to 16,667 of the Shares, on and
after January 1, 2000; (e) as to 16,667 of the Shares, on and after January 1,
2001; and (f) as to the final 16,667 of the Shares, on and after January 1,
2002. Each such installment shall be cumulative and your right of purchase
thereunder shall continue, unless exercised or terminated as herein provided,
through the expiration date of the Option.
2. Any installment of the Option, from and after the date it becomes
exercisable pursuant to Section 1 hereof, may be exercised in whole or in part
by delivering to the Company a written notice of exercise in the form attached
hereto as Exhibit A, specifying the number of the Shares to be purchased,
together with payment of the purchase price of the Shares to be purchased. The
purchase price is to be paid in cash or by delivering shares of Common Stock
already owned by you and having a fair market value on the date of exercise
equal to the exercise price of the Option, or a combination of such shares and
cash.
3. Except to the extent provided in Section 4 hereof, in the event your
employment with the Company is terminated for any reason, the Option shall
forthwith terminate, provided that you may exercise any then unexercised
installments of the Option then exercisable at any time prior to the earlier of
three months after the termination of your employment or the expiration of the
Option.
<PAGE> 2
Mr. Marc N. Bell
January 1, 1997
Page 2
4. In the event of the occurrence of any Change of Control of the Company
or of New Valley Corporation (as the term "Change of Control" is defined in
Section 6(f) of the Employment Agreement, dated as of January 1, 1995, as
amended as of January 1, 1996, between Howard M. Lorber and New Valley
Corporation), other than any Change of Control arising by reason of a
testamentary bequest by Bennett S. LeBow to or for the benefit of his surviving
spouse of any or all securities of the Company or of New Valley Corporation
beneficially owned by him as of his date of death so long as, following the
bequest, the event referenced in Section 6(f)(ii) of such Employment Agreement
shall not have occurred, all installments of the Option (to the extent not
previously exercised) shall become immediately exercisable at any time prior to
the earlier of three months after the termination of your employment or the
expiration of the Option.
5. The Option is not transferable otherwise than by will or by the
applicable laws of descent and distribution and may be exercised during your
lifetime only by you (or in the event of your Disability, by your personal
representative or representatives).
6. In the event of your death, the Option may be exercised by your
personal representative or representatives or by the person or persons to whom
your rights under the Option shall pass by will or by the applicable laws of
descent or distribution.
7. In the event of any change in the outstanding Common Stock by reason of
a stock dividend, recapitalization, merger, consolidation, split-up,
subdivision, combination or exchange of shares, or the like, the aggregate
number and kind of shares subject to the Option and the exercise price thereof
shall be proportionately adjusted by the Company.
8. Unless at the time of the exercise of the Option a registration
statement under the Securities Act of 1933, as amended (the "Act"), is in
effect as to the Shares, the Shares shall be acquired for investment and not
for sale or distribution, and if the Company so requests, upon any exercise of
the Option, in whole or in part, you agree to execute and deliver to the
Company a certificate to such effect.
9. You understand and acknowledge that, under existing law, unless at the
time of the exercise of the Option a registration statement under the Act is in
effect as to the Shares so issuable: (i) any Shares purchased by you upon
exercise of the Option may be required to be held indefinitely unless such
Shares are subsequently registered under the Act or an exemption from such
registration is available; (ii) any sales of such Shares made in reliance upon
Rule 144 promulgated under the Act may be made only in accordance with the
terms and conditions of that Rule (which, under certain circumstances, restrict
the number of shares which may be sold and the manner in which shares may be
sold); (iii) in the case of securities to which Rule 144 is not
<PAGE> 3
Mr. Marc N. Bell
January 1, 1997
Page 3
applicable, compliance with Regulation A promulgated under the Act or some
other disclosure exemption shall be required; (iv) certificates for Shares to
be issued to you hereunder shall bear a legend to the effect that the Shares
have not been registered under the Act and that the Shares may not be sold,
hypothecated or otherwise transferred in the absence of an effective
registration statement under the Act relating thereto or an opinion of counsel
satisfactory to the Company that such registration is not required; and (v) the
Company shall place an appropriate "stop transfer" order with its transfer
agent with respect to such Shares.
