Filed
pursuant to Rule 424(b)(3)
Registration No.
333-165511
The information in this preliminary prospectus supplement relates to
an effective registration statement under the Securities Act of 1933, but is not
complete and may be changed. This preliminary prospectus supplement is not an
offer to sell nor does it seek an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.
Subject to Completion. Dated March 16, 2010
Preliminary
Prospectus Supplement to Prospectus dated March 16, 2010.
7,869,311 Shares
Class A Common
Stock
All of the shares
of Lazard Ltd Class A common stock in this offering are being sold by the
selling shareholders identified in this prospectus supplement. Lazard
Ltd will not receive any proceeds from the sale of shares of its Class A
common stock being sold by the selling shareholders.
Lazard Ltd's
Class A common stock is listed on the New York Stock Exchange under the
symbol "LAZ". The last reported sale price of Lazard Ltd Class A
common stock on March 15, 2010 was $37.14 per share.
Investing in our common stock
involves risks. See "Risk Factors" beginning on page S-10 of this prospectus supplement and
page 4 of the
accompanying prospectus and "Item 1A. Risk Factors" on page 15 of our Annual
Report on Form 10-K for the year ended December 31, 2009 to read about
factors you should consider before buying shares of Lazard Ltd Class A
common stock.
Neither
the Securities and Exchange Commission nor any other regulatory body has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus supplement or the accompanying
prospectus. Any representation to the contrary is a criminal
offense.
Goldman, Sachs
& Co. has agreed to purchase the Class A common stock from the selling
shareholders at a price of $ per share which will
result in $ of
proceeds to the selling shareholders.
Goldman, Sachs
& Co. may offer the shares of Class A common stock from time to time
for sale in one or more transactions on the New York Stock Exchange, in the
over-the-counter market, through negotiated transactions or otherwise at market
prices prevailing at the time of sale, at prices related to prevailing market
prices or at negotiated prices.
Goldman, Sachs
& Co. expects to deliver the shares against payment in New York, New York on
March , 2010.
Goldman,
Sachs & Co.
The date of this
prospectus supplement is March , 2010.
Prospectus
Supplement
Page
Prospectus
No person is
authorized to give any information or to represent anything not contained in
this prospectus supplement or the accompanying prospectus. You must
not rely on any unauthorized information or representations. This
prospectus supplement and the accompanying prospectus is an offer to sell only
the shares offered hereby, but only under circumstances and in jurisdictions
where it is lawful to do so. The information contained in this
prospectus supplement or the accompanying prospectus is current only as of its
date.
This document is in
two parts. The first part is this prospectus supplement, which
describes the specific terms of this offering and certain other
matters. The second part is the accompanying prospectus, which gives
more general information, some of which may not apply to this
offering. Generally, unless we specify otherwise, when we refer only
to the "prospectus", we are referring to both parts combined.
If
information in this prospectus supplement is inconsistent with the accompanying
prospectus, you should rely on this prospectus supplement. This
prospectus supplement, the accompanying prospectus and the documents
incorporated into each by reference include important information about us, the
shares being offered and other information you should know before
investing. You should carefully read this prospectus supplement and
the accompanying prospectus together with additional information described under
the heading "Where You Can Find More Information" before investing in our
Class A common stock, which we refer to in this prospectus supplement as
our "common stock".
In
this prospectus supplement, unless the context otherwise requires, the
terms:
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"Lazard",
"we", "our", "us" and the "Company" refer to Lazard Ltd, a Bermuda
exempted company whose shares of common stock are publicly traded on the
New York Stock Exchange under the symbol "LAZ", and its subsidiaries,
including Lazard Group.
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"Lazard
Group" refers to Lazard Group LLC, a Delaware limited liability company
that is the holding company for the subsidiaries that conduct Lazard's
business (which includes all of the businesses, subsidiaries, assets and
liabilities of Lazard Ltd and Lazard Group, and which we refer to in this
prospectus supplement as "our
business").
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We prepare our financial statements in U.S.
dollars and in conformity with U.S. generally accepted accounting principles, or
"U.S. GAAP", including all of the financial statements incorporated by reference
or included in this prospectus supplement. Our fiscal year ends on
December 31. In this prospectus supplement, except where
otherwise indicated, references to “$” or “dollars” are to the lawful currency
of the United States.
The Lazard logo and
the other trademarks, trade names and service marks of Lazard mentioned in this
prospectus supplement, including Lazard® , are
the property of, and are used with the permission of, our
subsidiaries.
You should rely only on the information
contained in this prospectus supplement, the accompanying prospectus and the
documents incorporated by reference in this prospectus supplement and
accompanying prospectus. We have not authorized anyone to provide you
with different information. The distribution of this prospectus
supplement or the accompanying prospectus and the sale of these securities in
certain jurisdictions may be restricted by law. Persons in possession
of this prospectus supplement or the accompanying prospectus are required to
inform themselves about and observe any such restrictions. We are not
making an offer to sell these securities in any jurisdiction where the offer or
sale is not permitted. You should assume that the information
appearing in this prospectus supplement is accurate only as of the date on the
front cover of this prospectus supplement and that any information incorporated
by reference is accurate only as of the date of the document incorporated by
reference. Our business, financial condition, results of operations
and prospects may have changed since such dates.
We
file annual, quarterly and current reports, proxy statements and other
information with the United States Securities and Exchange Commission
("SEC"). You may read and copy any document the Company files at the
SEC's public reference room located at 100 F Street, N.E., Washington, D.C.
20549, U.S.A. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room. Our SEC filings are also
available to the public from the SEC's internet site at
http://www.sec.gov.
We
maintain an Internet site at
http://www.lazard.com. The information contained in or
connected to our website is not a part of this prospectus supplement, and you
should not rely on such information in making your decision whether to purchase
our common stock.
We
are "incorporating by reference" into this prospectus supplement specific
documents that we file with the SEC, which means that we can disclose important
information to you by referring you to those documents that are considered part
of this prospectus supplement. Information that we file subsequently
with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below,
and any future documents that we file with the SEC (excluding any portions of
such documents that are "furnished" but not "filed" for purposes of the Exchange
Act) under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934, as amended (which we refer to in this prospectus supplement as the
"Exchange Act"), until the termination of the offerings of all of the common
stock covered by this prospectus supplement have been completed. This
prospectus supplement is part of a registration statement filed with the
SEC.
We
are incorporating by reference into this prospectus supplement the following
documents filed with the SEC (excluding any portions of such documents that have
been "furnished" but not "filed" for purposes of the Exchange Act):
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Lazard Ltd's
Annual Report on Form 10-K for the fiscal year ended December 31,
2009, filed on March 1, 2010 ("Annual Report on Form 10-K") (File No.
001-32492);
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Lazard Ltd's
Preliminary Proxy Statement on Schedule 14A, filed on March 12, 2010
("Proxy Statement") (File No. 001-32492);
and
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Description
of the Class A common stock contained in the final prospectus for
Lazard Ltd filed pursuant to Rule 424(b)(3) of the Securities Act of 1933,
as amended (the "Securities Act"), on May 6, 2005 with respect to the
Registration Statement on Form S-1 (the "S-1 Registration Statement")
(File No. 333-121407).
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We
will provide to each person, including any beneficial owner, to whom a
prospectus supplement is delivered, upon written or oral request and without
charge, a copy of the documents referred to above that we have incorporated by
reference in this prospectus supplement. You can request copies of
such documents if you write to us at the following address: Investor Relations,
Lazard Ltd, 30 Rockefeller Plaza, New York, New York 10020 or call us at
(212) 632-6000. You may also obtain copies of any such documents
by visiting our website at
http://www.lazard.com.
This prospectus
supplement and information incorporated by reference herein contain summaries of
certain agreements that we have filed as exhibits to our various SEC filings, as
well as certain agreements that we will enter into in connection with the
offering of common stock covered by this prospectus supplement. The
descriptions of these agreements contained in this prospectus supplement or
information incorporated by reference herein do not purport to be complete and
are subject to, and qualified in their entirety by reference to, the definitive
agreements. Copies of the definitive agreements will be made
available without charge to you by making a written or oral request to us at the
address or telephone number listed above.
You should rely
only upon the information contained in this prospectus supplement and
incorporated by reference in this prospectus supplement. We have not
authorized anyone to provide you with different information. You
should not assume that the information in this document is accurate as of any
date other than that on the front cover of this prospectus
supplement.
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Any statement
contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this prospectus supplement to the extent that a
statement contained herein, in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein or in any
subsequent prospectus supplement, modifies or supersedes such
statement. Any such statement so modified or superseded shall
not be deemed, except as so modified and superseded, to constitute a part
of this prospectus supplement.
Business
We are one of
the world’s preeminent financial advisory and asset management firms and
have long specialized in crafting solutions to the complex financial and
strategic challenges of our clients. We serve a diverse set of clients
around the world, including corporations, partnerships, institutions,
governments and high-net worth individuals. The first Lazard partnership
was established in 1848. Over time we have extended our activities beyond
our roots in New York, Paris and London. We currently operate from 40
cities in key business and financial centers across 25 countries
throughout Europe, North America, Asia, Australia and Central and South
America.
Our
Business Model
We focus
primarily on two business segments: Financial Advisory and
Asset Management. We believe that the mix of our activities across
business segments, geographic regions, industries and investment
strategies helps to diversify and stabilize our revenue
stream.
Financial
Advisory
We offer
corporate, partnership, institutional, government and individual clients
across the globe a wide array of financial advisory services regarding
mergers and acquisitions ("M&A") and other strategic matters,
restructurings, capital structure, capital raising and various other
corporate finance matters. We focus on solving our clients' most complex
problems, providing advice to senior management, boards of directors and
business owners of prominent companies and institutions in transactions
that typically are of significant strategic and financial importance to
them.
We continue to
build our Financial Advisory business by fostering long-term, senior level
relationships with existing and new clients as their independent advisor
on strategic transactions. We seek to build and sustain long-term
relationships with our clients rather than focusing on individual
transactions, a practice that we believe enhances our access to senior
management of major corporations and institutions around the world. We
emphasize providing clients with senior level focus during all phases of
transaction execution.
While we strive
to earn repeat business from our clients, we operate in a highly
competitive environment in which there are no long-term contracted sources
of revenue. Each revenue-generating engagement is separately negotiated
and awarded. To develop new client relationships, and to develop new
engagements from historical client relationships, we maintain an active
dialogue with a large number of clients and potential clients, as well as
with their financial and legal advisors, on an ongoing basis. We have
gained a significant number of new clients each year through our business
development initiatives, through recruiting additional senior investment
banking professionals who bring with them client relationships and through
referrals from directors, attorneys and other third parties with whom we
have relationships. At the same time, we lose clients each year as a
result of the sale or merger of a client, a change in a client's senior
management, competition from other investment banks and other
causes.
We seek to
offer our services across most major industry groups, including, in many
cases, sub-industry specialties. Our Mergers and Acquisitions managing
directors and professionals are organized to provide advice in the
following major industry practice areas: consumer, financial institutions,
financial sponsors, healthcare and life sciences, industrial, power and
energy/infrastructure, real estate and technology, media and
telecommunications. These groups are managed locally in each
relevant geographic region and are coordinated globally, which allows us
to bring local industry-specific knowledge to bear on behalf of our
clients on a global basis. We believe that this enhances the quality of
the advice that we can offer, which improves our ability to market our
capabilities to clients.
In addition to
our Mergers and Acquisitions and Restructuring practices, we also maintain
specialties in the following distinct practice areas within our Financial
Advisory segment: government advisory, capital structure and
debt advisory, fund raising for alternative investment funds, private
investment in public equity, or "PIPE", and corporate
finance.
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Our focus in our
Financial Advisory business is on:
●
making a significant investment in our intellectual capital with
the addition of senior professionals who we believe have strong client
relationships and industry expertise,
● increasing
our contacts with existing clients to further enhance our long-term
relationships and our efforts in developing new client
relationships,
●
expanding the breadth and depth of our industry expertise and
selectively adding new practice areas, such as our capital structure
advisory effort to help corporations and governments in addressing the
significant deleveraging that is unfolding in the developed
markets,
●
coordinating
our industry specialty activities on a global basis and increasing the
integration of our industry experts in mergers and acquisitions with our
Restructuring and Capital Markets professionals, and
●
broadening
our geographic presence by adding new offices, including, since the
beginning of 2007, offices in Australia (Melbourne), Switzerland (Zurich)
and United Arab Emirates (Dubai City), as well as new regional offices in
the U.S. (Boston, Minneapolis, Charlotte and Washington DC), acquiring a
50% interest in a financial advisory firm with offices in Central and
South America (Argentina, Chile, Panama, Uruguay and Peru) and entering
into a joint cooperation agreement in Eastern Europe and Russia, as well
as a strategic alliance with a financial advisory firm in
Mexico.
In addition to
the investments made as part of this strategy, we believe that the
following external market factors may enable our Financial Advisory
business to benefit by:
●
increasing demand for independent, unbiased financial
advice,
●
continued high demand for Restructuring advice due to the
significant level of corporate defaults, and
●
a potential increase in cross-border M&A and large
capitalization M&A, two of our areas of historical
specialization.
Going forward,
our strategic emphasis in our Financial Advisory business is to leverage
the investments we have made in recent years to grow our business and
drive our productivity. We continue to seek to opportunistically attract
outstanding individuals to our business. We routinely reassess our
strategic position and may in the future seek opportunities to further
enhance our competitive position. In this regard, during 2007 and 2008, as
described above, we broadened our geographic footprint through
acquisitions, investments and alliances in Australia, Eastern Europe,
Russia and Central and South America, and by opening new offices. In
addition, as a result of acquiring Goldsmith, Agio, Helms and Lynner LLC
("GAHL") in 2007, we launched “Lazard Middle Market”, which advises
primarily mid-sized private companies.
Asset
Management
Our Asset
Management business provides investment management and advisory services
to institutional clients, financial intermediaries, private clients and
investment vehicles around the world. Our goal in our Asset Management
business is to produce superior risk-adjusted investment returns and
provide investment solutions customized for our clients. Many of our
equity investment strategies share an investment
philosophy that centers on fundamental security selection with a focus on
the trade-off between a company’s valuation and its financial
productivity.
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Our strategic
plan in our Asset Management business is to focus on delivering superior
investment performance and client service and broadening our product
offerings and distribution in selected areas in order to continue to drive
improved business results. Over the past several years, in an effort to
improve the operations of Lazard Asset Management LLC ("LAM") and expand
our business, we have:
● focused
on enhancing our investment performance;
● improved
our investment management platform by adding a number of senior investment
professionals (including portfolio managers and
analysts);
●
continued to strengthen our marketing and consultant relations
capabilities,
●
expanded our product platform, and
●
continued to expand LAM’s geographic reach, including through
opening offices in Hong Kong and Bahrain.
We believe
that our Asset Management business has long maintained an outstanding team
of portfolio managers and global research analysts. We intend to maintain
and supplement our intellectual capital to achieve our goals. We routinely
reassess our strategic position and may in the future seek acquisitions or
other transactions, including the opportunistic hiring of new employees,
in order to further enhance our competitive position. We also believe that
our specific investment strategies, global reach, unique brand identity
and access to multiple distribution channels may allow us to expand into
new investment products, strategies and geographic locations. In addition,
we plan to expand our participation in alternative investment activities
through investments in new and successor funds, and are considering
expanding the services we offer to high-net worth individuals, through
organic growth, acquisitions or otherwise.
Lazard’s
Organizational Structure
Lazard Group
is a Delaware limited liability company and the holding company for the
subsidiaries that conduct our business. Lazard Group has two
primary holders of its membership interests: Lazard Ltd and LAZ-MD
Holdings LLC, a Delaware limited liability company that holds equity
interests in Lazard Group and the Class B common stock of Lazard Ltd,
which we refer to in this prospectus supplement as "LAZ-MD
Holdings". Lazard Ltd has no material assets other than
indirect ownership of approximately 75.1% of the common membership
interests of Lazard Group as of March 16, 2010 (or approximately
80.0% of the common membership interests of Lazard Group after this
offering), and indirect control of both of the managing members of Lazard
Group. Lazard Ltd controls Lazard Group through this managing
member position. The remaining approximately 24.9% of Lazard
Group's common membership interests as of March 16, 2010 (or
approximately 20.0% of the common membership interests of Lazard Group
after this offering) is held by LAZ-MD Holdings, the holding company that
is owned by current and former managing directors of Lazard
Group. The Lazard Group common membership interests held by
LAZ-MD Holdings are effectively exchangeable over time on a one-for-one
basis with Lazard Ltd for shares of Class A common
stock.
Each share of
our Class A common stock entitles its holder to one vote per
share. Each LAZ-MD Holdings exchangeable interest, all of which
are held by the two classes of members of Lazard Group that consist of
current and former managing directors (or their family members, trusts and
charitable foundations), which we refer to in this prospectus supplement
as the "working members", is effectively exchangeable together with a
Lazard Group common interest held by LAZ-MD Holdings for a share of our
common stock, with such ratio subject to adjustment. The single
outstanding share of our Class B common stock is intended to allow our
current and former managing directors holding LAZ-MD Holdings exchangeable
interests to individually vote in proportion to their indirect economic
interests in Lazard Ltd. For a description of the voting rights
of holders of LAZ-MD Holdings exchangeable interests, see "Certain
Relationships and Related Transactions—LAZ-MD Holdings Stockholders'
Agreement" in our Proxy Statement. Our Class B common stock has
approximately 24.9% of the voting power of Lazard Ltd as of March 16, 2010
(or approximately 20.0% of the voting power of Lazard Ltd after this
offering), which percentage will further decrease proportionately as
Lazard Group common membership interests are exchanged for shares of our
common stock. Upon full exchange of the LAZ-MD Holdings
exchangeable interests for shares of our common stock, the Class B common
stock would cease to be outstanding, and all of the Lazard Group common
membership interests formerly owned by LAZ-MD Holdings would be owned
indirectly by Lazard Ltd. We expect that LAZ-MD Holdings
will manage its affairs so that it will not have to register as an
"investment company" under the U.S. Investment Company Act of 1940, as
amended, or the "Investment Company
Act".
