AGREEMENT AND PLAN OF MERGER Dated as of August 14, 2008 by and among LAZARD LTD, LAZ SUB I, LLC, LAZARD ASSET MANAGEMENT LLC, and LAZARD ASSET MANAGEMENT LIMITED
Exhibit
2.1
EXECUTION
VERSION
AGREEMENT
AND PLAN OF MERGER
Dated as
of August 14, 2008
by and
among
LAZ SUB
I, LLC,
LAZARD
ASSET MANAGEMENT LLC,
and
LAZARD
ASSET MANAGEMENT LIMITED
AGREEMENT AND PLAN OF MERGER dated as
of August 14, 2008 (this “Agreement”), by and
among LAZARD LTD, a company incorporated under the laws of Bermuda (“Parent”), LAZ SUB I,
LLC, a Delaware limited liability company and indirect subsidiary of Parent
(“Merger Sub”),
LAZARD ASSET MANAGEMENT LLC, a Delaware limited liability company (the “Company”), and
(solely for purposes of Section 5.01(c)) LAZARD ASSET MANAGEMENT LIMITED, a
company incorporated in England and Wales (“LAML”).
WHEREAS,
the respective Boards of Directors of each of the parties hereto and the
Managing Directors Special Committee of the Company (the “Managing Directors Special
Committee”) have each approved this Agreement and the transactions
contemplated hereby, including the merger (the “Merger”) of Merger
Sub with and into the Company on the terms and subject to the conditions set
forth in this Agreement;
WHEREAS,
prior to the execution and delivery of this Agreement, as an inducement to and
condition of Parent’s and Merger Sub’s willingness to enter into this Agreement,
certain Class B Members (such term and certain other capitalized terms are
defined in Section 7.05) (which collectively hold no less than a majority of the
outstanding Class B Units of the Company) have entered into a consent and
approval agreement substantially in the form of Annex A hereto (a
“Consent and Approval
Agreement”) and a delayed payment agreement substantially in the form of
Annex B hereto
(a “Delayed Payment
Agreement”); and
WHEREAS,
the parties desire to make certain representations, warranties, covenants and
agreements in connection with the Merger.
NOW,
THEREFORE, the parties hereto agree as follows:
ARTICLE
I
SECTION
1.01. The
Merger. On the terms and subject to the conditions set forth
in this Agreement, and in accordance with the Delaware Limited Liability Company
Act, 6 Del.
C.
§§ 18-101, et seq. (the “DLLCA”), Merger Sub
shall be merged with and into the Company at the Effective Time. At
the Effective Time, the separate existence of Merger Sub shall cease and the
Company shall continue as the surviving limited liability company (the “Surviving
Company”). The Merger, the payment of the Merger Consideration
and the other transactions contemplated by this Agreement are referred to
collectively as the “Transactions”.
SECTION
1.02. Closing. The
closing (the “Closing”) of the
Merger shall take place at the offices of Cravath, Swaine & ▇▇▇▇▇ LLP,
Worldwide Plaza, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m.
on the second business day following the satisfaction (or waiver by the party or
parties benefiting therefrom) of the conditions set forth in Article
VI. The date on which the Closing occurs is referred to in this
Agreement as the “Closing
Date”. At the Closing, Parent, Merger Sub and the Company
shall deliver to each other any customary closing documents as may be reasonably
requested by a party.
SECTION
1.03. Effective
Time. On the Closing Date, the Company shall file with the
Secretary of State of the State of Delaware a certificate of merger or other
appropriate documents (in any such case, the “Certificate of
Merger”) executed in accordance with the relevant provisions of the DLLCA
and shall make all other filings or recordings required under the
DLLCA. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with such Secretary of State, or at such
other time as Merger Sub and the Company shall agree and specify in the
Certificate of Merger (the time the Merger becomes effective being the “Effective
Time”).
SECTION
1.04. Effects. The
Merger shall have the effects set forth in Section 18-209 of the
DLLCA.
SECTION
1.05. Certificate of Formation and
Limited Liability Company Agreement. The Company Certificate
of Formation shall be the Certificate of Formation of the Surviving Company
until thereafter changed or amended as provided therein or by applicable
law. The limited liability company agreement of Merger Sub, as in
effect immediately prior to the Merger, shall be the Limited Liability Company
Agreement of the Surviving Company until thereafter changed or amended as
provided therein or by applicable law.
SECTION
1.06. Officers. The
officers of the Company immediately prior to the Effective Time shall be the
officers of the Surviving Company, until the earlier of their resignation or
removal or until their respective successors are duly elected or appointed and
qualified, as the case may be.
SECTION
1.07. Board
of Directors. The Board of Directors of the Company
immediately prior to the Effective Time shall be the Board of Directors of the
Surviving Company, until the earlier of any such director’s resignation or
removal or until such director’s successor is duly elected or appointed and
qualified, as the case may be.
