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Delaware		2111		65-0949535
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

Title of Each Class of			Amount			Proposed Maximum		Proposed Maximum		Amount
Securities to Be			to Be			Offering		Aggregate		of
Registered			Registered			Price Per Share		Offering Price		Registration Fee
Common Stock, $.10 par value			5,193,083 shares(1)			Not Applicable		$87,993,921(2)		$10,357(3)

(1)	Represents 22,260,607 common shares of New Valley Corporation outstanding on November 22, 2005, less 12,849,118 shares owned by VGR Holding Inc., plus an additional 205,333 New Valley Corporation common shares reserved for issuance upon exercise of outstanding stock options all as reported to us by New Valley Corporation on November 22, 2005 multiplied by the exchange ratio of 0.54.
(2)	Reflects the product of (a) $9.15, the market price of the common shares of New Valley Corporation computed in accordance with Rule 457(c) and 457(f) under the Securities Act, based upon the average of the high and low sale prices of the New Valley Corporation common shares as quoted on The Nasdaq Stock Market on November 16, 2005 and (b) 9,616,822, the maximum number of shares to be acquired pursuant to the offer. The proposed maximum aggregate offering price is estimated solely to determine the registration fee.
(3)	.0001177 multiplied by the proposed maximum aggregate offering price. $8,942 was previously paid on October 20, 2005 and $1,483 was previously paid on November 16, 2005.

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			Page
QUESTIONS AND ANSWERS ABOUT THE OFFER				iii
SUMMARY				1
	Introduction			1
	Information About Vector and New Valley			2
	The Offer			2
	Selected Historical Financial Data of Vector and New Valley			5
	Unaudited Comparative Per Share Data			8
	Comparative Per Share Market Data			9
	Vector Dividend Policy			9
RISK FACTORS				10
	Risks Related to the Offer and the Subsequent Merger			10
	Risks Related to Our Business			12
FORWARD-LOOKING INFORMATION				24
BACKGROUND AND REASONS FOR THE OFFER AND SUBSEQUENT MERGER				25
	Vector’s Long-Term Investment in New Valley			25
	Key Factors Motivating the Offer			25
	Financial Impact of the Offer on Vector			26
	No Prior Discussions Relating to Potential Extraordinary Transaction			26
	Vector Board’s September 27, 2005 Decision to Commence the Offer			26
	Events After Commencement of Our Offer			30
	Vector Board’s November 16, 2005 Decision to Increase the Exchange Ratio			31
	Opinion of Jefferies			33
	Agreements to Tender			41
ADDITIONAL FACTORS FOR CONSIDERATION BY NEW VALLEY STOCKHOLDERS				41
FINANCIAL FORECASTS				42
UNAUDITED PRO FORMA FINANCIAL INFORMATION				44
COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION				51
	Vector			51
	New Valley			52
THE OFFER				52
	Exchange of Common Shares of New Valley			52
	Timing of the Offer			54
	Extension, Termination and Amendment			54
	Delivery of Vector Common Stock			54
	Cash Instead of Fractional Shares of Vector Common Stock			55
	Procedure for Tendering Common Shares			55
	Withdrawal Rights			56
	Effect of a Tender of Common Shares			57
	Material U.S. Federal Income Tax Consequences			57
	Purpose of the Offer; The Subsequent Merger			60
	Appraisal Rights			62
	Conditions of the Offer			64

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			Page
CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS				67
	U.S. Approvals			67
	Non-U.S. Approvals			67
	State Takeover Laws			67
	Stockholder Litigation			67
CERTAIN EFFECTS OF THE OFFER				68
	Effects on the Market			68
	Exchange Act Registration			68
	Financing of the Offer			68
	Conduct of New Valley if the Offer is Not Completed			68
	Relationships with New Valley			68
	Accounting Treatment			70
	Fees and Expenses			71
INTERESTS OF CERTAIN PERSONS IN THE OFFER AND SUBSEQUENT MERGER				72
COMPARISON OF RIGHTS OF HOLDERS OF NEW VALLEY COMMON SHARES AND HOLDERS OF VECTOR COMMON STOCK				76
WHERE YOU CAN FIND MORE INFORMATION				79
VECTOR SEC FILINGS				79
NEW VALLEY SEC FILINGS				80
LEGAL MATTERS				80
EXPERTS				80
MISCELLANEOUS				81
ANNEXES:
	ANNEX A —  INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF VECTOR AND VGR HOLDING			A-1
	ANNEX B —  INTERESTS OF VECTOR AND THE DIRECTORS, EXECUTIVE OFFICERS AND AFFILIATES OF VECTOR IN COMMON SHARES OF NEW VALLEY			B-1
	ANNEX C —  SECTION 262 OF GENERAL CORPORATION LAW OF THE STATE OF DELAWARE			C-1
	ANNEX D —  OPINION OF JEFFERIES & COMPANY, INC.			D-1
Opinion of Milbank, Tweed, Hadley & McCloy LLP
Opinion of Milbank, Tweed, Hadley & McCloy LLP
Form of Opinion of Milbank, Tweed, Hadley & McCloy LLP
Consent of PricewaterhouseCoopers LLP - Vector
Consent of PricewaterhouseCoopers LLP - New Valley
Consent of PricewaterhouseCoopers LLP
Consent of Weiser LLP
Letter of Transmittal
Form of Letter to Brokers, Dealers
Form of Letter to Clients
Consent of Jefferies & Company, Inc.
Form of Memorandum

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Q.		Why Are We Making The Offer?
A.		We currently own 12,849,118 outstanding common shares of New Valley, representing approximately 57.7% of all of the outstanding common shares of New Valley. We are making the offer for the purpose of acquiring all of the remaining outstanding common shares of New Valley, in order to combine New Valley with Vector.
Q.		What Will I Receive In Exchange For The Common Shares Of New Valley That I Tender Into The Offer?
A.		If we successfully complete the offer, you will receive 0.54 of a share of Vector common stock in exchange for each common share of New Valley that you validly tender into the offer. We will not issue fractional shares of Vector common stock. Instead, any New Valley stockholder entitled to receive a fractional share of Vector common stock will receive cash in an amount equal to the fraction, multiplied by the closing price of a share of Vector common stock on the New York Stock Exchange on the last trading day before the time that the offer expires. See “The Offer — Cash Instead of Fractional Shares of Vector Common Stock” on page 55.
Q.		How Have You Revised The Offer?
A.		On October 20, 2005, we commenced the offer at an exchange ratio of 0.461 shares of Vector common stock for each common share of New Valley. On November 16, 2005, we announced an increase in the exchange ratio to 0.54 shares of Vector common stock for each common share of New Valley.
Q.		Have Any New Valley Stockholders Agreed to Tender Into The Offer?
A.		Yes. On November 16, 2005, we entered into agreements with several large stockholders of New Valley, who in the aggregate own approximately 28.2% of the outstanding New Valley common shares. Pursuant to these agreements, these stockholders agreed to tender their common shares of New Valley into our offer for no additional consideration in exchange for our agreement to increase the exchange ratio to 0.54 for all stockholders of New Valley. These common shares, when aggregated with the approximately 57.7% of the outstanding common shares of New Valley currently owned by Vector,

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		represent approximately 85.9% of New Valley’s outstanding common shares that are committed to the offer.
Q.		What Are The Potential Benefits Of This Offer To New Valley Stockholders?
A.		We believe that this offer should be attractive to New Valley stockholders for the reasons described elsewhere in this Prospectus as well as for the following reasons:
		• based on the closing price of Vector common stock on November 16, 2005, the day of our announcement of this revised offer, the value of the consideration we are offering for each New Valley common share was $10.82, representing a premium of 45% over $7.45, the last closing price for New Valley common shares before we announced our original offer on September 27, 2005;
		• if we successfully complete the offer, you will hold shares in a larger combined company which we believe will have a more liquid market for its shares than New Valley on a stand-alone basis;
		• as a result of your exchange of common shares of New Valley for shares of Vector common stock, you will become entitled to receive quarterly cash dividends from Vector, which we expect to continue to pay at our current quarterly rate of $0.40 per share. See “Comparative Per Share Market Price and Dividend Information — Vector — Vector Dividend Policy” on page 51. New Valley does not currently pay a regular cash dividend with respect to its common shares; and
		• you will have the opportunity to continue to participate in New Valley’s growth through your ownership of shares of Vector common stock.
Q.		What Are Some Of The Other Factors I Should Consider In Deciding Whether To Tender My Common Shares Of New Valley?
A.		In addition to the factors described elsewhere in this Prospectus, you should consider the following:
		• the exchange ratio reflects a value of approximately $10.82 per common share of New Valley, based on the closing price of Vector common stock on November 16, 2005, the day of our announcement of the revised 0.54 exchange ratio for our offer. This value is above the closing price of New Valley common shares on September 27, 2005, $7.45, and above the highest closing price at which common shares of New Valley had closed in the one year period before the announcement of our original offer, $7.63, which was reached on August 25, 2005. However, this value is below the closing price of New Valley common shares of $10.95 on November 21, 2005, the highest price at which common shares of New Valley have closed following the announcement of our offer; and
		• as a stockholder of Vector, your interest in the performance and prospects of New Valley will be only indirect and in proportion to your share ownership in Vector. You therefore may not realize the same financial benefits of any future appreciation in the value of New Valley that you may realize if the offer and subsequent merger were not completed and you were to remain a New Valley stockholder.
		We describe various factors New Valley stockholders should consider in deciding whether to tender their common shares under “Risk Factors” beginning on page 10 and “Additional Factors for Consideration by New Valley Stockholders” beginning on page 41.
Q.		If I Decide Not To Tender, How Will This Affect The Offer And My Common Shares Of New Valley?
A.		We will not acquire any common shares of New Valley in the offer unless New Valley stockholders (other than Vector and its subsidiaries) have tendered into the offer, and not withdrawn, as of the expiration of the offer, a sufficient number of common shares of New Valley such that we would hold following the offer at least 90% of the outstanding common shares of New Valley. Your failure to tender your common shares of New Valley will reduce the likelihood that we will receive tenders of a sufficient number of common shares of New Valley to be able to complete the offer. See “The Offer — Conditions of the Offer” beginning on page 64.