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Lazard Ltd was incorporated in
Bermuda on October 25, 2004. Lazard Group was formed in
Delaware on March 2, 2000 under the name Lazard LLC and was renamed
Lazard Group LLC on May 10, 2005. Our principal executive
offices are located in the United States at 30 Rockefeller Plaza, New
York, New York
10020, with a general
telephone number of (212) 632-6000, in France at 121 Boulevard
Haussmann, 75382 Paris Cedex 08, with a general telephone number of
33-1-44-13-01-11, and in the
United Kingdom at 50 Stratton Street, London W1J 8LL, with a general
telephone number of 44-207-187-2000. Our registered office
in Bermuda is located at
Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda, with a general
telephone number of (441) 295-1422. We maintain an
Internet site at
http://www.lazard.com. The
information contained in or connected to our website is not a part of this
prospectus supplement, and you should not rely on such information in
making your decision whether to purchase our common
stock.
The
Offering
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Common stock
offered by the selling shareholders
in this
offering:
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7,869,311 shares
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Common stock
to be outstanding immediately
after this offering:
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Class A
common stock(a)
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101,383,680 shares
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Class B
common stock
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1
share
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Lazard Group
common membership interests to be outstanding immediately after this
offering:
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Owned by
Lazard Ltd
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101,383,680 interests
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Owned by
LAZ-MD Holdings(b)
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25,302,658 interests |
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Total
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126,686,338 interests |
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Dividend
policy
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On January
27, 2010, our board of directors declared a dividend of $0.125 per share,
which was paid on February 26, 2010, to stockholders of record as of
February 8, 2010. We declared a quarterly cash dividend on our
common stock during each of the four quarters of 2009 and
2008.
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We currently
intend to declare quarterly dividends on all outstanding shares of our
common stock. The declaration of any dividends and, if
declared, the amount of any such dividend,
will be
subject to our actual future earnings, cash flow and capital requirements;
to the amount of distributions to us from Lazard Group; and to the
discretion of our board of directors. For further discussion of
the factors that will affect the determination by our board of directors
to declare dividends, see "Price Range of Our Common Stock and Dividend
Policy".
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Use of
Proceeds
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We will not
receive any net proceeds from the sales of common stock offered by the
selling shareholders in this offering. See "Use of
Proceeds".
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Risk
Factors
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For a
discussion of factors you should consider before buying shares of our
common stock, see "Risk Factors" in this prospectus supplement and in the
accompanying prospectus,
and the other
risk factors included in our Annual Report on Form
10-K.
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Material U.S.
Federal Income Tax Considerations
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We are
treated as a partnership for U.S. Federal income tax
purposes. As a result, each holder of our common stock will be
required to report on its income tax return its allocable share of our
income, gains, losses and deductions. For additional
information concerning
the material
tax consequences of investing in our common stock, see "Material U.S.
Federal Income Tax and Bermuda Tax Considerations".
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New York
Stock Exchange Symbol
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LAZ
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___________________
(a) Includes
(1) 6,180,639 shares of common stock to be sold pursuant to this
offering by the selling shareholders upon the exchange of 6,180,639
common membership interests in Lazard Group held by LAZ-MD Holdings and
(2) 95,203,041 shares of common stock outstanding immediately prior to
this offering (including 7,183,674 shares of our common stock held by
Lazard Group) but excludes (i) 25,302,658 shares of our common stock
that will be issuable in connection with future exchanges of common
membership interests in Lazard Group held by LAZ-MD Holdings, which Lazard
Group common membership interests are effectively exchangeable for shares
of our common stock on a one-for-one basis, (ii) up to 55,099,111 shares
of our common stock available for issuance in connection with our 2005
Equity Incentive Plan and our 2008 Incentive Compensation Plan (28,179,760
stock units in respect of which have been granted (net of forfeitures) as
of the date of this prospectus supplement and 26,919,351 of which are
subject to awards following this offering), (iii) an additional 2,631,570
shares of our common stock that will be issuable or otherwise deliverable
upon conversion of our outstanding $150 million convertible note, which we
refer to as the "$150 million convertible note", held by Banca Intesa
S.p.A. ("Intesa"), (iv) the following shares which are issuable in
connection with the acquisitions of Carnegie, Wylie & Company
(Holdings) PTY LTD ("CWC"), an Australia-based financial advisory firm, on
July 31, 2007 and GAHL, a U.S. based advisory firm, on August 13, 2007:
(A) 662,015 shares of our common stock that are issuable on a
non-contingent basis, (B) shares of our common stock that are issuable
upon the non-contingent conversion of 7,293 shares of our Series A
preferred stock, with the number of shares of our common stock dependent,
in part, upon future prices of our common stock, and (C) 948,631 shares of
our common stock that are contingently issuable and 19,590 shares of our
Series A preferred stock that are contingently convertible into shares of
our common stock, with the number of such shares of our common stock
dependent upon the future performance of GAHL and CWC, (v) 2,247,711
shares of our common stock (subject to upward adjustment to account for
certain cash dividends) that we expect will be issued, subject to certain
exceptions, on October 31, 2011 in connection with the LAM Merger (for a
description of the LAM Merger, see note 8 of the Notes to Consolidated
Financial Statements in our Annual Report on Form 10-K) and (vi) up to
1,142,857 shares of our common stock issuable in connection with the July
15, 2009 acquisition of the management vehicles of The Edgewater Funds
("Edgewater"), a Chicago-based private equity business, which shares will
be issued and paid only if certain performance thresholds for the next two
Edgewater funds are met. If, immediately following this
offering, LAZ-MD Holdings exchanged all of its then-remaining Lazard Group
common membership interests, members of LAZ-MD Holdings would
own 25,302,658 additional shares of our common stock, representing
approximately 20.0% of our outstanding common stock.
(b)
The Lazard Group common
membership interests held by LAZ-MD Holdings are effectively exchangable
over time, on a one-for-one basis, for shares of our common
stock.
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You
should carefully consider the following risk factors and the risk factors
incorporated by reference into this prospectus supplement and all of the other
information set forth in this prospectus supplement or incorporated by reference
in this prospectus supplement, including our consolidated financial statements
and related notes, before deciding to purchase shares of common stock offered by
this prospectus supplement. The risk factors set forth below and the
risk factors incorporated by reference into this prospectus supplement primarily
relate to the business of Lazard Group. These risks also affect
Lazard Ltd because Lazard Ltd has no material assets other than indirect
ownership of approximately 75.1% of the common membership interests in Lazard
Group as of March 16, 2010 (or approximately 80.0% of the common membership interests in
Lazard Group after this offering) and its controlling interest in Lazard
Group. For a discussion of the risks related to our business, see
"Item 1A. Risk Factors" in our Annual Report on Form 10-K, as
updated by annual, quarterly and other reports and documents we file with the
SEC which are incorporated by reference in this prospectus supplement and the
accompanying prospectus. The following risk factors and the risk
factors incorporated by reference into this prospectus supplement describe
material risks of which we are aware. If any of the events or
developments described below actually occurred, our business, financial
condition or results of operations would likely suffer.
Risks
Related to this Offering
The
market price and trading volume of our common stock may be volatile, and you may
not be able to resell your shares at or above the public offering
price.
The price of our
common stock in this offering was determined through negotiations between us and
the underwriter. The negotiated price of this offering may not be
indicative of the market price of the common stock after this
offering. The market price of our common stock will likely continue
to fluctuate in response to the following factors, some of which are beyond our
control, including the following:
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quarterly
fluctuations in our operating
results,
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changes in
investors' and analysts' perception of the business risks and conditions
of our business,
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broader
market fluctuations,
|
|
|
●
|
general
economic and political conditions,
|
|
|
●
|
acquisitions
and financings, including the potential issuance of a substantial number
of shares of our common stock as consideration for past or future
acquisitions and other
transactions,
|
|
|
●
|
the issuance
of a substantial number of shares of our common stock in exchange for a
reduction of debt upon conversion of any portion of the $150 million
convertible note held by Intesa, and further exchanges of the LAZ-MD
Holdings exchangeable interests,
|
|
|
●
|
sale of a
substantial number of shares of our common stock held by the existing
security holders in the public market, including shares issued upon
vesting of outstanding restricted stock units,
and
|
|
|
●
|
general
conditions in the financial services
industry.
|
As
a result, shares of our common stock may trade at prices significantly below the
price of this offering. Declines in the price of our common stock may
adversely affect our ability to recruit and retain key employees, including our
managing directors and other key professional employees.
Should
we be liquidated at our book value, investors would not receive the full amount
of their investment.
The market price
per share of our common stock exceeds the book value per share of our common
stock. Accordingly, should we be liquidated at our book value,
investors would not receive the full amount of their investment.
Our
share price may decline due to the large number of shares eligible for future
sale and for exchange.
Immediately after
this offering, our authorized and unissued shares of common stock will include
(i) approximately 25.3 million shares of our common stock
underlying the outstanding LAZ-MD Holdings exchangeable membership interests of
which approximately 4.0 million shares are held by the Estate of Bruce
Wasserstein (our former Chairman and Chief Executive Officer) and related
trusts, (ii) approximately 28.2 million shares of our common stock
underlying the restricted stock units and deferred stock units that have been
granted pursuant to our 2005 Equity Incentive Plan and our 2008 Incentive
Compensation Plan, (iii) approximately 2.6 million shares of our
common stock issuable or otherwise deliverable upon conversion of our
outstanding $150 million subordinated convertible note, and
(iv) approximately 2.2 million shares of our common stock that are
issuable in connection with the LAM Merger (the "LAM Merger") (see Note 8 of the
Notes to Consolidated Financial Statements in our Annual Report on Form 10-K).
In addition, the following shares are issuable in connection with the
acquisitions of CWC, GAHL and Edgewater: (A) approximately
662 thousand shares of our common stock that are issuable on a
non-contingent basis, (B) shares of our common stock that are issuable upon
the noncontingent conversion of approximately 7 thousand shares of our
Series A preferred stock, with the number of shares of our common stock
dependent, in part, upon future prices of our common stock,
(C) approximately 949 thousand shares of our common stock that are
contingently issuable and approximately 20 thousand shares of our Series A
preferred stock that are contingently convertible into shares of our common
stock, with the number of such shares of our common stock dependent upon the
future performance of GAHL and CWC and (D) up to approximately
1.1 million shares of our common stock issuable in connection with the
Edgewater acquisition, which shares will be issued and paid only if certain
performance thresholds for the next two Edgewater funds are met.
We
cannot predict whether, when and how many of our common shares will be sold into
the market and the effect, if any, that the possibility of market sales of
shares of our common stock, the actual sale of such shares or the availability
of such shares will have on the market price of our common stock or our ability
to raise capital through the issuance of equity securities from time to
time.
As
reflected in the table below, LAZ-MD Holdings exchangeable interests are
effectively exchangeable into our common stock, and thereafter that common stock
will become available for sale in significant numbers. In addition,
LAZ-MD Holdings and certain of our subsidiaries, with the consent of the Lazard
Ltd board of directors, have the right to cause the holders of LAZ-MD Holdings
exchangeable interests to exchange all such remaining interests during the
30-day period following May 10, 2014 and under certain other
circumstances. For a discussion of these exchange and transfer
restrictions, see "Certain Relationships and Related Transactions—Relationship
with LAZ-MD Holdings and LFCM Holdings—Master Separation Agreement" in our Proxy
Statement. From time to time, we expect to register the shares
received by the members of LAZ-MD Holdings pursuant to the exchange of LAZ-MD
Holdings exchangeable interests for resale by such members. Persons exchanging
their LAZ-MD Holdings exchangeable interests are likely to sell all or a portion
of their common stock promptly after exchange to provide liquidity, to cover any
taxes that may be payable upon such exchange or to diversify their
portfolios.
The following table
reflects the timetable for exchangeability of the LAZ-MD Holdings exchangeable
interests. As described below, exchangeability may be accelerated
under certain circumstances as described in "Compensation of Executive
Officers—Grants of Plan Based Awards—Retention Agreements with Named Executive
Officers", "Certain Relationships and Related Transactions—LAZ-MD Holdings
Stockholders' Agreement" and "Certain Relationships and Related
Transactions—Relationship with LAZ-MD Holdings and LFCM Holdings—Master
Separation Agreement—LAZ-MD Holdings Exchangeable Interests" in our Proxy
Statement.
|
Number
of additional shares of our common stock that are expected to become
available for exchange under LAZ—MD Holdings exchangeable
interests
|
||||||||
|
Dates
after which exchangeability is allowed
|
Prior
to this
Offering
|
After
this Offering
|
||||||
|
On or before
May 10, 2010
|
26,943,384
|
20,762,745
|
||||||
|
May 10,
2011
|
395,393
|
395,393
|
||||||
|
May 10,
2012
|
— | — | ||||||
|
May 10,
2013
|
4,144,520
|
4,144,520
|
||||||
|
Total
|
31,483,297
|
25,302,658
|
||||||
Lazard
Ltd's only material asset is its indirect interests in Lazard Group, and it is
accordingly dependent upon distributions from Lazard Group to pay dividends and
taxes and other expenses.
Lazard Ltd is a
holding company and, as of March 16, 2010, had no material assets other than the
indirect ownership of approximately 75.1% of the common membership interests of
Lazard Group as of March 16, 2010 (or approximately 80.0% of the common
membership interests of Lazard Group after this offering), and indirect control
of both of the managing members of Lazard Group. Lazard Ltd controls
Lazard Group through this managing member position. Lazard Ltd has no
independent means of generating revenue. Our wholly-owned
subsidiaries incur income taxes on their proportionate share of any net taxable
income of Lazard Group in their respective tax jurisdictions. We
intend to continue to cause Lazard Group to make distributions to its members,
including our wholly-owned subsidiaries, in an amount sufficient to cover all
applicable taxes payable by us and dividends, if any, declared by
us. To the extent that our subsidiaries need funds to pay taxes on
their share of Lazard Group's net taxable income, or if Lazard Ltd needs funds
for any other purpose, and Lazard Group is restricted from making such
distributions under applicable law or regulation, or is otherwise unable to
provide such funds, it could materially adversely affect our business, financial
condition or results of operations. See "Price Range of Our Common
Stock and Dividend Policy".
Lazard
Ltd may issue preference shares and our bye-laws and Bermuda law may discourage
takeovers, which could affect the rights of holders of our common
stock.
The ownership of
the Class B common stock gives LAZ-MD Holdings and, through the LAZ-MD Holdings
stockholders' agreement, the members of LAZ-MD Holdings, control of a
substantial portion of the total voting power of Lazard Ltd, which could, among
other things, impede a change in control of Lazard Ltd without LAZ-MD Holdings'
consent. We currently have 15,000,000 authorized preference shares,
of which 26,883 shares of non-participating convertible Series A preferred stock
are issued and outstanding. Our board of directors currently has the
authority to issue up to 14,973,117 preference shares without any further vote
or action by the shareholders, in accordance with the provisions of our
bye-laws. Since the preference shares could be issued with
liquidation, dividend and other rights superior to those of our common stock,
the rights of the holders of our common stock will be subject to, and may be
adversely affected by, the rights of the holders of any such preference
shares. The issuance of preference shares could have the effect of
making it more difficult for a third party to acquire a majority of our
outstanding voting stock. Further, the provisions of our bye-laws,
including our classified board of directors and the ability of shareholders to
remove directors only for cause, and of Bermuda law, could have the effect of
delaying or preventing a change in control of Lazard Ltd.
Lazard
Ltd is incorporated in Bermuda, and a significant portion of its assets are
located outside the U.S. As a result, it may not be possible for shareholders of
Lazard Ltd to enforce civil liability provisions of the U.S. Federal or state
securities laws.
Lazard Ltd is
incorporated under the laws of Bermuda, and a significant portion of its assets
are located outside the U.S. It may not be possible to enforce court
judgments obtained in the U.S. against Lazard Ltd in Bermuda, or
in countries other than the U.S. where Lazard Ltd has assets, based on the civil
liability provisions of the Federal or state securities laws of the
U.S. In addition, there is some doubt as to whether the courts of
Bermuda and other countries would recognize or enforce judgments of U.S. courts
obtained against Lazard Ltd or its directors or officers based on the civil
liabilities provisions of the Federal or state securities laws of the U.S. or
would hear actions against Lazard Ltd or those persons based on those
laws. Lazard Ltd has been advised by its legal advisors in Bermuda
that the U.S. and Bermuda do not currently have a treaty providing for the
reciprocal recognition and enforcement of judgments in civil and commercial
matters. Therefore, a final judgment for the payment of money
rendered by any Federal or state court in the U.S. based on civil liability,
whether or not based solely on U.S. Federal or state securities laws, would not
automatically be enforceable in Bermuda. Similarly, those judgments
may not be enforceable in countries other than the U.S. where we have
assets.
Bermuda
law differs from the laws in effect in the U.S. and may afford less protection
to our shareholders.
Our shareholders
may have more difficulty protecting their interests than would shareholders of a
corporation incorporated in a jurisdiction of the U.S. As a Bermuda
company, Lazard Ltd is governed by the Companies Act 1981 of Bermuda, which we
refer to in this prospectus supplement as the "Companies Act". The
Companies Act differs in some material respects from laws generally applicable
to U.S. corporations and shareholders, including the provisions relating to
interested directors, mergers, amalgamations and acquisitions, takeovers,
shareholder lawsuits and indemnification of directors.
