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Other Matters Employees At December 31, 1992 the Company's continuing operations, other than those located in the Commonwealth of Independent States, had approximately 1,450 employees. Approximately 42% of the Company's employees are hourly employees and are represented by unions. The Company has not experienced any significant work stoppages since 1977, and considers its relationship with its employees and their unions to be good. Other Events The Company acquired its indirect parent, Brooke Partners, L.P. ("Partners"), by means of a merger (the "Merger") of Partners into BGLS Inc. ("BGLS"}, a wholly-owned subsidiary of the Company on November 19, 1990. For additional information with respect to the Merger, see Note 1 to tl~e Consolidated Financial Statements included elsewhere in this report. item 2. Properties The Company's principal executive offices are located in Miami, Florida. Substantially all of Liggett's tobacco manufacturing facilities, consisting principally of factories, distribution and storage facilities, are located in or near Durham, North Carolina. Such facilities are both owned and leased. SkyBox's properties consist principally of its headquarters in Durham, North Carolina, adjacent to the Research Triangle Park, and warehouse space in several locations throughout the United States which is leased on an as-needed basis. The Company's other continuing businesses have leased properties in London, England and Moscow, Russia. Item 3. Legal Proceedings The following is a listing of certain legal proceedings to which the Company is or has been a party. A description of these proceedings (other than -14-

serves until the election and qualification of his or her successor or until his or her death, resignation or removal by the Board of Directors of the Company. Name Aq~ Position and Office wi~h the Comoanv Date of Becoming Executive Officer Bennett S. LeBow 55 President, Chief Executive Officer and Treasurer Chairman of the Board Interim President, Liggett Group Inc. June 30, 1990 June 18, 1990 March 30, 1993 Richard S. Ressler 34 Vice Chairman of the Board November 17, 1990 Michael Rosenbaum 55 Vice Chairman, SkyBox International Inc. Executive Vice President January 1, 1991 November 17, 1990 Jean E. Sharpe 46 Secretary Executive Vice President April 1, 1991 November 17, 1990 John A. Sarto 42 Vice President and Chief Financial Officer November 17, 1990 Frank J. O'Connell 49 President & Chief Executive Officer, SkyBox International Inc. July 22, 1991 Mr. LeBow has been Chairman of the Board, President and Chief Executive Officer and Treasurer of the Company since June 1990 and has been a director of the Company since October 1986. For more than five years, Mr. LeBow's principal occupation has been as an investor in and officer and/or director of privately and publicly held companies and a financial consultant through Brooke Management Inc. ("BMI'), which was formerly owned by Mr. LeBow and is now owned by the Company. Mr. LeBow was a director and the Chairman of the Board of Brooke General Corp., the controlling general partner of Partners until the Merger. He has been a director, the President and Treasurer of BGLS, a subsidiary of the Company which is in the business of acquiring other companies, since November 1990. Mr. LeBow was Chairman of MAI from before 1987 to January 1990, and has been Chairman of the Board and Chief Executive Officer of MAI since November 1990. Mr. LeBow has been a director of MAI 16-

Controller of Mastercard International, Inc. Company on or about April 16, 1993. Mr. Sarto will be leaving the Mr. O'Connetl has been President and Chief Executive Officer of SkyBox since July 1991. Mr. O'Connell served as President of Reebok Brands, North America from 1988 to 1990. From before 1988 to 1988 he was President and Chief Executive Officer of the HBO division of Time, Inc. 18-

PART III Item 10. Directors and Executive Officers of the Registrant The information relating to the Company's directors, set forth under the caption "Nomination and Election of Directors" in the registrant's Definitive Proxy Statement in connection with its 1993 Annual Meeting of Stockholders (the "Definitive Proxy Statement"), is incorporated herein by reference. See the information presented in Part I of this report under the caption "Executive Officers of the Registrant" for information relating to the Company's executive officers. Item 11. Executive Compensation The information relating to the Company's executive officers set forth under the caption "Executive Compensation" in the Definitive Proxy Statement is incorporated herein by reference. The information relating to the Company's directors set forth under the caption "Compensation of Directors" in the Definitive Proxy Statement is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management The information set forth under the caption "Beneficial Stock Ownership" in the Definitive Proxy Statement is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions The information set forth under the caption "Certain Transactions" in the Definitive Proxy Statement is incorporated herein by reference. - 20-