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		If you do not tender your common shares of New Valley and we nonetheless successfully complete the offer, as permitted under Delaware law, we would then effect a “short form” merger of one of our wholly-owned subsidiaries with New Valley without the approval of New Valley’s board of directors or the remaining holders of New Valley’s common shares. We will effect this subsequent merger as soon as practicable after we complete the offer unless we are prevented from doing so by a court or other legal requirement. Each common share of New Valley that we do not own or acquire in the offer would be converted in the subsequent merger into the right to receive 0.54 of a share of Vector common stock, and cash instead of fractional shares, unless you properly perfect your appraisal rights under Delaware law. See “The Offer — Purpose of the Offer; The Subsequent Merger” beginning on page 60 and “The Offer — Appraisal Rights” beginning on page 62.
		If we do not successfully complete the offer, your common shares of New Valley will remain outstanding and we expect that New Valley will remain a majority-owned subsidiary of Vector. See “Certain Effects of the Offer — Conduct of New Valley if the Offer is Not Completed” beginning on page 68.
Q.		How Long Will It Take To Complete The Offer And The Subsequent “Short Form” Merger?
A.		We hope to complete the offer promptly after its expiration at 5:00 p.m., New York City time, on Friday, December 9, 2005. However, we may extend the offer if the conditions to the offer have not been satisfied as of the offer’s scheduled expiration or if we are required to extend the offer pursuant to the tender offer rules of the SEC. We will complete the subsequent merger as soon as practicable after the successful completion of the offer, unless a court or other legal requirement prevents us from doing so.
Q.		Has The New Valley Board Formed A Special Committee Of Independent Directors To Evaluate Vector’s Offer?
A.		Yes. New Valley has formed a special committee consisting of independent directors Arnold I. Burns (Chairman), Ronald J. Kramer, Barry W. Ridings and Victor M. Rivas to evaluate our offer.
Q.		Has New Valley’s Board Of Directors Made A Recommendation Concerning The Offer?
A.		On November 22, 2005, the special committee issued a press release in which the special committee stated that it had determined on behalf of the New Valley board of directors that our revised offer at an exchange ratio of 0.54 was fair to the holders of common shares of New Valley, other than Vector and its affiliate, and will recommend that holders of common shares of New Valley tender their common shares pursuant to our revised offer. The press release also stated that the special committee will provide additional information relating to its recommendation pursuant to an amended Solicitation/Recommendation Statement on Schedule 14D-9 promptly after the filing of this Prospectus with the SEC. In evaluating this offer, you should be aware that four of eight members of the New Valley board are Vector directors and/or executive officers. For additional information on interests that New Valley’s board members and executive officers may have in the offer and subsequent merger, see “Interests of Certain Persons in the Offer and Subsequent Merger” beginning on page 72.
Q.		Has Vector Negotiated, Or Sought The Approval Of, The Terms Of This Offer Or The Subsequent Merger With New Valley?
A.		We have not negotiated the terms of this offer or the subsequent merger with New Valley, its board of directors or the special committee of its board. Moreover, we have not requested that New Valley, its board of directors or any special committee approve this offer. However, after we commenced our initial offer at an exchange ratio of 0.461 on October 20, 2005, our representatives and representatives of the special committee’s financial and legal advisors scheduled a series of due diligence meetings. In addition, representatives of our respective financial advisors held several discussions to exchange perspectives regarding the offer and subsequent merger and on November 21, 2005 we provided to the special committee a substantially complete copy of this Prospectus.

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Q.		What Percentage Of Vector Common Stock Will Current New Valley Stockholders Receive After The Successful Completion Of The Offer And Subsequent Merger?
A.		We anticipate that the completion of the offer and subsequent merger will result in the exchange of the outstanding common shares of New Valley that we do not currently own into approximately 10.2% of the shares of Vector’s common stock outstanding at the conclusion of the transactions, without regard to outstanding stock options or outstanding series of convertible notes of Vector, and 7.4% on a fully diluted basis. In general, this assumes that:
		• up to approximately 5,082,000 shares of Vector common stock would be issued in the offer and the subsequent merger and, if all New Valley stock options vest and are exercised by the holders thereof, up to a maximum of approximately 5,193,000 shares of Vector common stock would be issued;
		• 44,733,460 shares of Vector common stock are outstanding before giving effect to the completion of the offer and the subsequent merger; and
		• no New Valley stockholders exercise appraisal rights.
		The holders of Vector common stock are entitled to one vote for each share they hold. The former stockholders of New Valley, who would receive Vector common stock, will, therefore, receive approximately 10.2% of the outstanding voting power of Vector immediately following the offer and the subsequent merger, without regard to outstanding stock options or outstanding series of convertible notes of Vector, and 7.4% of the voting power on a fully diluted basis.
Q.		What Are The Most Significant Conditions To The Offer?
A.		The offer is conditioned upon, among other things, satisfaction of the minimum tender condition. In particular, there must be validly tendered, and not properly withdrawn prior to the expiration of the offer, at least 7,185,429 common shares (based on the number of outstanding common shares of New Valley as of the date of this Prospectus) such that, after giving effect to the offer, we own at least 90% of the total number of outstanding common shares of New Valley (or 22,260,607, as of November 22, 2005). If this minimum tender condition is satisfied, more than a majority of the minority stockholders of New Valley (i.e., stockholders unaffiliated with Vector and its subsidiaries and stockholders who are not directors or officers of New Valley) will have also validly tendered and not properly withdrawn their common shares of New Valley in our offer. We will not waive this minimum tender condition. In addition, the following conditions, among others, must also be met:
		• the Registration Statement, of which this Prospectus is a part, having been declared effective by the SEC;
		• the issuance of certain shares of Vector common stock to be issued in the offer and the subsequent merger having been approved by Vector stockholders entitled to vote thereon;
		• the shares of Vector common stock to be issued in the offer and the subsequent merger having been approved for listing on the New York Stock Exchange;
		• the receipt of an opinion of counsel regarding the federal income tax consequences of the offer and the subsequent merger;
		• the absence of any event that would be expected to have a material adverse effect on New Valley such that, regardless of the circumstances, in our good faith judgment, it would be inadvisable to proceed with the offer;
		• the absence of material adverse developments in the New Valley stockholder litigations against us which are pending, including any appeals; and
		• the absence of legal impediments to the offer or the subsequent merger.
		These conditions and other conditions to the offer are discussed in this Prospectus under “The Offer — Conditions of the Offer” beginning on page 64.

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Q.		Will I Be Taxed On The Vector Common Stock That I Receive?
A.		The offer and the subsequent merger are intended to qualify as a reorganization for United States federal income tax purposes under which you would generally not recognize gain or loss upon the receipt of shares of Vector common stock in exchange for your common shares of New Valley, other than any gain or loss recognized on the receipt of cash instead of fractional shares. The offer is conditioned on the receipt of an opinion from Vector’s legal counsel to the effect that the Vector common stock received in the offer and subsequent merger will be treated as received in a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended. See “The Offer — Material U.S. Federal Income Tax Consequences” beginning on page 57. The tax consequences to you will depend on the facts and circumstances of your own situation. Please consult your tax advisor for a full understanding of the tax consequences to you.
Q.		Do The Statements On The Cover Page Regarding This Prospectus Being Subject To Change And The Registration Statement Filed With The SEC Not Yet Being Effective Mean That The Offer Has Not Commenced?
A.		No. As permitted under SEC rules, we have commenced the offer without the Registration Statement, of which this Prospectus is a part, having been declared effective by the SEC. We cannot, however, complete the offer and accept for exchange any common shares of New Valley tendered in the offer until the Registration Statement is declared effective by the SEC and the other conditions to our offer have been satisfied or, where permissible, waived.
Q.		Are Vector’s Business, Prospects And Financial Condition Relevant To My Decision To Tender My Common Shares In The Offer?
A.		Yes. Common shares of New Valley accepted in the offer will be exchanged for shares of Vector common stock and therefore you should consider Vector’s business, prospects and financial condition before you decide whether to tender your common shares in the offer. In considering our business, prospects and financial condition, you should review the documents incorporated by reference in this Prospectus because they contain detailed business, financial and other information about us. See “Where You Can Find More Information” beginning on page 79.
Q.		If I Have Already Tendered My Common Shares In The Original Offer Do I Need To Do Anything To Tender Into The Revised Offer?
A.		No. New Valley common shares validly tendered in connection with our offer commenced on October 20, 2005 and not properly withdrawn will automatically be considered tendered into this revised offer.
Q.		Whom Can I Call With Questions About The Offer?
A.		You can contact our Information Agent or Dealer Manager for the offer:

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	The number of shares of Vector common stock that you will receive in the offer and the subsequent merger will be based upon a fixed exchange ratio. The value of the shares of Vector common stock at the time you receive them could be less than at the time you tender your common shares of New Valley.

	The trading price of Vector’s common stock may be affected by factors in addition to those factors affecting the price of New Valley’s common shares. The price of Vector’s common stock could decline following the offer.

	We have not negotiated with or sought approval of the price or terms of the offer or the subsequent merger from New Valley’s board.

	The board of directors and executive officers of New Valley have potential conflicts of interests with respect to the offer.

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	The offer and the subsequent merger may not qualify as a reorganization for United States federal income tax purposes.

	We may not be able to effect the “short form” merger even if a sufficient number of common shares of New Valley are tendered in the offer.

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	We and our subsidiaries have a substantial amount of indebtedness.

	We are a holding company and depend on cash payments from subsidiaries, which are subject to contractual and other restrictions, in order to service our debt and to pay dividends on our common stock.

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	Our liquidity could be adversely affected if taxing authorities prevail in their assertion that we incurred a tax obligation in 1998 and 1999 in connection with the Philip Morris brand transaction.

	Liggett faces intense competition in the domestic tobacco industry.

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	Liggett’s business is highly dependent on the discount cigarette segment.

	Liggett’s market share is susceptible to decline.

	The domestic cigarette industry has experienced declining unit sales in recent periods.

	Litigation and regulation will continue to harm the tobacco industry.

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	Liggett may have additional payment obligations under the Master Settlement Agreement and its other settlement agreements with the states.

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	Liggett has significant sales to a single customer.

	Liggett may be adversely affected by recent legislation to eliminate the federal tobacco quota system.

	Excise tax increases adversely affect cigarette sales.

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	Vector Tobacco is subject to risks inherent in new product development initiatives.

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	The actual costs and savings associated with restructurings of our tobacco business may differ materially from amounts we estimate.

	New Valley is subject to risks relating to the industries in which it operates.

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	•	periods of economic slowdown or recession,
	•	a change in the current low interest rate environment resulting in rising interest rates,
	•	decreasing home ownership rates, or
	•	declining demand for real estate.

	New Valley’s potential investments are unidentified and may not succeed.

	We depend on our key personnel.

	While we believe our controls systems are effective, there are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected.

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	The price of our common stock may fluctuate significantly, and this may make it difficult for you to resell the shares of our common stock issuable upon exchange when you want or at prices you find attractive.

	•	actual or anticipated fluctuations in our operating results;
	•	changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors;
	•	the operating and stock performance of our competitors;
	•	announcements by us or our competitors of new products or services or significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;
	•	the initiation or outcome of litigation;
	•	changes in interest rates;
	•	general economic, market and political conditions;
	•	additions or departures of key personnel; and
	•	future sales of our equity or convertible securities.

	We have many potentially dilutive securities outstanding.

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	•	economic outlook;
	•	capital expenditures;
	•	cost reduction;
	•	new legislation;
	•	cash flows;
	•	operating performance;
	•	litigation;
	•	impairment charges and cost savings associated with restructurings of our tobacco operations; and
	•	related industry developments (including trends affecting our business, financial condition and results of operations).

