<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K/A
(AMENDMENT NO. 1)
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JOINT ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
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BROOKE GROUP LTD.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
DELAWARE 1-5759 51-0255124
<S> <C> <C>
(State or other jurisdiction of Commission File Number (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
BGLS INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
DELAWARE 33-93576 13-3593483
<S> <C> <C>
(State or other jurisdiction of Commission File Number (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
100 S.E. SECOND STREET
MIAMI, FLORIDA 33131
305/579-8000
(Address, including zip code and telephone number, including area code,
of the principal executive offices)
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Part III of the Joint Annual Report on Form 10-K of Brooke Group Ltd.
(the "Company") and BGLS Inc. ("BGLS") for the year ended December 31, 1997 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 14,
1998, with respect to each person who is a director of the Company and of BGLS.
Each director is a citizen of the United States of America. For information
concerning the executive officers of the Company and BGLS, see Item 4.
"Submission of Matters to a Vote of Security-Holders; Executive Officers of the
Registrants".
<TABLE>
<CAPTION>
DIRECTOR
NAME AND ADDRESS AGE PRINCIPAL OCCUPATION SINCE
---------------- --- -------------------- -----
<S> <C> <C> <C>
Bennett S. LeBow 60 Chairman of the Board October 1986
Brooke Group Ltd. and Chief Executive Officer
100 S.E. Second Street of the Company
Miami, FL 33131
Robert J. Eide 45 Secretary and Treasurer of November 1993
Aegis Capital Corp. Aegis Capital Corp.
70 East Sunrise Highway
Valley Stream, NY 11581
Jeffrey S. Podell 57 Chairman of the Board and November 1993
Newsote, Inc. President of Newsote, Inc.
26 Jefferson Street
Passaic, NJ 07055
</TABLE>
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 DIRECTORS (OTHER THAN EXECUTIVE OFFICERS)
ROBERT J. EIDE has been a director of the Company since November 1993.
Mr. Eide has been a director of BGLS since November 1993, a director of NV
Holdings since September 1994 and Secretary and Treasurer of Aegis Capital
Corp., a registered broker-dealer, since before 1988. Mr. Eide also serves as a
director of Nathan's Famous, Inc., a restaurant chain.
JEFFREY S. PODELL has been a director of the Company since November
1993. Mr. Podell has been a director of BGLS since November 1993, a director of
NV Holdings since September 1994 and the Chairman of the Board and President of
Newsote, Inc., a privately-held holding company, since 1989.
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 (the "Reporting Persons"),
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. 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 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,
1997, all Reporting Persons have timely complied with all filing requirements
applicable to them.
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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, 1997, the Company's Chief Executive Officer, the other two
executive officers of the Company and an executive officer of a subsidiary of
the Company whose cash compensation exceeded $100,000 (collectively, the "named
executive officers"):
SUMMARY COMPENSATION TABLE (1)
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
SECURITIES
NAME AND OTHER ANNUAL UNDERLYING
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS
- ------------------------------ ---- --------- ------- ------------ -------
($) ($) ($) (#)
<S> <C> <C> <C> <C> <C>
Bennett S. LeBow 1997 1,113,281 667,969(2) -- --
Chairman of the Board, 1996 1,484,375 890,626(2) -- --
President and Chief 1995 1,187,500 712,500(2) -- --
Executive Officer
Richard J. Lampen(3) 1997 650,000 -- -- 260,000(4)
Executive Vice President 1996 600,000 100,000 -- --
Joselynn D. Van Siclen(5) 1997 140,000 -- -- --
Vice President, Chief 1996 131,667 10,000 -- --
Financial Officer and
Treasurer
Ronald S. Fulford(6) 1997 425,000 -- 247,961(7)(8) --
Chairman of the Board, 1996 157,530 -- 552,832(8) --
President and Chief
Executive Officer of Liggett
</TABLE>
- ----------------------
(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 the rules of the Securities and Exchange Commission (the
"SEC").
(2) Includes payments equal to 10% of base salary ($111,328, $148,438 and
$118,750 during 1997, 1996 and 1995, respectively) in lieu of certain
other executive benefits. See "Employment Agreements".
