OFFER BY VGR HOLDING INC.
TO EXCHANGE
0.461 OF A SHARE OF COMMON STOCK
OF
VECTOR GROUP LTD.
FOR
EACH OUTSTANDING COMMON SHARE
OF
NEW VALLEY CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON
THURSDAY, DECEMBER 1, 2005, UNLESS THE OFFER IS EXTENDED.
October 20, 2005
To Our Clients:
Enclosed for your consideration are the Prospectus, dated October 20, 2005
(the "Prospectus"), and the related Letter of Transmittal (which, as amended or
supplemented from time to time, collectively constitute the "Offer") in
connection with the offer by VGR Holding Inc., a Delaware corporation
("Offeror") and a wholly-owned subsidiary of Vector Group Ltd., a Delaware
corporation ("Vector"), to exchange each outstanding common share, par value
$.01 per share (collectively, the "Shares"), of New Valley Corporation, a
Delaware corporation ("New Valley"), for 0.461 of a share of Common Stock, par
value $.10 per share, of Vector (the "Vector Shares") and cash in lieu of
fractional shares, upon the terms and subject to the conditions set forth in the
Prospectus and in the related Letter of Transmittal.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE ENCLOSED LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR
YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all Shares held by us for your account pursuant to
the terms and conditions set forth in the Offer.
Please note the following:
1. The consideration per Share will be 0.461 of a Vector Share.
2. The Offer is being made for all outstanding Shares.
3. The Offer and withdrawal rights will expire at 5:00 p.m., New York
City Time, on Thursday, December 1, 2005, unless the Offer is extended.
4. The Offer is conditioned upon a sufficient number of Shares being
validly tendered and not properly withdrawn prior to the expiration of the
Offer such that, giving effect to the Offer, Vector owns at least 90% of
the outstanding Shares. The Offer is also subject to other terms and
conditions described in the Prospectus.
5. If Offeror successfully completes the Offer, and owns at least 90%
of the outstanding Shares, Offeror intends to effect a "short form" merger
as soon as practicable after the completion of the Offer. In this
subsequent merger, each Share remaining outstanding would be converted into
the same consideration that New Valley stockholders receive pursuant to the
Offer, unless a New Valley stockholder properly perfects appraisal rights.
6. Offeror will pay cash in lieu of any fraction of a Vector Share to
which a New Valley stockholder would otherwise be entitled. A New Valley
stockholder who fails to complete and sign the Substitute Form W-9 may be
subject to a required federal backup withholding tax on any payment to the
stockholder pursuant to the Offer.
7. Payment for Shares purchased pursuant to the Offer will in all
cases be made only after timely receipt by American Stock Transfer & Trust
Company (the "Exchange Agent and Depositary") of (a) Share Certificates or
timely confirmation of the book-entry transfer of such Shares into the
account maintained by The Depository Trust Company, pursuant to the
procedures set forth in the Prospectus, (b) the Letter of Transmittal (or a
manually signed facsimile thereof), properly completed and duly executed,
with any required signature guarantees or an "agent's message" (as defined
in the Prospectus), in connection with a book-entry delivery and (c) any
other documents required by the Letter of Transmittal. TENDERS BY NOTICE OF
GUARANTEED DELIVERY WILL NOT BE ACCEPTED.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth on the back page of this letter. If you
authorize the tender of your Shares, all such Shares will be tendered unless
otherwise specified on the back page of this letter. An envelope to return your
instructions to us is enclosed. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN
AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE
EXPIRATION OF THE OFFER.
Offeror is not aware of any state where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If Offeror becomes aware of any valid state statute prohibiting the
making of the Offer of the acceptance of the Shares pursuant thereto, Offeror
will make a good faith effort to comply with such statute or seek to have such
statute declared inapplicable to the Offer. If, after such good faith effort,
Offeror cannot comply with such state statute, the Offer will not be made to
(nor will tenders be accepted from or on behalf of) holders of Shares in such
state. In any jurisdiction where the securities, "blue sky" or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of Offeror by Georgeson Shareholder Securities
Corporation, the Dealer Manager, or one or more registered brokers or dealers
that are licensed under the laws of such jurisdiction.
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INSTRUCTIONS WITH RESPECT TO THE
OFFER BY VGR HOLDING INC.
TO EXCHANGE
0.461 OF A SHARE OF COMMON STOCK
OF
VECTOR GROUP LTD.
FOR
EACH OUTSTANDING COMMON SHARE
OF
NEW VALLEY CORPORATION
The undersigned acknowledge(s) receipt of your letter, the enclosed
Prospectus, dated October 20, 2005 (the "Prospectus"), and the related Letter of
Transmittal (which, as amended or supplemented from time to time, collectively
constitute the "Offer") in connection with the offer by VGR Holding Inc., a
Delaware corporation ("Offeror") and a wholly-owned subsidiary of Vector Group
Ltd., a Delaware corporation ("Vector"), to exchange each outstanding common
share, par value $.01 per share (collectively, the "Shares"), of New Valley
Corporation, a Delaware corporation, for 0.461 of a share of Common Stock, par
value $.10 per share, of Vector and cash in lieu of fractional shares, upon the
terms and subject to the conditions set forth in the Prospectus and in the
related Letter of Transmittal.
This will instruct you to tender to Offeror the number of Shares indicated
below (or if no number is indicated below, all Shares) which are held by you for
the account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
Number of Shares to be Tendered: ____________ Shares*
- --------------------------------------------------------------------------------
Sign Below
Account Number:
- ---------------------------------------- Signature(s)
- ---------------------------------------------
Dated: ______________, 2005
- --------------------------------------------------------------------------------
Please Type or Print Name(s)
- --------------------------------------------------------------------------------
Please Type or Print Address(es) Here
- --------------------------------------------------------------------------------
Area Code and Telephone Numbers
- --------------------------------------------------------------------------------
Taxpayer Identification or Social Security Number(s)
- ---------------
* Unless otherwise indicated, it will be assumed that you instruct us to tender
all Shares held by us for your account.
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