Under Bermuda law,
the duties of directors and officers of a company are generally owed to the
company only. Shareholders of Bermuda companies generally do not have
rights to take action against directors or officers of the company, and may only
do so in limited circumstances. Officers of a Bermuda company must,
in exercising their powers and performing their duties, act honestly and in good
faith with a view to the best interests of the company and must exercise the
care and skill that a reasonably prudent person would exercise in comparable
circumstances. Directors have a duty not to put themselves in a
position in which their duties to the company and their personal interests may
conflict and also are under a duty to disclose any personal interest in any
contract or arrangement with the company or any of its
subsidiaries. If a director or officer of a Bermuda company is found
to have breached his or her duties to that company, he or she may be held
personally liable to the company in respect of that breach of duty. A
director may be liable jointly and severally with other directors if it is shown
that the director knowingly engaged in fraud or dishonesty. In cases
not involving fraud or dishonesty, the liability of the director will be
determined by the Bermuda courts on the basis of their estimation of the
percentage of responsibility of the director for the matter in question, in
light of the nature of the conduct of the director and the extent of the causal
relationship between his or her conduct and the loss suffered.
In
addition, our bye-laws provide that no director shall be liable to the Company,
any of our shareholders or any other person for the acts, neglects or defaults
of any other director, or for any loss or expense happening to the Company
through the insufficiency or deficiency of title to any property acquired by
order of the directors for or on behalf of the Company, or for the insufficiency
or deficiency of any security in or upon which any of the moneys of the Company
shall be invested, or for any loss or damage arising from the bankruptcy,
insolvency, or tortuous act of any person with whom any moneys, securities or
effects shall be deposited, or for any loss occasioned by any error of judgment,
omission, default, or oversight on his or her part, or for any other loss,
damage, or misfortune whatever which shall happen in relation to the execution
of the duties of his or her office, provided that such provisions shall not
extend to any matter which would render any of them void under the Companies
Act.
There
are provisions in our bye-laws that may require certain of our non-U.S.
shareholders to sell their shares to Lazard Ltd or to a third
party.
Our bye-laws
provide that if our board of directors determines that we or any of our
subsidiaries do not meet, or in the absence of repurchases of shares will fail
to meet, the ownership requirements of a limitation on benefits article of any
bilateral income tax treaty with the U.S. applicable to us, and that such tax
treaty would provide material benefits to us or any of our subsidiaries, we
generally have the right, but not the obligation, to repurchase at fair market
value (as determined in the good faith discretion of our board of directors)
shares of our common stock from any shareholder who beneficially owns more than
0.25%
of the outstanding shares of our common stock and who fails to demonstrate to
our satisfaction that such shareholder is either (a) a U.S. citizen or
(b) a qualified resident of the U.S. or the other contracting state of the
applicable tax treaty (as determined for purposes of the relevant provision of
the limitation on benefits article of such treaty). Natixis S.A.
("Natixis") is not subject to this repurchase right with respect to the
6,999,800 aggregate number of shares it acquired pursuant to certain
transactions between us and IXIS-Corporate & Investment Bank (now known as
Natixis) in May 2005, which we refer to as the "Natixis
placements".
The number of
shares that may be repurchased from any such shareholder will equal the product
of the total number of shares that Lazard Ltd reasonably determines to purchase
to ensure ongoing satisfaction of the limitation on benefits article of the
applicable tax treaty, multiplied by a fraction, the numerator of which is the
number of shares beneficially owned by such shareholder (other than the
6,999,800 aggregate number of shares Natixis acquired pursuant to the Natixis
placements), and the denominator of which is the total number of shares (reduced
by the aggregate number of shares Natixis acquired pursuant to the Natixis
placements) beneficially owned by such shareholders subject to this repurchase
right.
Instead of
exercising the repurchase right described above, Lazard Ltd will have the right,
but not the obligation, to cause the transfer to, and procure the purchase by,
any U.S. citizen or a qualified resident of the U.S. or the other contracting
state of the applicable tax treaty (as determined for purposes of the relevant
provision of the limitation on benefits article of such treaty) of the number of
outstanding shares beneficially owned by any shareholder that are otherwise
subject to repurchase under our bye-laws as described above, at fair market
value (as determined in the good faith discretion of our board of
directors).
Outcome
of future U.S. tax legislation is unknown at the present time.
On
February 1, 2010, the fiscal year 2011 U.S. Federal budget was released. The
budget included various provisions, including provisions that would (i) limit
the deduction of certain related party interest; (ii) defer the deduction of
interest attributable to non-U.S. source income of foreign subsidiaries; and
(iii) repeal the current law's exemption from withholding tax for interest and
dividends paid by certain domestic companies. Each of these provisions would be
effective only for taxable years beginning after December 31, 2010. Certain
aspects of these budget provisions may adversely impact Lazard's tax rate.
However, at this point in time we are unable to predict the ultimate outcome of
the budget process.
This prospectus
supplement and the information incorporated herein by reference include
forward-looking statements within the meaning of Section 27A of the
Securities Act, and Section 21E of the Exchange Act. We have
made statements in this prospectus supplement and in the information
incorporated by reference in this prospectus supplement under the captions
"Prospectus Supplement Summary" and "Risk Factors", and in other sections of
this prospectus supplement that are forward-looking statements. In
some cases, you can identify these statements by forward-looking words such as
"may", "might", "will", "should", "expect", "plan", "anticipate", "believe",
"estimate", "predict", "potential" or "continue", and the negative of these
terms and other comparable terminology. These forward-looking
statements, which are subject to known and unknown risks, uncertainties and
assumptions about us, may include projections of our future financial
performance based on our growth strategies and anticipated trends in our
business. These statements are only predictions based on our current
expectations and projections about future events. There are important
factors that could cause our actual results, level of activity, performance or
achievements to differ materially from the results, level of activity,
performance or achievements expressed or implied by the forward-looking
statements. In particular, you should consider the numerous risks and
uncertainties outlined in "Risk Factors" above or incorporated by reference into
this prospectus supplement, including the following:
|
|
●
|
a continued
decline or further deterioration in general economic conditions or the
global financial markets,
|
|
|
●
|
losses caused
by financial or other problems experienced by third
parties,
|
|
|
●
|
losses due to
unidentified or unanticipated
risks,
|
|
|
●
|
a lack of
liquidity, i.e., ready access to funds, for use in our businesses,
and
|
|
|
●
|
competitive
pressure on our businesses and on our ability to retain our
employees.
|
These risks and
uncertainties are not exhaustive. Other sections of this prospectus
supplement may include additional factors which could adversely impact our
business and financial performance. Moreover, we operate in a very
competitive and rapidly changing environment. New risks and
uncertainties emerge from time to time, and it is not possible for our
management to predict all risks and uncertainties, nor can we assess the impact
of all factors on our business or the extent to which any factor, or combination
of factors, may cause actual results to differ materially from those contained
in any forward-looking statements.
Although we believe
the expectations reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, level of activity, performance or
achievements. Moreover, neither we nor any other person assumes
responsibility for the accuracy or completeness of any of these forward-looking
statements. You should not rely upon forward-looking statements as
predictions of future events. We are under no duty to update any of
these forward-looking statements after the date of this prospectus supplement to
conform our prior statements to actual results or revised expectations and we do
not intend to do so.
Forward-looking
statements include, but are not limited to, statements about the:
|
|
●
|
business'
possible or assumed future results of operations and operating cash
flows,
|
|
|
●
|
business'
strategies and investment policies,
|
|
|
●
|
business'
financing plans and the availability of short-term
borrowing,
|
|
|
●
|
business'
competitive position,
|
|
|
●
|
future
acquisitions, including the consideration to be paid and the timing of
consummation,
|
|
|
●
|
potential
growth opportunities available to our
businesses,
|
|
|
●
|
recruitment
and retention of our managing directors and
employees,
|
|
|
●
|
target levels
of compensation expense,
|
|
|
●
|
business'
potential operating performance, achievements, productivity improvements,
efficiency and cost reduction
efforts,
|
|
|
●
|
likelihood of
success and impact of litigation,
|
|
|
●
|
expected tax
rate,
|
|
|
●
|
changes in
interest and tax rates,
|
|
|
●
|
expectations
with respect to the economy, securities markets, the market for mergers,
acquisitions, strategic advisory and restructuring activity, the market
for asset management activity and other industry
trends,
|
|
|
●
|
effects of
competition on our businesses, and
|
|
|
●
|
impact of
future legislation and regulation on our
business.
|
We
are committed to providing timely and accurate information to the investing
public, consistent with our legal and regulatory obligations. To that
end, we use our websites to convey information about our businesses, including
the anticipated release of quarterly financial results, quarterly financial,
statistical and business-related information, and the posting of updates of
assets under management in various mutual funds, hedge funds and other
investment products managed by LAM and its subsidiaries. Monthly
updates of these funds are posted to the LAM website (www.lazardnet.com) on the
third business day following the end of each month. Investors can
link to Lazard Ltd, Lazard Group and their operating company websites
through
http://www.lazard.com. The information contained in or
connected to our website is not a part of this prospectus, and you should not
rely on such information in making your decision whether to purchase our common
stock.
We
will not receive any net proceeds from the sales of common stock offered by the
selling shareholders. We have agreed to pay the expenses of the
selling shareholders in this offering, other than the custodial fees applicable
to the shares they sell.
Price
Range of Our Common Stock
Our Class A
common stock is traded on the New York Stock Exchange under the symbol
"LAZ". There is no public trading market for our Class B common
stock, which is held by LAZ-MD Holdings. The following table sets
forth, for the fiscal quarters indicated, the high and low sales prices per
share of our Class A common stock, as reported in the consolidated
transaction reporting system, and the quarterly dividends declared since the
first quarter of 2007.
|
Sales
Price
|
Dividends
per Share of Common Stock
|
|||||||||||
|
High
|
Low
|
|||||||||||
|
2010
|
||||||||||||
|
First quarter
(until March 15, 2010)
|
$ | 41.02 | $ | 34.24 | $ | 0.125 | ||||||
|
2009
|
||||||||||||
|
Fourth
quarter
|
$ | 44.62 | $ | 34.66 | $ | 0.125 | ||||||
|
Third
quarter
|
$ | 42.70 | $ | 25.79 | $ | 0.125 | ||||||
|
Second
quarter
|
$ | 34.10 | $ | 25.20 | $ | 0.10 | ||||||
|
First
quarter
|
$ | 31.94 | $ | 20.55 | $ | 0.10 | ||||||
|
2008
|
||||||||||||
|
Fourth
quarter
|
$ | 44.29 | $ | 19.17 | $ | 0.10 | ||||||
|
Third
quarter
|
$ | 50.00 | $ | 30.96 | $ | 0.10 | ||||||
|
Second
quarter
|
$ | 41.85 | $ | 32.84 | $ | 0.10 | ||||||
|
First
quarter
|
$ | 43.58 | $ | 29.00 | $ | 0.10 | ||||||
|
2007
|
||||||||||||
|
Fourth
quarter
|
$ | 52.89 | $ | 38.36 | $ | 0.09 | ||||||
|
Third
quarter
|
$ | 49.75 | $ | 34.72 | $ | 0.09 | ||||||
|
Second
quarter
|
$ | 56.25 | $ | 43.88 | $ | 0.09 | ||||||
|
First
quarter
|
$ | 56.90 | $ | 46.33 | $ | 0.09 | ||||||
As
of March 15, 2010, there were approximately 46 holders of record of our
Class A common stock. This does not include the number of shareholders that hold
shares in “street-name” through banks or broker-dealers.
On
March 15, 2010, the last reported sales price for our Class A common stock
on the New York Stock Exchange was $37.14 per
share.
Dividend
Policy
Subject to
compliance with applicable law, we currently intend to declare quarterly
dividends on all outstanding shares of our Class A common
stock. The Class B common stock is not entitled to dividend
rights.
On
January 27, 2010 our board of directors declared a dividend of $0.125 per share,
which was paid on February 26, 2010, to stockholders of record as of February 8,
2010. We declared a quarterly cash dividend on our common stock
during each of the four quarters of 2009 and 2008.
The declaration of
any dividends and, if declared, the amount of any such dividend, will be subject
to the actual future earnings, cash flow and capital requirements of our
company, to the amount of distributions to us from Lazard
Group and to the discretion of our board of directors. Our board of
directors will take into account:
|
|
●
|
general
economic and business conditions,
|
|
|
●
|
the financial
results of our company and Lazard
Group,
|
|
|
●
|
capital
requirements of the Company and our subsidiaries (including Lazard
Group),
|
|
|
●
|
contractual,
legal, tax and regulatory restrictions on and implications of the payment
of dividends by us to our shareholders or by our subsidiaries (including
Lazard Group) to us, and
|
|
|
●
|
such other
factors as our board of directors may deem
relevant.
|
We
are a holding company and have no direct operations. As a result, we
depend upon distributions from Lazard Group to pay any dividends. We
expect to continue to cause Lazard Group to pay distributions to us in order to
fund any such dividends, subject to applicable law and the other considerations
discussed above. In addition, as managing directors and other members
of LAZ-MD Holdings convert their exchangeable interests into shares of our
common stock, the number of our outstanding shares will increase, thereby
diluting each shareholder's proportional interests in the excess cash held by us
to the extent that we retain excess cash balances or acquire additional assets
with excess cash balances. For a discussion of Lazard Group's cash
distribution policy, see "The Separation and Recapitalization Transactions and
the Lazard Organizational Structure" in our S-1 Registration
Statement.
Additionally, we
are subject to Bermuda legal constraints that may affect our ability to pay
dividends on our common stock and make other payments. Under the
Companies Act, we may declare or pay a dividend out of distributable reserves
only if we have reasonable grounds for believing that we are, or would after the
payment be, able to pay our liabilities as they become due and if the realizable
value of our assets would thereby not be less than the aggregate of our
liabilities and issued share capital and share premium accounts.
The selling
shareholders listed below include current and former managing directors of
Lazard (including certain executive officers), and the Estate of Bruce
Wasserstein who hold LAZ-MD Holdings exchangeable interests and common
stock. The selling shareholders are selling an aggregate
of 7,869,311 shares of our common stock pursuant to this prospectus
supplement.
The selling
shareholders listed below are selling an aggregate of 6,180,639 shares
of our common stock upon the exchange of an aggregate
of 6,180,639 LAZ-MD Holdings exchangeable interests (with the
remaining 1,688,672 shares having been issued in connection with prior
exchanges of LAZ-MD Holdings exchangeable interests, granted pursuant to
compensation plans or purchased in the open market). These LAZ-MD
Holdings exchangeable interests will be exchanged immediately prior to the
consummation of this offering. See "Description of Our Common
Stock—Registration Rights".
The Wasserstein
family trusts, which currently have a nominee on the Company's board of
directors, are selling approximately 97% of the shares in this
offering. See “Agreements with Natixis and the Wasserstein Family
Trusts” in our Proxy Statement. The Wasserstein
family trusts have agreed that, immediately following completion of this
offering, the Company’s obligation to nominate one person designated by the
Wasserstein family trusts to the Company’s board of directors will terminate.
The Wasserstein family trusts have also agreed that Ellis Jones will not stand
for reelection at the Company’s 2010 annual general meeting of
shareholders. No member of the Company's board of directors is
selling any shares in this offering. Similarly, Natixis is not
selling any of its 6,999,800 shares of our common stock in this
offering.
The shares being
sold by our current and former managing directors (including certain executive
officers) upon the exchange of an aggregate of 6,180,639 LAZ-MD
Holdings exchangeable interests represent approximately 19.6% of the LAZ-MD
Holdings exchangeable interests held by all current and former managing
directors (including our executive officers) as of March 16,
2010. The shares being sold by the current and former managing
directors will have been issued pursuant to, and in accordance with the exchange
schedule in, agreements that were entered into in connection with the initial
public offering of our Class A common stock on May 10,
2005.
The following table
sets forth as of the date of this prospectus supplement certain information
regarding the beneficial ownership of our common stock by the selling
shareholders:
|
|
●
|
the number of
shares beneficially owned immediately prior to the consummation of this
offering,
|
|
|
●
|
the number of
shares to be sold in this offering,
and
|
|
|
●
|
the adjusted
number of shares beneficially owned, reflecting the sale of the shares
sold in this offering.
|
Each selling
shareholder, except as noted in the table below, is a current or former managing
director of Lazard or companies formerly affiliated with Lazard
or
an estate of a current or former managing director. To our
knowledge, and pursuant to applicable community property laws, the persons named
in the table below and their applicable family trusts and grantor retained
annuity trusts (and similar entities) have beneficial ownership of the common
stock and LAZ-MD Holdings exchangeable interests held by them. The
table below assumes the full exchange of all LAZ-MD Holdings exchangeable
interests, including those proposed to be sold in this offering, into shares of
our common stock. The address for each selling shareholder is: c/o
Lazard Group LLC, 30 Rockefeller Plaza, New York, New York 10020.
|
Prior
to this Offering
|
Sold
in this Offering
|
After
this Offering
|
||||||||||||||||||
|
Selling
Shareholders (a)
|
Shares
of Common
Stock
|
Percentage
of
Common
Stock
|
Shares
of
Common
Stock
|
Percentage
of
Common
Stock
|
Shares
of
Common
Stock
|
Percentage
of
Common
Stock
|
||||||||||||||
|
The Estate of
Bruce Wasserstein
|
11,759,106 | 9.28 | % | |||||||||||||||||
|
Executive
Officers and Directors:
|
||||||||||||||||||||
|
Mr. Charles
G. Ward III
|
540,453 | * | * | * | ||||||||||||||||
|
Current
and Former Managing Directors:
|
||||||||||||||||||||
|
Mr. Richard
J. Kradjel
|
28,000 | * | * | * | ||||||||||||||||
|
Mr. Harry C.
Pinson
|
169,579 | * | * | * | ||||||||||||||||
|
Mr. Russell
E. Planitzer
|
37,172 | * | * | |||||||||||||||||
|
New York
Lexington Trust
|
182,117 | * | * | |||||||||||||||||
|
Total
|
12,716,427 | 10.04 | % |
7,869,311
|
6.21 | % |
4,847,116
|
3.83 | % | |||||||||||
___________________
* Less than 1% benefically owned.