ARTICLE
II
Effect on the Limited
Liability Company Interests of the
Company and Merger
Sub
SECTION
2.01. Effect on Limited Liability
Company Interests. At the Effective Time, by virtue of the
Merger and without any action on the part of the Company, Merger Sub, any Member
or any holder of Class A units of Merger Sub:
(a) Conversion of Merger Sub
Interests. Each issued and outstanding Class A unit of Merger
Sub shall be converted into and become one issued and outstanding Class A Unit
of the Surviving Company.
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(b) Conversion of Class A
Units. Each issued and outstanding Class A Unit shall be
converted into and become one issued and outstanding Class A Unit of the
Surviving Company.
(c) Conversion of Class B
Units. Subject to Section 2.02(c), (d) and (f), each issued
and outstanding Class B Unit shall be converted into the right to receive (i) on
or after the Effective Time, $26.25 in cash and (ii) on the Year 3 Payment
Date, (x) $39.375 in cash, (y) .95943 shares of Class A common stock
of Parent, par value $0.01 per share (“Parent Stock”), and
(z) an additional number of shares of Parent Stock equal to the sum of the
Dividend Equivalent Shares.
(d) Conversion of Class A
Capital. The Class A Capital of each Class A Member shall be
converted into and become an equivalent amount of Class A Capital of such Class
A Member in the Surviving Company.
(e) Conversion of Class B
Capital. Subject to Section 2.02(d), the Class B Capital of
each Class B Member (if any) shall be converted into the right of such Class B
Member to receive an equivalent amount of cash on or after the Effective
Time.
Notwithstanding
the foregoing, no Merger Consideration (other than in respect of Class B
Capital) shall be payable under this Section with respect to any Class B Unit if
the holder thereof elects to exercise Appraisal Rights in accordance with the
procedures set forth in the Information Statement, and any such Class B Unit
shall, instead, be converted into the right to receive such consideration as
shall be awarded in connection with such exercise of Appraisal
Rights. For clarity, any Class B Capital allocable to a Class B
Member that shall have elected to exercise Appraisal Rights shall be converted
in accordance with Section 2.01(e), notwithstanding the exercise of Appraisal
Rights by any such member.
The cash payable and shares of Parent
Stock issuable upon the conversion of Units, Capital and limited liability
company interests of Merger Sub pursuant to clause (a) through (e) above
(together with the cash payable in lieu of fractional shares of Parent Stock
pursuant to Section 2.02(c) below) are referred to collectively as the
“Merger
Consideration”.
SECTION
2.02. Payment of Merger
Consideration.
(a) General. Parent
hereby agrees to pay, or cause one of its subsidiaries to pay, the Merger
Consideration payable under Section 2.01(c) and (e).
(b) No Further
Ownership. As of the Effective Time, all Class B Members shall
cease to have any right, title or interest in and to the Company, other than (i)
the right to receive the Merger Consideration as and when payable under this
Agreement or (ii) Appraisal Rights and the right to receive that portion of the
Merger Consideration related to Class B Capital (if applicable) as and when
payable under this Agreement, as the case may be.
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(c) No Fractional
Shares. No fractional shares of Parent Stock shall be issued
under this Agreement to any Class B Member or holder of a Phantom Right or LAML
Phantom Right. In lieu thereof, Parent shall pay (or cause one of its
subsidiaries to pay), on the applicable payment date, an amount in cash to each
such member and holder equal to (i) the fractional share of Parent Stock such
member or holder is otherwise entitled multiplied by (ii) the
closing price per share of Parent Stock on the New York Stock Exchange for the
trading day immediately preceding the Closing Date.
(d) Payment
Procedures. No later than one business day following the
Closing Date, the Surviving Company shall send a customary letter of transmittal
(“Letter of
Transmittal”) to each holder of Class B Units, Phantom Rights and/or LAML
Phantom Rights as of the Closing Date, which letter shall provide for the
procedures to be followed to receive payment of the Merger Consideration and/or
Phantom Consideration. Following the return of any such Letter of
Transmittal, the applicable holder shall be paid (as promptly as practicable but
in no event later than the third business day after receipt (but subject, for
clarity, to Section 5.01(b)) the Merger Consideration and/or Phantom
Consideration then payable in respect of the Class B Units, Class B Capital,
Phantom Rights and/or LAML Phantom Rights of such holder. For
clarity, no interest will be paid or will accrue on any amounts payable as
Merger Consideration or Phantom Consideration.