	•	general economic and market conditions and any changes therein, due to acts of war and terrorism or otherwise;
	•	governmental regulations and policies;
	•	effects of industry competition;
	•	impact of business combinations, including acquisitions and divestitures, both internally for us and externally in the tobacco industry;
	•	impact of restructurings on our tobacco business and our ability to achieve any increases in profitability estimated to occur as a result of these restructurings;
	•	impact of new legislation on our competitors’ payment obligations, results of operations and product costs, i.e., the impact of recent federal legislation eliminating the federal tobacco quota system;
	•	uncertainty related to litigation and potential additional payment obligations for us under the Master Settlement Agreement and other settlement agreements with the states; and
	•	risks inherent in our new product development initiatives.

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	•	the potential to realize synergies and cost savings;
	•	the potential to more efficiently utilize the New Valley consolidated tax group’s tax loss and credit carryforwards before they begin to expire; and
	•	the opportunity to minimize potential conflicts of interest.

	Potential to Realize Synergies and Cost Savings

	•	eliminating redundant overhead, administration and other costs relating to each entity’s status as a public company, including estimated potential cost savings related to directors’ fees ($330,000 to $350,000), accounting and legal expense ($250,000 to $750,000), insurance ($250,000 to $400,000) and state franchise taxes ($200,000 to $365,000); and
	•	reducing the aggregate number of stockholders of both companies and eliminating annual report and proxy printing and mailing costs based on fewer stockholders of the combined companies (estimated potential cost savings of approximately $200,000 to $300,000).

	Potential to More Efficiently Utilize the New Valley Consolidated Tax Group’s Tax Loss and Credit Carryforwards

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	Minimizing Potential Conflicts of Interest

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	•	$22,917,434 for the present value of the New Valley consolidated tax group’s tax loss carryforwards available to an unaffiliated third party acquiror. Our board discussed its view that this present value was potentially too high because of the perceived uncertainty that the tax loss carryforwards could be fully utilized by such unaffiliated third party acquirer due to, among other things, the fact that the applicable tax laws and tax rates could change and the risk that such acquirer would not have sufficient taxable income in order to fully utilize the benefit of the tax loss carryforwards during the required period.
	•	the value that Jefferies ascribed to New Valley’s pending Westar litigation. Our board discussed its view that this present value may be too high due to, among other things, the perceived risk of New Valley obtaining a final judgment or settlement in its favor, the timing and ability of New Valley collecting on any such judgment or settlement, and the probability of New Valley incurring more legal expenses than previously estimated in order to collect on any such judgment or settlement. The board noted that an interim decision by the trial court in this case was rendered in New Valley’s favor on August 19, 2005 regarding the liability of the United States government, but not the amount of damages for which the government might be liable.
	•	$5,888,889 for the estimated value of the shares of Ladenburg Thalmann Financial Services Inc., or Ladenburg Thalmann, owned by New Valley based on the current market price of the shares. Our board discussed its view that using the current market price to estimate the current value of the shares was aggressive, and suggested that the current market price should be discounted due to, among other things, the relative lack of liquidity in Ladenburg Thalmann stock given its historically modest trading volume, the fact that New Valley owns approximately 10% of Ladenburg Thalmann, making a sale of its shares of Ladenburg Thalmann on the open market more difficult, and the recent publicly reported operating results of Ladenburg Thalmann.

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	•	$4,600,686 for the present value of the note receivable from Ladenburg Thalmann. Our board discussed its view that this present value was potentially too high due to, among other things, Ladenburg Thalmann’s recent publicly reported operating results and the perceived risks of Ladenburg Thalmann’s ability to make timely payment of principal and interest on the note through December 31, 2008.
	•	$10,672,500 valuation for New Valley’s interest in Koa Investors. Our board discussed its view that this value was higher than the value of Koa Investors determined by Jefferies using a discounted cash flow valuation methodology.

	September 27, 2005

	The Board of Directors
	New Valley Corporation
	100 S.E. Second Street
	Miami, Florida 33131
	Gentlemen:

It has become clear to us that the best interests of our respective stockholders will be served by Vector’s acquisition of the outstanding shares of New Valley that we do not already own. We believe that a full combination of our businesses will yield significant efficiencies and, by fully integrating New Valley into the Vector family of operations, New Valley stockholders will be able to share in a greater scope of opportunities than are available to them as New Valley stockholders. New Valley shareholders will become owners of a company with solid cash flow and an attractive dividend yield. In addition, the transaction will provide New Valley stockholders with an immediate premium for their shares and a currency that has substantially greater liquidity than New Valley has been able to provide.

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	As evidenced by Vector’s long history with New Valley, we are not interested in selling our shares in New Valley. Moreover, if the two companies are combined, we expect important cost savings will be realized and that the transaction would be immediately accretive to Vector’s cash earnings.
	Consequently, our Board of Directors has authorized us to make an exchange offer pursuant to which the stockholders of New Valley (other than VGR Holding Inc.) will be offered 0.461 shares of common stock of Vector for each outstanding share of New Valley common stock they own in a transaction designed to be tax-free. Based on the $19.54 closing price of Vector’s shares on September 26, 2005, our offer provides a value of approximately $9.00 per share of New Valley common stock and a 21% premium to the closing price of New Valley common stock on that date.
	Vector’s offer is being made directly to New Valley’s stockholders. We believe that it will be favorably received by them due to the substantial premium to New Valley’s market price, the attractiveness of Vector stock and the opportunity for greater liquidity. New Valley stockholders, through their ownership of Vector common stock, will continue to participate in New Valley’s business.
	Our offer will be conditioned on the tender of a sufficient number of shares of New Valley common stock such that, after the offer is completed, we will own at least 90% of the outstanding shares of New Valley common stock and other customary conditions. Assuming that the conditions to the offer are satisfied and that the offer is completed, we will then effect a “short form” merger of New Valley with a subsidiary of Vector as soon as practicable thereafter. In this merger, the remaining New Valley public stockholders will receive the same consideration as in the exchange offer, except for those stockholders who choose to exercise their appraisal rights.
	We intend to file our offering materials with the Securities and Exchange Commission and commence our exchange offer on or about October 12, 2005. Vector is not seeking, and as the offer is being made directly to New Valley’s stockholders, Delaware law does not require approval of the offer from New Valley’s Board of Directors. We, however, encourage you to consult with your outside counsel as to the obligations of New Valley’s Board of Directors under the U.S. tender offer rules to advise the stockholders of your recommendation with respect to our offer. Also, enclosed is a copy of the press release that we are issuing in connection with the offer.

	Sincerely,
	/s/ Bennett S. LeBow
	Bennett S. LeBow
	Chairman of the Board of Directors and
	Chief Executive Officer

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	“We are disappointed by the special committee’s decision recommending against our premium offer of $9 per share in Vector Group stock, which we believe represents compelling value for all New Valley shareholders. We are eager for New Valley shareholders – once they have had the opportunity to review our exchange offer materials – to make their own determination on the merits of our offer.
	Due to the 90% tender requirement, it is highly unlikely that Vector will be able to close this transaction unless all significant New Valley shareholders tender into the offer. If the 90% tender requirement is not satisfied, there can be no second-step short form merger and, consequently, no appraisal rights.”

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	•	reviewed Vector’s and New Valley’s operations and prospects;
	•	reviewed certain financial and other information about Vector and New Valley that was publicly available;
	•	reviewed information furnished by Vector’s management, including certain internal financial analyses, financial forecasts with respect to Vector and New Valley, budgets, reports and other information;
	•	based on information provided to Jefferies by Vector’s management and outside advisors concerning the tax assets of New Valley and the treatment of New Valley’s net operating losses after giving effect to the short form merger upon completion of the offer, considered the value of New Valley’s tax assets to Vector after giving effect to the offer and the subsequent merger;
	•	considered written waivers from certain officers of New Valley waiving rights to severance and other benefits to which they would otherwise be entitled arising from completion of the short form merger upon completion of the offer;
	•	held discussions with various members of Vector’s management concerning historical and current operations, financial conditions and prospects, including recent financial performance;
	•	reviewed the share trading price history of Vector and New Valley for a period Jefferies deemed appropriate;
	•	reviewed the valuation of the New Valley implied by the exchange ratio;
	•	reviewed the premiums paid in selected acquisition transactions;
	•	prepared a discounted cash flow analysis of New Valley on a stand-alone basis; and
	•	reviewed an analysis of the combined entity and the resulting earnings accretion/dilution.

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						Premium Implied by
		New Valley Common Shares				Implied Share Purchase
Time Period Ending September 26, 2005		Closing Price				Price of $10.78
September 27, 2005		$	7.45				44.7	%
1-Day Prior		$	7.45				44.7	%
1-Week Prior		$	7.50				43.8	%
4-Weeks Prior		$	7.50				43.8	%
6-Months Prior		$	6.35				69.8	%
1-Year Prior		$	4.84				122.8	%
2-Years Prior		$	4.11				162.4	%
52-Week High		$	7.63				41.3	%
52-Week Low		$	4.81				124.2	%

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			Period Prior to September 27, 2005
			One Day				One Week				Four Weeks
New Valley price per share during period			$	7.45			$	7.50			$	7.50
Proposed purchase price per share			$	10.78			$	10.78			$	10.78
	Implied premium			44.7	%			43.8	%			43.8	%
Premiums paid in other public transactions
Median				24.1	%			27.0	%			27.1	%
High				96.4	%			114.6	%			118.8	%
Low				2.7	%			1.7	%			-16.1	%

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				Book Value				Estimated Value
				as of				as of
				9/30/2005				11/15/2005
ASSETS
Cash and Marketable Securities				$	95,926,998			$	95,750,000
Investment Securities Available for Sale					12,489,378				11,931,093
Other Current Assets					170,000				170,000
	Total Current Assets				108,586,376				107,851,093
Investments in Real Estate:
	St. Regis Hotel				6,263,000				6,263,000
	Holiday Isle				—				2,500,000
	Koa Hotel				(600,000	)			10,672,500
	Douglas Elliman				27,178,183				59,148,128
		Total Investments in Real Estate			32,841,183				78,583,628
Long-Term Investments and Assets, Net					2,536,567				15,130,543
Other Assets					1,109,000				1,109,000
Pending Litigation (Westar)					—				6,241,709
Proceeds from Option Exercises					—				1,004,348
Note Receivable from Ladenburg Thalmann					—				4,742,984
Deferred Tax Assets — Unaffiliated 3rd Party Value					—				25,973,930	**
	Total Asset Value			$	145,073,126			$	240,637,234
LIABILITIES
Accounts Payable and Accrued Liabilities					2,856,000				2,856,000
Prepetition Claims					300,000				300,000
Income Taxes					838,000				838,000
Severance					—				12,819,999	*/**
Long-Term Liabilities					2,501,000				2,501,000
	Total Liabilities			$	6,495,000			$	19,314,999
New Valley Equity Value				$	138,578,126			$	221,322,235
Total Liabilities and Equity Value				$	145,073,126			$	240,637,234
Shares Outstanding					22,260,607				22,465,940

Implied New Valley Estimated Value Per Share		$	6.23			$	9.85	**
Implied Exchange Ratio			0.312				0.493
Implied New Valley Acquisition Price Per Share						$	10.78
Exchange Ratio							0.540

*	Triggered upon a change of control and under other circumstances.