(3) Effective July 1, 1996, Mr. Lampen was appointed Executive Vice
President of the Company. In 1997 and 1996, all of Mr. Lampen's salary
and bonus were paid by New Valley and 25% (or $162,500 and $175,000 in
1997 and 1996, respectively) was subsequently reimbursed to New Valley
by the Company. The table reflects 100% of Mr. Lampen's salary and
bonus.
(4) Represents options to purchase Common Stock. See "Stock Option Grants
in 1997".
(5) Effective May 6, 1996, Ms. Van Siclen was appointed Vice President,
Chief Financial Officer and Treasurer of the Company.
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(6) Effective September 5, 1996, Mr. Fulford was appointed Chairman of the
Board, President and Chief Executive Officer of Liggett.
(7) Represents an automobile allowance, living allowance and group term
life insurance provided to Mr. Fulford.
(8) Includes payments ($163,155 and $552,832 in 1997 and 1996,
respectively) made pursuant to a consulting agreement between Mr.
Fulford and the Company, which payments were reimbursed to the Company
by New Valley. See "Employment Agreements".
The following table sets forth all grants of stock options to the named
executive officers during 1997.
<TABLE>
<CAPTION>
STOCK OPTION GRANTS IN 1997
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT
OPTIONS EMPLOYEES IN PRICE EXPIRATION DATE PRESENT
NAME GRANTED (#) 1997 ($/SHARE) DATE VALUE ($)(2)
---- ----------- ---- --------- ---- ---------
<S> <C> <C> <C> <C> <C>
Richard J. Lampen 260,000 (1) 61.6% $ 5.00 12/31/06 $ 1,118,000
</TABLE>
(1) Represents options to purchase shares of Common Stock, which were
granted at fair market value on January 1, 1997. Subject to earlier
vesting upon a change of control (as defined), the options vest and
become exercisable in six equal annual installments commencing on
January 1, 1998.
(2) The estimated present value at grant date of options granted during
1997 has been calculated using the Black-Scholes option pricing model,
based upon the following assumptions: volatility of 81.46%, a risk-free
rate of 6.44%, an expected life of 10 years, and no expected dividends
or forfeiture. The approach used in developing the assumptions upon
which the Black-Scholes valuation was done is consistent with the
requirements of Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation".
The following table sets forth certain information concerning
unexercised options held by the named executive officers as of December 31,
1997. There were no stock options exercised by any of the named executive
officers during 1997.
<TABLE>
<CAPTION>
AGGREGATED FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT DECEMBER 31, 1997 OPTIONS AT DECEMBER 31, 1997
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Richard J. Lampen - 0 - 260,000 -- $942,500 *
</TABLE>
* Calculated using the closing price of $8 5/8 per share on December 31,
1997 less the option exercise price.
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COMPENSATION OF DIRECTORS
Outside directors of the Company each receive $7,000 per annum as
compensation for serving as a director, $1,000 per annum for each Board
committee membership, $1,000 per meeting for each Board meeting attended, and
$500 per meeting for each committee meeting attended. In addition, each outside
director of BGLS receives $28,000 per annum as compensation for serving as a
director, $500 per annum for each Board committee membership, $500 per meeting
for each Board meeting attended, and $500 for each committee meeting attended.
Each outside director is reimbursed for reasonable out-of-pocket expenses
incurred in serving on the Board of the Company and/or BGLS.
In April 1998, each outside director of the Company received an
award of 10,000 shares of Common Stock for services as a director. Subject to
earlier vesting upon a change of control (as defined), the shares vest
one-quarter on the date of grant and the remaining shares vest in three equal
annual installments commencing on the first anniversary of the date of grant.
EMPLOYMENT AGREEMENTS
Bennett S. LeBow is a party to an employment agreement with the Company
dated February 21, 1992. 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, 1998,
Mr. LeBow's annual base salary was $1,391,601. He is also entitled to an annual
bonus for 1998 of $695,800 payable quarterly 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 (as defined), 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 (as
defined) or in connection with similar events, he is entitled to receive a lump
sum payment equal to 2.99 times his then current base salary and bonus. Under
the terms of the Indenture governing the BGLS Notes, Mr. LeBow's salary and
bonus may not be increased from one year to the next by more than 10% per annum,
except that his salary and bonus may be increased in the same percentage amount
as any increase in the price of the Company's Common Stock during a calendar
year, subject to a maximum increase of 25% per annum. His salary and bonus are
subject to decrease if the price of the Common Stock decreases by more than 10%
during a calendar year, up to a maximum decrease of 25% per annum, but in no
event lower than compensation earned in 1994 ($1,425,000).
