prer14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
AMENDMENT NO. 2
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant
þ
Filed by a Party other than the Registrant
o
Check the appropriate box:
þ Preliminary
Proxy Statement
o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
o Definitive
Proxy Statement
o Definitive
Additional Materials
o Soliciting
Material under
Rule 14a-12
GLG
PARTNERS, INC.
(Name of Registrant as Specified In
Its Charter)
N/A
(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
o No
fee required.
þ Fee
computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11
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(1)
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Title of each class of securities to which transaction applies:
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Common stock, par value $0.0001 per share, of GLG Partners, Inc.
(Common Stock)
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(2)
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Aggregate number of securities to which transaction applies:
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323,717,487 shares of Common Stock*
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(3)
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Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11
(set forth the amount on which the filing fee is calculated and
state how it was determined):
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The maximum aggregate value of the transaction was determined by
calculating the sum of (i) the product of
160,887,080 shares of Common Stock that may be exchanged
for cash in the transaction, multiplied by the $4.50 per share
cash merger consideration, (ii) the product of 149,900,926
shares of Common Stock that will be exchanged by the Selling
Stockholders (as defined below) for shares of Man Group plc in
the transaction, multiplied by the average of the high and low
sales prices of Common Stock on The New York Stock Exchange on
August 5, 2010 of $4.40 per share, and (iii) the
product of awards under GLG Partners, Inc.s stock plans
which represent a right to receive 12,929,481 shares of
Common Stock upon satisfaction of vesting conditions, which
shall be assumed by Man Group plc in the transaction and shall
be settleable in shares of Man Group plc following the
transaction upon satisfaction of such vesting conditions,
multiplied by the average of the high and low sales prices of
Common Stock on The New York Stock Exchange on August 5,
2010 of $4.40 per share. In accordance with Exchange Act Rule
0-11(b), the filing fee was determined by multiplying
0.00007130 by the maximum aggregate value of the transaction.
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(4)
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Proposed maximum aggregate value of transaction: $1,440,445,651
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$102,704
þ Fee
paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by
Exchange Act
Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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*
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Includes 58,904,993 shares of Common Stock that are
issuable upon conversion of 58,904,993 shares of Ordinary
Class B Shares, par value $0.0001 per share, of FA Sub 2
Limited that are held by the Selling Stockholders, and awards
under GLG Partners, Inc.s stock plans which represent a
right to receive 12,929,481 shares of Common Stock upon
satisfaction of vesting conditions, which shall be assumed by
Man Group plc in the transaction and shall be settleable in
shares of Man Group plc following the transaction upon
satisfaction of such vesting conditions.
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PRELIMINARY
PROXY STATEMENT, SUBJECT TO COMPLETION
DATED AUGUST 27, 2010
GLG PARTNERS, INC.
399 Park Avenue, 38th Floor
New York, New York 10022
To Our Stockholders:
We cordially invite you to attend the special meeting of
stockholders of GLG Partners, Inc. to be held at the offices of
Chadbourne & Parke LLP, 30 Rockefeller Plaza, New
York, New York 10112 on September , 2010, at
10:00 a.m., Eastern Time. The Board of Directors has fixed
the close of business on August 30, 2010 as the record date
for the purpose of determining the stockholders entitled to
receive notice of and vote at the special meeting and any
adjournment or postponement of the special meeting.
On May 17, 2010, we agreed to be acquired by Man Group plc,
subject to, among other things, the approval of the respective
stockholders of Man and GLG as described in the accompanying
proxy statement. The proposed acquisition is contemplated to be
made through two concurrent transactions: a cash merger under an
Agreement and Plan of Merger dated as of May 17, 2010, as
amended, among Man, Escalator Sub 1 Inc. (a wholly owned
subsidiary of Man) and GLG; and a share exchange under a Share
Exchange Agreement dated as of May 17, 2010 among Man and
Noam Gottesman, Pierre Lagrange and Emmanuel Roman, together
with their related trusts and affiliated entities, two limited
partnerships that held shares for the benefit of key personnel
who are participants in GLGs equity participation plans
and the permitted transferees of such limited partnerships.
At the special meeting, you will be asked to consider and vote
upon a proposal to adopt the merger agreement. If the merger is
completed, GLGs stockholders (other than parties to the
share exchange agreement (with respect to the shares subject
thereto), Man and its subsidiaries, GLG and certain of its
subsidiaries, stockholders who properly exercise and perfect
their appraisal rights under Delaware law, and holders of
restricted shares and other awards to receive shares of our
common stock under our stock incentive plans) will have the
right to receive, for each share of our common stock they hold
at the time of the merger, $4.50 in cash.
Upon completion of the proposed merger, we will cease to be a
publicly traded company and Man will own 100% of our outstanding
securities. As a result, you will no longer have any direct or
indirect equity interest in GLG or any interest in our future
earnings or growth, if any. Following completion of the merger,
the registration of our common stock and our reporting
obligations with respect to our common stock under the
Securities Exchange Act of 1934 are expected to be terminated.
In addition, upon completion of the merger, shares of our common
stock will no longer be listed on the New York Stock Exchange.