**	As discussed below, Jefferies also considered the additional estimated $2.02 per share of incremental value expected to be realized by Vector in the offer based on the value of New Valley’s deferred tax

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	asset to Vector as opposed to a third party purchaser and waivers by certain members of New Valley’s senior management of any rights to severance and other benefits.

	•	For purposes of analyzing New Valley’s marketable securities, the book value of such securities as of September 30, 2005 was compared to the closing market trading price of the securities on November 15, 2005 in order to determine the estimated value of the securities. One of New Valley’s marketable securities is Ladenburg Thalmann, of which New Valley owns 11.1 million shares at a market price of $0.51 per share as of November 15, 2005. Jefferies noted that Ladenburg Thalmann recently completed a $10.0 million private placement of its common stock at a price of $0.45 per share. In addition, Jefferies noted that the price at which New Valley would be able to sell its shares in the open market based on current trading volumes and market conditions could be lower than the current market price of the stock or the price at which the stock was sold in the recent private placement.
	•	The analysis of the estimated valuation of New Valley’s interest in Koa Investors, LLC, or Koa Investors, was based on an estimated sale valuation of $105.0 million for the Koa Investors property, less the repayment of $82.0 million of outstanding indebtedness and an estimated $105,000 in transfer taxes, $1.05 million in sales commission and $500,000 in legal fees.
	•	The analysis of the estimated valuation of New Valley’s interest in Douglas Elliman Realty, LLC was based on a recent offer by Prudential Real Estate Financial Services to sell its 20.59% interest in Douglas Elliman Realty for an estimated purchase price of $20.4 million at September 30, 2005 and included the value of an outstanding $9.5 million loan from New Valley to Douglas Elliman Realty.
	•	The estimated value of New Valley’s existing long-term investments in Steel Partners, Ukraine Fund, 411Web.com, CIM Urban Real Estate Fund, L.P. and Amroc was based on information provided by Vector’s management, which amounts were compared to the book value of such long-term investments on New Valley’s balance sheet as of September 30, 2005.
	•	For purposes of analyzing the estimated value of the pending Westar litigation, a present value calculation was performed on the $15.0 million of settlement proceeds that Vector’s management estimated would be received by New Valley in connection with the litigation. The $15.0 million of estimated settlement proceeds was reduced by Vector management’s estimates of the cost of legal expenses to be incurred through December 31, 2008. The present value calculation was performed using a discount rate of 30%, which was based on Jefferies’ assessment of potential risks associated with the actual receipt by New Valley of the settlement proceeds.
	•	For purposes of analyzing the estimated value of the $6.4 million note receivable from Ladenburg Thalmann, which note Vector’s management estimates will be repaid to New Valley in installments through the fiscal year ending December 31, 2008, a present value calculation was performed using a discount rate of 25%, which was based on Jefferies’ assessment of the potential risks associated with the actual receipt by New Valley of payments of interest and principal on the note receivable.
	•	The estimated present value of New Valley’s deferred tax assets, including the treatment of New Valley’s $137.5 million in net operating losses, to Vector was $58.5 million compared to $26.0 million, which was the estimated present value to an independent third party of the cumulative tax benefits of $62.4 million estimated to be utilized between 2006 and 2020, using a discount rate of 12%.
	•	For purposes of this analysis, the estimated costs to be incurred by New Valley under its management severance arrangements with Messrs. LeBow, Lorber, Lampen and J. Bryant Kirkland III, in the event of an acquisition by a third party, were calculated based on the

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		agreements currently in place with such executive officers of New Valley under the assumption that these individuals would not be retained by the acquiring company.

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	Pro Forma Financial Analysis

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	•	As a stockholder of Vector, your interest in the performance and prospects of New Valley would only be indirect and in proportion to your share ownership in Vector. You therefore may not realize the same financial benefits of future appreciation in the value of New Valley, if any, that you may realize if the offer and the subsequent merger were not completed and you remain a New Valley stockholder.
	•	An investment in a company of New Valley’s size may be associated with greater risk and a greater potential for gain than an investment in a much larger company like Vector.
	•	As this offer has been made directly to New Valley stockholders by means of an exchange offer, Vector controls the conditions, timing and price of the offer, and has reserved the right to unilaterally modify any of the terms of the offer, except that we will not modify or waive the Registration Statement effectiveness condition, the Vector stockholder approval condition, the listing condition, and the minimum tender condition.
	•	The exchange ratio reflects a value per common share of New Valley above the closing price of New Valley common shares on September 27, 2005 of $7.45 and above the highest closing price at which common shares of New Valley have closed before the announcement of the original offer, $7.63, which was reached on August 25, 2005. However, this value is below the closing price of New Valley common shares of $10.95 on November 21, 2005, the highest price at which common shares of New Valley have closed following the announcement of our offer.

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								Purchase
								Accounting
								Adjustments/
				Historical				Eliminations				Pro-Forma
				(Dollars in thousands, except per share amounts)
Revenues*				$	342,251			$	—			$	342,251
Expenses:
	Cost of goods sold*				202,780				—				202,780
	Operating, selling, administrative and general expenses				76,485				—				76,485
		Operating income			62,986				—				62,986
Other income (expenses):
	Interest and dividend income				3,260				—				3,260
	Interest expense				(24,155	)			—				(24,155	)
	Gain on sale of investments, net				1,433				—				1,433
	Gain from conversion of LTS notes				9,461				—				9,461
	Equity loss on operations of LTS				(299	)			—				(299	)
	Equity income from non-consolidated New Valley real estate businesses				6,202				—				6,202
	Other, net				69				—				69
Income from continuing operations before income taxes and minority interests					58,957				—				58,957
	Income tax expense				29,322				2,296	(B)			31,618
	Minority interests				(2,403	)			2,403	(C)			—
Income from continuing operations				$	27,232			$	107			$	27,339
Per basic common share:
	Income from continuing operations(A)			$	0.62							$	0.56
Per diluted common share:
	Income from continuing operations(A)			$	0.59							$	0.53

*	Revenues and Cost of goods sold include excise taxes of $112,856.

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								Purchase
								Accounting
								Adjustments/
				Historical				Eliminations				Pro-Forma
				(Dollars in thousands, except per share amounts)
Revenues:
	Tobacco*			$	498,860			$	—			$	498,860
Expenses:
	Cost of goods sold*				325,663				—				325,663
	Operating, selling, administrative and general expenses				144,051				(4,177	)(D)			139,874
	Restructuring and impairment charges				13,699				—				13,699
		Operating income			15,447				4,177				19,624
Other income (expenses):
	Interest and dividend income				2,563				—				2,563
	Interest expense				(25,077	)			—				(25,077	)
	Loss on extinguishment of debt				(5,333	)			—				(5,333	)
	Gain on sale of investments, net				8,664				—				8,664
	Equity income from non-consolidated New Valley real estate businesses				9,782				—				9,782
	Other, net				60				—				60
Income from continuing operations before benefit for income taxes and minority interests					6,106				4,177				10,283
	Benefit for income taxes				(6,960	)			5,214	(B)			(1,746	)
	Minority interests				(9,027	)			9,022	(C)			(5	)
Income from continuing operations				$	4,039			$	7,985			$	12,024
Per basic common share:
	Income from continuing operations(A)			$	0.09							$	0.25
Per diluted common share:
	Income from continuing operations(A)			$	0.09							$	0.24

*	Revenues and Cost of goods sold include excise taxes of $175,674.

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									Purchase
									Accounting
									Adjustments/
					Historical				Eliminations				Pro-Forma
					(Dollars in thousands, except
					per share amounts)
ASSETS:
Current assets:
	Cash and cash equivalents				$	158,964			$	—			$	158,964
	Investment securities available for sale					19,672				—				19,672
	Accounts receivable — trade					22,373				—				22,373
	Other receivables					502				—				502
	Inventories					76,602				—				76,602
	Deferred income taxes					3,486				—				3,486
	Other current assets					9,140				—				9,140
		Total current assets				290,739				—				290,739
Property, plant and equipment, net						62,615				—				62,615
Assets held for sale						2,212				—				2,212
Long-term investments, net						2,540				5,365	(G)			7,905
Investments in non-consolidated real estate businesses						33,441				18,282	(G)			51,723
Restricted assets						5,082				—				5,082
Deferred income taxes						17,937				—				17,937
Intangible asset						107,511				—				107,511
Goodwill						—				37,758	(G)			37,758
Other assets						14,330				—				14,330
		Total assets			$	536,407			$	61,405			$	597,812
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT):
Current liabilities:
	Current portion of notes payable and long-term debt				$	16,955			$	—			$	16,955
	Accounts payable					9,161				—				9,161
	Accrued promotional expenses					15,442				—				15,442
	Accrued taxes payable, net					31,084				—				31,084
	Settlement accruals					14,130				—				14,130
	Tobacco quota buyout					9,975				—				9,975
	Deferred income taxes					3,731				—				3,731
	Accrued interest					3,643				—				3,643
	Other accrued liabilities					18,555				3,750	(E),(G)			22,305
		Total current liabilities				122,676				3,750				126,426
Notes payable, long-term debt and other obligations, less current portion						237,772				—				237,772
Fair value of derivatives embedded within convertible debt						40,194				—				40,194
Noncurrent employee benefits						17,760				—				17,760
Deferred income taxes						150,332				(23,753	) (F)			135,931
										9,352	(G)
Other liabilities						5,328				—				5,328
Minority interests						58,590				(58,590	) (G)			—
Commitments and contingencies						—				—				—
Stockholders’ equity (deficit):
	Common stock, par value $0.10 per share					4,459				508	(G)			4,967
	Additional paid-in capital					30,029				23,753	(F)			159,580
										105,798	(G)
	Unearned compensation					(10,100	)			—				(10,100	)
	Deficit					(93,175	)			—				(93,175	)
	Accumulated other comprehensive loss					(11,138	)			587	(G)			(10,551	)
	Less: Treasury stock, at cost					(16,320	)			—				(16,320	)
			Total stockholders’ equity (deficit)			(96,245	)			130,646				34,401
			Total liabilities and stockholders’ equity (deficit)		$	536,407			$	61,405			$	597,812

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Purchase price allocated to New Valley net assets:
Number of common shares of New Valley outstanding at November 16, 2005			22,260,607
Number of common shares of New Valley outstanding at November 16, 2005 held by Vector			12,849,118
Number of common shares of New Valley outstanding at November 16, 2005 not owned by Vector			9,411,489
Exchange ratio			0.54
Number of shares of Vector common stock to be issued			5,082,204
Average closing price per share of Vector common stock for the five trading days ended November 18, 2005 (two days prior and two days subsequent to November 16, 2005)		$	20.03
Fair value of Vector common stock to be issued		$	101,797
Fair value of stock options to be acquired (Note H)			1,346
Transaction fees and other costs (Note E)			3,750
Total purchase price		$	106,893

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Tangible assets acquired:
Current assets		$	108,586
Long-term investments			15,242
Investments in non-consolidated real estate businesses			76,084
Other assets			1,109
Total tangible assets acquired			201,021
Adjustment to reflect Vector’s stock ownership of New Valley prior to the offer and subsequent merger			(116,039	)
Liabilities assumed			(6,495	)
Deferred tax liability related to acquired long-term investments and non-consolidated real estate businesses			(9,352	)
Total assets acquired in excess of liabilities assumed		$	69,135
Goodwill			37,758
Total purchase price		$	106,893