Ronald S. Fulford, Chairman of the Board, President and Chief Executive
Officer of Liggett, is a party to an employment agreement with Liggett, dated
September 5, 1996. As of September 5, 1996, Mr. Fulford's annual salary was
$425,000. Bonus payments are at the sole discretion of the Board of Liggett.
Effective as of March 1, 1996, the Company entered into an agreement with Mr.
Fulford. Pursuant to this agreement, Mr. Fulford agreed to provide various
services in connection with the Company's investment in RJR Nabisco (including,
without limitation, consulting services, attendance at and participation in
meetings related to the Company's solicitation of proxies at RJR Nabisco's 1996
annual meeting and presentations to financial analysts and institutional
investors). During the term of the agreement, which ended on March 31, 1997, Mr.
Fulford received compensation equal to UK(pound)33,417 (or approximately
$54,000) per month and reimbursement for all reasonable business and travel
expenses incurred in performing services under the agreement. The Company also
agreed to reimburse Mr. Fulford for any reduction in pension benefits (currently
estimated at approximately UK(pound)14,400 (or approximately $23,000 per annum)
which resulted from his terminating his employment with Imperial Tobacco to
enter into the agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, Messrs. Eide, LeBow and Podell were members of the
Company's compensation committee. Messrs. Eide and Podell serve as directors of
BGLS and NV Holdings. Mr. Eide is a stockholder, and serves as the Secretary and
Treasurer of Aegis Capital Corp. ("ACC"), a registered broker-dealer, that has
performed services for the Company and/or its affiliates since before January 1,
1996.
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During 1997, ACC received commissions and other income in the aggregate amount
of approximately $522,000 from the Company and/or its affiliates. ACC, in the
ordinary course of its business in 1997, engaged in brokerage activities with
Ladenburg Thalmann & Co. Inc., a subsidiary of New Valley, on customary terms.
Effective July 1, 1990, a former executive of the Company transferred
his equity in the Company to Mr. LeBow and resigned from substantially all of
his positions with the Company and its affiliates. In consideration for this
transfer, LLP, a partnership controlled by Mr. LeBow, agreed, among other
things, to make certain payments to the Company on account of the former
executive's outstanding indebtedness of $5,477,000. On March 7, 1997, LLP
satisfied its obligation with respect to the loan by transferring to the Company
400,000 shares of the Company's Common Stock, which shares had been pledged to
secure the non-recourse obligation, except as to the pledged shares.
Mr. LeBow is a director of Liggett. He is Chairman of the Board and
Chief Executive Officer of New Valley, BGLS and NV Holdings. Mr. Lampen, an
executive officer of the Company and BGLS, is an executive officer and director
of New Valley.
DEFINED BENEFIT OR ACTUARIAL PLAN DISCLOSURE
BGLS sponsors the Retirement Plan For Salaried Non-Bargaining Unit
Employees (the "Retirement Plan") 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 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 Retirement Plan
also provides benefits to disabled participants and to surviving spouses of
participants who die prior to 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 for Liggett employees was frozen.
As of December 31, 1997, none of the named executive officers was
eligible to receive any benefits under the Retirement Plan.