Parent shall, or shall cause one of its
subsidiaries to, pay the Merger Consideration and Phantom Consideration as and
when payable under this Agreement, (i) by wire transfer of immediately available
funds to the account specified by the applicable holder in his or her Letter of
Transmittal (which account, in the case of holders that are employees of Parent
or its subsidiaries, shall be an account at Lazard Capital Markets) (in the case
of a cash payment) or (ii) by causing the transfer agent and registrar of the
Parent Stock to credit (via book-entry transfer) the applicable shares of Parent
Stock to the account specified by the applicable holder in his or her Letter of
Transmittal (in the case of a payment in the form of Parent Stock).
(e) Withholding
Rights. Parent, or one of its subsidiaries, as applicable,
shall be entitled to deduct and withhold from the amounts otherwise payable to
any holder of Units, Phantom Rights or LAML Phantom Rights pursuant to this
Agreement such amounts as may be required to be deducted and withheld with
respect to the making of such payment or vesting of such compensation under the
Internal Revenue Code of 1986, as amended (the “Code”), or under any
provision of state, local or foreign tax law and any amounts so withheld shall
be treated as having been paid to the holder of the applicable Unit, Phantom
Right or LAML Phantom Right; provided that, with
respect to Units, such withholding shall be limited to backup withholding
obligations.
(f) Death; Change in
Control. Notwithstanding anything in Section 2.01(c) or
5.01(a) to the contrary, (i) except as set forth in Section 5.01(b), in the
event of a Change in Control, any and all Merger Consideration and Phantom
Consideration (as defined below) that shall not have been paid as of such Change
in Control shall become immediately due and payable and (ii) except as set
forth in Section 5.01(b), in the event a holder of Class B Units, Phantom
Rights or LAML Phantom Rights shall be a natural person and such holder dies
during the period commencing on the Closing Date and ending on the Year 3
Payment Date, any and all Merger Consideration and/or Phantom Consideration
payable to such holder that shall not have been paid as of such death shall
become due and payable on the earlier of (x) the Year 3 Payment Date
and (y) the 30th day following the date of such
death. Notwithstanding
any provision of this Section 2.02(f), in the case of any Phantom Consideration,
in the event of a Change in Control that does not qualify as an event described
in Section 409A(a)(2)(A)(v) of the Code, such Phantom Consideration shall not be
paid until the earliest permissible payment event under Section 409A of the Code
following such Change in Control.
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(g) Adjustments. Notwithstanding
anything in this Agreement to the contrary, (i) in the event of any stock
dividend, subdivision, reclassification, recapitalization, split, combination,
conversion or exchange of shares of Parent Stock occurring on or after the date
hereof and on or prior to the Year 3 Payment Date, the number of shares of
Parent Stock issuable as Merger Consideration or Phantom Consideration under
this Agreement shall be modified to equitably reflect such stock dividend,
subdivision, reclassification, recapitalization, split, combination, conversion
or exchange of shares and (ii) in the event that Parent shall declare an
extraordinary dividend or distribution, or a series of related dividends or
distributions (excluding, for avoidance of doubt, any regular cash dividends
that comprise “Dividend Equivalent Shares”), the number of shares of Parent
Stock issuable as Merger Consideration or Phantom Consideration under this
Agreement shall be modified to equitably reflect such dividend or distribution
or series thereof.
(h) Installment
Sale. The parties hereto intend for the transactions
contemplated hereby to qualify as an installment sale within the meaning of
Section 453 of the Code and Parent agrees that it will not, and will not permit
any of its subsidiaries, to take any action inconsistent with such
treatment.
ARTICLE
III
Representations and
Warranties of the Company
The Company hereby represents and
warrants to Parent and Merger Sub, as of the date of this Agreement, as
follows:
The
Company has full power and authority to execute this Agreement, the Consent and
Approval Agreements and the Delayed Payment Agreements and to consummate the
Transactions. The execution and delivery by the Company of this
Agreement, the Consent and Approval Agreements and the Delayed Payment
Agreements and the consummation by the Company of the Transactions have been
duly authorized by all necessary limited liability company
action. The Company has duly executed and delivered this Agreement,
the Consent and Approval Agreements and the Delayed Payment Agreements and each
of the foregoing agreements constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
other similar laws relating to or affecting creditors’ rights generally and to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
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ARTICLE
IV
Representations and
Warranties of Parent and Merger Sub
Parent and Merger Sub hereby represent
and warrant to the Company, as of the date of this Agreement, as
follows:
Each of
Parent and Merger Sub has full power and authority to execute this Agreement,
the Consent and Approval Agreements and the Delayed Payment Agreements and to
consummate the Transactions. The execution and delivery by Parent and
Merger Sub of this Agreement, the Consent and Approval Agreements and the
Delayed Payment Agreements and the consummation by Parent and Merger Sub of the
Transactions have been duly authorized by all necessary corporate or limited
liability company action. Each of Parent and Merger Sub has duly
executed and delivered this Agreement, the Consent and Approval Agreements and
the Delayed Payment Agreements and each of the foregoing agreements constitutes
its legal, valid and binding obligation, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws relating to or affecting
creditors’ rights generally and to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
As of the date of the Information
Statement, the Information Statement will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
ARTICLE
V
Additional
Agreements
SECTION
5.01. Phantom Rights; LAML Phantom
Rights.