(A)		Average Number of Common Shares of New Valley Outstanding. Both the basic and diluted average number of common shares of New Valley outstanding have been adjusted to reflect the impact of the offer and the subsequent merger by applying the 0.54 exchange ratio to amounts historically reported by New Valley.
(B)		Income Taxes. The pro forma adjustment to provision for income taxes represents the application of Vector’s and New Valley’s estimated statutory tax rates to each company’s respective share of the pro forma adjustments impacting pretax income.
(C)		Minority Interests. Under the purchase method of accounting, Vector’s historical minority interest in New Valley’s results from operations will be eliminated upon the completion of the offer and the subsequent merger.
(D)		Intercompany Transactions. To eliminate an intercompany expense and liability, net of minority interests, from Vector to New Valley related to the settlement of litigation.
(E)		Transaction Fees (in thousands). Various transaction fees and other costs, estimated to total approximately $2,000 and $1,750, have been or are expected to be incurred by Vector and New Valley, respectively, in connection with the offer and the subsequent merger and will be considered part of the purchase price (and have been reflected as such).
(F)		Elimination of Deferred Tax Liability Associated with New Valley. Under the purchase method of accounting, Vector’s deferred tax liability associated with book and tax basis differences in its investment in New Valley will be eliminated upon the completion of the offer and the subsequent merger.
(G)		Purchase Price Allocation Goodwill and Related Adjustments. Under the purchase method of accounting, the combined company will allocate the purchase price paid by Vector to the fair value of the New Valley tangible and intangible assets acquired and liabilities assumed. The combined company will also eliminate Vector’s minority interest in its investment in New Valley. The pro

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		forma purchase price allocation is preliminary as the transaction has not yet taken place. Therefore, the pro forma presentation assumes that the historical value of New Valley’s tangible assets and liabilities approximates fair value. Additionally, the allocation of purchase price to acquired intangible assets is preliminary and subject to the final outcome of management analyses to be conducted upon the completion of the offer and subsequent merger. The residual amount of the purchase price has been allocated to goodwill. The actual amounts recorded when such merger is completed may differ materially from the pro forma amounts presented herein.
		The preliminary pro forma purchase price allocation is summarized as follows (in thousands):

Excess of New Valley tangible assets acquired over liabilities assumed at November 16, 2005		$	78,487
Deferred tax liability related to acquired long-term investments and non-consolidated real estate businesses			(9,352	)
Goodwill			37,758
Total Purchase Price		$	106,893

(H)		Fair Value of Stock Options. At the effective time of the subsequent merger, each outstanding option to purchase common shares of New Valley under New Valley’s stock plans, whether vested or unvested, will fully vest (if unvested) and will be deemed to constitute an option to acquire, on the same terms and conditions as were applicable under such New Valley option, a number of shares of Vector common stock.
		The fair value of the options issued to New Valley option holders represents an additional cost incurred by Vector to acquire New Valley. The aggregate fair value of these options, for the purposes of the pro forma balance sheet, was calculated using the following assumptions as inputs to the Black-Scholes option valuation formula:

Weighted average expected term (years)		0.62 - 9.52 years
Weighted average risk-free interest rate		4.36% to 4.54%
Weighted average expected volatility		25%
Weighted average per-share fair value		$6.56
Number of shares underlying options (at November 16, 2005)		205,333
Aggregate fair value — allocated to purchase price (in thousands)		1,346

		These amounts are preliminary, and the actual amounts to be recorded upon completion of the offer and the subsequent merger may be significantly different than the pro forma amounts. The aggregate fair value of the stock options following the offer and the subsequent merger will fluctuate with the market price of Vector’s common stock as well as with periodic changes to the other Black-Scholes assumptions.
(I)		Reconciliation of Equity. The following table reconciles adjustments to Vector’s equity accounts (in thousands).

Equity portion of purchase price		$	106,893
Elimination of deferred tax liability (Note F)			23,753
Increase to Stockholders’ Equity		$	130,646

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										Cash
		High				Low				Dividends
2005:
Fourth Quarter (through Nov. 22)		$	20.82			$	18.67			$	—
Third Quarter			20.27				17.01				.38
Second Quarter			18.78				14.29				.38
First Quarter			16.02				14.62				.38
2004:
Fourth Quarter		$	16.11			$	14.16			$	.38
Third Quarter			15.95				13.62				.36
Second Quarter			15.71				13.20				.36
First Quarter			16.55				14.67				.36
2003:
Fourth Quarter		$	15.65			$	12.98			$	.36
Third Quarter			15.76				12.09				.35
Second Quarter			15.59				9.47				.35
First Quarter			12.52				9.50				.35

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		High				Low
2005:
Fourth Quarter (through Nov. 22)		$	10.95			$	7.26
Third Quarter			10.41				6.60
Second Quarter			7.30				6.00
First Quarter			7.22				5.51
2004:
Fourth Quarter		$	6.78			$	4.68
Third Quarter			5.25				3.70
Second Quarter			4.69				3.66
First Quarter			4.34				4.00
2003:
Fourth Quarter		$	4.44			$	3.60
Third Quarter			4.53				3.71
Second Quarter			5.00				3.11
First Quarter			4.74				3.18

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	•	Deliver certificates for your shares, a properly completed and duly executed Letter of Transmittal or a duly executed copy thereof, along with any other required documents, to the Exchange Agent and Depositary at one of its addresses set forth on the back cover of this Prospectus prior to the expiration of the offer;
	•	Arrange for a book-entry transfer of your shares to be made to the Exchange Agent and Depositary’s account at DTC and receipt by the Exchange Agent and Depositary of a confirmation of this transfer prior to the expiration of the offer, and the delivery of a properly completed and duly executed Letter of Transmittal or a duly executed copy thereof, and any other required documents to the Exchange Agent and Depositary at one of its addresses set forth on the back cover of this Prospectus prior to the expiration of the offer; or
	•	Arrange for a book-entry transfer of your shares to the Exchange Agent and Depositary’s account at DTC and receipt by the Exchange Agent and Depositary of confirmation of this transfer, including an “agent’s message”, prior to the expiration of the offer.

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	•	an individual who is a U.S. citizen or a U.S. resident alien;
	•	a corporation created or organized under the laws of the United States or any State;
	•	a trust where (1) a U.S. court is able to exercise primary supervision over the administration of the trust and (2) one or more U.S. persons have the authority to control all substantial decisions of the trust; or
	•	an estate that is subject to U.S. tax on its worldwide income from all sources.

	•	banks, insurance companies and financial institutions;
	•	tax-exempt organizations;
	•	mutual funds;
	•	persons that have a functional currency other than the U.S. dollar;
	•	investors in pass-through entities;
	•	traders in securities who elect to apply a mark-to-market method of accounting;
	•	dealers in securities or foreign currencies;
	•	New Valley stockholders who received their common shares of New Valley through the exercise of options, or otherwise as compensation or through a tax-qualified retirement plan or who are entitled to require New Valley to purchase their common shares of New Valley pursuant to an agreement with New Valley;
	•	holders of options granted by New Valley;
	•	New Valley stockholders who are not U.S. persons; and
	•	New Valley stockholders who hold common shares of New Valley as part of a hedge, straddle, constructive sale or conversion transaction.

	(1)	prior to consummation of the offer, VGR converts into a Delaware limited liability company (“VGR LLC”);
	(2)	VGR LLC consummates the offer in the manner described herein;

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	(3)	immediately after step (2), VGR LLC distributes all of the New Valley common shares that it owns to Vector;
	(4)	immediately after step (3), Vector contributes the New Valley common shares received from VGR LLC to a newly formed wholly-owned Vector corporate subsidiary (“MergerCo”) in exchange for MergerCo stock;
	(5)	as soon as practical after step (4), MergerCo will effect the subsequent “short form” merger by merging New Valley into MergerCo, with MergerCo surviving, pursuant to which the holders of New Valley common shares other than MergerCo will receive Vector common stock in consideration for their New Valley common shares as described under “The Offer — Purpose of the Offer; the Subsequent Merger”; and
	(6)	immediately after step (5), MergerCo merges into a newly formed wholly-owed Vector subsidiary that is organized as a Delaware limited liability company taxed as an entity disregarded from Vector, with the limited liability company surviving.

	•	New Valley stockholders will not recognize any gain or loss on the exchange of common shares of New Valley for Vector common stock in the offer and the subsequent merger, except with respect to cash, if any, they receive instead of fractional shares of Vector common stock;
	•	the aggregate tax basis to a New Valley stockholder of the Vector common stock received in exchange for common shares of New Valley pursuant to the offer or the subsequent merger will equal the New Valley stockholder’s aggregate tax basis in the common shares of New Valley surrendered, decreased by the amount of any tax basis allocable to any fractional share interest in Vector common stock for which cash is received;
	•	the holding period of a New Valley stockholder for the Vector common stock received pursuant to the offer or the subsequent merger will include the holding period of the common shares of New Valley surrendered in exchange; and
	•	a New Valley stockholder who receives cash instead of a fractional share of Vector common stock pursuant to the offer or the subsequent merger will recognize gain or loss on the exchange in an amount equal to the difference between the amount of cash received and the basis of the common shares of New Valley allocable to the fractional share. The gain or loss generally will constitute capital gain or loss. Capital gain or loss will generally be long-term capital gain or loss if the New Valley stockholder has held the New Valley common shares for more than one year. Non-corporate

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		taxpayers are subject to a reduced tax rate (currently a maximum 15% rate) on their long-term capital gains. The deductibility of capital losses is subject to limitations for both individuals and corporations.

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	Notification of Merger’s Effective Time:

	Electing Appraisal Rights:

	Only Record Holders May Demand Appraisal Rights:

	•	If common shares of New Valley are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, the demand should be executed in that capacity.
	•	If common shares of New Valley are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand should be executed by or for all owners.
	•	An authorized agent, including one of two or more joint owners, may execute the demand for appraisal for a holder of record. The agent must identify the owner or owners of record and expressly disclose the fact that, in executing the demand, the agent is acting as agent for the owner or owners of record.
	•	A holder of record, such as a broker, who holds New Valley’s common shares as nominee for a beneficial owner, may exercise a holder’s right of appraisal with respect to New Valley’s common shares held for all or less than all of those beneficial owners’ interest. In that case, the written demand should set forth the number of common shares of New Valley covered by the demand. If no number of shares is expressly mentioned, the demand will be presumed to cover all of New Valley’s common shares standing in the name of the record holder. New Valley stockholders who hold their shares in brokerage accounts or through any other nominee and wish to exercise appraisal rights should consult their brokers or other nominees to determine the procedures they must follow in order for their brokers and other nominees to exercise appraisal rights in respect of their common shares of New Valley.