10. Promptly following the date hereof, the Company shall use its best
efforts to file and keep in effect a Registration Statement on Form S-8, Form
S-3 or other applicable form to register under the Act the Shares issuable to
you upon exercise of the Option and the resale thereof by you.
<PAGE> 4
Mr. Marc N. Bell
January 1, 1997
Page 4
Would you kindly evidence your acceptance of the Option and your agreement
to comply with the provisions hereof by executing this letter in the space
provided below.
Very truly yours,
BROOKE GROUP LTD.
By: /s/ Bennett S. LeBow
-----------------------------
Bennett S. LeBow
Chairman, President
and Chief Executive Officer
AGREED TO AND ACCEPTED:
/s/ Marc N. Bell
- -------------------------------
Marc N. Bell
<PAGE> 5
EXHIBIT A
Brooke Group Ltd.
100 S. E. Second Street, 32nd Floor
Miami, Florida 33131
Gentlemen:
Notice is hereby given of my election to purchase __________ shares of
Common Stock, $.10 par value (the "Shares"), of Brooke Group Ltd., at a price
of $5.00 per Share, pursuant to the provisions of the stock option granted to
me on January 1, 1997. Enclosed in payment for the Shares is:
[ ] my check in the amount of $ ____________________.
[ ] ___________________ Shares having a total value of $
______________, such value being based on the closing price(s)
of the Shares on the date hereof.
The following information is supplied for use in issuing an registering
the Shares purchased hereby:
Number of Certificates
and Denominations _________________________________
Name _________________________________
Address _________________________________
_________________________________
_________________________________
Social Security _________________________________
Dated:
Very truly yours,
Marc N. Bell
<PAGE> 1
Exhibit 4.4
BROOKE GROUP LTD.
100 S.E. SECOND STREET, 32ND FLOOR
MIAMI, FLORIDA 33131
January 1, 1997
Mr. James B. Kirkland, III
1666 West Avenue, Apt. 405
Miami Beach, Florida 33139
Dear Mr. Kirkland:
We are pleased to inform you that Brooke Group Ltd. (the "Company") has
granted you a nonqualified option (the "Option") to purchase 62,000 shares of
the Company's common stock, par value $.10 per share (the "Common Stock"), at a
price of $5.00 per share (any of the underlying shares of Common Stock to be
issued upon exercise of the Option are referred to hereinafter as the
"Shares"), subject to the following terms and conditions:
1. The Option may be exercised on or prior to December 31, 2006 (at which
date the Option will, to the extent not previously exercised, expire), as
follows: (a) as to 10,333 of the Shares, on and after January 1, 1998; (b) as
to 10,333 of the Shares, on and after January 1, 1999; (c) as to 10,333 of the
Shares, on and after January 1, 2000; (d) as to 10,333 of the Shares, on and
after January 1, 2001; (e) as to 10,334 of the Shares, on and after January 1,
2002; and (f) as to the final 10,334 of the Shares, on and after January 1,
2003. Each such installment shall be cumulative and your right of purchase
thereunder shall continue, unless exercised or terminated as herein provided,
through the expiration date of the Option.
2. Any installment of the Option, from and after the date it becomes
exercisable pursuant to Section 1 hereof, may be exercised in whole or in part
by delivering to the Company a written notice of exercise in the form attached
hereto as Exhibit A, specifying the number of the Shares to be purchased,
together with payment of the purchase price of the Shares to be purchased. The
purchase price is to be paid in cash or by delivering shares of Common Stock
already owned by you and having a fair market value on the date of exercise
equal to the exercise price of the Option, or a combination of such shares and
cash.
3. Except to the extent provided in Section 4 hereof, in the event your
employment with the Company is terminated for any reason, the Option shall
forthwith terminate, provided that you may exercise any then unexercised
installments of the Option then exercisable at any time prior to the earlier of
three months after the termination of your employment or the expiration of the
Option.