(a) Parent will, or will
cause one of its subsidiaries to, pay cash and issue shares of Parent Stock to
any holder of a Phantom Right and/or LAML Phantom Right (in each case, whether
vested or unvested) as of the Closing Date as follows (such cash and shares, the
“Phantom
Consideration”):
(i) subject to
Section 2.02(d), on or after the Effective Time and with respect to each
such Phantom Right and LAML Phantom Right held as of the Effective Time, each
such holder shall receive $26.25 in cash; and
(ii) subject to
Section 2.02(c), (d) and (f), on the Year 3 Payment Date and with
respect to each such Phantom Right and LAML Phantom Right held as of the
Effective Time, each such holder shall receive (x) $39.375 in cash,
(y) .95943 shares of Parent Stock and (z) an additional number of
shares of Parent Stock equal to the sum of the Dividend Equivalent
Shares.
6
(b) Notwithstanding any
provision of Section 5.01(a) or 2.02(f) to the contrary, in the event that the
Closing occurs prior to January 1, 2009, in the case of any holder of Phantom
Rights who is a U.S. taxpayer, (A) except as otherwise provided in clause (C) or
(D) of this sentence, the amounts described in clause (i) of Section 5.01(a)
will be paid on January 2, 2009, (B) in the event of a holder’s death prior to
January 1, 2009, Phantom Consideration will be paid to the holder on the later
of (w) not later than 30 days following the holder’s death or (x) January 2,
2009, (C) in the event of a Change in Control prior to January 1, 2009, unless
such Change in Control constitutes a Liquidity Event, Control Event, Lazard Sale
Event or an Extraordinary Item that is income or gain (as each such term is
defined in the Company LLC Agreement), Phantom Consideration will be paid to the
holder on the later of (y) not later than 10 days following the Change in
Control or (z) January 2, 2009, and (D) in the event that a Liquidity Event,
Control Event, Lazard Sale Event occurs, or in the event of an Extraordinary
Item that is income or gain, prior to January 1, 2009, solely to the extent
necessary to avoid the imposition of any taxes or penalties pursuant to Section
409A of the Code, all amounts described in clauses (i) and (ii) of Section
5.01(a) will be paid within 10 days following the occurrence of such Liquidity
Event, Control Event, Lazard Sale Event or Extraordinary Item, as the case may
be. Furthermore, the terms of the immediately preceding sentence shall apply to
any holder of LAML Phantom Rights who is a U.S. taxpayer and who consents to the
treatment described in such sentence.
(c) As of the Effective
Time, (i) the ▇▇▇ Incentive Plan and the LAML Phantom Interest Agreements shall
be amended to provide for payment solely pursuant to the terms set forth in this
Agreement and (ii) no Phantom Right or LAML Phantom Right shall represent or
otherwise entitle the holder to any right, title or interest in and to the
Company, LAML or any of their respective benefit or other compensation plans and
arrangements (including, without limitation, the ▇▇▇ Incentive Plan and the LAML
Phantom Interest Agreements), except the right to receive the Phantom
Consideration as and when payable under this Agreement.
SECTION 5.02. Information Statement.
(a) The parties hereto agree
to (i) endeavor diligently to jointly prepare a confidential information
statement (the “Information
Statement”) as promptly as practicable, which shall set forth the
material terms of the Transactions and include such other information that the
Company deems necessary and appropriate for purposes of providing the Class B
Members with sufficient information to indicate their approval or disapproval of
the Transactions and (ii) after consultation with the Managing Directors Special
Committee, deliver the Information Statement to each Class B Member and holder
of Phantom Rights or LAML Phantom Rights.
7
(b) Notwithstanding any
approval of this Agreement by any one or more Class B Members, and for clarity,
nothing in this Agreement shall confer upon any Class B Member the right (legal,
equitable or otherwise) to approve or disapprove the Transactions (it being
understood and agreed that the parties hereto have elected to voluntarily
solicit the views of the Class B Members with respect to the Transactions and no
such election or other action on the part of any party shall amount to, or be
deemed to constitute, an amendment to or waiver of the express terms and
conditions of the Company LLC Agreement).
SECTION
5.03. Commercially Reasonable
Efforts. Upon the terms and subject to the conditions set
forth in this Agreement, each of the parties shall use its commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the Merger and the other
Transactions.