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	Court Petition Must Be Filed:

	Appraisal Proceeding by Delaware Court:

	Effect of Appraisal Demand on Voting and Right to Dividends; Tax Consequences:

	Loss, Waiver or Withdrawal of Appraisal Rights:

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	Dismissal of Appraisal Proceeding:

	Minimum Condition:

	Registration Statement Effectiveness Condition:

	Vector Stockholder Approval:

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	Listing Condition:

	Additional Conditions:

	•	there shall be threatened, instituted or pending any action, proceeding or application by or before any court, government or governmental authority or other regulatory or administrative agency or commission, domestic or foreign (other than the New Valley stockholder litigations described under “Certain Legal Matters and Regulatory Approvals — Stockholder Litigation” beginning on page 67);

	•	which challenges the acquisition by us of the common shares of New Valley, seeks to restrain, delay or prohibit the consummation of the offer or the transactions contemplated by the offer or any subsequent merger or seeks to obtain any material damages or otherwise, directly or indirectly, relates to the transactions contemplated by the offer or subsequent merger;
	•	which seeks to prohibit or impose material limitations on our acquisition, ownership or operation of all or any portion of our or New Valley’s business or assets (including the business or assets of their respective affiliates and subsidiaries) or of the common shares of New Valley (including, without limitation, the right to vote the shares purchased by us, on an equal basis with all other shares, on all matters presented to the stockholders of New Valley), or seeks to compel us to dispose of or hold separate all or any portion of our or New Valley’s business or assets (including the business or assets of their respective affiliates and subsidiaries) as a result of the transactions contemplated by the offer or any subsequent merger;
	•	which may reasonably be expected to materially and adversely affect New Valley or us, or any of our respective affiliates or subsidiaries (which we refer to as a “Material Adverse Effect”), or result in a material diminution in the value of the common shares of New Valley or common stock of Vector or the benefits expected to be derived by us, as described under “Background and Reasons for the Offer and Subsequent Merger — Key Factors Motivating the Offer” beginning on page 25, “Background and Reasons for the Offer and Subsequent Merger — Vector Board’s September 27, 2005 Decision to Commence the Offer” beginning on page 26, and “Background and Reasons for the Offer and Subsequent Merger — Vector Board’s November 16, 2005 Decision to Increase the Exchange Ratio” beginning on page 31, as a result of the transactions contemplated by the offer or any subsequent merger (which we refer to as a “Material Diminution in Value”); or
	•	which seeks to impose any condition to the offer unacceptable to us; or

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	•	there shall have occurred any material development in the New Valley stockholder litigations, described under “Certain Legal Matters and Regulatory Approvals — Stockholder Litigation” beginning on page 67, that is adverse to the defendants in those litigations; or
	•	any statute, including without limitation, any state anti-takeover statute, rule, regulation or order or injunction shall be sought, proposed, enacted, promulgated, entered, enforced or deemed or become applicable or asserted to be applicable to the offer or any subsequent merger or the transactions contemplated by the offer or subsequent merger that may, directly or indirectly, reasonably be expected to result in any of the consequences referred to in the 1st through 4th sub-bullets of the initial bullet paragraph under “Additional Conditions” immediately above, including any determination or assertion by any governmental authority that a filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the HSR Act, is required; or
	•	any change (or any condition, event or development involving a prospective change) shall have occurred or be threatened that has had or may reasonably be expected to have a materially adverse effect on the business, properties, assets, liabilities, capitalization, stockholders’ equity, financial condition, operations, results of operations or prospects of New Valley or any of its subsidiaries, or Vector or we shall have become aware of any fact that has had or may reasonably be expected to have a Material Adverse Effect or results or may reasonably be expected to result in a Material Diminution in Value; or
	•	there shall have occurred:

	•	any general suspension of, or limitation on times or prices for, trading in securities (including, but not limited to, New Valley’s common shares or Vector’s common stock) on any national securities exchange or in the over-the-counter market;
	•	a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States;
	•	the outbreak or escalation of a war, terrorist activities, armed hostilities or other international or national calamity directly or indirectly involving the United States;
	•	any limitation (whether or not mandatory) by any governmental authority on, or any other event which might affect the extension of, credit by banks or other lending institutions;
	•	a suspension of or limitation (whether or not mandatory) on the currency exchange markets or the imposition of, or material changes in, any currency or exchange control laws in the United States; or
	•	in the case of any of the foregoing existing at the time of the commencement of the offer, a material acceleration or worsening thereof; or

	•	New Valley, with the approval of the special committee, and we shall have reached an agreement or understanding that the offer be terminated or amended or we (or one of our affiliates) shall have entered into a definitive agreement or an agreement in principle with New Valley, with the approval of the special committee, to acquire New Valley by merger or similar business combination, or purchase of shares or assets of New Valley; or
	•	any change (or any condition, event or development involving a prospective change) shall have occurred or be threatened in the general economic, financial, currency exchange or market conditions in the United States or abroad that has had or may reasonably be expected to have a Material Adverse Effect or results or may reasonably be expected to result in a Material Diminution in Value.

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	Ladenburg Thalmann Financial Services Inc.:

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	Expense Sharing Agreement:

	Lawsuits:

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	•	a broker or dealer in securities, including the Dealer Manager in its capacity as a dealer or broker, which is a good standing member of any national securities exchange or of the NASD;
	•	a foreign broker or dealer not eligible for membership in the NASD that agrees to conform to the NASD’s Rules of Fair Practice in soliciting tenders outside the United States to the same extent as though it were an NASD member; or
	•	a bank or trust company.

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	•	it has complied with the applicable requirements of the Securities Act, the Exchange Act, and the laws of any states or jurisdictions in which it solicits exchange of common shares of New Valley pursuant to the offer, including the prohibition against paying directly or indirectly any fee (or any portion thereof) receivable hereunder to or for the account of any beneficial owner of common shares of New Valley;
	•	it is entitled to such compensation for such solicitation under the terms and conditions of the offer;
	•	in soliciting tenders of common shares of New Valley, it has used no soliciting materials other than those furnished by Vector; and
	•	if it is a foreign broker or dealer not eligible for membership in the NASD, it has agreed to conform to the NASD’s Rules of Fair Practice in making solicitations.

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	Agreements with New Valley:

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	Agreements with Vector:

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New Valley		Vector
Capital Stock
Authorized Stock
New Valley’s certificate of incorporation authorizes New Valley to issue 50,000,000 common shares and 10,000,000 shares of preferred stock.		Vector’s certificate of incorporation authorizes Vector to issue 100,000,000 shares of common stock and 10,000,000 shares of preferred stock.
New Valley’s board has the authority to issue one or more series of preferred stock, having terms designated by New Valley’s board.		Vector’s board has the authority to issue one or more series of preferred stock, having terms designated by Vector’s board.
As of November 22, 2005, there were 22,260,607 common shares and no shares of preferred stock outstanding. New Valley’s common shares are listed on The Nasdaq Stock Market.		As of November 22, 2005, there were 44,733,460 shares of common stock and no shares of preferred stock outstanding. Vector’s common stock is listed on the New York Stock Exchange.
Voting Rights
Each common share of New Valley entitles its holder to one vote on all matters on which stockholders are entitled to vote		Each share of Vector’s common stock entitles its holder to one vote on all matters on which stockholders are entitled to vote.
Notice of Stockholder Proposals
New Valley’s by-laws do not provide for advance notice of stockholder proposals		Vector’s by-laws do not provide for advance notice of stockholder proposals.
Board of Directors
Number of Directors
New Valley’s by-laws provide that the number of directors shall not be more than nine and less than three as shall be determined from time to time by		Vector’s by-laws provide that the number of directors may be fixed, from time to time, by the affirmative vote of a majority of the entire board or

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New Valley		Vector
resolution of the board. New Valley’s board is currently composed of eight members. In addition, the by-laws provide that the board may increase the number of directors above the maximum specified above by such number as may at any time be required under the provisions of the certificate of incorporation entitling the holders of shares of any class or series, because dividends on such shares are in arrears to an increase in the number and to elect additional directors; and the board may correspondingly reduce the number as so increased, at any time when under the provisions of the certificate of incorporation the holders of shares of any class or series have been divested of such right of election and the directors elected by them have therefore ceased to be directors.		by action of the Vector stockholders. Vector’s board is currently composed of seven members.
Classified Board
All of New Valley’s directors are in one class and elected annually.		All of Vector’s directors are in one class and elected annually.
Removal of Directors
New Valley’s by-laws provide that, except as otherwise provided by statute, any director may be removed, either with or without cause, at any time, by the stockholders.		Vector’s certificate of incorporation and by-laws provide that any director or the entire board may be removed, with or without cause, by the holders of a majority of shares at the time entitled to vote at any election of directors (whether or not the board is classified).
Filling of Board Vacancies
New Valley’s by-laws provide that newly created directorships resulting from an increase in the number of directors and vacancies in the board occasioned by the death, resignation, removal or disqualification of a director may, except as otherwise provided by statute, be filled, until successors shall have been elected as prescribed in the by-laws and shall have qualified, by vote of a majority of the directors then in office, although less than a quorum exists, or by the stockholders.		Vector’s by-laws provide that any vacancy in the board, whether arising from death, resignation, removal (with or without cause), an increase in the number of directors or any other cause, may be filled by the vote of a majority of the directors then in office, though less than a quorum, or by the sole remaining director or by the stockholders at the next annual meeting thereof or at a special meeting thereof. Each director so elected shall hold office until his successor shall have been elected and qualified.
Nomination of Directors
Neither New Valley’s certificate of incorporation nor by-laws specifically provide for how directors are nominated.		Neither Vector’s certificate of incorporation nor by- laws specifically provide for how directors are nominated.
Stockholders Voting Agreement
New Valley has no Voting Agreement or similar arrangement.		Vector has no Voting Agreement or similar arrangement.

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New Valley		Vector
Other Matters
Calling Special Meetings of Stockholders
New Valley’s by-laws provide that a special meeting of stockholders, other than meetings regulated by statute, may be called at any time by resolution of the board, and shall be called by the Chairman of the Board or in his absence the President, and in his absence, the Secretary on request in writing of a majority of the directors or of any stockholder or stockholders holding of record shares of New Valley capital stock entitled to at least 25 percent of the votes entitled to be cast at such meeting.		Vector’s by-laws provide that special meetings of stockholders, unless otherwise prescribed by statute, may be called at any time by the board or by the Chairman of the Board or, in his absence, the President and shall be called by the Secretary upon the request in writing of a stockholder or stockholders holding of record at least 25 percent of the voting power of the issued and outstanding shares of Vector stock entitled to vote at such meeting.
Stockholder Action by Written Consent
Delaware law provides that stockholders may act by written consent unless otherwise provided in the certificate of incorporation (neither New Valley’s certificate of incorporation nor by-laws provide for stockholder action by written consent).		Vector’s by-laws provide that stockholders may take action by written consent, if the consent sets forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes necessary to authorize or take such action at a meeting at which all shares of Vector stock entitled to vote thereon were present and voted.
Business Combinations
Section 203 of the Delaware General Corporation Law (relating to Business Combinations with Interested Stockholders) applies to New Valley.		Section 203 of the Delaware General Corporation Law (relating to Business Combinations with Interested Stockholders) applies to Vector.
Stockholders’ Rights Plan
New Valley has not adopted a stockholders’ rights plan.		Vector has not adopted a stockholders’ rights plan.
Amendment of Organizational Documents
Certificate of Incorporation
New Valley’s certificate of incorporation does not specifically provide for amending the certificate of incorporation. However, Section 242 of the Delaware General Corporation Law authorizes amendments to the certificate of incorporation.		Vector’s certificate of incorporation provides that Vector reserves the right to amend, alter, change or repeal any provision contained in the certificate of incorporation.
By-Laws
New Valley’s certificate of incorporation and by-laws provides that the by-laws may be amended or repealed by the board by the vote of a majority of the directors present at a meeting of the board at which a quorum is present. In addition, the by-laws provide that the by-laws may be amended or repealed at any stockholders’ meeting by the vote of a majority interest of the stockholders present in person or by proxy thereat, a quorum being present; provided notice of the proposed amendment or alteration was included in the notice of such meeting.		Vector’s by-laws provide that the by-laws may be amended or repealed (1) by action of the stockholders entitled to vote thereon at any annual or special meeting of stockholders or (2) if the certificate of incorporation so provides, by action of the board at a regular or special meeting thereof. The by-laws also provide that any by-law made by the board may be amended or repealed by action of the stockholders at any annual or special meeting of stockholders.

