-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KHCi/PmzjPdJQ32l45x66NU7xs+LVcTRfC9W2Y11o98+2j7eFEz4JWU2RJds3AzO kpAHBKchfAAWOV/2ZH8C2Q== 0000950144-97-003210.txt : 19970329 0000950144-97-003210.hdr.sgml : 19970329 ACCESSION NUMBER: 0000950144-97-003210 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970328 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW VALLEY CORP CENTRAL INDEX KEY: 0000106374 STANDARD INDUSTRIAL CLASSIFICATION: [9995] IRS NUMBER: 135482050 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-02493 FILM NUMBER: 97567729 BUSINESS ADDRESS: STREET 1: INTERNATIONAL PLACE STREET 2: 100 SOUTHEAST SECOND STREET CITY: MIAMI STATE: FL ZIP: 33131 BUSINESS PHONE: 3055798000 MAIL ADDRESS: STREET 1: INTERNATIONAL PLACE STREET 2: 100 SE SECOND STREET CITY: MIAMI STATE: FL ZIP: 33131 FORMER COMPANY: FORMER CONFORMED NAME: WESTERN UNION CORP/NY/ DATE OF NAME CHANGE: 19910516 FORMER COMPANY: FORMER CONFORMED NAME: WESTERN UNION TELEGRAPH CO /NY/ DATE OF NAME CHANGE: 19880121 10-K/A 1 NEW VALLEY CORPORATION FORM 10-K/A 12/31/96 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, 1996 COMMISSION FILE NUMBER 1-2493 NEW VALLEY CORPORATION (Exact name of registrant as specified in its charter) Delaware 13-5482050 (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) 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 2 Part III of the Annual Report on Form 10-K of New Valley Corporation (the "Company") for the year ended December 31, 1996 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 March 25, 1997, 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".
DIRECTOR NAME AND ADDRESS AGE PRINCIPAL OCCUPATION SINCE - ---------------- --- -------------------- ----- Bennett S. LeBow 59 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 48 President and Chief Operating January New Valley Corporation Officer of the Company 1991 100 S.E. Second Street Miami, FL 33131 Richard J. Lampen 43 Executive Vice President and June New Valley Corporation General Counsel 1996 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 38 Chairman and Chief Executive November Ladenburg, Thalmann Officer of Ladenburg, Thalmann 1994 Group Inc. Group Inc. 1209 Orange Street Wilmington, Delaware 19801 Richard S. Ressler 38 President and Chief Executive Officer, August Orchard Capital Corporation Orchard Capital Corporation 1990 10960 Wilshire Boulevard Los Angeles, CA 90024 Henry C. Beinstein 54 Managing Director, November Milbank, Tweed, Hadley Milbank, Tweed, Hadley & McCloy 1994 & McCloy 1 Chase Manhattan Plaza New York, NY 10005-1413
2 3
DIRECTOR NAME AND ADDRESS AGE PRINCIPAL OCCUPATION SINCE - ---------------- --- -------------------- ----- Barry W. Ridings 45 Managing Director, November Alex. Brown & Sons, Alex. Brown & Sons, 1994 Incorporated Incorporated 787 Seventh Avenue New York, NY 10019
The Board of Directors of the Company consists of the foregoing eight directors, seven of whom were appointed pursuant to the Joint Plan and subsequently re-elected at the 1995 and 1996 Annual Meetings of Shareholders. Messrs. Beinstein and Ridings (together, the "Shareholder Designees) are deemed by the Joint Plan 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 - Bankruptcy Reorganization". Mr. Lampen was elected as a director of the Company at the 1996 Annual Meeting. 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 Group since June 1995 and Chairman of the Board and Chief Executive Officer of Ladenburg since December 1995 and an employee thereof for more than the past five years. Mr. Kramer currently serves on the Boards of Directors of Griffon Corporation and Grand Casinos, Inc. 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 Chairman of MAI since May 1995 and a director thereof since February 1995. He was Chief Executive Officer of MAI from October 1994 to February 1997 and President from October 1994 to February 1996. 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 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 Vice President of Brooke. Mr. Ressler owns 10.0% of the outstanding common stock of Brooke and formerly served as a consultant to Brooke and its subsidiaries. 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. 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, Inc., SubMicron Systems Corporation, Norex Industries, Inc., Noodle Kidoodle Inc., Search Capital Group, Inc. and Telemundo Group, Inc. 3 4 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, 1996, 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, 1996, the Company's Chief Executive Officer and the three other executive officers whose cash compensation exceeded $100,000 (collectively, the "named executive officers").