ARTICLE
VI
Conditions
Precedent
SECTION
6.01. Conditions to Obligations of
Parent and Merger Sub. The respective obligation of Parent and
Merger Sub to effect the Merger is subject to the satisfaction or waiver on or
prior to the Closing Date of the following conditions:
(a) No Injunctions or
Restraints. No law or injunction enacted, entered,
promulgated, enforced or issued by any governmental entity or other legal
restraint or prohibition preventing the consummation of the Merger or any other
Transaction shall be in effect, and there shall not be pending any suit, action
or proceeding seeking to restrain or prohibit (or materially increase the costs
associated with) the consummation of the Merger or any such other
Transaction.
(b) Representations and
Warranties. The representations and warranties of the Company
in this Agreement shall be true and correct as of the Closing Date, as though
made on the Closing Date, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct on and as of such
earlier date).
(c) Performance of Obligations
of the Company. The Company shall have performed in all
material respects the obligations required to be performed by it under this
Agreement at or prior to the Closing Date.
(d) Board and Committee
Approval. The Board of Directors of the Company and the
Managing Directors Special Committee shall have each approved the Transactions
and not otherwise revoked their respective approval.
(e) Class B Approval. Holders
of more than 50% of the Class B Units outstanding as of the Closing Date shall
have submitted written instruments, in the form of a Consent and Approval
Agreement, indicating their approval of the Transactions on or prior to the
Closing Date.
8
(f) Appraisal Rights. Holders
of not more than 15% of the Class B Units outstanding as of the Closing Date
shall have elected to exercise Appraisal Rights.
(g) Delayed Payment
Agreements. Each of the persons set forth on Schedule A
shall have duly executed and delivered a Delayed Payment Agreement.
(h) ▇▇▇ Incentive
Plan. Substantially contemporaneous with the Closing, the ▇▇▇
Incentive Plan shall have been amended as contemplated by Section
5.01(c).
SECTION 6.02. Conditions to Obligations of
Company. The obligation of the Company to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) No Injunctions or
Restraints. No law or injunction enacted, entered,
promulgated, enforced or issued by any governmental entity or other legal
restraint or prohibition preventing the consummation of the Merger or any other
Transaction shall be in effect, and there shall not be pending any suit, action
or proceeding seeking to restrain or prohibit the consummation of the Merger or
any such other transaction.
(b) Representations and
Warranties. The representations and warranties of Parent and
Merger Sub in this Agreement shall be true and correct as of the Closing Date,
as though made on the Closing Date, except to the extent such representations
and warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct on and as of such
earlier date).
(c) Performance of Obligations
of Parent and Merger Sub. Parent and Merger Sub shall have
performed in all material respects their respective obligations required to be
performed under this Agreement at or prior to the Closing Date.
ARTICLE
VII
General
Provisions
SECTION
7.01. Survival. The
representations and warranties set forth in this Agreement shall not survive the
Closing, all other provisions of this Agreement shall survive
indefinitely.
SECTION
7.02. Termination. This
Agreement may be terminated and the Merger and the other transactions
contemplated hereby abandoned at any time prior to the Closing by any party
hereto without the consent or approval of any other party hereto. If
for any reason the Closing shall not have occurred on or prior to December 20,
2008, then this Agreement shall automatically terminate without any action on
the part of any party hereto (subject to extension with the written consent of
the parties hereto and the Managing Directors Special Committee). If
this Agreement is terminated prior to the Closing, all rights and obligations of
the parties hereunder shall terminate without liability of any party to any
other party.
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SECTION
7.03. Notices. All
notices, requests, claims, demands and other communications under this Agreement
shall be in writing and shall be deemed given upon receipt by the following
persons at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Parent or Merger
Sub, to:
c/o
Lazard Ltd
▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇
▇▇▇▇▇▇▇, Esq.
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Cravath,
Swaine & ▇▇▇▇▇ LLP
Worldwide
Plaza
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇
▇. ▇▇▇▇▇▇, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
(b) if to the Company,
to:
Lazard Asset Management
LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General
Counsel
Facsimile No.: (▇▇▇)
▇▇▇-▇▇▇▇
(c) if to the Managing
Directors Special Committee, to:
▇▇▇▇▇▇
▇▇▇▇▇▇▇
c/▇
▇▇▇▇▇▇ Asset Management LLC
▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a
copy to:
▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇
▇. ▇▇▇▇, Esq.
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
10
SECTION
7.04. Amendments and
Waivers. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto and the Managing Directors Special Committee;
provided that no consent of the Managing
Directors Special Committee shall be required for amendments hereto to
cure an ambiguity, omission, defect or inconsistency or that are otherwise not
adverse to the interests of the Class B Members or the holders of Phantom Rights
and/or LAML Phantom Rights (x) in any respect (in the case of amendments related
to the payment of Merger Consideration or Phantom Consideration or the
provisions in respect of Appraisal Rights or the amendment of the ▇▇▇ Incentive
Plan) or (y) in any material respect (in the case of amendments to other
provisions of this Agreement). For clarity, nothing in
this Section 7.04 shall undermine or otherwise impair each party’s right to
terminate this Agreement pursuant to Section 7.02 above. By an
instrument in writing, (i) Parent and Merger Sub may waive compliance by the
Company with any term or provision of this Agreement that the Company was or is
obligated to comply with or perform and (ii) the Company may waive
compliance by Parent and/or Merger Sub with any term or provision of this
Agreement that Parent and/or Merger Sub was or is obligated to comply with or
perform.