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Annual Report on Form 10-K, as amended.		For the fiscal year ended December 31, 2004.
Quarterly Reports on Form 10-Q.		For the fiscal quarters ended March 31, June 30, and September 30, 2005.
Current Reports on Form 8-K.		Filed on January 11, 2005, February 2, 2005, February 17, 2005, February 24, 2005, March 3, 2005, March 7, 2005, March 17, 2005, March 21, 2005, April 1, 2005, April 14, 2005, May 10, 2005, June 20, 2005, July 22, 2005, August 9, 2005, September 28, 2005, November 9, 2005, November 14, 2005 and November 17, 2005, respectively.
The description of Vector’s common stock in our prospectus dated June 3, 2005 filed on Form 424B3		Filed on June 3, 2005.

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Annual Report on Form 10-K, as amended.		For the fiscal year ended December 31, 2004.
Quarterly Reports on Form 10-Q.		For the fiscal quarters ended March 31, June 30, and September 30, 2005.
Current Reports on Form 8-K.		Filed on January 12, 2005, February 17, 2005, March 21, 2005, June 20, 2005, July 22, 2005, August 25, 2005, September 28, 2005 and October 27, 2005, respectively.
The description of New Valley’s common shares in its Current Report on Form 8-K dated September 21, 2000.		Filed on September 22, 2000.

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		Present Occupation or Employment,
Name and Title		Five-Year Employment History and Address
Bennett S. LeBow Chairman of the Board and Chief Executive Officer of Vector, VGR Holding and New Valley		Bennett S. LeBow has been Chairman of the Board and Chief Executive Officer of Vector since June 1990 and has been a director of Vector since October 1986. Since November 1990, he has been Chairman of the Board and Chief Executive Officer of VGR Holding Inc., a wholly-owned subsidiary of Vector, which directly or indirectly holds the Vector’s equity interests in several private and public companies. Effective January 1, 2006, Mr. LeBow will serve as Executive Chairman of the Board of Vector and VGR Holding. Mr. LeBow has served as President and Chief Executive Officer of Vector Tobacco Inc., a subsidiary of Vector engaged in the development and marketing of low nicotine and nicotine-free cigarette products and the development of reduced risk cigarette products, since January 2001 and as a director since October 1999. Mr. LeBow has been Chairman of the Board of New Valley, a majority-owned subsidiary of Vector engaged in the real estate business and seeking to acquire additional operating companies and real estate properties, since January 1988 and Chief Executive Officer since November 1994.
Howard M. Lorber President, Chief Operating Officer and director of Vector, VGR Holding and New Valley		Howard M. Lorber has been President, Chief Operating Officer and a director of Vector and VGR Holding since January 2001. Effective January 1, 2006, Mr. Lorber will serve as President, Chief Executive Officer and a director of Vector and VGR Holding. Since November 1994, Mr. Lorber has served as President and Chief Operating Officer of New Valley, where he also serves as a director. Mr. Lorber was Chairman of the Board of Directors of Hallman & Lorber Assoc. Inc., consultants and actuaries of qualified

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		Present Occupation or Employment,
Name and Title		Five-Year Employment History and Address
		pension and profit sharing plans, and various of its affiliates from 1975 to December 2004 and has been a consultant to these entities since January 2005; a stockholder and a registered representative of Aegis Capital Corp., a broker-dealer and a member firm of the National Association of Securities Dealers, since 1984; Chairman of the Board of Directors since 1987 and Chief Executive Officer since November 1993 of Nathan’s Famous, Inc., a chain of fast food restaurants; a consultant to Vector and its Liggett Group Inc. subsidiary from January 1994 to January 2001; a director of United Capital Corp., a real estate investment and diversified manufacturing company, since May 1991; and the Chairman of the Board of Ladenburg Thalmann Financial Services since May 2001.
Ronald J. Bernstein Director of Vector and VGR Holding. President and Chief Executive Officer of Liggett and Liggett Vector Brands		Ronald J. Bernstein has been a director of Vector and VGR Holding since March 2004. Mr. Bernstein has served as President and Chief Executive Officer of Liggett since September 1, 2000 and of Liggett Vector Brands since March 2002. From July 1996 to December 1999, Mr. Bernstein served as General Director and, from December 1999 to September 2000, as Chairman of Liggett-Ducat Ltd., Vector’s former Russian tobacco business sold in 2000. Prior to that time, Mr. Bernstein served in various positions with Liggett commencing in 1991, including Executive Vice President and Chief Financial Officer.
Henry C. Beinstein Director of Vector, VGR Holding and New Valley		Henry C. Beinstein has been a director of Vector and VGR Holding since March 2004. Since January 2005, Mr. Beinstein has been a partner of Gagnon Securities LLC, a broker-dealer, and has been a money manager and registered representative at such firm since August 2002. He retired in August 2002 as the Executive Director of Schulte Roth & Zabel LLP, a New York-based law firm, a position he had held since August 1997. Before that, Mr. Beinstein had served as the Managing Director of Milbank, Tweed, Hadley & McCloy LLP, a New York-based law firm, commencing November 1995. Mr. Beinstein was the Executive Director of Proskauer Rose LLP, a New York-based law firm, from April 1985 through October 1995. Mr. Beinstein is a certified public accountant in New York and New Jersey and prior to joining Proskauer was a partner and National Director of Finance and Administration at Coopers & Lybrand. Mr. Beinstein has been a director of Ladenburg Thalmann Financial Services since May 2001 and a director of New Valley since November 1994.
Robert J. Eide Director of Vector and VGR Holding		Robert J. Eide has been a director of Vector and VGR Holding since November 1993. Mr. Eide has been the Chairman and Chief Executive Officer of

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		Present Occupation or Employment,
Name and Title		Five-Year Employment History and Address
		Aegis Capital Corp., a registered broker-dealer, since 1984. Mr. Eide also serves as a director of Nathan’s Famous, Inc. and Ladenburg Thalmann Financial Services.
Jeffrey S. Podell Director of Vector and VGR Holding		Jeffrey S. Podell has been a director of Vector and VGR Holding since November 1993. Mr. Podell has been the Chairman of the Board and President of Newsote, Inc., a privately-held holding company, since 1989. Mr. Podell also serves as a director of Ladenburg Thalmann Financial Services.
Jean E. Sharpe Director of Vector and VGR Holding		Jean E. Sharpe has been a director of Vector and VGR Holding since May 1998. Ms. Sharpe is a private investor and has engaged in various philanthropic activities since her retirement in September 1993 as Executive Vice President and Secretary of Vector and as an officer of various of its subsidiaries. Ms. Sharpe previously served as a director of Vector from July 1990 until September 1993.
Richard J. Lampen Executive Vice President of Vector and VGR Holding. Executive Vice President, General Counsel and director of New Valley		Richard J. Lampen has been Executive Vice President of Vector and VGR Holding since July 1996, and has served as Executive Vice President and General Counsel of New Valley since October 1995. Since November 1998, Mr. Lampen has served as President and Chief Executive Officer of CDSI Holdings Inc., an affiliate of New Valley with an interest in a direct mail and telemarketing services company. Mr. Lampen serves as a director of New Valley, CDSI and Ladenburg Thalmann Financial Services.
Marc N. Bell Vice President, General Counsel and Secretary of Vector and VGR Holding. Vice President, Associate General Counsel and Secretary of New Valley		Marc N. Bell has been the Vice President of Vector and VGR Holding since January 1998, the General Counsel and Secretary of Vector and VGR Holding since May 1994, and the Senior Vice President and General Counsel of Vector Tobacco since April 2002. Since November 1994, Mr. Bell has served as Associate General Counsel and Secretary of New Valley and since February 1998, as Vice President of New Valley.
Joselynn D. Van Siclen Vice President, Chief Financial Officer and Treasurer of Vector and VGR Holding		Joselynn D. Van Siclen has been Vice President, Chief Financial Officer and Treasurer of Vector and VGR Holding, and currently holds various positions with certain of VGR Holding’s subsidiaries, including Vice President and Treasurer of Eve Holdings Inc. since April 1994 and May 1996, respectively. Prior to May 1996, Ms. Van Siclen served as Vector’s Director of Finance and was employed in various accounting capacities with our subsidiaries since 1992.

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		Number of Common Shares				Percentage of Outstanding
Name		Beneficially Owned				Common Shares
Bennett S. LeBow			12,849,118	(1)			57.7	%
Vector Group Ltd.
VGR Holding Inc.
Howard M. Lorber			963,941	(2)			4.3	%
Henry C. Beinstein			41,499	(3)			*
Robert J. Eide			5				*

(1)	VGR Holding exercises sole voting power and sole dispositive power over 12,849,118 common shares of New Valley. Each of Vector and Mr. LeBow disclaims beneficial ownership of these shares under Rule 13d-3, or for any other purpose.
(2)	Includes 778,608 common shares of New Valley held directly by Mr. Lorber, 120,000 common shares of New Valley held by Lorber Alpha II Partnership, a Nevada limited partnership, and 65,333 common shares of New Valley subject to currently exercisable employee stock options. Lorber Alpha II, Inc., a Nevada corporation, is the general partner of Lorber Alpha II Partnership. Mr. Lorber is the director, officer and principal stockholder of Lorber Alpha II, Inc.
(3)	Includes 833 common shares of New Valley beneficially owned by his spouse, as to which shares Mr. Beinstein disclaims beneficial ownership, and 30,000 common shares of New Valley issuable upon exercise of options exercisable within 60 days of November 22, 2005.

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	(1) Provided, however, that no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of stockholders to act upon the agreement of merger or consolidation, were either (i) listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as provided in subsection (f) of § 251 of this title.
	(2) Notwithstanding paragraph (1) of this subsection, appraisal rights under this section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to §§ 251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock anything except:

	a. Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof;
	b. Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or held of record by more than 2,000 holders;
	c. Cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a. and b. of this paragraph; or
	d. Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a., b. and c. of this paragraph.