* Less than 1% benefically owned.
|
(a)
|
Includes
shares of our common stock that are issuable upon exchange of the LAZ-MD
Holdings exchangeable interests held by such person and the family trusts
or grantor retained annuity trusts (and similar entities) created by
them. These interests are included on an as exchanged
basis. Absent an acceleration event and except as otherwise
described in this prospectus supplement, these interests will, to the
extent not already exchangeable, generally be exchangeable on the fifth
anniversary of our May 2005 equity public offering assuming compliance
with covenants. Each selling shareholder's share ownership also
includes shares of our common stock underlying restricted stock units
issued to such person that will vest within 60 days from the date of this
prospectus supplement. See "Risk Factors—Risks Related to this
Offering—Our share price may decline due to the large number of shares
eligible for future sale and for
exchange".
|
For a discussion of
certain relationships and related transactions, including our relationship with
LAZ-MD Holdings and LFCM Holdings, the LAZ-MD Holdings Stockholders' Agreement,
and certain relationships with our directors, executive officers and employees,
see "Certain Relationships and Related Transactions" in our Proxy
Statement.
The
following summary is a description of the material terms of our share
capital. We have filed our certificate of incorporation and
memorandum of association and bye-laws as exhibits to the registration statement
of which this prospectus supplement is a part. See "Where You Can
Find More Information".
General
Our authorized
capital stock consists of 500,000,000 shares of Class A common stock, par
value $0.01 per share, 1 share of Class B common stock, par value $0.01 per
share and 15,000,000 preference shares, par value $0.01 per share.
Common
Stock
Immediately
following the completion of this offering, there will be 101,383,680 shares
of Class A common stock issued and outstanding, including 7,183,674
shares of our Class A common stock held by Lazard Group, and one share of
Class B common stock issued and outstanding.
Preferred
Stock
Immediately
following the completion of this offering, there will be 26,883 shares of
non-participating convertible Series A preferred stock issued and
outstanding.
Voting
Each share of our
Class A common stock entitles its holder to one vote per
share. Each LAZ-MD Holdings exchangeable interest, all of which are
held by the working members, is effectively exchangeable, together with a Lazard
Group common interest held by LAZ-MD Holdings, for a share of our Class A
common stock, with such ratio subject to adjustment. The single
outstanding share of our high-vote Class B common stock is intended to allow the
holders of LAZ-MD Holdings exchangeable interests to individually vote in
proportion to their indirect economic interests in Lazard Ltd. For a
description of the voting rights of holders of LAZ-MD Holdings exchangeable
interests, see "Certain Relationships and Related Transactions—LAZ-MD Holdings
Stockholders' Agreement" in our Proxy Statement. Our Class B common
stock has approximately 24.9% of the voting power of Lazard Ltd as of March 16,
2010 (or approximately 20.0% of the voting power of Lazard Ltd after this
offering), which percentage will decrease proportionately as Lazard Group common
membership interests are exchanged for shares of our Class A common
stock. Upon full exchange of the LAZ-MD Holdings exchangeable
interests for shares of our Class A common stock, the Class B common stock
would cease to be outstanding, and all of the Lazard Group common membership
interests formerly owned by LAZ-MD Holdings would be owned indirectly by Lazard
Ltd. We expect that
LAZ-MD Holdings will manage its affairs so that it will not have to register as
an "investment company" under the Investment Company Act.
Economic
Rights
Pursuant to our
bye-laws, each share of our Class A common stock is entitled to equal
economic rights. However, the Class B common stock will have no
rights to dividends or any liquidation preference. Although the Class
B common stock represents approximately 24.9% of the voting power of Lazard Ltd
as of March 16, 2010 (or approximately 20.0% of the voting power of Lazard Ltd
after this offering), the Class B common stock will have no economic
rights.
Dividends
For a discussion of
our dividend policy and Bermuda legal constraints related to the payment of
dividends, see "Price Range of Our Common Stock and Dividend Policy" and
"—Bermuda Law".
Preference
Shares
Pursuant to Bermuda
law and our bye-laws, our board of directors by resolution may establish one or
more series of preference shares having such number of shares, designations,
dividend rates, relative voting rights, conversion or exchange rights,
redemption rights, liquidation rights and other relative participation, optional
or other special rights, qualifications, limitations or restrictions as may be
fixed by the board of directors without any shareholder
approval. Such rights, preferences, powers and limitations as may be
established could also have the effect of discouraging an attempt to obtain
control of Lazard Ltd. We currently have 15,000,000 authorized
preference shares, of which 26,883 shares of non-participating convertible
Series A preferred stock are issued and outstanding. Our board of
directors currently has the authority to issue up to 14,973,117 preference
shares without any further vote or action by the shareholders, in accordance
with the provisions of our bye-laws. We have no present plans to
issue any additional preference shares. See "Risk Factors—Risks
Related to this Offering—Lazard Ltd may issue preference shares and our bye-laws
and Bermuda law may discourage takeovers, which could affect the rights of
holders of our common stock".
Acquisition
of Shares by Us
Our bye-laws
provide that if our board of directors determines that we or any of our
subsidiaries do not meet, or in the absence of repurchases of shares will fail
to meet, the ownership requirements of a limitation on benefits article of a
bilateral income tax treaty with the U.S., and that such tax treaty would
provide material benefits to us or any of our subsidiaries, we generally have
the right, but not the obligation, to repurchase at fair market value (as
determined in the good faith discretion of our board of directors) shares from
any shareholder who beneficially owns more than 0.25% of our outstanding shares
and who fails to demonstrate to our satisfaction that such shareholder is either
(a) a U.S. citizen or (b) a qualified resident of the U.S. or the
other contracting state of the applicable tax treaty (as determined for purposes
of the relevant provision of the limitation on benefits article of such
treaty). Natixis is not subject to this repurchase right with respect
to the aggregate number of shares it acquired pursuant to the Natixis
placements. The number of shares that may be repurchased from any
such shareholder will equal the product of the total number of shares that we
reasonably determine to purchase to ensure on-going satisfaction of the
limitation on benefits article of the applicable tax treaty, multiplied by a
fraction, the numerator of which is the number of shares beneficially owned by
such shareholder and the denominator of which is the total number of shares
(reduced by the aggregated number of shares Natixis acquired pursuant to the
Natixis placements) beneficially owned by subject
shareholders. Instead of exercising the repurchase right described
above, we will have the right, but not the obligation, to cause the transfer to,
and procure the purchase by, any U.S. citizen or a qualified resident of the
U.S. or the other contracting state of applicable tax treaty of the number of
outstanding shares beneficially owned by any shareholder that are otherwise
subject to repurchase under our bye-laws as described above, at fair market
value (as determined in the good faith discretion of our board of
directors).
Share
Repurchase Program
On
January 27, 2010, the board of directors of Lazard Ltd authorized, on a
cumulative basis, a new share repurchase program for the repurchase of up to
$200 million in aggregate cost of its Class A common stock and Lazard Group
common membership interest through December 31, 2011. The share repurchase
program will be used primarily to offset a portion of the shares to be issued
under Lazard Ltd’s 2005 Plan and the 2008 Plan. Purchases under the share
repurchase program may be made in the open market or through privately
negotiated transactions. On March 16, 2010, approximately $263
million remained available under the share repurchase program.
Bermuda
Law
Our board of
directors believes that it is of primary importance that our shareholders are
treated fairly and have proper access to and recourse against the
Company. Bermuda was chosen as our place of incorporation for several
reasons, including its acceptability to our working members, who are domiciled
around the world, and potential investors. Bermuda has an established
corporate law which, coupled with the provisions of our bye-laws, we believe
provides shareholders with an appropriate level of protection and
rights.
We
are an exempted company organized under the Companies Act. The rights
of our shareholders, including those persons who will become shareholders in
connection with this offering, are governed by Bermuda law and our memorandum of
association and bye-laws. The Companies Act differs in some material
respects from laws generally applicable to U.S. corporations and their
shareholders. For a summary of the material provisions of Bermuda law
and our organizational documents, please see "Description of Capital
Stock—Bermuda Law" in our S-1 Registration Statement.
Registration
Rights
For a description
of registration rights available under the LAZ-MD Holdings stockholders'
agreement, see "Certain Relationships and Related Transactions—LAZ-MD Holdings
Stockholders' Agreement" in our Proxy Statement. For a description of
the registration rights that have been granted to Natixis and that will be
granted to Intesa upon the initial conversion of the $150 million convertible
note, see "—Natixis Investment in Our Common Stock" and "—Relationship with
Intesa", respectively.
Transfer
Agent and Registrar
A
register of holders of our common stock will be maintained by Codan Services
Limited in Bermuda, and a branch register will be maintained in the U.S. by The
Bank of New York Mellon, who will serve as branch registrar and transfer
agent.
Description
of Lazard Group Membership Interests
For a description
of Lazard Group membership interests see "Description of Capital
Stock—Description of Lazard Group Membership Interests" in our S-1 Registration
Statement.
Participatory
Interests
For a description
of participatory interests see "Description of Capital Stock—Description of
Lazard Group Membership Interests" in our S-1 Registration
Statement.
Natixis
Investment in Our Common Stock
Under the Natixis
placements, IXIS-Corporate & Investment Bank (now known as Natixis)
participated as an investor in our recapitalization transactions in May 2005,
purchasing $150 million of Lazard's equity security units ("ESUs") (which
represented a contract to purchase our common stock on May 15, 2008 and a
senior note of Lazard Group in an aggregate amount of $150 million) and
2,000,000 shares of our common stock at the equity public offering price of $25
per share. On May 15, 2008, the ESUs held by Natixis were
settled and Natixis was issued 4,999,800 shares of common stock. In
connection with Natixis's investment, we have agreed that we will nominate one
person designated by Natixis to our board of directors until such time as the
sum of (a) the shares of our common stock then owned by Natixis, plus
(b) the shares of our common stock issued under the terms of the ESUs then
owned by Natixis, constitutes less than 50% of the sum of (x) the shares of
our common stock initially purchased by Natixis, plus (y) the shares of our
common stock issued under the terms of the ESUs purchased by
Natixis. Laurent Mignon is currently the Natixis nominee to our board
of directors.
Pursuant to a
registration rights agreement, we granted Natixis registration rights with
respect to securities purchased by Natixis in connection with the equity public
offering and the ESU offering. The Natixis registration rights
agreement provides that holders of those securities generally will have
unlimited "piggyback"
registration rights. The registration rights agreement also grants
Natixis four demand registration rights requiring that we register the shares of
our common stock held by Natixis, provided that the amount of securities subject
to such demand constitutes at least 25% of the shares of our common stock held
by Natixis and has an aggregate market value in excess of $20
million.
Relationship
with Intesa
For a description
of the termination of Lazard Group's joint venture with Intesa, see Lazard
Group's Current Report on Form 8-K, filed on May 17, 2006. See "Where
You Can Find More Information". Pursuant to the terms of the $150
million convertible note held by Intesa, we will enter into a registration
rights agreement with Intesa upon the initial conversion of the
note. The registration rights agreement will provide that Intesa
generally will have unlimited "piggyback" registration rights and additional
demand rights.
Delaware
Law
The terms of share
capital of corporations incorporated in the U.S., including Delaware, differ
from corporations incorporated in Bermuda. See "Description of
Capital Stock—Delaware Law" in our S-1 Registration Statement for a discussion
highlighting the material differences of the rights of a shareholder of a
Delaware corporation compared with the rights of our shareholders under Bermuda
law.
The following
discussion of our taxation and the taxation of our shareholders does not purport
to be a comprehensive discussion of all the tax considerations that may be
relevant to your decision to purchase common stock.
The discussion is
based upon current law, including the Internal Revenue Code of 1986, as amended
(the "Code"). Legislative, judicial or administrative changes or
interpretations may be forthcoming that could be retroactive and could affect
the tax consequences to holders of common stock.
The tax treatment
of a holder of common stock, or of a person treated as a holder of common stock
for U.S. Federal income, state, local or foreign tax purposes, may vary
depending on the holder's particular tax situation. Statements
contained herein as to the beliefs, expectations and conditions of Lazard and
its subsidiaries, as they relate to the application of such tax laws or facts,
represent the view of management and do not represent the opinions of
counsel.
Prospective
investors (including all Non-U.S. Persons as defined below) should consult their
own tax advisors concerning the U.S. Federal, state, local and foreign tax
consequences of owning common shares under the laws of their countries of
citizenship, residence, ordinary residence or domicile, including any
information reporting obligations that may be imposed on an
investor.
Taxation
of Lazard and Its Subsidiaries
Bermuda
At
the present time, Lazard Ltd is not subject to any Bermuda income or profits
tax, withholding tax, capital gains tax, capital transfer tax, estate duty or
inheritance tax. Lazard Ltd has obtained an assurance from the
Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection
Act 1966 that, in the event that any legislation is enacted in Bermuda imposing
any tax computed on profits or income, or computed on any capital asset, gain or
appreciation or any tax in the nature of estate duty or inheritance tax, such
tax shall not, until March 28, 2016, be applicable to us, to any of our
operations or to our shares, debentures or other obligations, except insofar as
such tax applies to persons ordinarily resident in Bermuda or to any taxes
payable by us in respect of real property owned or leased by us in
Bermuda.
United
States
Partnership Status of Lazard
Ltd. We have elected to be treated as a partnership for U.S.
Federal income tax purposes. An entity that is treated as a
partnership for U.S. Federal income tax purposes is not a taxable entity and
incurs no U.S. Federal income tax liability. Instead, each partner is
required to take into account its allocable share of items of income, gain, loss
and deduction of the partnership in computing its U.S. Federal income tax
liability, regardless of whether cash distributions are
made. Distributions of cash by a partnership to a partner are
generally not taxable unless the amount of cash distributed to a partner is in
excess of the partner's adjusted basis in its partnership interest.
Because Lazard Ltd
is a "publicly traded partnership" within the meaning of Section 7704(b) of
the Code, Lazard Ltd will be taxable as a corporation unless 90% or more of its
gross income (which does not include the income of its corporate subsidiaries)
for each taxable year beginning with the year of our equity public offering is
"qualifying income". For this purpose, qualifying income includes
interest (other than interest derived in the conduct of a financial business),
dividends and gains from capital assets held for the production of interest or
dividends. Although certain of Lazard Group's corporate subsidiaries
conduct a financial business (which gives rise to income that would not be
qualifying income), Lazard Ltd does not believe, on the basis of all the facts
and circumstances, that it is treated as conducting a financial business within
the meaning of Section 7704 of the Code. However, the Internal
Revenue Service (the "IRS") may challenge this position. While we
intend to manage our affairs so that Lazard Ltd will meet the 90% test in each
taxable year, we may not be able to do so.
The remainder of
this discussion assumes that Lazard Ltd will be treated as a partnership for
U.S. Federal income tax purposes.
U.S. Subsidiaries and Effectively
Connected Income of Non-U.S. Subsidiaries. Lazard Group is a
limited liability company treated as a partnership for U.S. Federal income tax
purposes. As members of Lazard Group, certain U.S. subsidiaries of
Lazard Ltd are subject to U.S. Federal income tax on a net income basis on their
share of the income of Lazard Group and its subsidiaries. In
addition, certain non-U.S. subsidiaries of Lazard Ltd will be subject to U.S.
Federal income tax on a net income basis on the income of Lazard Group and its
subsidiaries that is "effectively connected" with their conduct of a trade or
business in the U.S. In addition, those non-U.S. Lazard Ltd
subsidiaries will be subject to a "branch profits" tax on their "effectively
connected earnings and profits" (as determined for U.S. Federal income tax
purposes), with certain adjustments, and a U.S. withholding tax on certain U.S.
source income that is not "effectively connected" with a U.S. trade or
business. The branch profits tax and the U.S. withholding tax are
imposed at a rate of 30%, unless an applicable income tax treaty provides for a
lower rate. The eligibility of our non-U.S. subsidiaries for treaty
benefits depends upon their being "qualified residents" of their country, which
in turn depends upon, among other things, at least 50% of the principal class of
their shares being considered "ultimately owned" by U.S. citizens or persons
that are "qualified residents" of the U.S. or of the treaty
partner. We believe that these non-U.S. subsidiaries are eligible for
benefits under the income tax treaty between the U.S. and the relevant foreign
country, which provides for a maximum branch profits tax rate of 5% and a
withholding tax rate of 0%. This requirement may not, however, be
satisfied in any taxable year and we may not be able to document that fact to
the satisfaction of the IRS.
Personal Holding
Companies. Any of our U.S. subsidiaries could be
subject to additional U.S. tax on a portion of its income if any of them is
considered to be a personal holding company, or "PHC", for U.S. Federal income
tax purposes. A U.S. corporation generally will be classified as a
PHC for U.S. Federal income tax purposes in a given taxable year if (1) at
any time during the last half of such taxable year, five or fewer individuals
(without regard to their citizenship or residency and including as individuals
for this purpose certain entities such as certain tax-exempt organizations and
pension funds) own or are deemed to own (pursuant to certain constructive
ownership rules) more than 50% of the stock of the corporation by value and
(2) at least 60% of the corporation's adjusted ordinary gross income, as
determined for U.S. Federal income tax purposes, for such taxable year consists
of "PHC income" (which includes, among other things, dividends, interest,
royalties, annuities and, under certain circumstances, rents). The
PHC rules do not apply to non-U.S. corporations.
We
believe that five or fewer individuals or tax-exempt organizations will be
treated as owning more than 50% of the value of our
shares. Consequently, one or more of our U.S. subsidiaries could be
or become PHCs, depending on whether any such subsidiaries satisfy the PHC gross
income test. We intend to cause our subsidiaries to manage their
affairs in a manner that reduces the possibility that any of them will meet the
60% income threshold. We cannot be certain, however, that our
subsidiaries will not become PHCs following this offering or in the
future.
If
any of our U.S. subsidiaries is or were to become a PHC in a given taxable year,
such company would be subject to an additional 15% PHC tax on its "undistributed
PHC income", which generally includes the company's taxable income, subject to
certain adjustments. For taxable years beginning after
December 31, 2010, the PHC tax rate on "undistributed PHC income" will be
equal to the highest marginal rate on ordinary income applicable to
individuals. Consequently, if our U.S. subsidiaries were to become
PHCs, the amount of PHC income and the U.S. tax imposed on such income may be
material.