<PAGE> 2
Mr. James B. Kirkland, III
January 1, 1997
Page 2
4. In the event of the occurrence of any Change of Control of the Company
or of New Valley Corporation (as the term "Change of Control" is defined in
Section 6(f) of the Employment Agreement, dated as of January 1, 1995, as
amended as of January 1, 1996, between Howard M. Lorber and New Valley
Corporation), other than any Change of Control arising by reason of a
testamentary bequest by Bennett S. LeBow to or for the benefit of his surviving
spouse of any or all securities of the Company or of New Valley Corporation
beneficially owned by him as of his date of death so long as, following the
bequest, the event referenced in Section 6(f)(ii) of such Employment Agreement
shall not have occurred, all installments of the Option (to the extent not
previously exercised) shall become immediately exercisable at any time prior to
the earlier of three months after the termination of your employment or the
expiration of the Option.
5. The Option is not transferable otherwise than by will or by the
applicable laws of descent and distribution and may be exercised during your
lifetime only by you (or in the event of your Disability, by your personal
representative or representatives).
6. In the event of your death, the Option may be exercised by your
personal representative or representatives or by the person or persons to whom
your rights under the Option shall pass by will or by the applicable laws of
descent or distribution.
7. In the event of any change in the outstanding Common Stock by reason of
a stock dividend, recapitalization, merger, consolidation, split-up,
subdivision, combination or exchange of shares, or the like, the aggregate
number and kind of shares subject to the Option and the exercise price thereof
shall be proportionately adjusted by the Company.
8. Unless at the time of the exercise of the Option a registration
statement under the Securities Act of 1933, as amended (the "Act"), is in
effect as to the Shares, the Shares shall be acquired for investment and not
for sale or distribution, and if the Company so requests, upon any exercise of
the Option, in whole or in part, you agree to execute and deliver to the
Company a certificate to such effect.
9. You understand and acknowledge that, under existing law, unless at the
time of the exercise of the Option a registration statement under the Act is in
effect as to the Shares so issuable: (i) any Shares purchased by you upon
exercise of the Option may be required to be held indefinitely unless such
Shares are subsequently registered under the Act or an exemption from such
registration is available; (ii) any sales of such Shares made in reliance upon
Rule 144 promulgated under the Act may be made only in accordance with the
terms and conditions of that Rule (which, under certain circumstances, restrict
the number of shares which may be sold and the manner in which shares may be
sold); (iii) in the case of securities to which Rule 144 is not
<PAGE> 3
Mr. James B. Kirkland, III
January 1, 1997
Page 3
applicable, compliance with Regulation A promulgated under the Act or some
other disclosure exemption shall be required; (iv) certificates for Shares to
be issued to you hereunder shall bear a legend to the effect that the Shares
have not been registered under the Act and that the Shares may not be sold,
hypothecated or otherwise transferred in the absence of an effective
registration statement under the Act relating thereto or an opinion of counsel
satisfactory to the Company that such registration is not required; and (v) the
Company shall place an appropriate "stop transfer" order with its transfer
agent with respect to such Shares.
10. Promptly following the date hereof, the Company shall use its best
efforts to file and keep in effect a Registration Statement on Form S-8, Form
S-3 or other applicable form to register under the Act the Shares issuable to
you upon exercise of the Option and the resale thereof by you.
<PAGE> 4
Mr. James B. Kirkland, III
January 1, 1997
Page 4
Would you kindly evidence your acceptance of the Option and your agreement
to comply with the provisions hereof by executing this letter in the space
provided below.
Very truly yours,
BROOKE GROUP LTD.
By: /s/ Bennett S. LeBow
-------------------------------
Bennett S. LeBow
Chairman, President
and Chief Executive Officer
AGREED TO AND ACCEPTED:
/s/ James B. Kirkland, III
- --------------------------------
James B. Kirkland, III
<PAGE> 5
EXHIBIT A
Brooke Group Ltd.
100 S. E. Second Street, 32nd Floor
Miami, Florida 33131
Gentlemen:
Notice is hereby given of my election to purchase __________ shares of
Common Stock, $.10 par value (the "Shares"), of Brooke Group Ltd., at a price
of $5.00 per Share, pursuant to the provisions of the stock option granted to
me on January 1, 1997. Enclosed in payment for the Shares is:
[ ] my check in the amount of $ ____________________.
[ ] ___________________ Shares having a total value of $
______________, such value being based on the closing price(s)
of the Shares on the date hereof.