Exhibit No. 3.(a) (b) (c) (d) 4.(a) INDEX OF EXHIBITS Description Restated Certificate of Incorporation of Liggett Group Inc., as amended. Incorporated by reference to the Issuer's Form S-1 (File No. 33-16868). Certificate of Amendment of the Restated Certificate of Incorporation of LGI. Incorporated by reference to the Issuer's Form I O-Q for the quarter ended June 30, 1990 Certificate of Designations of Series A Junior Convertible Participating PIK Preferred Stock, Series B Junior Convertible Participating Reset Preferred Stock, Series C Junior Convertible Participating Reset Preferred Stock and Series D Junior Convertible Participating Reset Preferred Stock. Incorporated by reference to the Issuer's Form 10-Q for the quarter ended September 30, 1990. By-Laws of Brooke Group Ltd., as amended. Incorporated by reference to the issuer's Form S-1 (File No. 33-16499). Form of Indenture, dated as of April 1, 1988, among Brooke Partners, Brooke Capital Corp., L Holdings and National Westminster Bank USA, as Trustee (including form of Senior Subordinated Note). Incorporated by reference to the Issuer's Form I O-Q for the quarter ended September 30, 1990. Sequentially Numbered Page 22-

Exhibit No. (g) (h) Description First Supplemental Indenture dated as of September 4, 1990 to the Indenture dated as of April 1, 1988 among Brooke Partners, L.P., Brooke Capital Corp., L Holdings Inc. and First Trust National Association. Incorporated by reference to the Issuer's Form I O-K for the year ended December 31, 1990. Second Supplemental Indenture dated as of November 19, 1990 to the Indenture dated as of April 1, 1988 among Brooke Partners, L.P., Brooke Capital Corp., L Holdings Inc. and First Trust National Association. Incorporated by reference to the Issuer's Form I O-K for the year ended December 31, 1990. Third Supplemental Indenture dated as of November 19, 1990 to the Indenture dated as of April 1, 1988 among Brooke Partners, L.P., Brooke Capital Corp., L Holdings Inc. and First Trust National Association. Incorporated by reference to the Issuer's Form I O-K for the year ended December 31, 1990. U.S. $72,119,230 Amended and Restated Credit Agreement dated as of March 29, 1991 (amending and restating the Credit Agreement dated as of January 15, 1988) among MAI, Various Financial Institutions Now or Thereafter Parties Thereto as the Banks and Canadian Imperial Bank of Commerce, New York Agency, as agent for the Banks. Incorporated by reference to MAI's Form 10-Q for the quarter ended March 31, 1991. Sequentially Numbered Page - 24-

Exhibit No. (m) (n) (o) (P) Description Amendment Agreement No. 4 and Waiver Agreement No. 5 to the Credit Agreement filed as Exhibit 4(i) to the Issuer's Annual Report on Form l OK for 1990 dated as of February 28, 1992 by and among MAI, various financial institutions now or hereafter parties thereto and Canadian Imperial Bank of Commerce, New York Agency and Canadian Imperial Bank of Commerce. Incorporated by reference to MAI's Quarterly Report on Form IOQ for the quarter ended March 31, 1992. Indenture, dated as of February 14, 1992 among Liggett, Eve Holdings Inc. and Bankers Trust Company as Trustee. Incorporated by reference to the Issuer's Form 10K for .the year ended December 31, 1991. Security Agreement, dated as of February 14, 1992 among Liggett, Eve Holdings Inc. and Bankers Trust Company. Incorporated by reference to the Issuer's Form 1OK for the year ended December 31, 1991. Deed of Trust and Assignment of Rents, Leases and Leasehold Interests dated February 14, 1992 by Liggett to Bankers Trust Company. Incorporated by reference to the Issuer's Form 10K for the year ended December 31, 1991. Sequentially Numbered Page - 26-