Taxation
of Shareholders
Bermuda
Taxation
Under current
Bermuda law, there is no Bermuda income or profits tax, withholding tax, capital
gains tax, capital transfer tax, estate duty or inheritance tax payable by our
shareholders in respect of our common stock.
U.S.
Federal Income Taxation
The following
discussion sets forth the material U.S. Federal income tax considerations
related to the purchase, ownership and disposition of our common
stock. Unless otherwise stated, this summary deals only with
shareholders who are U.S. Persons (as defined below), who purchase their common
stock in this offering, and who hold their common stock as capital assets within
the meaning of Section 1221 of the Code.
The discussion does
not purport to address all of the U.S. Federal income tax consequences that may
be relevant to a particular shareholder in light of such shareholder's specific
circumstances. For example, if a partnership holds our common stock,
the tax treatment of a partner will generally depend on the status of the
partner and the activities of the partnership. If you are a partner
of a partnership holding common stock, you should consult your tax
advisor. In addition, except as expressly stated, the following
summary does not address the U.S. Federal income tax consequences that may be
relevant to special classes of shareholders who may be subject to special rules
or treatment under the Code, such as financial institutions, insurance
companies, regulated investment companies, real estate investment trusts,
partnerships or other pass-through entities, financial asset securitization
investment trusts, dealers or traders in securities, tax-exempt organizations,
expatriates, any person who owns or is deemed to own 10% or more of the total
combined voting power of all classes of shares of Lazard Ltd entitled to vote,
any person who holds common stock as part of a hedging or conversion transaction
or as part of a short-sale or straddle or any individual who is a non-U.S.
Person (as defined below) and who is present in the U.S. for 183 days or more in
a taxable year. Furthermore, the discussion does not include any
description of the tax laws of any state or local governments within the U.S.
and this discussion does not address any information reporting obligations
imposed on our shareholders as a result of the purchase, ownership or
disposition of our common stock or any aspects of estate and gift
taxation.
For purposes of
this discussion, the term "U.S. Person" means (1) a citizen or resident of
the U.S., (2) a corporation created or organized in or under the laws of
the U.S., or any political subdivision thereof (including the District of
Columbia), (3) an estate the income of which is subject to U.S. Federal
income taxation regardless of its source, (4) a trust if either (a) a
court within the U.S. is able to exercise primary supervision over the
administration of such trust and one or more U.S. Persons have the
authority to control all substantial decisions of such trust or (b) the
trust has a valid election in effect to be treated as a U.S. Person for U.S.
Federal income tax purposes or (5) any other person or entity that is
treated for U.S. Federal income tax purposes as if it were one of the
foregoing. The term "non-U.S. Person" means any person other than a
U.S. Person.
Partner
Status. Beneficial owners of shares who are also
shareholders of record of Lazard Ltd are treated as partners of Lazard Ltd for
U.S. Federal income tax purposes. Beneficial owners whose common
stock is held in street name or by a nominee and who have the right to direct
the nominee in the exercise of all substantive rights attendant to the ownership
of their common stock are also treated as partners of Lazard Ltd for U.S.
Federal income tax purposes.
A
beneficial owner of common stock whose common stock has been transferred to a
short seller to complete a short sale would appear to lose its status as a
partner with respect to this common stock for U.S. Federal income tax
purposes. Please read "—Treatment of Shares Lent to Short
Sellers".
Flow-Through of Taxable
Income. Lazard Ltd does not pay any U.S. Federal
income tax. Instead, each shareholder will be required to report on
its U.S. Federal income tax return its allocable share of our income, gains,
losses, and deductions without regard to whether corresponding cash
distributions are received by that shareholder. Although we generally
operate our business so that our only net income consists of dividends received
from our subsidiaries (and possibly interest), and we intend to allocate that
income to the shareholders of Lazard Ltd to whom it is distributed, a
shareholder may be allocated a share of our income even if it has not received a
cash distribution. Each shareholder must include in income its
allocable share of our income, gain, loss, and deduction for our taxable year
ending with or within such shareholder's taxable year.
Our gross income is
derived principally from distributions on and redemptions of shares of our
wholly-owned subsidiaries' stock. Such distributions and redemptions
are taxable as dividend income to the extent of the payor corporation's current
and accumulated earnings and profits, as determined for U.S. Federal income tax
purposes, then treated as a tax-free return of capital to the extent of our
basis in the payor corporation's stock, and thereafter taxed as capital
gain.
To
the extent received by Lazard Ltd from a U.S. subsidiary, such dividend income
received before 2011 that is allocable to individual Lazard Ltd shareholders
that are U.S. Persons should be characterized as "qualified dividend income" and
eligible for reduced rates of tax, provided that certain holding period
requirements are satisfied.
Subject to the
discussions below relating to the potential application of the passive foreign
investment company, or "PFIC", rules to our non-U.S. subsidiaries, dividend
income received from our non-U.S. subsidiaries before 2011 that is allocable to
individual Lazard Ltd shareholders that are U.S. Persons should be characterized
as "qualified dividend income" eligible for reduced rates of tax, provided that
certain holding period requirements are satisfied and that the payor corporation
is a "qualified resident" of the relevant treaty partner as described
above.
Treatment of
Distributions. Because of the flow-through of
taxable income described above, Lazard Ltd's distributions to a shareholder
generally will not be taxable to the shareholder for U.S. Federal income tax
purposes to the extent of such shareholder's tax basis in its common shares
immediately before the distribution. Our cash distributions in excess
of a shareholder's tax basis generally will be considered to be gain from the
sale or exchange of the common shares, taxable in accordance with the rules
described under "—Dispositions of Common Stock" below. Any reduction
in a shareholder's share of our liabilities, if any, for which no partner bears
the economic risk of loss, known as "nonrecourse liabilities", will be treated
as a distribution of cash to that shareholder. A decrease in a
shareholder's percentage interest in Lazard Ltd because of our issuance of
additional common shares would decrease its share of our nonrecourse
liabilities, if any, and thus would result in a corresponding deemed
distribution of cash. However, we generally operate our business so
that Lazard Ltd has no direct "nonrecourse liabilities".
Basis of Common
Stock. A shareholder will have an initial tax
basis for its common shares equal to the amount it paid for the common stock
plus its share of our nonrecourse liabilities, if any. That basis
will be increased by the shareholder's share of Lazard Ltd income and by any
increases in its share of our nonrecourse liabilities, if any. That
basis will be decreased, but not below zero, by distributions from Lazard Ltd,
by the shareholder's share of our losses, by any decrease in its share of our
nonrecourse liabilities (if any) and by its share of Lazard Ltd expenditures
that are not deductible in computing our taxable income and are not required to
be capitalized.
Limitations on Deductibility of Our
Losses. Because we currently do not (and intend in
the future not to) hold any significant assets other than stock of our
subsidiaries, Lazard Ltd will likely incur losses, if any, only under limited
circumstances, including, potentially, upon a sale of some or all of the stock
of its subsidiaries. If Lazard Ltd were to incur any losses, a
shareholder's use of such losses could be limited under the "at risk" or
"passive loss" rules.
The deduction by a
shareholder of its share of our losses will be limited to the tax basis in its
common stock and, in the case of an individual shareholder or a corporate
shareholder that is subject to the "at risk" rules, to the amount for which the
shareholder is considered to be "at risk" with respect to our activities, if
that is less than its tax basis. In general, a shareholder will be at
risk to the extent of the tax basis of its common stock, excluding any portion
of that basis attributable to its share of our nonrecourse liabilities (if any),
reduced by any amount of money it borrows to acquire or hold its common stock,
if the lender of those borrowed funds owns an interest in Lazard Ltd, is related
to the shareholder, or can look only to the common stock for
repayment. A shareholder's at risk amount will generally increase or
decrease as the tax basis of the shareholder's common stock increases or
decreases. A shareholder must recapture losses deducted in previous
years to the extent that distributions cause its at risk amount to be less than
zero at the end of any taxable year. Losses disallowed to a
shareholder or recaptured as a result of these limitations will carry forward
and will be allowable to the extent that its tax basis or at risk amount, whichever
is the limiting factor, subsequently increases. Upon the taxable
disposition of common stock, any gain recognized by a shareholder can be offset
by losses that were previously suspended by the at risk limitation but may not
be offset by losses suspended by the basis limitation. Any excess
loss previously suspended by the at risk or basis limitations above that gain
may no longer be used.
The passive loss
limitations generally provide that individuals, estates, trusts and some
closely-held corporations and personal service corporations can deduct losses
from passive activities only to the extent of the taxpayer's income from those
passive activities. A passive activity is defined as any activity
that involves the conduct of a trade or business in which the taxpayer does not
materially participate or any rental activity. We believe that the
manner in which Lazard Ltd conducts its operations does not constitute the
conduct of a trade or business for purposes of the passive activity loss
rules. Consequently, these rules should not apply to holders of our
common stock. We cannot be certain, however, that our manner of
operations will not change and that holders of our common stock will not become
subject to the passive activity loss rules in the future.
Prospective
investors should consult their tax advisors as to the effects of the at risk
and/or passive activity loss rules and any other limitations of deductions,
including the 2% limitation on itemized deductions.
Limitations on Interest
Deductions. The deductibility of a non-corporate
taxpayer's "investment interest" expense is generally limited to the amount of
that taxpayer's "net investment income". The IRS has announced that
Treasury Regulations will be issued that characterize net passive income (as
determined under the passive loss limitation rules) from a publicly-traded
partnership as investment income for this purpose. In addition, the
shareholder's share of our dividend and interest income will be treated as
investment income, although "qualified dividend income" subject to reduced rates
of tax in the hands of an individual, as described above, will only be treated
as investment income if the individual shareholder elects to treat such dividend
as ordinary income not subject to reduced rates of tax. Investment
interest expense includes:
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interest on
indebtedness properly allocable to property held for
investment,
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our interest
expense attributed to portfolio income, if any,
and
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the portion
of interest expense incurred to purchase or carry an interest in a passive
activity to the extent attributable to portfolio
income.
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The computation of
a shareholder's investment interest expense will take into account interest on
any margin account borrowing or other loan incurred to purchase or carry a
common share. Net investment income includes gross income from
property held for investment and amounts treated as portfolio income under the
passive loss rules, less deductible expenses, other than interest, directly
connected with the production of investment income, but generally does not
include gains attributable to the disposition of property held for
investment.
Allocation of Income, Gain, Loss and
Deduction. In general, if Lazard Ltd has a net
profit or net loss, its items of income, gain, loss and deduction are allocated
among the shareholders in accordance with their particular percentage interests
in Lazard Ltd. However, we generally operate our business so that our
only net income consists of dividends received from our subsidiaries (and
possibly interest), and we intend to allocate that income to the shareholders of
Lazard Ltd to whom it is distributed.
Special rules
generally apply to determine the allocation of a partnership's items of income,
deduction, gain and loss related to "contributed property" (other than
cash). Such special rules have limited relevance to our shareholders
because such rules will generally not adversely affect shareholders who purchase
their shares directly from Lazard Ltd or from the selling shareholders for
cash.
An
allocation of items of our income, gain, loss or deduction will generally be
given effect for U.S. Federal income tax purposes in determining a partner's
distributive share of an item of income, gain, loss or deduction only if
the allocation has "substantial economic effect". In any other case,
a partner's distributive share of an item will be determined on the basis of the
partner's interest in Lazard Ltd, which will be determined by taking into
account all the facts and circumstances, including the partner's relative
contributions to Lazard Ltd, the interests of the partners in economic profits
and losses, the interests of the partners in cash flow and other nonliquidating
distributions and rights of the partners to distributions of capital upon
liquidation.
Although our
operations generally do not result in the creation of negative capital accounts,
if negative capital accounts nevertheless result, items of our income and gain
will be allocated in an amount and manner sufficient to eliminate the negative
balance as quickly as possible.
Treatment of Shares Lent to Short
Sellers. A shareholder whose common shares are
loaned to a "short seller" to cover a short sale of common shares may be
considered as having disposed of ownership of those common shares. If
so, the shareholder would no longer be a partner with respect to those common
shares during the period of the loan and, although the shareholder will receive
no cash, the shareholder may recognize gain or loss from the disposition, which
will generally be capital gain or loss as described below under "—Dispositions
of Common Stock". As a result, during this period:
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any of our
income, gain, deduction or loss with respect to those common shares would
not be reportable by the
shareholder,
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any cash
distributions received by the shareholder with respect to those common
shares would be fully taxable, and
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all of these
distributions would appear to be treated as ordinary
income.
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The holding period
of a shareholder whose common shares are loaned to a "short seller" to cover a
short sale of common shares will restart when the common shares are returned to
the shareholder. Shareholders desiring to ensure their status as
partners and avoid the risk of gain recognition should modify any applicable
brokerage account agreements to prohibit their brokers from borrowing their
common shares. The IRS has announced that it is actively studying
issues relating to the tax treatment of short sales of partnership
interests. Please also read "—Dispositions of Common
Stock—Recognition of Gain or Loss". Shareholders whose common shares
are loaned to a "short seller" should consult their own tax advisors with
respect to their status as partners of Lazard Ltd for U.S. Federal income tax
purposes.
Dispositions of Common
Stock. A shareholder will recognize gain or loss
on a sale of common stock equal to the difference between the amount realized
and the shareholder's tax basis for the common stock sold. A
shareholder's amount realized will be measured by the sum of the cash or the
fair market value of other property received plus its share of our nonrecourse
liabilities, if any. Because the amount realized includes a
shareholder's share of our nonrecourse liabilities, if any, the gain recognized
on the sale of common shares could result in a tax liability in excess of any
cash received from the sale.
Prior distributions
from Lazard Ltd that decreased a shareholder's tax basis in that common share
will, in effect, become taxable income if the common stock is sold at a price
greater than the shareholder's tax basis in that common stock, even if the price
is less than its original cost.
Except as noted
below (and, if applicable, under "—Passive Foreign Investment Companies"), gain
or loss recognized by a shareholder on the sale or exchange of common stock will
generally be taxable as capital gain or loss and as long-term capital gain or
loss if the common stock is held for more than 12 months, subject (in the case
of shareholders who are individuals) to tax in taxable years beginning before
January 1, 2011 at a maximum U.S. Federal income tax rate of
15%. Net capital loss may offset no more than $3,000 of ordinary
income in the case of individuals and may only be used to offset capital gain in
the case of corporations.
The IRS has ruled
that a partner who acquires interests in a partnership in separate transactions
must combine those interests and maintain a single adjusted tax basis for all
those interests. Upon a sale or other disposition
of less than all of those interests, a portion of that tax basis must be
allocated to the interests sold using an "equitable apportionment"
method. On the other hand, a selling shareholder who can identify
common stock transferred with an ascertainable holding period may elect to use
the actual holding period of the common stock transferred. A
shareholder electing to use the actual holding period of common stock
transferred must consistently use that identification method for all subsequent
sales or exchanges of common stock.
Section 754
Election. Lazard Ltd has made the election
permitted by Section 754 of the Code. The election is irrevocable without
the consent of the IRS. The election generally permits Lazard Ltd to
adjust a common stock purchaser's tax basis in our assets ("inside basis") under
Section 743(b) of the Code to reflect the common stock purchaser's purchase
price. This election does not apply to a person who purchases common
stock directly from Lazard Ltd. The Section 743(b) adjustment
generally belongs to the purchaser and not to other partners. For
purposes of this discussion, a partner's inside basis in our assets will be
considered to have two components, (1) its share of our tax basis in our
assets ("common basis") and (2) its Section 743(b) adjustment to that
basis.
Because Lazard Ltd
currently does not (and in the future intends not to) hold any significant
assets other than stock of its subsidiaries, our Section 754 election will
likely not be relevant to our shareholders except if Lazard Ltd sells, or is
treated as selling, all or part of the stock of its
subsidiaries. Generally, a Section 754 election is advantageous
to a transferee shareholder if such shareholder's tax basis in its common stock
is higher than the common stock share of the aggregate tax basis of our assets
immediately prior to the transfer. In that case, as a result of the
election, the transferee shareholder would have a higher tax basis in its share
of our assets for purposes of calculating, among other items, its share of any
gain or loss on a sale of our assets. Conversely, a Section 754
election is disadvantageous to a transferee shareholder if such shareholder's
tax basis in its common stock is lower than those common shares' share of the
aggregate tax basis of our assets immediately prior to the
transfer. Thus, the fair market value of the common stock may be
affected either favorably or adversely by the election.
The calculations
involved in the Section 754 election are complex, and we make them on the
basis of assumptions as to the value of our assets and other
matters. The determinations we make may be successfully challenged by
the IRS and any allocations resulting from them may be reduced or disallowed
altogether. Should the IRS require a different basis adjustment to be
made, and should, in our opinion, the expense of compliance exceed the benefit
of the election, Lazard Ltd may seek permission from the IRS to revoke its
Section 754 election (although Lazard Ltd will be required to make similar
adjustments to a partner's inside basis in its assets under certain
circumstances even if no Section 754 election is in effect). If
Lazard Ltd successfully revokes its Section 754 election, a subsequent
purchaser of common stock may be allocated more income than it would have been
allocated had the election not been revoked.
Constructive
Termination. Subject to the electing large
partnership rules described below, Lazard Ltd will be considered to have been
terminated for tax purposes if there is a sale or exchange of 50% or more of the
total interests in our capital and profits within a 12-month
period. Lazard Ltd's termination would result in the closing of our
taxable year for all shareholders. In the case of a shareholder
reporting on a taxable year other than a fiscal year ending December 31,
the closing of our taxable year may result in more than 12 months of our taxable
income or loss being includable in its taxable income for the year of
termination. Lazard Ltd would be required to make new tax elections
after a termination, including a new election under Section 754 of the
Code. A termination could also result in penalties if Lazard Ltd were
unable to determine that the termination had occurred. Moreover, a
termination might either accelerate the application of, or subject us to, any
tax legislation enacted before the termination.