SUMMARY COMPENSATION TABLE (1) Long-Term Compensation ------------------------- Annual Compensation ------------------- Securities Under- Restricted Lying All Name Stock Options Other and Principal Position Year Salary Bonus Award(s) (#) Compensation ---------------------- ---- ------------- --------- ------------ ----------- ------------- Bennett S. LeBow 1996 $2,000,000 -- -- -- -- Chairman and Chief Executive 1995 1,894,823 -- -- -- -- Officer(2) 1994 71,045 -- -- -- -- Howard M. Lorber 1996 $1,250,000 $300,000 $4,356,000(3) 427,000(4) -- President and Chief Operating 1995 956,376 500,000 -- -- -- Officer(2) 1994 56,008 -- -- -- -- Richard J. Lampen 1996 $600,000 $100,000 -- -- -- Executive Vice President and 1995 150,000 100,000 -- -- -- General Counsel(5) Robert M. Lundgren(6) 1996 $90,000 $15,000 -- -- -- Vice President, Chief Financial Officer and Treasurer
4 5 - -------------------------- (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) Messrs. LeBow and 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. (3) Represents an award of 36,000 Class A Senior Preferred Shares valued based on the closing price on the date of issuance. Subject to earlier vesting upon a change of control (as defined), the shares vest in six equal annual installments commencing on July 1, 1997. The shares are identical with all other Class A Senior Preferred Shares issued and outstanding as of July 1, 1996, including undeclared dividends of $3,776,000 and declared dividends of $1,080,000. Dividends are payable on the shares provided that such payments will be deferred until the time of vesting. At December 31, 1996, the shares had a market value of $4,320,000 (without giving effect to any diminution in value attributable to the restrictions). (4) Represents options to purchase 330,000 Common Shares and 97,000 Class B Preferred Shares. See "Option Grants in Fiscal 1996". (5) Mr. Lampen commenced employment with the Company in October 1995. (6) Effective May 7, 1996, Mr. Lundgren was appointed Vice President, Chief Financial Officer and Treasurer of the Company. The following table sets forth certain information regarding stock options granted during 1996.
OPTION GRANTS IN FISCAL 1996 ---------------------------- Percent of Number of Total Securities Options Underlying Granted to Exercise Grant Date Options Employees Price Market Value Expiration Grant Date Name Granted (#) In Fiscal Year ($/Share) ($/Share) Date Present Value ($)(1) ---- ----------- -------------- --------- ------------ ---------- -------------------- Howard M. Lorber 330,000 Common Shares 100 .58 2.75 07/01/06 878,000 97,000 Class B Preferred Shares 100 1.85 9.25 07/01/06 895,000
- --------------------------------- (1) The estimated present value at grant date (November 18, 1996) of options granted during fiscal year 1996 has been calculated using the Black-Scholes option pricing model, based upon the following assumptions: volatility of 101% for the Common Shares and 171% for the Class B Preferred Shares, a risk free rate of 6.2%, 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". 5 6 STOCK OPTION EXERCISES There were no stock options exercised by the named executive officers during 1996. COMPENSATION OF DIRECTORS In 1996, 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 Mr. LeBow 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 1, 1997, Mr. LeBow's annual base salary was $2,000,000. 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 his then current base salary. The Joint Plan provides that the annual compensation paid to Mr. LeBow for services rendered in his capacity as an officer or director of the Company shall not exceed $2,000,000. Howard M. Lorber is a party to an employment agreement with the Company dated June 1, 1995, as amended. 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 1, 1997, Mr. Lorber's annual base salary was $1,400,000. The Board shall periodically review such base salary and may increase (but not decrease) it from time to time, in its sole discretion. In addition, the Board of Directors may award an annual bonus to Mr. Lorber at its sole discretion. The Board of Directors awarded Mr. Lorber a bonus of $300,000 for 1996. 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 January 1, 1997, his annual base salary was $650,000. In addition, the Board of Directors may award an annual bonus to Mr. Lampen at its sole discretion. The Board of Directors awarded Mr. Lampen a bonus of $100,000 for 1996. 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 for one year after termination of his employment term. 6 7 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. Mr. LeBow 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, Mr. Kramer was named Chairman of the Board and Chief Executive Officer of Ladenburg Group in June 1995 and Chairman of the Board and Chief Executive Officer of Ladenburg in December 1995, and Mr. Lampen was named Executive Vice President and General Counsel of the Company in October 1995. During 1996, Mr. LeBow was Chairman of the Board, President and Chief Executive Officer of Brooke (a member of the Compensation Committee) and BGLS; and from July 1996, Mr. Lampen was Executive Vice President of Brooke and BGLS. For information on the interests of Messrs. LeBow, Lorber and Lampen in Brooke and certain other relationships and transactions, see Item 1. "Business - -- Significant Shareholders", Item 12. "Security Ownership of Certain Beneficial Owners and Management", and Item 13. "Certain Relationships and Related Transactions". 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. 7 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 March 25, 1997.
