Exhibit 2.1
EXECUTION VERSION
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
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
The
Merger
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 &
Moore LLP, Worldwide Plaza, 825 Eighth Avenue, New York, New York
10019 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.
(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.
(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.
(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.
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.
(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 follow