Passive Foreign Investment
Companies. In general, a foreign corporation will
be a PFIC during a given year if (1) 75% or more of its gross income
constitutes "passive income" or (2) 50% or more of its assets produce
passive income.
If
any of our direct non-U.S. subsidiaries were characterized as a PFIC during a
given year, U.S. Persons holding common stock would be subject to adverse U.S.
Federal income tax consequences, including a penalty tax at the time of the sale
at a gain of (or receipt of an "excess distribution" with respect to) their
shares, unless such
persons made a "qualified electing fund election" or "mark-to-market"
election. For these purposes, stock of a PFIC that is owned by Lazard
Ltd is considered as owned proportionately by our shareholders. It is
uncertain whether Lazard Ltd would be able to provide its shareholders with the
information necessary for a U.S. Person to make a "qualified electing fund
election" with respect to our non-U.S. subsidiaries.
We
believe that none of Lazard Ltd's directly-held non-U.S. subsidiaries should be
treated as a PFIC. However, actual determination of PFIC status is
fundamentally factual in nature and cannot be made until the close of the
applicable taxable year. Moreover, we cannot be certain that the IRS
will not challenge this position and that a court will not sustain such
challenge. Prospective investors should consult their tax advisors as
to the effects of the PFIC rules if they were to apply.
U.S. Federal Income Tax
Considerations for Non-U.S. Persons. Ownership of
our common stock by non-U.S. Persons raises special U.S. Federal income tax
considerations. To the extent Lazard Ltd receives dividends from a
U.S. subsidiary, distributions of such dividend income to Lazard Ltd
shareholders who are non-U.S. Persons will be subject to U.S. withholding tax at
a rate of 30%. A non-U.S. Person's ability to lower such withholding
rate under an applicable income tax treaty will likely be limited due to special
rules under the Code relating to hybrid entities, such as Lazard Ltd, which is a
partnership for U.S. Federal income tax purposes but which may not be a
partnership under the laws of the non-U.S. Person's country of
residence.
To
the extent Lazard Ltd receives dividends from a non-U.S. subsidiary,
distributions of such dividend income to Lazard Ltd shareholders who are
non-U.S. Persons will not be subject to U.S. tax, unless such income were deemed
to be effectively connected with a trade or business conducted by Lazard Ltd or
the recipient shareholder in the U.S.
While we manage our
affairs so that Lazard Ltd will not be engaged in a trade or business in the
U.S., we may not, however, be able to do so in the future. If Lazard
Ltd were engaged in a trade or business in the U.S., non-U.S. Persons that own
our common stock would be considered to be engaged in business in the U.S. and
would be subject to U.S. Federal income tax on a net income basis at regular
rates on income "effectively connected" with such trade or
business.
Lazard Ltd will be
required to pay withholding tax with respect to the portion of our income that
is "effectively connected" with the conduct of a U.S. trade or business and that
is allocable to non-U.S. Persons that hold our common stock. Under
rules applicable to publicly-traded partnerships, Lazard Ltd will withhold taxes
on actual cash distributions attributable to effectively connected income made
quarterly to shareholders that are non-U.S. Persons at the highest marginal rate
applicable to individuals at the time of the distribution. Each
shareholder that is a non-U.S. Person must obtain a taxpayer identification
number from the IRS and submit that number to our transfer agent on a Form
W-8BEN or applicable substitute form in order to obtain credit for the taxes
withheld or to claim the benefits of an applicable tax treaty. A
change in applicable law may require us to change these procedures.
If
Lazard Ltd is unable to avoid being considered to be engaged in a trade or
business in the U.S., a foreign corporate shareholder that owns our common stock
may be subject to U.S. branch profits tax at a rate of 30%, in addition to
regular Federal income tax, on its allocable share of our income and gain, as
adjusted for changes in the foreign corporate shareholder's "U.S. net equity",
which are effectively connected with its conduct of a U.S. trade or
business. That tax may be reduced or eliminated by an income tax
treaty between the U.S. and the country of which the foreign corporate
shareholder is a "qualified resident". In addition, this type of
shareholder is subject to special information reporting requirements under
Section 6038C of the Code.
A
shareholder that is a non-U.S. Person will be subject to U.S. Federal income tax
upon the sale or disposition of our common stock to the extent that such
shareholder recognizes gain upon such sale or disposition and such gain is
effectively connected with a U.S. trade or business of the
shareholder. The IRS has concluded in a published ruling that a
shareholder's gain will be treated as effectively connected with a U.S. trade or
business of the shareholder to the extent Lazard Ltd is treated as engaged in a
U.S. trade or business
through a fixed place of business in the U.S. and the shareholder's gain is
attributable to our U.S. source property.
Administrative
Matters
Information
Returns. We furnish to each shareholder, within 90
days after the close of each calendar year, specific tax information, which
describes each shareholder's share of our income, gain, loss and deduction for
its preceding taxable year. In preparing this information, which is
generally not reviewed by counsel, we use various accounting and reporting
conventions, some of which have been mentioned in the previous discussion, to
determine the shareholder's share of income, gain, loss and
deduction. Any of those conventions may not yield a result that
conforms to the requirements of the Code, regulations or administrative
interpretations of the IRS. The IRS may successfully contend in court
that those accounting and reporting conventions are
impermissible. Any challenge by the IRS could negatively affect the
value of the common stock.
Elective Procedures for Large
Partnerships. The Code allows large partnerships
to elect streamlined procedures for income tax reporting. This
election would reduce the number of items that must be separately stated on the
Schedules K-1 that are issued to the shareholders, and such Schedules K-1 would
have to be provided to shareholders on or before the first March 15
following the close of each taxable year. In addition, this election
would prevent Lazard Ltd, which is taxed as a partnership for U.S. Federal
income tax purposes, from suffering a "technical termination" (which would close
our taxable year) if, within a twelve month period, there is a sale or exchange
of 50% or more of our total interests. To date, Lazard Ltd has not
made such an election.
Backup
Withholding. For each calendar year, Lazard Ltd
reports to its shareholders who are U.S. Persons and to the IRS the amount of
distributions that it pays, and the amount of tax (if any) that it withholds on
these distributions. Under the backup withholding rules, you may be
subject to backup withholding tax with respect to distributions paid unless you:
(i) are a corporation or come within another exempt category and
demonstrate this fact when required; or (ii) provide a taxpayer
identification number, certify as to no loss of exemption from backup
withholding tax and otherwise comply with the applicable requirements of the
backup withholding tax rules. Exempt shareholders who are U.S.
Persons should indicate their exempt status on a properly completed IRS Form W-9
or an applicable substitute form. A non-U.S. Person may qualify as an
exempt recipient by submitting a properly completed IRS Form W-8BEN or an
applicable substitute form. Backup withholding is not an additional
tax. The amount of any backup withholding from a payment to a
shareholder will be allowed as a credit against such shareholder's U.S. Federal
income tax liability and may entitle the shareholder to a refund.
Treatment of Amounts
Withheld. If Lazard Ltd or any of its subsidiaries
is required to withhold any U.S. tax on distributions made to any shareholder or
to Lazard Ltd that are allocable to any shareholder, Lazard Ltd or such
subsidiary will pay such withheld amount to the IRS. That payment, if
made, will be treated as a distribution of cash to the shareholder with respect
to whom the payment was made and will reduce the amount of cash to which such
shareholder would otherwise be entitled.
Nominee
Reporting. Persons who hold an interest in Lazard
Ltd as a nominee for another person are required to furnish to us:
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(a)
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the name,
address and taxpayer identification number of the beneficial owner and the
nominee,
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(b)
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whether the
beneficial owner is:
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(1)
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a person that
is not a U.S. Person,
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(2)
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a foreign
government, an international organization or any wholly-owned agency or
instrumentality of either of the foregoing,
or
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(3)
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a tax-exempt
entity,
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(c)
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the amount
and description of common stock held, acquired or transferred for the
beneficial owner, and
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(d)
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specific
information including the dates of acquisitions and transfers, means of
acquisitions and transfers, and acquisition cost for purchases, as well as
the amount of net proceeds from
sales.
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Brokers and
financial institutions are required to furnish additional information, including
whether they are U.S. Persons and specific information on common stock they
acquire, hold or transfer for their own account. A penalty of $50 per
failure, up to a maximum of $100,000 per calendar year, is imposed by the Code
for failure to report that information to Lazard Ltd. The nominee is
required to supply the beneficial owner of the common stock with the information
return furnished by Lazard Ltd.
Lazard Ltd, the
selling shareholders and Goldman, Sachs & Co. (the "underwriter") have
entered into an underwriting agreement and a pricing agreement with respect to
the shares of our common stock being offered. Subject to certain
conditions, the underwriter has agreed to purchase all of the 7,869,311
shares offered hereby.
The underwriter may
receive from purchasers of the shares normal brokerage commissions in amounts
agreed with such purchasers.
Our common stock is
traded on the New York Stock Exchange under the symbol "LAZ".
The underwriter
proposes to offer the shares of our common stock from time to time for sale in
one or more transactions on the New York Stock Exchange, in the over-the-counter
market, through negotiated transactions or otherwise at market prices prevailing
at the time of sale, at prices related to prevailing market prices or at
negotiated prices, subject to receipt and acceptance by it and subject to its
right to reject any order in whole or in part. In connection with the
sale of the shares of common stock offered hereby, the underwriter may be deemed
to have received compensation in the form of underwriting
discounts. The underwriter may effect such transactions by selling
shares of our common stock to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriter and/or purchasers of shares of our common stock for whom they may
act as agents or to whom they may sell as principal.
In
connection with the offering, the underwriter may purchase and sell shares of
our common stock in the open market. These transactions may include
short sales and purchases to cover positions created by short sales. Short sales
involve the sale by the underwriter of a greater number of shares than it is
required to purchase in the offering. The underwriter will need to
close out any short sale by purchasing shares in the open market. The
underwriter is likely to create a short position if it is concerned that there
may be downward pressure on the price of our common stock in the open market
after pricing that could adversely affect investors who purchase in this
offering.
Purchases to cover
a short position, as well as other purchases by the underwriter for its own
account, may have the effect of preventing or retarding a decline in the market
price of the Company's stock, and may maintain or otherwise affect the market
price of our common stock. As a result, the price of our common stock
may be higher than the price that otherwise might exist in the open market. If
these activities are commenced, they may be discontinued at any time. These
transactions may be effected on the New York Stock Exchange, in the
over-the-counter market or otherwise.
The selling
shareholders have agreed with the underwriter, subject to certain exceptions,
not to dispose of or hedge any of our shares of common stock or securities
convertible into or exchangeable for shares of our common stock during the
period from the date of this prospectus supplement continuing through the date
that is 60 days after the date of this prospectus supplement, except with the
prior written consent of the underwriter.
In
relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive (each, a Relevant Member State), the
underwriter has represented and agreed that with effect from and including the
date on which the Prospectus Directive is implemented in that Relevant Member
State (the Relevant Implementation Date) it has not made and will not make an
offer of shares to the public in that Relevant Member State prior to the
publication of a prospectus in relation to the shares which has been approved by
the competent authority in that Relevant Member State or, where appropriate,
approved in another Relevant Member State and notified to the competent
authority in that Relevant Member State, all in accordance with the Prospectus
Directive, except that it may, with effect from and including the Relevant
Implementation Date, make an offer of shares to the public in that Relevant
Member State at any time:
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(a)
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to legal
entities which are authorized or regulated to operate in the financial
markets or, if not so authorized or regulated, whose corporate purpose is
solely to invest in securities;
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(b)
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to any legal
entity which has two or more of (1) an average of at least 250
employees during the last financial year; (2) a total balance sheet
of more than €43,000,000 and (3) an annual net turnover of more than
€50,000,000, as shown in its last annual or consolidated
accounts;
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(c)
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to fewer than
100 natural or legal persons (other than qualified investors as defined in
the Prospectus Directive) subject to obtaining the prior consent of the
underwriter for any such offer; or
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(d)
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in any other
circumstances which do not require the publication by the Issuer of a
prospectus pursuant to Article 3 of the Prospectus
Directive.
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For the purposes of
this provision, the expression an "offer of shares to the public" in relation to
any shares in any Relevant Member State means the communication in any form and
by any means of sufficient information on the terms of the offer and the shares
to be offered so as to enable an investor to decide to purchase or subscribe the
shares, as the same may be varied in that Relevant Member State by any measure
implementing the Prospectus Directive in that Relevant Member State and the
expression Prospectus Directive means Directive 2003/71/EC and includes any
relevant implementing measure in each Relevant Member State.
The underwriter has
represented and agreed that:
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(a)
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it has only
communicated or caused to be communicated and will only communicate or
cause to be communicated an invitation or inducement to engage in
investment activity (within the meaning of Section 21 of the FSMA)
received by it in connection with the issue or sale of the shares in
circumstances in which Section 21(1) of the FSMA would not, if the
Issuer was not an authorized person, apply to the Issuer;
and
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(b)
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it has
complied and will comply with all applicable provisions of the FSMA with
respect to anything done by it in relation to the shares in, from or
otherwise involving the United
Kingdom.
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The shares may not
be offered or sold by means of any document other than (i) in circumstances
which do not constitute an offer to the public within the meaning of the
Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to "professional
investors" within the meaning of the Securities and Futures Ordinance (Cap.571,
Laws of Hong Kong) and any rules made thereunder, or (iii) in other
circumstances which do not result in the document being a "prospectus" within
the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no
advertisement, invitation or document relating to the shares may be issued or
may be in the possession of any person for the purpose of issue (in each case
whether in Hong Kong or elsewhere), which is directed at, or the contents of
which are likely to be accessed or read by, the public in Hong Kong (except if
permitted to do so under the laws of Hong Kong) other than with respect to
shares which are or are intended to be disposed of only to persons outside Hong
Kong or only to "professional investors" within the meaning of the Securities
and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made
thereunder.
This prospectus
supplement has not been registered as a prospectus with the Monetary Authority
of Singapore. Accordingly, this prospectus supplement and any other
document or material in connection with the offer or sale, or invitation for
subscription or purchase, of the shares may not be circulated or distributed,
nor may the shares be offered or sold, or be made the subject of an invitation
for subscription or purchase, whether directly or indirectly, to persons in
Singapore other than (i) to an institutional investor under
Section 274 of the Securities and Futures Act, Chapter 289 of Singapore
(the "SFA"), (ii) to a relevant person, or any person pursuant to
Section 275(1A), and in accordance with the conditions, specified in
Section 275 of the SFA or (iii) otherwise pursuant to, and in
accordance with the conditions of, any other applicable provision of the
SFA.
Where the shares
are subscribed or purchased under Section 275 by a relevant person which
is: (a) a corporation (which is not an accredited investor) the sole
business of which is to hold investments and the entire share capital of which
is owned by one or more individuals, each of whom is an accredited investor; or
(b) a trust (where the trustee is not an accredited investor) whose sole
purpose is to hold investments and each beneficiary is an accredited investor,
shares, debentures and units of shares and debentures of that corporation or the
beneficiaries' rights and interest in that trust shall not be transferable for
six months after that corporation or that trust has acquired the shares under
Section 275 except: (1) to an institutional investor under
Section 274 of the SFA or to a relevant person, or any person pursuant to
Section 275(1A), and in accordance with the conditions, specified in
Section 275 of the SFA; (2) where no consideration is given for the
transfer; or (3) by operation of law.
The securities have
not been and will not be registered under the Financial Instruments and Exchange
Law of Japan (the Securities and Exchange Law) and the underwriter has agreed
that it will not offer or sell any securities, directly or indirectly, in Japan
or to, or for the benefit of, any resident of Japan (which term as used herein
means any person resident in Japan, including any corporation or other entity
organized under the laws of Japan), or to others for re-offering or resale,
directly or indirectly, in Japan or to a resident of Japan, except pursuant to
an exemption from the registration requirements of, and otherwise in compliance
with, the Financial Instruments and Exchange Law and any other applicable laws,
regulations and ministerial guidelines of Japan.
Lazard estimates
that the total expenses of this offering, all of which will be borne by Lazard,
and excluding deemed underwriting discounts and commissions, will be
approximately $800,000.
Lazard and the
selling shareholders have agreed to indemnify the underwriter against certain
liabilities, including liabilities under the Securities Act.
The underwriter and
its affiliates are full service financial institutions engaged in various
activities, which may include securities trading, commercial and investment
banking, financial advisory, investment management, principal investment,
hedging, financing and brokerage activities. In the ordinary course
of their various business activities, the underwriter and its affiliates may
make or hold a broad array of investments and actively trade debt and equity
securities (or related derivative securities) and financial instruments
(including bank loans) for their own account and for the accounts of their
customers and may at any time hold long and short positions in such securities
and instruments. Such investment and securities activities may involve
securities and instruments of the Company.
The underwriter and
its affiliates have, from time to time, performed, and may in the future
perform, various financial advisory and investment banking services for the
Company, for which they received or will receive customary fees and
expenses. Lazard Ltd, Lazard Group and their affiliates have in the
past provided, and may in the future from time to time provide, similar services
to the underwriter and its affiliates on customary terms and for customary
fees. The underwriter was an underwriter in the equity public
offering and the ESU offering and an initial purchaser in two privately placed
Lazard Group notes offerings.
The validity of the
shares of our common stock offered hereby has been passed upon for Lazard Ltd by
Conyers Dill & Pearman, Hamilton, Bermuda. Lazard has been
represented by Cravath, Swaine & Moore LLP, New York, New
York. Goldman, Sachs & Co. has been represented by
Sullivan & Cromwell LLP, New York, New York.