SECTION
7.05. Definitions. For
purposes of this Agreement:
“Appraisal Rights”
means, with respect to a Class B Member that shall have indicated its
disapproval of the Transactions by following the provisions set forth in the
Information Statement in connection therewith, the right of any such member (if
it so elects in accordance with the provisions set forth in the Information
Statement) to forgo payment of the Merger Consideration in respect of all of
such member’s Class B Units (but excluding, for clarity, the Class B Capital (if
any) of such member) and in lieu thereof receive payment of the fair value of
such member’s Class B Units in an arbitration proceeding subject to the
provisions of Section 12.11 of the Company LLC Agreement. For
purposes of determining fair value in connection with the exercise of Appraisal
Rights, the fair value of a Class B Unit shall be the price that a disinterested
and willing seller and disinterested and willing buyer, each under no compulsion
to enter into the transaction, would reach in connection with the sale of a
Class B Unit, taking into account the terms of and restrictions upon, the Class
B Units as in effect as of the date of this Agreement, including the
restrictions on transfer, likelihood of a liquidity or other monetization event,
lack of voting rights, lack of participation in profits and other relevant
factors.
“Capital”; “Class A Member”;
“Class A
Units”; “Class
A Capital”; “Class B Member”;
“Class B Units”
and “Class B
Capital” each have the meanings ascribed thereto in the Company LLC
Agreement.
“Change in Control”
means any of the following events:
(i) The acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act (a “Specified Person”))
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 30% or more of either (A) the then-outstanding shares of Parent
Stock (treating, for this purpose, the then-outstanding Exchangeable Interests
as shares of Parent Stock on an as-if fully exchanged basis in accordance with
the Master Separation Agreement) (the “Outstanding Parent
Stock”), assuming the full exchange of all of the then-outstanding
Exchangeable Interests for shares of Parent Stock in accordance with the Master
Separation Agreement or (B) the combined
voting power of the then-outstanding voting securities of Parent entitled to
vote generally in the election of directors (the “Outstanding Parent Voting
Securities”); provided, however, that, for
purposes of this definition, the following acquisitions shall not constitute a
Change in Control: (1) any acquisition directly from Parent,
other than an acquisition by virtue of the exercise of a conversion privilege
unless the security being so converted was itself acquired directly from Parent,
(2) any acquisition by Parent, (3) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by Parent or any of its
affiliates or subsidiaries, or (4) any acquisition pursuant to a transaction
which complies with clauses (A), (B) and (C) of clause (iii) of this definition;
or
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(ii) Any time at which individuals who,
as of the Closing Date, constitute the Board of Directors of Parent (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board of Directors
of Parent; provided, however, that any
individual becoming a director subsequent to the Closing Date whose election, or
nomination for election by Parent’s shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Specified Person other
than the Board of Directors of Parent; or
(iii) Consummation of a reorganization,
merger, amalgamation, statutory share exchange or consolidation or similar
corporate transaction involving Parent or any of its subsidiaries (for the
avoidance of doubt, including the Company), a sale or other disposition of all
or substantially all of the assets of Parent, or the acquisition of assets or
stock of another entity by Parent or any of its subsidiaries (for the avoidance
of doubt, including the Company) (a “Business
Combination”); excluding, however, such a Business Combination pursuant
to which (A) all or substantially all of the individuals and entities who are
the beneficial owners, respectively, of the Outstanding Parent Stock and
Outstanding Parent Voting Securities immediately prior to such Business
Combination (assuming in each case the full exchange of the Exchangeable
Interests for shares of Parent Stock in accordance with the Master Separation
Agreement) will beneficially own, directly or indirectly, more than 50% of,
respectively, the outstanding shares of common stock, and the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting from
such Business Combination (including, without limitation, a corporation which,
as a result of such transaction, owns Parent or all or substantially all of
Parent’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination, of the Outstanding Parent Stock and Outstanding Parent
Voting Securities, as the case may be, (B) no Specified Person (other than
Parent, any employee benefit plan (or related trust) of Parent or such
corporation resulting from such Business Combination) will beneficially own,
directly or indirectly, 30% or more of, respectively, the outstanding shares of
common stock of the corporation resulting from such Business Combination or the
combined voting power of the outstanding voting securities of such corporation
entitled to vote generally in the election of directors (assuming in each case
the full exchange of the Exchangeable Interests for shares of Parent Stock in
accordance with the Master Separation Agreement) except to the extent that such
ownership existed prior to the Business Combination, and (C) individuals who
were members of the Incumbent Board at the time of the execution of the initial
agreement or of the action of the Board of Directors of Parent providing for
such Business Combination will constitute at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination;
12
(iv) The approval by the shareholders
of Parent of a complete liquidation or dissolution of Parent (excluding, for the
avoidance of doubt, any discontinuance of Parent);
(v) The sale or transfer (whether
direct or indirect, or in one transaction or a series of related transactions)
of all or substantially all the assets or equity interests of the Company to any
person other than Parent or any of its subsidiaries (whether through a sale of
assets, merger, consolidation or otherwise); or
(vi) The initial public offering of the
Company.
