2016 NOTICE TO VECTOR GROUP LTD. STOCKHOLDERS

VECTOR GROUP LTD. ANTICIPATES 27.29% OF ITS 2016 CASH DISTRIBUTIONS ARE TAXABLE DIVIDENDS AND THE REMAINING 72.71% OF 2016 CASH DISTRIBUTIONS ARE NONTAXABLE RETURNS OF CAPITAL

Vector Group Ltd. (NYSE: VGR) anticipates 27.29% of its distributions paid in 2016 on its common stock are taxable dividends and the remaining 72.71% are nontaxable returns of capital.

These distributions consisted of four quarterly cash distributions paid in 2016. Based on tax calculations, Vector Group has determined that its current earnings and profits for federal income tax purposes were 27.29% of the total quarterly cash distributions. Vector Group’s determination of its earnings and profits for 2016 and prior years has been filed with the Internal Revenue Service (“IRS”).

Distributions that are not taxable as dividend income must be applied to reduce the adjusted tax basis of the shares on which the distributions are paid. If the nontaxable distributions exceed the stockholder’s basis in the Vector Group stock, a capital gain will result.

Stockholders should secure their own tax advice regarding the status of cash and property distributions under applicable federal, state and local tax laws.

The Company has completed and posted on its Internet Site the Internal Revenue Service’s report of organizational actions affecting basis of securities at http://www.vectorgroupltd.com/form-8937/.