The consolidated
financial statements and the related financial statement schedule, incorporated
in this prospectus supplement by reference from the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2009, and the effectiveness of
the Company's internal control over financial reporting have been audited by
Deloitte & Touche LLP, an independent registered public accounting firm, as
stated in their reports, which are incorporated herein by reference. Such
consolidated financial statements and financial statement schedule have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
Prospectus
Class A
Common Stock
Debt
Securities
Preference
Shares
Warrants
Stock
Purchase Contracts
Stock
Purchase Units
The securities
covered by this prospectus may be sold from time to time by Lazard
Ltd. In addition, selling security holders to be named in a
prospectus supplement may offer and sell from time to time securities in such
amounts as set forth in such prospectus supplement. We may, and any
selling security holder may, offer the securities independently or together in
any combination for sale directly to purchasers or through underwriters, dealers
or agents to be designated at a future date. Unless otherwise set
forth in a prospectus supplement, we will not receive any proceeds from the sale
of securities by any selling security holders.
When we offer
securities, we will provide you with a prospectus supplement describing the
specific terms of the specific issue of securities, including the offering price
of the securities. You should carefully read this prospectus and the
prospectus supplement relating to the specific issue of securities, together
with the documents we incorporate by reference, before you decide to invest in
any of these securities.
THIS PROSPECTUS
MAY NOT BE USED TO OFFER OR SELL ANY SECURITIES UNLESS ACCOMPANIED BY A
PROSPECTUS SUPPLEMENT.
Our
Class A common stock is traded on the New York Stock Exchange under the
symbol "LAZ."
Investing
in our securities involves risks. See "Risk Factors" on page
4 of this
prospectus. You should carefully review the risks and uncertainties
described under the heading "Risk Factors" contained in the applicable
prospectus supplement and any related free writing prospectus, and under similar
headings in the other documents that are incorporated by reference into this
prospectus.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is March 16, 2010.
No person is authorized to give any information or to represent anything not
contained in this prospectus. You must not rely on any unauthorized
information or representations. This prospectus is an offer to sell
only the securities offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information contained
in this prospectus is current only as of its date.
TABLE
OF CONTENTS
This prospectus
is part of a registration statement that we filed with the United States
Securities and Exchange Commission, which we refer to in this prospectus as the
"SEC," using the "shelf" registration process. Under this shelf registration
process, we, or certain of our security holders, may sell the securities
described in this prospectus in one or more offerings.
This prospectus
provides you with a general description of the securities we or a selling
security holder may offer. Each time we, or, under certain
circumstances, our security holders, sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering and the means of distribution. The prospectus
supplement may include other special considerations applicable to such offering
of securities. The prospectus supplement may also add to, update or
change information contained in this prospectus. If there is any
inconsistency between the information in this prospectus and any prospectus
supplement, you should rely on the information in the prospectus
supplement. You should carefully read both this prospectus and any
prospectus supplement together with additional information described under the
heading "Where You Can Find More Information."
The prospectus
supplement will describe: the terms of the securities offered, any initial
public offering price, the price paid to us for the securities, the net proceeds
to us, the manner of distribution and any underwriting compensation and the
other specific material terms related to the offering of these
securities. For more detail on the terms of the securities, you
should read the exhibits filed with or incorporated by reference in our
registration statement of which this prospectus forms a
part.
In this
prospectus, unless the context otherwise requires, the
terms:
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"Lazard,"
"we," "our," "us" and the "Company" refer to Lazard Ltd, a Bermuda
exempted company whose shares of common stock are publicly traded on the
New York Stock Exchange under the symbol "LAZ," and its subsidiaries,
including Lazard Group.
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"Lazard
Group," refers to Lazard Group LLC, a Delaware limited liability company
that is the holding company for the subsidiaries that conduct Lazard’s
business (which includes all of the businesses, subsidiaries, assets and
liabilities of Lazard Ltd and Lazard Group, which we refer to in this
prospectus as "our business").
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References to
"securities" includes any security that we might sell under this prospectus or
any prospectus supplement.
We prepare our
financial statements in U.S. dollars and in conformity with U.S.
generally accepted accounting principles, or "U.S. GAAP", including all of the
financial statements incorporated by reference or included in this
prospectus. Our fiscal year ends on December 31. In
this prospectus, except where otherwise indicated, references to "$" or
"dollars" are to the lawful currency of the United
States.
The results of
operations for the period prior to May 10, 2005, the date of our initial equity
public offering, do not reflect what our results of operations would have been
had we been a stand-alone, public company. In addition, the results of
operations for the period prior to May 10, 2005 are not comparable to results of
operations for subsequent periods.
The Lazard logo
and the other trademarks, trade names and service marks of Lazard mentioned in
this prospectus, including Lazard®, are
the property of, and are used with the permission of, our
subsidiaries.
This prospectus
contains summaries of certain provisions contained in some of the documents
described herein. Please refer to the actual documents for complete
information. All of the summaries are qualified in their entirety by the actual
documents. Copies of the documents referred to herein have been
filed, or will be filed or incorporated by reference as exhibits to the
registration statement of which this prospectus is a part, and you may obtain
copies of those documents as described below under "Where You Can Find More
Information."
You should
rely only on the information contained in this prospectus or incorporated by
reference in this prospectus. We have not authorized anyone to
provide you with different information. The distribution of this
prospectus and sale of these securities in certain jurisdictions may be
restricted by law. Persons in possession of this prospectus are
required to inform themselves about and observe any such
restrictions. We are not making an offer to sell these securities in
any jurisdiction where the offer or sale is not permitted. You should
assume that the information appearing in this prospectus is accurate as of the
date on the front cover of this prospectus only. Our business,
financial condition, results of operations and prospects may have changed since
that date.
We are one of the world's preeminent financial advisory and asset management
firms and have long specialized in crafting solutions to the complex financial
and strategic challenges of our clients. We serve a diverse set of clients
around the world, including corporations, partnerships, institutions,
governments and high-net worth individuals. The first Lazard partnership was
established in 1848. Over time we have extended our activities beyond our roots
in New York, Paris and London. We currently operate from 40 cities in key
business and financial centers across 25 countries throughout Europe, North
America, Asia, Australia, and Central and South America. We focus primarily on
two business segments - Financial Advisory and Asset Management. We believe that
the mix of our activities across business segments, geographic regions,
industries and investment strategies helps to diversify and stabilize our
revenue stream.
Lazard Ltd was
incorporated in Bermuda on October 25, 2004. Lazard Group was
formed in Delaware on March 2, 2000 under the name Lazard LLC and was
renamed Lazard Group LLC on May 10, 2005. Our principal
executive offices are located in the U.S. at 30 Rockefeller Plaza, New York, New
York 10020, with a general telephone number of (212) 632-6000, in France at
121 Boulevard Haussmann, 75382 Paris Cedex 08, with a general telephone number
of 33-1-44-13-01-11 and in the U.K. at 50 Stratton Street, London W1J 8LL, with
a general telephone number of 44-207-187-2000. Lazard Ltd's
registered office in Bermuda is located at Clarendon House, 2 Church Street,
Hamilton HM 11, Bermuda, with a general telephone number of
(441) 295-1422. We maintain a public website at http://www.lazard.com. The information contained in or connected to our
website is not a part of this prospectus, and you should not rely on such
information in making your decision whether to purchase
securities.
Investing in
our securities involves risks. Potential investors are urged to read and
consider the risk factors and other disclosures relating to an investment in
securities issued by Lazard Ltd described in our Annual Report on Form 10-K for
the fiscal year ended December 31, 2009, as updated by annual, quarterly and
other reports and documents we file with the SEC after the date of this
prospectus and that are incorporated by reference herein. Before making an
investment decision, you should carefully consider those risks as well as other
information we include or incorporate by reference in this prospectus and any
prospectus supplement. If any of the events or developments described actually
occurred, our business, financial condition or results of operations would
likely suffer. The risks and uncertainties we have described are not the only
ones facing our company. Additional risks and uncertainties not presently known
to us or that we currently consider immaterial may also affect our business
operations. To the extent a particular offering implicates additional risks, we
will include a discussion of those risks in the applicable prospectus
supplement.
This
prospectus, any accompanying prospectus supplement and the information
incorporated herein and therein by reference include forward-looking statements
within the meaning of Section 27A of the Securities Act and
Section 21E of the Securities Exchange Act of 1934, as amended, which we
refer to in this prospectus as the "Exchange Act." We have made
statements in the prospectus and in the information incorporated by reference in
this prospectus under the captions "Lazard Ltd," "Risk Factors," "Management’s
Discussion and Analysis of Financial Condition and Results of Operations" and in
other sections of this prospectus, and in the information incorporated by
reference in this prospectus that are forward-looking
statements.
In some cases,
you can identify these statements by forward-looking words such as "may,"
"might," "will," "should," "expect," "plan," "anticipate," "believe,"
"estimate," "predict," "potential" or "continue," and the negative of these
terms and other comparable terminology. These forward-looking
statements, which are subject to known and unknown risks, uncertainties and
assumptions about us, may include projections of our future financial
performance based on our growth strategies and anticipated trends in our
business. These statements are only predictions based on our current
expectations and projections about future events. There are important
factors that could cause our actual results, level of activity, performance or
achievements to differ materially from the results, level of activity,
performance or achievements expressed or implied by the forward-looking
statements. In particular, you should consider the numerous risks and
uncertainties outlined in "Risk Factors," including the
following:
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a
continued decline or further deterioration in general economic conditions
or the global financial markets,
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losses
caused by financial or other problems experienced by third
parties,
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losses
due to unidentified or unanticipated
risks,
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a
lack of liquidity, i.e., ready access to funds, for use in our businesses,
and
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competitive
pressure on our businesses and on our ability to retain our
employees.
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These risks and
uncertainties are not exhaustive. Other sections of this prospectus
may include additional factors which could adversely impact our business and
financial performance. Moreover, we operate in a very competitive and
rapidly changing environment. New risks and uncertainties emerge from
time to time, and it is not possible for our management to predict all risks and
uncertainties, nor can we assess the impact of all factors on our business or
the extent to which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any forward-looking
statements.
Although we
believe the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, level of activity, performance
or achievements. Moreover, neither we nor any other person assumes
responsibility for the accuracy or completeness of any of these forward-looking
statements. You should not rely upon forward-looking statements as
predictions of future events. We are under no duty to update any of
these forward-looking statements after the date of this prospectus to conform
our prior statements to actual results or revised expectations and we do not
intend to do so.
Forward-looking
statements include, but are not limited to, statements about
the:
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business'
possible or assumed future results of operations and operating cash
flows,
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business'
strategies and investment policies,
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business'
financing plans and the availability of short-term
borrowing,
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business'
competitive position,
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future
acquisitions, including the consideration to be paid and the timing of
consummation,
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potential
growth opportunities available to our
businesses,
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recruitment
and retention of our managing directors and
employees,
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target
levels of compensation expense,
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business'
potential operating performance, achievements, productivity improvements,
efficiency and cost reduction
efforts,
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likelihood
of success and impact of
litigation,
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expected
tax rate,
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changes
in interest and tax rates,
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expectations
with respect to the economy, securities markets, the market for mergers,
acquisitions, strategic advisory and restructuring activity, the market
for asset management activity and other industry
trends,
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effects
of competition on our businesses,
and
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impact
of future legislation and regulation on our
businesses.
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Lazard is
committed to providing timely and accurate information to the investing public,
consistent with our legal and regulatory obligations. To that end, we
use websites to convey information about our businesses, including the
anticipated release of quarterly financial results, quarterly financial,
statistical and business-related information, and the posting of updates of
assets under management, or which we refer to in this prospectus as "AUM," in
various mutual funds, hedge funds and other investment products managed by
Lazard Asset Management LLC, or which we refer to in this prospectus as "LAM,"
and its subsidiaries. Monthly updates of these funds are posted to
the LAM website (
http://www.lazardnet.com ) by the third business day following the end of
each month. Investors can link to Lazard Ltd, Lazard Group and their operating
company websites through http://www.lazard.com. The
information contained in or connected to our website is not a part of this
prospectus, and you should not rely on such information in making your decision
whether to purchase securities.
We may register securities covered by this prospectus for re-offers and resales
by any selling security holders to be named in a prospectus
supplement. Because we are a well-known seasoned issuer, as defined
in Rule 405 of the Securities Act, we may add secondary sales of securities by
any selling security holders by filing a prospectus supplement with the
SEC. We may register these securities to permit selling security
holders to resell their securities when they deem appropriate. A
selling security holder may resell all, a portion or none of their securities at
any time and from time to time. We may register those securities for
sale through an underwriter or other plan of distribution as set forth in a
prospectus supplement. See "Plan of Distribution." Selling
security holders may also sell, transfer or otherwise dispose of some or all of
their securities in transactions exempt from the registration requirements of
the Securities Act. We may pay all expenses incurred with respect to
the registration of the securities owned by the selling security holders, other
than underwriting fees, discounts or commissions, which will be borne by the
selling security holders. We will provide you with a prospectus
supplement naming the selling security holders, the amount of securities to be
registered and sold and other terms of the securities being sold by a selling
security holder.
The following
table sets forth our ratio of earnings to fixed charges and the deficiency of
our earnings to cover fixed charges for the periods
indicated.
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Year
Ended
December
31, 2009
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Year
Ended
December
31, 2008
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Year
Ended
December
31, 2007
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Year
Ended
December
31, 2006
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Year
Ended
December
31, 2005
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Ratio
of earnings to fixed charges(a)
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(a)
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For
purposes of computing the ratio of earnings to fixed charges: earnings for
the years ended December 31, 2009, 2008, 2007, 2006 and 2005 represent
income from continuing operations before income taxes, and, for the period
prior to May 10, 2005, the date of Lazard Ltd's equity public offering,
before distributions for services rendered by managing directors and
employee members of LAM, and before fixed charges, and fixed charges
represent the interest expense from continuing operations and the portion
of rental expense from continuing operations which represents an
appropriate interest factor.
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(b)
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Lazard's
earnings were insufficient to cover its fixed charges by $182 million for
the year ended December 31, 2009.
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Unless
otherwise indicated in a prospectus supplement, we intend to use the net
proceeds from the sale of our securities for general corporate purposes, which
may include additions to working capital, repayment of indebtedness, the
financing of possible acquisitions and investments, stock repurchases or for
such other purposes as may be specified in the applicable prospectus
supplement. Unless otherwise set forth in a prospectus supplement, we
will not receive any proceeds from any sales of our securities by any selling
security holder to be named in a prospectus supplement.
For a
description of the common stock we or selling security holders may offer, see
"Description of Capital Stock," in Lazard Ltd’s final prospectus filed pursuant
to Rule 424(b)(3) of the Securities Act on May 6, 2005 with respect to the
Registration Statement on Form S-1 (File No. 333-121407). See
"Where You Can Find More Information."
The following
description of the terms of the debt securities we may issue sets forth certain
general terms and provisions of any debt securities to which any prospectus
supplement may relate. The particular terms of debt securities
offered by any prospectus supplement and the extent, if any, to which these
general terms and provisions may apply to those debt securities will be
described in the prospectus supplement relating to the applicable debt
securities. The applicable prospectus supplement may also state that
any of the terms set forth in this description are inapplicable to such debt
securities. This description does not purport to be
complete.
General
We may enter
into indenture agreements with respect to any debt securities we may
offer. We may enter into separate indentures, with different
trustees, for our debt securities. We use the term "indentures" to
refer to any such indentures we may enter into, and we use the term "trustees"
to refer to the trustees under such indentures. The material terms of
any indenture governing a series of debt securities will be described in the
applicable prospectus or prospectus supplement. The indentures will
be qualified under the Trust Indenture Act of 1939, as
amended.
If specified in
the prospectus supplement or other offering material, certain of our
subsidiaries may guarantee such debt securities or we may guarantee debt
securities issued by our subsidiaries as described in the prospectus supplement
or other offering material relating to the applicable debt
securities.
Additional
Information
We will
describe in any applicable prospectus supplement the following terms relating to
a series of debt securities:
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the
title,
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any
limit on the amount that may be
issued,
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whether
or not we will issue the series of notes in global form, the terms and who
the depository will be,
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the
maturity date,
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the
annual interest rate, which may be fixed or variable, or the method for
determining the rate and the date interest will begin to accrue, the dates
interest will be payable and the regular record dates for interest payment
dates or the method for determining such
dates,
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whether
or not the notes will be secured or unsecured, and the terms of any
secured debt,
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the
terms of the subordination of any series of subordinated
debt,
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the
place where payments will be
payable,
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our
right, if any, to defer payment of interest and the maximum length of any
such deferral period,
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the
date, if any, after which, and the price at which, we may, at our option,
redeem the series of notes pursuant to any optional redemption
provisions,
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the
date, if any, on which, and the price at which we are obligated, pursuant
to any mandatory sinking fund provisions or otherwise, to redeem, or at
the holder’s option to purchase, the series of
notes,
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whether
the indenture will restrict our ability to pay dividends, or will require
us to maintain any asset ratios or
reserves,
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whether
we will be restricted from incurring any additional
indebtedness,
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a
discussion on any material or special United States Federal income tax
considerations applicable to the
notes,
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if
applicable, a discussion of any material Bermuda tax
considerations,
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the
denominations in which we will issue the series of notes, if other than
denominations of $1,000 and any integral multiple thereof,
and
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any
other specific terms, preferences, rights or limitations of, or
restrictions on, the debt
securities.
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The
applicable prospectus supplement will describe the terms of any debt securities
offered thereby.
Conversion
or Exchange of Debt Securities
Such
prospectus or prospectus supplement will also describe, if applicable, the terms
on which the debt securities may be converted or exchanged into our common
stock, preference shares or other securities or property. These terms will
include whether the conversion or exchange is mandatory, is at our option or is
at the option of the holder. The prospectus supplement will describe how the
number of shares of common stock, preference shares or other securities or
property to be received would be calculated.
The following
description of the terms of the preference shares we may issue sets forth
certain general terms and provisions of any series of preference shares to which
any prospectus supplement may relate. The particular terms of the
preference shares offered by any prospectus supplement and the extent, if any,
to which these general terms and provisions may apply to those series of
preference shares will be described in the prospectus supplement relating to the
applicable preference shares. The applicable prospectus supplement
may also state that any of the terms set forth in this description are
inapplicable to such series of preference shares. This description
does not purport to be complete and is subject to and qualified in its entirety
by reference to applicable Bermuda law and the provisions of our bye-laws
relating to our preference shares.