NUMBER OF PERCENTAGE NAME AND ADDRESS TITLE OF CLASS SHARES (1) OF CLASS (1) - ---------------- -------------- ---------- ------------ Bennett S. LeBow Class A Senior 618,326(2) 57.7% 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 3,989,710(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 719,571(3) 7.5% 1330 Avenue of the Americas New York NY 10019
- --------------------------- (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 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, NV Holdings and Bennett S. LeBow, the beneficial owner of 52.7% of the common stock of Brooke and the Chairman of the Board and Chief Executive Officer of the Company 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 8 9 sole voting power and sole dispositive power, subject to the Pledge (as defined below) over: (i) 19,748 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) 3,969,962 Common Shares (approximately 41.4% of such class); and (ii) 618,326 Class A Senior Preferred Shares (approximately 57.7% 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 Mr. LeBow disclaims beneficial ownership of the BGLS Shares and NV Holdings Shares under Rule 13d-3, or for any other purpose. Pursuant to the indenture relating to BGLS' 15.75% Series B Senior Secured Notes due 2001 (the "Series B Notes"), BGLS has 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. The Indenture also provides for restrictions on certain affiliated transactions between the Company and Brooke, BGLS and their affiliates, as well as for certain restrictions on the use of future distributions received from the Company. For information on interests in and positions held with Brooke and its affiliates by Mr. LeBow and other directors and officers 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 -- Bankruptcy Reorganization "and" -- Significant Shareholders" 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 719,571 Common Shares. The following table sets forth, as of March 25, 1997, 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 10
NUMBER OF PERCENT OF NAME TITLE OF CLASS SHARES(1) CLASS(1) - ---- -------------- --------- ---------- Bennett S. LeBow(2)...................... Class A Senior Preferred Shares 618,326 57.7% Class B Preferred Shares 250,885 8.9% Common Shares 3,989,710 41.6% Howard M. Lorber(3)...................... Class A Senior Preferred Shares 36,000 3.4% Common Shares 375 -- (5) Henry C. Beinstein(4).................... Class B Preferred Shares 34,500 1.3% All directors and executive officers as a group (9) persons)................ Class A Senior Preferred Shares 654,326 61.1% Class B Preferred Shares 285,385 10.2% Common Shares 3,990,085 41.6%
- ------------------------ (1) The percentage of each class is calculated based on the total number of shares of each class outstanding on March 25, 1997. 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) Represents the BGLS Shares and NV Holding Shares, as to which shares Mr. LeBow disclaims beneficial ownership. See footnote (2) to the preceding table. (3) Mr. Lorber possesses voting power over his Class A Senior Preferred Shares. See Item 11. "Executive Compensation -- Summary Compensation Table." 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 and registered representative of Aegis Capital Corp. ("Aegis"), a broker-dealer that has performed services for the Company and its subsidiaries since before January 1, 1996. During 1996, Aegis received commission and other income in the aggregate amount of approximately $316,781. Aegis, in the ordinary course of its business in 1996, engaged in brokerage activities with Ladenburg on customary terms. Mr. Lorber is also Chairman of the Board and Chief Executive Officer of Hallman & Lorber and its affiliates, and serves as a consultant to Brooke and its subsidiaries and is a shareholder of Brooke. During 1996, Hallman & Lorber and its affiliates received ordinary and customary insurance commissions aggregating approximately $43,080 on various insurance policies issued for the Company. On December 18, 1996, the Company loaned to BGLS $990,000 under a short-term promissory note due January 31, 1997 and bearing interest at 14%. On January 2, 1997, the Company loaned to BGLS an additional $975,000 under another short-term promissory note due January 31, 1997 and bearing interest at 14%. Both loans including interest were repaid on January 31, 1997. On January 31, 1997, the Company acquired the BML Shares, representing 99.1% of the outstanding shares of BML from BOL. The Company paid to BOL a purchase price of $55 million, consisting of $21.5 million in cash and the $33.5 million 9% Note of New Valley. The Note is secured by 10 11 the BML Shares and is payable $21.5 million on June 30, 1997 and $12 million on December 31, 1997. For further information with respect to this transaction, see Item 1. "Business -- BrookeMil Ltd". In 1995, the Company and Brooke entered into an expense sharing agreement pursuant to which certain lease, legal and administrative expenses are allocated to the entity incurring the expense. The Company expensed $462,257 under this agreement for the year ended December 31, 1996. During 1996, the Company entered into a court-approved Stipulation and Agreement (the "Settlement") with Brooke and BGLS relating to Brooke's and BGLS's application under the Federal Bankruptcy Code for reimbursement of legal fees and expenses incurred by them in connection with the Company's bankruptcy reorganization proceedings. Pursuant to the Settlement, the Company reimbursed Brooke and BGLS $655,217 for such legal fees and expenses. The terms of the Settlement were substantially similar to the terms of previous settlements between the Company and other applicants who had sought reimbursement of reorganization-related legal fees and expenses. Mr. Burns 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 1996 did not exceed five percent of the law firm's revenues. Mr. Beinstein is 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 1996 did not exceed five percent of the law firm's revenues. Certain Matters Relating to RJR Holdings. For information concerning certain agreements and transactions between the Company and Brooke relating to RJR Nabisco, see Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations - Recent Developments - Certain Matters Relating to RJR Nabisco" and Note 5 (Investment Securities Available for Sale) and Note 18 (Related Party Transactions) to the Company's Consolidated Financial Statements. See, also, Item 11. "Executive Compensation - Compensation Committee Interlocks and Insider Participation". 11 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/ Richard J. Lampen ---------------------------- Richard J. Lampen Executive Vice President Date: March 28, 1997 12 -----END PRIVACY-ENHANCED MESSAGE-----