Exhibit No. (u) 10.(a) (b) (c) Description Amendment Agreement No. 7 and Waiver Agreement No. 8 to the Credit Agreement filed as Exhibit 4(i) to the Issuer's Annual Report on Form 10-K for 1990, dated as of June 12, 1992, by and among MAI, various financial institutions now or hereafter parties thereto and Canadian Imperial Bank of Commerce, New York Agency and Canadian Imperial Bank of Commerce. Incorporated by reference to MAI's Form 8-K filed on June 15, 1992. The registrant undertakes to furnish a copy of omitted long-term debt instruments to the Commission upon request. Profit Sharing Plan of Liggett Group Inc. for Salaried Non-Bargaining Unit Employees, as amended. Incorporated by reference to the Issuer's Form S-1 (File No. 33-16499). 1987 Liggett Group Inc. Stock Option Plan. Incorporated by reference to the Issuer's Form 10-K for the year ended December 31, 1990. Deferred Compensation Plan. Incorporated by reference to the Issuer's Form S-1 (File No. 33-16499). Sequentially Numbered Page - 28 -

Exhibit No. Description Sequentially Numbered Page (j) Promissory Note dated November 15, 1990 between New Brooke Holdings Inc., as maker, and Bennett S. LeBow, as payee. Incorporated by reference to the Issuer's Form 10-K for the year ended December 31, 1990. (k) Operations Agreement dated March 1, 1991 by and between BGLS Inc. and L Aviation Inc. Incorporated by reference to the Issuer's Form 10-K for the year ended December 31, 1990. (I) Indemnity Letter dated November 15, 1990 from Bennett S. LeBow to New Brooke Holdings Inc. Incorporated by reference to the Issuer's Form I O-K for the year ended December 31, 1990. (m) Employment Agreement dated July 22, 1991 by and between SkyBox International Inc. and Frank O'Connell. Incorporated by reference to the Issuer's Form 10-Q for the quarter ended September 30, 1991, (n) Brooke Group Ltd. 1991 Stock Incentive Plan. Incorporated by reference to the Issuer's Form 10Q for the quarter ended September 30, 1991. (o) Option Agreement dated as of June 20, 1991 by and between Bennett S. LeBow and Brooke Group Ltd. Incorporated by reference to the Issuer's Form I O-Q for the quarter ended September 30, 1991. - 30-

Exhibit No. Description Sequentially Numbered Page (v) Employment Agreement dated as of January 1, 1991 by and between Richard S. Ressler and BGLS Inc. Incorporated by reference to the Issuer's Form 10K for the year ended December 31, 1991. (w) Amendment to Security Agreement dated as of January 1, 1991 by and between Richard S. Ressler and BGLS Inc. Incorporated by reference to the Issuer's Form l OK for the year ended December 31, 1991. (x) Amended and Restated Non-Negotiable Promissory Note dated as of January 1, 1991 from Richard S. Ressler, as maker, to BGLS Inc., as payee. Incorporated by reference to the Issuer's Form l OK for the year ended December 31, 1991. (y) Promissory Note dated December 30, 1991 from Bennett S. LeBow, as maker, to Brooke Group Ltd., as payee. Incorporated by reference to the Issuer's Form 10K for the year ended-December 31, 1991. (z) Promissory Note dated December 30, 1991 from Bennett S. LeBow, as maker, to Brooke Group Ltd., as payee. Incorporated by reference to the Issuer's Form 10K for the year ended December 31, 1991. (aa) Liggett Group Inc. Senior Management Long- Term Incentive Plan. Incorporated by reference to the Quarterly Report of Liggett Group Inc. on Form 10Q for the quarter ended June 30, 1992. - 32-