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	(3) In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under § 253 of this title is not owned by the parent corporation immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation.

	(1) If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for such meeting with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) hereof that appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section. Each stockholder electing to demand the appraisal of such stockholder’s shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder’s shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or
	(2) If the merger or consolidation was approved pursuant to § 228 or § 253 of this title, then either a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice, demand in writing from the surviving or resulting corporation the appraisal of such holder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder’s shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder’s shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given,

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	provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given.

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	(i) reviewed the Company’s and New Valley’s operations and prospects;
	(ii) reviewed certain financial and other information about the Company and New Valley that was publicly available;

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	(iii) reviewed information furnished to us by the Company’s management, including certain internal financial analyses, financial forecasts with respect to the Company and New Valley, budgets, reports and other information;
	(iv) based on information furnished to us by the Company’s management and its outside advisors concerning the tax assets of New Valley and the treatment of New Valley’s net operating losses after giving effect to the Transaction, considered the value of New Valley’s tax assets to the Company after giving effect to the Transaction;
	(v) considered written waivers from certain officers of New Valley waiving rights to severance and other benefits to which they would otherwise be entitled arising from completion of the Transaction;
	(vi) held discussions with various members of management of the Company concerning historical and current operations, financial conditions and prospects, including recent financial performance;
	(vii) reviewed the share trading price history of the Company Common Stock and the New Valley Common Stock for a period we deemed appropriate;
	(viii) reviewed the valuation of New Valley implied by the Exchange Ratio;
	(ix) reviewed the premiums paid in selected acquisition transactions;
	(x) prepared a discounted cash flow analysis of New Valley on a stand-alone basis; and
	(xi) reviewed an analysis of the combined entity and the resulting earnings accretion/dilution.

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	Very truly yours,
	JEFFERIES & COMPANY, INC.

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By Mail or Overnight Courier:		By Hand:
American Stock Transfer & Trust Company		American Stock Transfer & Trust Company
Operations Center		Attn: Reorganization Department
Attn: Reorganization Department		59 Maiden Lane
6201 15th Avenue		New York, NY 10038
Brooklyn, NY 11219

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Item 20.	Indemnification of Directors and Officers

Item 21.	Exhibits and Financial Statement Schedules

Exhibit
Number				Description of Document
	3	.1		Amended and Restated Certificate of Incorporation of Vector (incorporated by reference to Exhibit 3.1 to Vector’s Quarterly Report on Form 10-Q, as amended, for the period ended September 30, 1999)
	3	.2		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Vector (incorporated by reference to Exhibit 3.1 in Vector’s Form 8-K, dated May 24, 2000)
	3	.3		By-Laws of Vector effective March 3, 2004 (incorporated by reference to Exhibit 3.3 to Vector’s Annual Report on Form 10-K for the year ended December 31, 2003)
	5	.1		Opinion of Milbank, Tweed, Hadley & McCloy LLP
	8	.1		Opinion of Milbank, Tweed, Hadley & McCloy LLP
	8	.2		Form of opinion of Milbank, Tweed, Hadley & McCloy LLP
	10	.1		Agreement to Tender dated November 16, 2005 between Vector and Jeff Altman (incorporated by reference to Exhibit(a)(17) to Amendment No. 7 to the Schedule TO filed by Vector on November 17, 2005)
	10	.2		Agreement to Tender dated November 16, 2005 between Vector and Canyon Capital Advisors LLC (incorporated by reference to Exhibit(a)(18) to Amendment No. 7 to the Schedule TO filed by Vector on November 17, 2005)
	10	.3		Agreement to Tender dated November 16, 2005 between Vector, Diamond A Partners, L.P. and Diamond A Investors, L.P. (incorporated by reference to Exhibit(a)(19) to Amendment No. 7 to the Schedule TO filed by Vector on November 17, 2005)
	10	.4		Agreement to Tender dated November 16, 2005 between Vector and Little Meadow Corp. (incorporated by reference to Exhibit(a)(20) to Amendment No. 7 to the Schedule TO filed by Vector on November 17, 2005)
	10	.5		Agreement to Tender dated November 16, 2005 between Vector and Steel Partners II LP. (incorporated by reference to Exhibit(a)(21) to Amendment No. 7 to the Schedule TO filed by Vector on November 17, 2005)

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Exhibit
Number				Description of Document
	10	.6		Agreement to Tender dated November 16, 2005 between Vector and Tortoise Corp. (incorporated by reference to Exhibit(a)(22) to Amendment No. 7 to the Schedule TO filed by Vector on November 17, 2005)
	10	.7		Agreement to Tender dated November 16, 2005 between Vector and Robert D. Evans (incorporated by reference to Exhibit(a)(23) to Amendment No. 7 to the Schedule TO filed by Vector on November 17, 2005)
	10	.8		Agreement to Tender dated November 16, 2005 between Vector and Howard M. Lorber (incorporated by reference to Exhibit(a)(24) to Amendment No. 8 to the Schedule TO filed by Vector on November 17, 2005)
	23	.1		Consent of PricewaterhouseCoopers LLP, independent registered certified public accounting firm of Vector
	23	.2		Consent of PricewaterhouseCoopers LLP, independent registered certified public accounting firm of New Valley
	23	.3		Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm
	23	.4		Consent of Weiser LLP, independent registered public accounting firm
	23	.5		Consent of Milbank, Tweed, Hadley & McCloy LLP (included in Exhibits 5.1 and 8.1)
	24	.1		Power of Attorney*
	99	.1		Letter of Transmittal
	99	.2		Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
	99	.3		Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees to Clients
	99	.4		Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9*
	99	.5		Request from VGR Holding for stockholder list of New Valley*
	99	.6		Pill v. New Valley Corporation, et al., (C.A. No. 1678-N)*
	99	.7		Tombs v. New Valley Corporation, et al. (Case No. 05-19623 CA 22)*
	99	.8		Consent of Jefferies & Company, Inc.
	99	.9		Lindstrow v. LeBow, et al (C.A. No. 1745-N) (incorporated by reference to Exhibit (a)(13) to Amendment No. 4 to Vector’s Schedule TO dated November 7, 2005)
	99	.10		Form of Memorandum of Understanding

*	Previously filed.

Item 22.	Undertakings

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	VECTOR GROUP LTD.

	By:	/s/ Joselynn D. Van Siclen

	Joselynn D. Van Siclen
	Name: Joselynn D. Van Siclen

	Title:	Vice President and Chief Financial Officer

Signature				Title
/s/ Bennett S. LeBow*   Bennett S. LeBow				Chairman of the Board (Principal Executive Officer)
/s/ Joselynn D. Van Siclen   Joselynn D. Van Siclen				Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
/s/ Henry C. Beinstein*   Henry C. Beinstein				Director
/s/ Ronald J. Bernstein*   Ronald J. Bernstein				Director
/s/ Robert J. Eide*   Robert J. Eide				Director
/s/ Howard M. Lorber*   Howard M. Lorber				Director
/s/ Jeffrey S. Podell*   Jeffrey S. Podell				Director
/s/ Jean E. Sharpe*   Jean E. Sharpe				Director
*By:		/s/ Joselynn D. Van Siclen   Joselynn D. Van Siclen Attorney-in-Fact

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Exhibit
Number				Description of Document
	3	.1		Amended and Restated Certificate of Incorporation of Vector (incorporated by reference to Exhibit 3.1 to Vector’s Quarterly Report on Form 10-Q, as amended, for the period ended September 30, 1999)
	3	.2		Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Vector (incorporated by reference to Exhibit 3.1 in Vector’s Form 8-K, dated May 24, 2000)
	3	.3		By-Laws of Vector effective March 3, 2004 (incorporated by reference to Exhibit 3.3 to Vector’s Annual Report on Form 10-K for the year ended December 31, 2003)
	5	.1		Opinion of Milbank, Tweed, Hadley & McCloy LLP
	8	.1		Opinion of Milbank, Tweed, Hadley & McCloy LLP
	8	.2		Form of opinion of Milbank, Tweed, Hadley & McCloy LLP
	10	.1		Agreement to Tender dated November 16, 2005 between Vector and Jeff Altman (incorporated by reference to Exhibit(a)(17) to Amendment No. 7 to the Schedule TO filed by Vector on November 17, 2005)
	10	.2		Agreement to Tender dated November 16, 2005 between Vector and Canyon Capital Advisors LLC (incorporated by reference to Exhibit(a)(18) to Amendment No. 7 to the Schedule TO filed by Vector on November 17, 2005)
	10	.3		Agreement to Tender dated November 16, 2005 between Vector, Diamond A Partners, L.P. and Diamond A Investors, L.P. (incorporated by reference to Exhibit(a)(19) to Amendment No. 7 to the Schedule TO filed by Vector on November 17, 2005)
	10	.4		Agreement to Tender dated November 16, 2005 between Vector and Little Meadow Corp. (incorporated by reference to Exhibit(a)(20) to Amendment No. 7 to the Schedule TO filed by Vector on November 17, 2005)
	10	.5		Agreement to Tender dated November 16, 2005 between Vector and Steel Partners II LP. (incorporated by reference to Exhibit(a)(21) to Amendment No. 7 to the Schedule TO filed by Vector on November 17, 2005)
	10	.6		Agreement to Tender dated November 16, 2005 between Vector and Tortoise Corp. (incorporated by reference to Exhibit(a)(22) to Amendment No. 7 to the Schedule TO filed by Vector on November 17, 2005)
	10	.7		Agreement to Tender dated November 16, 2005 between Vector and Robert D. Evans (incorporated by reference to Exhibit(a)(23) to Amendment No. 7 to the Schedule TO filed by Vector on November 17, 2005)
	10	.8		Agreement to Tender dated November 16, 2005 between Vector and Howard M. Lorber (incorporated by reference to Exhibit(a)(24) to Amendment No. 8 to the Schedule TO filed by Vector on November 17, 2005)
	23	.1		Consent of PricewaterhouseCoopers LLP, independent registered certified public accounting firm of Vector
	23	.2		Consent of PricewaterhouseCoopers LLP, independent registered certified public accounting firm of New Valley
	23	.3		Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm
	23	.4		Consent of Weiser LLP, independent registered public accounting firm
	23	.5		Consent of Milbank, Tweed, Hadley & McCloy LLP (included in Exhibits 5.1 and 8.1)
	24	.1		Power of Attorney*
	99	.1		Letter of Transmittal
	99	.2		Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
	99	.3		Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees to Clients
	99	.4		Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9*
	99	.5		Request from VGR Holding for stockholder list of New Valley*
	99	.6		Pill v. New Valley Corporation, et al., (C.A. No. 1678-N)*

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Exhibit
Number				Description of Document
	99	.7		Tombs v. New Valley Corporation, et al. (Case No. 05-19623 CA 22)*
	99	.8		Consent of Jefferies & Company, Inc.
	99	.9		Lindstrow v. LeBow, et al (C.A. No. 1745-N) (incorporated by reference to Exhibit (a)(13) to Amendment No. 4 to Vector’s Schedule TO dated November 7, 2005)
	99	.10		Form of Memorandum of Understanding

*	Previously filed.