The following information is supplied for use in issuing an registering
the Shares purchased hereby:
Number of Certificates
and Denominations _________________________________
Name _________________________________
Address _________________________________
_________________________________
_________________________________
Social Security _________________________________
Dated:
Very truly yours,
James B. Kirkland, III
<PAGE> 1
Exhibit 5.1
March 31, 1997
Brooke Group Ltd.
100 S.E. Second Street, 32nd Floor
Miami, Florida 33131
RE: OFFERING OF SHARES PURSUANT TO
REGISTRATION STATEMENT ON FORM S-8
----------------------------------
Gentlemen:
I have acted as counsel to Brooke Group Ltd., a Delaware corporation (the
"Company"), in connection with the preparation and filing with the Securities
and Exchange Commission under the Securities Act of 1933, as amended, of a
Registration Statement on Form S-8 (the "Registration Statement") relating to
the registration by the Company of 1,422,000 shares of the Company's Common
Stock, $.10 par value per share (the "Shares"), issuable from time to time upon
the exercise of stock options (the "Options") granted to key employees and a
consultant of the Company.
In so acting, I have examined originals, or copies certified or otherwise
identified to my satisfaction, of (a) the Restated Certificate of
Incorporation, as amended, and Amended and Restated By-Laws of the Company as
currently in effect, (b) the Registration Statement, (c) the Stock Option
Agreements pursuant to which the Options were granted, which agreements are
included as exhibits to the Registration Statement, (d) certain resolutions
adopted by the Board of Directors of the Company, and (e) such other documents,
records, certificates and other instruments of the Company as in my judgment
are necessary or appropriate for purposes of this opinion.
Based on the foregoing, I am of the following opinion:
1. The Company is a corporation duly incorporated and validly existing in
good standing under the laws of the State of Delaware.
<PAGE> 2
Brooke Group Ltd.
March 31, 1997
Page 2
2. The Shares have been duly authorized by the Company and, when issued
and paid for as contemplated by the Registration Statement, will be duly
and validly issued and will be fully paid and non-assessable.
I hereby consent to the filing of this opinion as exhibit 5.1 to the
Registration Statement.
Very truly yours,
/s/ Andrew E. Balog
Andrew E. Balog
Associate General Counsel
AEB/smg
Enclosure
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Brooke Group Ltd. on Form S-8 of: (i) our report, dated March 27, 1997, on our
audits of the consolidated financial statements and financial statement schedule
of Brooke Group Ltd. and Subsidiaries as of December 31, 1996 and 1995, and for
the years ended December 31, 1996, 1995, and 1994, and (ii) of our report, dated
March 24, 1997, on our audit of the consolidated financial statements of New
Valley Corporation and Subsidiaries as of December 31, 1996 and December 31,
1995, and for the years ended December 31, 1996 and December 31, 1995, which
reports are included in the Annual Report on Form 10-K of Brooke Group Ltd. for
the year ended December 31, 1996.
Coopers & Lybrand L.L.P.
Miami, Florida
March 27, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 24, 1995, relating to the
financial statements of New Valley Corporation and its subsidiaries, which
appears on page F-52 of the Brooke Group Ltd. Annual Report on Form 10-K for the
year ended December 31, 1996.
Price Waterhouse LLP
Morristown, New Jersey
March 24, 1997
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Brooke Group Ltd.
We consent to the incorporation by reference of our report dated March 9, 1995
in the registration statement on Form S-8 of Brooke Group Ltd., relating to the
consolidated statements of operations, stockholders' deficiency and cash flows
of MAI Systems Corporation for the year ended December 31, 1994 and related
schedule, which report appears in the December 31, 1996 annual report on Form
10-K of Brooke Group Ltd.
KPMG Peat Marwick LLP
Orange County, California
March 27, 1997
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors
Brooke Group Ltd.
We consent to the incorporation by reference of our report dated February 11,
1997 in the registration statement on Form S-8 of Brooke Group Ltd., relating to
the consolidated balance sheets of Thinking Machines Corporation and
subsidiaries as of December 31, 1996 and the related consolidated statements of
operations, stockholders' investment and cash flows for the year then ended,
which report appears in the December 31, 1996 annual report on Form 10-K of New
Valley Corporation.
Arthur Anderson LLP
Boston, Massachusetts
March 27, 1997