For the avoidance of doubt, in no event
shall the exchange of Exchangeable Interests for shares of Parent Stock,
individually or in the aggregate, on its own, constitute a Change in
Control.
“Company Certificate of
Formation” means the Certificate of Formation for the Company, filed with
the Secretary of State of the State of Delaware on August 20, 2002 (as amended
or otherwise modified from time to time).
“Company LLC
Agreement” means the First Amended and Restated Limited Liability Company
Agreement of the Company dated as of January 10, 2003 (as amended or otherwise
modified from time to time).
“Control Event” and
“Covered Control
Event” each have the meanings ascribed thereto in the Company LLC
Agreement.
“Dividend Equivalent
Shares” means, with respect to each ordinary dividend payment date on
Parent Stock during the period commencing on the Closing Date and ending on the
Year 3 Payment Date (if any), a number of shares of Parent Stock equal to
the quotient obtained by dividing (i) the ordinary cash dividend amount
that would have been paid on such dividend payment date with respect
to .95943 shares of Parent Stock (and with respect to any
additional shares theretofore credited as “Dividend Equivalent Shares”, in the
case of the second of such dividend payment dates and thereafter) if such shares
of Parent Stock were issued and outstanding (x) on the Closing Date (in the
case of the .95943 shares) or (y) on the applicable prior
dividend payment date (in the case of previously credited “Dividend Equivalent
Shares”) by (ii) the closing trading price of one share of Parent Stock on
such dividend payment date.
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“Exchange Act” means
the Securities Exchange Act of 1934, as amended.
“Exchangeable
Interest” means a Class II Interest of LAZ-MD Holdings LLC (or, if
applicable, the Common Interest of Lazard Group LLC issued in exchange therefor)
that, upon full exchange in accordance with the Master Separation Agreement is
entitled to receive share(s) of Parent Stock as set forth in such Master
Separation Agreement.
“Extraordinary Item”;
“▇▇▇ Incentive
Plan”; “LAML
Phantom Interest Agreement”; “LAML Phantom Rights”;
“Liquidity
Event”; and “Lazard Sale Event”
each have the meanings ascribed thereto in the Company LLC
Agreement.
“Master Separation
Agreement” means that certain Master Separation Agreement dated as of May
10, 2005, among Parent, LAZ-MD Holdings LLC and the other persons party thereto,
as amended.
“Member” has the
meaning ascribed thereto in the Company LLC Agreement.
“person” means any
individual, firm, corporation, partnership, company, limited liability company,
trust, joint venture, association, governmental entity or other
entity.
“Phantom Rights” has
the meaning ascribed thereto in the Company LLC Agreement.
“subsidiary” of any
person means another person, an amount of the voting securities, other voting
ownership or voting partnership interests of which is sufficient to elect at
least a majority of its Board of Directors or other governing body (or, if there
are no such voting interests, 50% or more of the equity interests of which) is
owned directly or indirectly by such first person.
“Units” has the
meanings ascribed thereto in the Company LLC Agreement.
“Year 3 Payment Date”
means October 31, 2011.
SECTION
7.06. Interpretation. When
a reference is made in this Agreement to an Article or Section, such reference
shall be to an Article or Section of this Agreement unless otherwise
indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words “include”, “includes” or
“including” are used in this Agreement, they shall be deemed to be followed by
the words “without limitation”.
14
SECTION
7.07. Severability. If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any rule or law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the Transactions is not affected
in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that Transactions are fulfilled to
the extent possible.
SECTION
7.08. Counterparts. This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other parties. Delivery of an executed counterpart by facsimile shall
be as effective as delivery of a manually executed counterpart.