Under certain circumstances, the amount of retirement benefit payable
under the Retirement Plan to certain employees may be limited by the federal tax
laws. Any Retirement Plan benefit lost due to such a limitation will be made up
by BGLS through a non-qualified supplemental retirement benefit plan. BGLS has
accrued, but not funded, amounts to pay benefits under this supplemental plan.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 14, 1998, the beneficial
ownership of the Company's Common Stock (the only class of voting securities) by
(i) each person known to the Company to own beneficially more than five percent
of the Common Stock, (ii) each of the Company's directors and nominees, (iii)
each of the Company's named executive officers and (iv) all directors and
executive
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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.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES CLASS
---------------- ------ -----
<S> <C> <C>
Bennett S. LeBow (1)(5)(6) 9,205,008 45.2%
Richard S. Ressler (2)
Orchard Capital Corporation 1,824,999 9.0%
10960 Wilshire Boulevard
Los Angeles, CA 90024
AIF II, L.P. and Lion Advisors, L.P.(3)
Two Manhattanville Road 2,000,000 8.9%
Purchase, NY 10577
High River Limited Partnership (4)
Riverdale LLC 1,500,000 7.4%
Carl C. Icahn
100 South Bedford Road
Mt. Kisco, NY 10549
Robert J. Eide (5) 20,000 (*)
Aegis Capital Corp.
70 East Sunrise Highway
Valley Stream, NY 11581
Jeffrey S. Podell (5)
Newsote, Inc. 20,000 (*)
26 Jefferson Street
Passaic, NJ 07055
Richard J. Lampen (6) 33 (*)
Joselynn D. Van Siclen (6) 5,000 (*)
Ronald S. Fulford (7)
Liggett Group Inc. -- --
700 West Main Street
Durham, NC 27702
All directors and executive officers as a group 9,250,041 45.4%
(7 persons)
</TABLE>
- ---------------------------
(*) The percentage of shares beneficially owned does not exceed 1% of the
Common Stock.
(1) Includes 8,658,008 shares of Common Stock held by LeBow Limited
Partnership, a Delaware limited partnership ("LLP"), and 547,000 shares
of Common Stock held by The Bennett and Geraldine LeBow Foundation,
Inc., a Florida not-for-profit corporation (the "Foundation"). Mr.
LeBow indirectly exercises sole voting power and sole dispositive power
over the shares of Common Stock held by LLP, 8,191,800 shares of which
are pledged to U.S. Clearing Corp. to secure a margin loan to Mr.
LeBow. Mr. LeBow is a director, officer and sole shareholder of LeBow
Holdings, Inc., a Nevada corporation ("LHI"), the general partner of
LLP. Mr. LeBow and
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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. The Foundation's
principal business and office address is 1221 Brickell Avenue, 21st
Floor, Miami, Florida 33131.
(2) Based upon Amendment No. 6 to Schedule 13D dated April 15, 1998, filed
by the named individual.
(3) Based upon Schedule 13D dated March 26, 1998, filed by the named
entities. These shares are issuable upon exercise of currently
exercisable warrants to purchase Common Stock expiring March 3, 2003.
See Item 13. "Certain Relationships and Related Transactions".
(4) Based upon Schedule 13D dated January 28, 1998, filed by the named
entities. Riverdale LLC is the general partner of High River Limited
Partnership and is wholly owned by Mr. Icahn. See Item 13. "Certain
Relationships and Related Transactions".
(5) The named individual is a director of the Company.
(6) The named individual is an executive officer of the Company.
(7) The named individual is an executive officer of the Company's
subsidiary Liggett.
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 BGLS and Liggett, and securities of New Valley, in which
the Company holds an indirect voting interest of approximately 42%. The
disclosure of this information shall not be construed as an admission that Mr.
LeBow is the beneficial owner of any securities of the Company's subsidiaries
or New Valley under Rule 13d-3 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or for any other purpose, and such 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 or New Valley.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On December 16, 1996, the Company entered into a Stock Option Agreement
(the "Agreement") with Howard M. Lorber, a consultant who serves as a director
and President of New Valley. The Agreement granted such consultant non-qualified
stock options to purchase 1,000,000 shares of the Company's Common Stock at an
exercise price of $1.00 per share. The options, which have a ten-year term, vest
and become exercisable in six equal annual installments beginning on July 1,
1997. Pursuant to the Agreement, Common Stock dividend equivalents are paid on
each vested and unexercised option. During 1997 and in 1998, the consultant has
received consulting fees of $40,000 per month from the Company and a subsidiary.