We may issue
preference shares. Preference shares may be issued independently or
together with any other securities and may be attached to or separate from the
securities.
Pursuant to
Bermuda law and our bye-laws, our board of directors by resolution may establish
one or more class or series of preference shares having such number of shares,
designations, dividend rates, relative voting rights, conversion or exchange
rights, redemption rights, liquidation rights and other relative participation,
optional or other special rights, qualifications, limitations or restrictions as
may be fixed by the board of directors without any shareholder
approval. Such rights, preferences, powers and limitations as may be
established could also have the effect of discouraging an attempt to obtain
control of Lazard Ltd. We currently have 15,000,000 authorized
preference shares, par value $0.01 per share.
The board of
directors, in approving the issuance of a class or series of preference shares
and the applicable prospectus supplement, will set forth with respect to such
class or series, the following:
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the
number of shares in the class or
series,
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the
designations of the class or
series,
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the
dividend rates on the shares of that class or series (including, whether
dividends are cumulative, and if so, from which date(s)) and the relative
rights of priority, if any, of the payment of dividends on shares of that
class or series,
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whether
that class or series has voting rights (in addition to voting rights
provided by law), and if so, the terms of such voting
rights,
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the
conversion or exchange rights of the class or series, if any (including
conversion into common stock), including the terms and conditions of such
conversion or exchange (including provision for adjustment of the
conversion or exchange rate as the board of directors
determines),
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whether
the class or series will have a sinking fund for the redemption or
repurchase of shares of that class or series, and if so, the terms and
amounts of such sinking fund,
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the
right of the shares of that class or series to the benefit of conditions
and restrictions upon the creation of indebtedness of Lazard Ltd or any of
its subsidiaries, upon the issue of any additional shares (including
additional shares of such class or series or any other class or series)
and upon the payment of dividends or the making of other distributions on,
and the purchase, redemption or other acquisition by Lazard Ltd or any of
its subsidiaries of any issued shares of Lazard
Ltd,
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the
liquidation rights and other relative participation,
and
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any
optional or other special rights, qualifications, limitations or
restrictions of that class or
series.
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The terms of
each class or series of preference shares will be described in any prospectus
supplement related to such class or series of preference shares and will contain
a discussion of any material Bermuda or material United States Federal income
tax considerations applicable to the preference shares.
The following
description of the terms of warrants we may issue sets forth certain general
terms and provisions of any warrants to which any prospectus supplement may
relate. The particular terms of warrants offered by any prospectus
supplement and the extent, if any, to which these general terms and provisions
may apply to those warrants will be described in the prospectus supplement
relating to the applicable warrants. The applicable prospectus
supplement may also state that any of the terms set forth in this description
are inapplicable to such warrants. This description does not purport
to be complete.
General
We may issue
warrants, including warrants to purchase shares of our common stock and
preference shares. Warrants may be issued independently or together
with any securities and may be attached to or separate from the
securities. Each series of warrants will be issued under a separate
warrant agreement to be entered into between us and a bank or trust company, as
warrant agent.
Debt
Warrants
The applicable
prospectus supplement will describe the terms of debt warrants offered thereby,
the warrant agreement relating to the debt warrants and the certificates
representing the debt warrants, including the following:
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the
title of the debt warrants,
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the
aggregate number of debt warrants,
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the
price or prices at which the debt warrants will be
issued,
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the
currency or currencies, including composite currencies or currency units,
in which the price of the debt warrants may be
payable,
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the
designation, aggregate principal amount and terms of the debt securities
purchasable upon exercise of the debt warrants, and the procedures and
conditions relating to the exercise of the debt
warrants,
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the
designation and terms of any related debt securities with which the debt
warrants are issued, and the number of the debt warrants issued with each
debt security,
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the
currency or currencies, including composite currencies or currency units,
in which any principal, premium, if any, or interest on the debt
securities purchasable upon exercise of the debt warrants will be
payable,
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the
date, if any, on and after which the debt warrants and the related debt
securities will be separately
transferable,
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the
principal amount of debt securities that may be purchased upon exercise of
each debt warrant, and the price at which and the currency or currencies,
including composite currencies or currency units, in which the principal
amount of debt securities may be purchased upon
exercise,
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the
date on which the right to exercise the debt warrants will commence, and
the date on which the right will
expire,
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the
maximum or minimum number of the debt warrants that may be exercised at
any time,
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if
applicable, a discussion of any material Bermuda tax
considerations,
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if
applicable, a discussion of any material United States Federal income tax
considerations, and
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any
other terms of the debt warrants and terms, procedures and limitations
relating to the exercise of the debt
warrants.
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Certificates
representing debt warrants will be exchangeable for new certificates
representing debt warrants of different denominations, and debt warrants may be
exercised at the corporate trust office of the warrant agent or any other office
indicated in the applicable prospectus supplement. Before the
exercise of their debt warrants, holders of debt warrants will not have any of
the rights of holders of the debt securities issuable upon exercise and will not
be entitled to payment of principal of or any premium or interest on the debt
securities issuable upon exercise.
Other
Warrants
The applicable
prospectus supplement will describe the following terms of any other warrants
that we may issue:
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the
title of the warrants,
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the
securities (which may include preference shares or common stock) for which
the warrants are exercisable,
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the
price or prices at which the warrants will be
issued,
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the
currency or currencies, including composite currencies or currency units,
in which the price of the warrants may be
payable,
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if
applicable, the designation and terms of the preference shares or common
stock with which the warrants are issued, and the number of the warrants
issued with each share of preference shares or common
stock,
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if
applicable, the date on and after which the warrants and the related
preference shares or common stock will be separately
transferable,
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if
applicable, a discussion of any material Bermuda tax
considerations,
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if
applicable, a discussion of any material United States Federal income tax
considerations, and
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any
other terms of the warrants, including terms, procedures and limitations
relating to the exchange and exercise of the
warrants.
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Exercise
of Warrants
Each warrant
will entitle the holder to purchase for cash or other consideration the number
of debt securities, preference shares or shares of our common stock at the
exercise price as will in each case be described in, or can be determined from,
the applicable prospectus supplement relating to the offered
warrants. Warrants may be exercised at any time up to the close of
business on the expiration date described in the applicable prospectus
supplement. After the close of business on the expiration date,
unexercised warrants will become void.
Warrants may be
exercised as described in the applicable prospectus supplement. Upon
receipt of payment and the certificate representing the warrant properly
completed and duly executed at the corporate trust office of the warrant agent
or any other offices indicated in the applicable prospectus supplement, we will,
as soon as practicable, forward the securities issuable upon
exercise. If less than all of the warrants represented by the
certificate are exercised, a new certificate will be issued for the remaining
warrants.
UNITS
WE MAY OFFER
The following
description of the terms of stock purchase contracts and stock purchase units we
may issue sets forth certain general terms and provisions of any stock purchase
contracts or stock purchase units to which any prospectus supplement may
relate. The particular terms of stock purchase contracts or stock
purchase units offered by any prospectus supplement and the extent, if any, to
which these general terms and provisions may apply to those stock purchase
contracts or stock purchase units will be described in the prospectus supplement
relating to the applicable stock purchase contracts or stock purchase
units. The applicable prospectus supplement may also state that any
of the terms set forth in this description are inapplicable to such stock
purchase contracts or stock purchase units. This description does not
purport to be complete.
We may issue
stock purchase contracts, including contracts obligating holders to purchase
from or sell to us, and obligating us to sell to or purchase from the holders, a
specified number of shares of our common stock or preference shares at a future
date or dates, which we refer to in this prospectus as "stock purchase
contracts." The price per share of the securities and the number of
shares of the securities may be fixed at the time the stock purchase contracts
are issued or may be determined by reference to a specific formula set forth in
the stock purchase contracts, and may be subject to adjustment under
anti-dilution formulas. The stock purchase contracts may be issued
separately or as part of units consisting of a stock purchase contract and debt
securities or debt obligations of third parties, including U.S. treasury
securities, any other securities described in the applicable prospectus
supplement or any combination of the foregoing, securing the holders'
obligations to purchase the securities under the stock purchase contracts, which
we refer to herein as "stock purchase units." The stock purchase
contracts may require holders to secure their obligations under the stock
purchase contracts in a specified manner. The stock purchase
contracts also may require us to make periodic payments to the holders of the
stock purchase contracts or the stock purchase units, as the case may be, or
vice versa, and those payments may be unsecured or pre-funded on some
basis.
The applicable
prospectus supplement will describe the terms of any stock purchase contracts or
stock purchase units offered thereby and will contain a discussion of any
material Bermuda or material United States Federal income tax considerations
applicable to the stock purchase contracts and stock purchase
units.
We may sell our
securities, and any selling security holder may offer and sell securities
covered by this prospectus, in any one or more of the following ways from time
to time:
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through
agents;
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to
or through underwriters;
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through
brokers or dealers;
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through
a block trade in which the broker or dealer engaged to handle the block
trade will attempt to sell the securities as agent, but may position and
resell a portion of the block as principal to facilitate the
transaction;
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directly
by us or any selling security holders to purchasers, including through a
specific bidding, auction or other process;
or
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through
a combination of any of these methods of
sale.
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We will
describe in a prospectus supplement the particular terms of the offering of the
securities, including the following:
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the
names of any underwriters, dealers or
agents;
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the
purchase price of the securities and the net proceeds we will receive from
the sale;
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any
underwriting discounts and other items constituting underwriters’
compensation;
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any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers;
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any
securities exchanges on which the securities of the series may be listed;
and
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any
other information we think is
material.
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In addition, we
and any selling security holder may sell any securities covered by this
prospectus in private transactions or under Rule 144 of the Securities Act
rather than pursuant to this prospectus.
We may sell
offered securities directly or through agents designated by us from time to
time. Any agent in the offer or sale of the securities for which this prospectus
is delivered will be named, and any commissions payable by us to that agent will
be set forth, in the prospectus supplement. Unless indicated in the prospectus
supplement, the agents will have agreed to use their reasonable best efforts to
solicit purchases for the period of their appointment.
In connection
with the sale of securities covered by this prospectus, broker-dealers may
receive commissions or other compensation from us in the form of commissions,
discounts or concessions. Broker-dealers may also receive compensation from
purchasers of the securities for whom they act as agents or to whom they sell as
principals or both. Compensation as to a particular broker-dealer may be in
excess of customary commissions or in amounts to be negotiated. In connection
with any underwritten offering, underwriters may receive compensation in the
form of discounts, concessions or commissions from us or from purchasers of the
securities for whom they act as agents. Underwriters may sell the securities to
or through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agents. Any underwriters,
broker-dealers agents or other persons acting on our behalf that participate in
the distribution of the securities may be deemed to be "underwriters" within the
meaning of the Securities Act, and any profit on the sale of the securities by
them and any discounts, commissions or concessions received by any of those
underwriters, broker-dealers agents or other persons may be deemed to be
underwriting discounts and commissions under the Securities
Act.
In connection
with the distribution of the securities covered by this prospectus or otherwise,
we or any selling security holder may enter into hedging transactions with
broker-dealers or other financial institutions. In connection with such
transactions, broker-dealers or other financial institutions may engage in short
sales of our securities in the course of hedging the positions they assume with
us or any selling security holder. We or any selling security holder may also
sell securities short and deliver the securities offered by this prospectus to
close out our short positions. We or any selling security holder may also enter
into options or other transactions with broker-dealers or other financial
institutions that require the delivery to such broker-dealer or other financial
institution of securities offered by this prospectus, which securities such
broker-dealer or other financial institution may resell pursuant to this
prospectus, as supplemented or amended to reflect such transaction. We or any
selling security holder may also from time to time pledge our securities
pursuant to the margin provisions of our customer agreements with our brokers.
Upon our default, the broker may offer and sell such pledged securities from
time to time pursuant to this prospectus, as supplemented or amended to reflect
such transaction.
At any time a
particular offer of the securities covered by this prospectus is made, a revised
prospectus or prospectus supplement, if required, will be distributed which will
set forth the aggregate amount of securities covered by this prospectus being
offered and the terms of the offering, including the name or names of any
underwriters, dealers, brokers or agents, any discounts, commissions,
concessions and other items constituting compensation from us and any discounts,
commissions or concessions allowed or reallowed or paid to dealers. Such
prospectus supplement, and, if necessary, a post-effective amendment to the
registration statement of which this prospectus is a part, will be filed with
the SEC to reflect the disclosure of additional information with respect to the
distribution of the securities covered by this prospectus. In order to comply
with the securities laws of certain states, if applicable, the securities sold
under this prospectus may only be sold through registered or licensed
broker-dealers. In addition, in some states the securities may not be sold
unless they have been registered or qualified for sale in the applicable state
or an exemption from registration or qualification requirements is available and
is complied with.
In connection
with an underwritten offering, we and any selling security holder would execute
an underwriting agreement with an underwriter or underwriters. Unless otherwise
indicated in the revised prospectus or applicable prospectus supplement, such
underwriting agreement would provide that the obligations of the underwriter or
underwriters are subject to certain conditions precedent, and that the
underwriter or underwriters with respect to a sale of the covered securities
will be obligated to purchase all of the covered securities, if any such
securities are purchased. We or any selling security holder may grant to the
underwriter or underwriters an option to purchase additional securities at the
public offering price, less any underwriting discount, as may be set forth in
the revised prospectus or applicable prospectus supplement. If we or any selling
security holder grants any such option, the terms of that option will be set
forth in the revised prospectus or applicable prospectus
supplement.
Underwriters,
agents, brokers or dealers may be entitled, pursuant to relevant agreements
entered into with us, to indemnification by us or any selling security holder
against certain civil liabilities, including liabilities under the Securities
Act that may arise from any untrue statement or alleged untrue statement of a
material fact, or any omission or alleged omission to state a material fact in
this prospectus, any supplement or amendment hereto, or in the registration
statement of which this prospectus forms a part, or to contribution with respect
to payments which the underwriters, agents, brokers or dealers may be required
to make.
The validity of
the securities will be passed upon for us by Conyers Dill & Pearman,
Hamilton, Bermuda, with respect to securities governed by Bermuda law, and by
Cravath, Swaine & Moore LLP, New York, New York, with respect to securities
governed by New York law, as applicable, unless otherwise indicated in the
applicable prospectus supplement. If the securities are being distributed in an
underwritten offering, certain legal matters will be passed upon for the
underwriters by counsel identified in the related prospectus
supplement.
The
consolidated financial statements and the related financial statement schedule,
incorporated in this prospectus by reference from the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2009, and the effectiveness of
the Company's internal control over financial reporting have been audited by
Deloitte & Touche LLP, an independent registered public accounting firm, as
stated in their reports, which are incorporated herein by reference. Such
consolidated financial statements and financial statement schedule have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
We file annual,
quarterly and current reports, proxy statements and other information with the
SEC. You may read and copy any document the company files at the SEC’s public
reference room located at 100 F Street, N.E., Washington, D.C. 20549, U.S.A.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. Lazard Ltd’s SEC filings are also available to the public from
the SEC’s website at http://www.sec.gov.
Copies of these reports and other information can also be inspected at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005, U.S.A.
We maintain a
website at
http://www.lazard.com. The information contained in or connected to our
website is not a part of this prospectus, and you should not rely on such
information in making your decision whether to purchase
securities.
We are
"incorporating by reference" into this prospectus specific documents that we
file with the SEC, which means that we can disclose important information to you
by referring you to those documents that are considered part of this prospectus.
Information that we file subsequently with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below, and any future documents that we file with the SEC (excluding any
portions of such documents that are "furnished" but not "filed" for purposes of
the Exchange Act) under Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act until the termination of the offerings of all of the securities covered by
this prospectus has been completed. This prospectus is part of a registration
statement filed with the SEC.
We are
"incorporating by reference" into this prospectus the following documents filed
with the SEC (excluding any portions of such documents that have been
"furnished" but not "filed" for purposes of the Exchange
Act):
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Lazard
Ltd's Annual Report on Form 10-K for the fiscal year ended
December 31, 2009, filed on March 1, 2010 (File No.
001-32492);
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Lazard
Ltd's Preliminary Proxy Statement on Schedule 14A, filed on March 12, 2010
("Proxy Statement") (File No. 001-32492);
and
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Description
of the Class A common stock and risk factors related to the offering
contained in the final prospectus for Lazard Ltd filed pursuant to Rule
424(b)(3) of the Securities Act on May 6, 2005 with respect to the
Registration Statement on Form S-1 (File
No. 333-121407).
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We will provide
to each person, including any beneficial owner, to whom a prospectus is
delivered, upon written or oral request and without charge, a copy of the
documents referred to above that we have incorporated in this prospectus by
reference. You can request copies of such documents if you call or
write us at the following address or telephone number: Investor Relations,
Lazard Ltd, 30 Rockefeller Plaza, New York, New York 10020,
(212) 632-6000, or you may visit our website at
http://www.lazard.com for copies of any of such
documents.
This
prospectus, any accompanying prospectus supplement or information incorporated
by reference herein or therein, contains summaries of certain agreements that we
have filed as exhibits to various SEC filings, as well as certain agreements
that we will enter into in connection with the offering of securities covered by
any particular accompanying prospectus supplement. The descriptions
of these agreements contained in this prospectus, any accompanying prospectus
supplement or information incorporated by reference herein or therein do not
purport to be complete and are subject to, or qualified in their entirety by
reference to, the definitive agreements. Copies of the definitive
agreements will be made available without charge to you by making a written or
oral request to us.
You should rely
only upon the information contained in this prospectus, any prospectus
supplement or incorporated by reference in this prospectus or in any prospectus
supplement. We have not authorized anyone to provide you with
different information. You should not assume that the information in
this document is accurate as of any date other than that on the front cover of
this prospectus.
Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this prospectus to the extent that a statement contained herein, in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein or in any accompanying prospectus supplement modifies or
supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified and superseded, to
constitute a part of this prospectus.
20
7,869,311 Shares
Lazard
Ltd
Class A Common
Stock
Goldman,
Sachs & Co.