SECTION
7.09. Entire Agreement;
Third-Party Beneficiaries. This Agreement, together with
any other agreements and documents executed and delivered at the Closing,
constitutes the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
Transactions. This Agreement is not intended to confer upon any
person other than the parties any rights or remedies (other than, following the
Closing, (i) the Class B Members who shall each be intended third party
beneficiaries of this Agreement to the extent necessary, and solely to the
extent necessary, to enforce Sections 2.01 and 2.02 and (ii) the holders of
Phantom Rights and/or LAML Phantom Rights who shall each be intended third party
beneficiaries of this Agreement to the extent necessary, and solely to the
extent necessary, to enforce Sections 5.01(a) and (b) and
2.02).
SECTION
7.10. Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof,
except to the extent the laws of Delaware are mandatorily applicable to the
Merger.
SECTION
7.11. Assignment. Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by operation of law or
otherwise by any of the parties without the prior written consent of the other
parties. Any purported assignment without such consent shall be
void. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and assigns.
SECTION
7.12. Consent to
Jurisdiction. Each party irrevocably submits to the
jurisdiction of (a) the Supreme Court of the State of New York, New York
County, and (b) the United States District Court for the Southern District
of New York, for the purposes of any suit, action or other proceeding arising
out of this Agreement or any Transaction. Each party agrees to
commence any such action, suit or proceeding either in the United States
District Court for the Southern District of New York or if such suit, action or
other proceeding may not be brought in such court for jurisdictional reasons, in
the Supreme Court of the State of New York, New York County. Each
party further agrees that service of any process, summons, notice or document by
U.S. registered mail to such party’s respective address set forth above shall be
effective service of process for any action, suit or proceeding in New York with
respect to any matters to which it has submitted to jurisdiction in this
Section. Each party irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the Transactions in any such court and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding has been brought in an
inconvenient forum. Notwithstanding the foregoing, the parties shall
be bound by the arbitration provisions set forth in
Section 7.13.
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SECTION
7.13. Dispute
Resolution. All disputes, controversies and claims arising out
of or relating to this Agreement or the other Transactions (“Disputes”) shall be
finally determined by an arbitral tribunal under the Rules of Arbitration (the
“ICC Rules”) of
the International Chamber of Commerce (the “ICC”) and in
accordance with this Section. The arbitral tribunal determining any Dispute
shall be comprised of three arbitrators. Each party to a Dispute shall designate
one arbitrator. If a party fails to designate an arbitrator within a reasonable
period, the ICC shall designate an arbitrator for such party, including upon a
request by another party. The two arbitrators designated by the parties to a
Dispute (or, if applicable, the ICC) shall designate a third arbitrator. In the
event that the two arbitrators designated by the parties to a Dispute (or, if
applicable, the ICC) are unable to agree upon a third arbitrator within a
reasonable period, the third arbitrator shall be selected in accordance with the
ICC Rules by the ICC. The language, place and procedures of the arbitration of
any Dispute shall be as agreed upon by the parties to such Dispute or, failing
such agreement within a reasonable period, as determined in accordance with the
ICC Rules in order to ensure a speedy, efficient and just resolution of such
Dispute. If neither the parties nor the arbitral tribunal can agree upon
procedures, the arbitration shall be conducted in accordance with the ICC’s
procedures. The hearings and taking of evidence of any Dispute may be conducted
at any locations that will, in the judgment of the arbitral tribunal, result in
a speedy, efficient and just resolution of such Dispute. The parties to a
Dispute shall use their best efforts to cooperate with each other and the
arbitral tribunal in order to obtain a resolution as quickly as possible,
including by adopting the ICC’s “fast-track” procedure (as provided for in
Article 32(1) of the ICC Rules) if appropriate. Without limiting the generality
of the foregoing, the arbitrators shall have the authority to include as part of
any award that they shall make to any person an amount to reimburse such person,
in whole or in part, for the person’s expenses (including, without limitation,
attorney’s fees) incurred in such proceeding.
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SECTION
7.14. Waiver of Jury
Trial. EACH PARTY HEREBY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY TRANSACTION. EACH PARTY (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION. NOTWITHSTANDING THE FOREGOING, THE PARTIES SHALL BE BOUND BY
THE ARBITRATION PROVISIONS SET FORTH IN SECTION 7.13.
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IN WITNESS WHEREOF, the parties have
duly executed this Agreement, all as of the date first written
above.
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LAZARD
LTD, as Parent,
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by
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| /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ | |
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Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Title:
Chief Financial Officer
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LAZARD
ASSET MANAGEMENT LLC, as the Company,
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by
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| /s/ ▇▇▇▇▇▇ ▇▇▇▇ | |
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Name:
▇▇▇▇▇▇ ▇▇▇▇
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Title:
Managing Director and General
Counsel
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Solely
for purposes of Section 5.01(c):
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LAZARD
ASSET MANAGEMENT LIMITED, as LAML,
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by
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| /s/ ▇▇▇▇▇▇ ▇▇▇▇ | |
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Name:
▇▇▇▇▇▇ ▇▇▇▇
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Title:
Authorized Person
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