In January 1998, the consultant and the Company entered into an amendment to his
consulting agreement whereby he is entitled on an annual basis to receive
additional payments in an amount necessary to reimburse him, on an after-tax
basis, for all applicable taxes incurred by him during the prior calendar year
as a result of the grant to him, or vesting, of a 1994 award of 500,000
restricted shares of the Company's Common Stock, a 1995 award of 500,000 options
to acquire shares of the Company's Common Stock and the 1996 award of 1,000,000
options pursuant to the Agreement. The consultant received an additional
consulting payment of $425,000 in January 1998, which the consultant and the
Company have agreed will constitute full satisfaction of the Company's
obligations under the amendment with respect to 1997.
In 1995, the Company and New Valley entered into an expense sharing
agreement pursuant to which certain lease, legal and administrative expenses are
allocated to between the entities. The Company was reimbursed $375,000 under
this agreement for the year ended December 31, 1997.
On December 18, 1996, New Valley loaned BGLS $990,000 under a
short-term promissory note due January 31, 1997 and bearing interest at 14% per
annum. On January 2, 1997, New Valley loaned BGLS an additional $975,000 under
another short-term promissory note due January 31, 1997 and bearing interest at
14% per annum. Both loans, including interest, were repaid on January 31, 1997.
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On January 31, 1997, BOL sold New Valley the BML Shares, representing
99.1% of the shares of the common stock of BML. New Valley paid a purchase price
of $55 million, consisting of $21.5 million in cash and a $33.5 million 9%
promissory note of New Valley. The note has been paid in full. See Item 1.
"Business - Brooke (Overseas) Ltd. - Sale of BrookeMil Ltd.", as well as Notes 4
and 16 to the Company's Consolidated Financial Statements for information
concerning the transaction and a pending lawsuit relating to New Valley's
purchase of the BML Shares.
As of April 14, 1998, the Apollo Holders are the beneficial owners of
8.9% of the Company's Common Stock and held $97,239,000 principal amount of the
BGLS Notes. For information concerning the Standstill Agreement with the Apollo
Holders and the issuance of warrants to purchase shares of the Company's Common
Stock to the Apollo Holders in connection with the Standstill Agreement, see
Item 7. "Management's Discussion and Analysis of Financial Condition and Results
of Operations - Recent Developments - The Company", as well as Note 9 to the
Company's Consolidated Financial Statements. The Company, New Valley and their
affiliates have other business relationships with affiliates of the Apollo
Holders. For additional information concerning such business relationships, see
Item 1. "Business - New Valley Corporation - Western Realty" and "- New Valley
Realty Division", as well as Note 2 to the Company's Consolidated Financial
Statements.
As of April 14, 1998, High River Limited Partnership ("High River") is
the beneficial owner of 7.4% of the Company's Common Stock and an affiliate,
Tortoise Corp., held $97,551,000 principal amount of the BGLS Notes. On January
16, 1998, the Company entered into a Stock Purchase Agreement in which High
River purchased 1,500,000 shares of the Company's Common Stock at $6.00 per
share for an aggregate purchase price of $9,000,000. The Company has agreed to
use its best efforts to file with the SEC a shelf registration statement on Form
S-3 to cover resales of the shares by High River to be declared effective by May
15, 1998. If the registration statement has not been declared effective by such
date, liquidated damages on the shares of Common Stock will accrue at the rate
of $25,000 per day for the first 60-day period, and thereafter at the rate of
$50,000 per day, provided that the aggregate liquidated damages shall not exceed
$9,000,000.
For information concerning certain agreements and transactions between
the Company, BGLS and New Valley relating to RJR Nabisco, see Item 7,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Recent Developments - New Valley - Investment in RJR Nabisco" and
Notes 3 and 17 to the Company's Consolidated Financial Statements.
See, also, Item 11. "Executive Compensation - Compensation Committee
Interlocks and Insider Participation".
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrants have duly caused this Report to be signed
on its behalf by the undersigned thereunto duly authorized.
Brooke Group Ltd.
(Registrant)
By: /s/ Joselynn D. Van Siclen
-----------------------------
Vice President and
Chief Financial Officer
BGLS Inc.
By: /s/ Joselynn D. Van Siclen
-----------------------------
Vice President and
Chief Financial Officer
Date: April 30, 1998
10