After careful consideration, our Board of Directors has
determined that the merger is advisable and that the terms of
the merger are fair to, and in the best interests of, GLG and
its stockholders and, therefore, has approved the merger
agreement, the merger and the other transactions contemplated by
the merger agreement, and recommends that you vote
FOR adoption of the merger agreement. This
recommendation of our Board of Directors is based upon the
unanimous recommendation of a special committee of the Board of
Directors consisting of three independent and disinterested
directors, who were advised by an independent financial advisor
on the fairness of the value of the cash merger consideration
and by independent legal counsel.
In considering the recommendation of our Board of Directors with
respect to the merger, you should be aware that some of our
directors have interests in the merger that are different from,
or in addition to, the interests of our stockholders generally.
For example, each of Noam Gottesman, Pierre Lagrange and
Emmanuel Roman will enter into employment or service agreements
with Man entities providing for, among other things, the payment
of salaries, and each of them, through their respective trusts,
holds our convertible notes, which pursuant to their terms
upon conversion during a specified period following the merger
will be entitled to a make-whole premium, in addition to the
right to receive a cash amount equal to the merger consideration
for each share of common stock into which the notes are
convertible. In addition, outstanding restricted stock awards
held by our non-employee directors will be accelerated and paid
a cash amount equal to the merger consideration for each
restricted share as a result of the merger. Moreover,
indemnification and directors and officers liability
insurance coverage will continue to be provided by the surviving
corporation in the merger to our current and former officers and
directors. Furthermore, pursuant to the terms of the merger
agreement, we are required to use reasonable best efforts to
launch a tender offer to purchase all of our outstanding
warrants to purchase shares of our common stock, including
warrants held by certain of our directors. Finally, compensation
will be paid to the directors serving on the special committee.
In addition, you are being asked at the special meeting to
approve the adjournment of the special meeting, if necessary, to
permit further solicitation and vote of proxies if there are
insufficient votes at the time of the special meeting to adopt
the merger agreement. Our Board of Directors unanimously
recommends that you vote FOR the adjournment of the
special meeting, if necessary, to permit further solicitation
and vote of proxies if there are insufficient votes at the time
of the special meeting to adopt the merger agreement. The
accompanying notice of special meeting and proxy statement
provide information regarding the matters to be acted on at the
special meeting, including any adjournment or postponement of
the special meeting. Please read these materials carefully.
YOUR VOTE IS VERY IMPORTANT, regardless of the number of shares
you own. We cannot complete the merger unless the holders of a
majority of the outstanding shares of GLG common stock
(excluding (i) Noam Gottesman, Pierre Lagrange and Emmanuel
Roman, together with their related trusts and affiliated
entities, (ii) the permitted transferees of two limited
partnerships that held shares for the benefit of key personnel
who are participants in GLGs equity participation plans,
(iii) Man and its affiliates, (iv) GLG and its
affiliates (other than directors serving on the special
committee of the GLG Board of Directors) and (v) employees
of GLG) entitled to vote on the matter vote to adopt the merger
agreement. Once you have read the accompanying materials, please
take the time to vote on the matters submitted to stockholders
at the special meeting, whether or not you plan to attend the
special meeting. I urge you to submit a proxy to vote your
shares promptly by using the telephone or Internet or by signing
and returning the enclosed proxy card. Voting by proxy will not
prevent you from voting your shares in person if you
subsequently choose to attend the special meeting in person.
Your vote in person will revoke any proxy previously submitted.
If your shares are held in street name by your
broker, bank or other nominee, your broker, bank or other
nominee will be unable to vote your shares on the merger
proposal or the adjournment proposal without instructions from
you. You should instruct your broker, bank or other nominee to
vote your shares by following the procedures provided by your
broker, bank or other nominee.
Our Board of Directors and management urge you to vote
FOR each of the proposals.
Sincerely,
Noam Gottesman
Chairman of the Board and Co-Chief Executive Officer
Neither the Securities and Exchange Commission nor any state
securities regulatory agency has approved or disapproved the
merger, passed upon the merits or fairness of the merger or
passed upon the adequacy or accuracy of the disclosure in this
document. Any representation to the contrary is a criminal
offense.
The proxy statement is dated August , 2010 and
is first being mailed to stockholders on or about
August , 2010.
GLG
PARTNERS, INC.
399 Park Avenue, 38th Floor
New York, New York 10022
NOTICE OF
SPECIAL MEETING OF STOCKHOLDERS
To Be Held
September , 2010
To Our Stockholders:
Notice is hereby given that a special meeting of stockholders of
GLG Partners, Inc. (GLG) will be held on
September , 2010, at 10:00 a.m., Eastern
Time, at the offices of Chadbourne & Parke LLP, 30
Rockefeller Plaza, New York, New York 10112 for the
following purposes:
1. To consider and vote on a proposal to adopt the
Agreement and Plan of Merger dated as of May 17, 2010, as
amended, among GLG, Man Group plc, a public limited company
existing under the laws of England and Wales (Man),
and Escalator Sub 1 Inc., a Delaware corporation and a wholly
owned subsidiary of Man (the Merger Proposal).
2. To approve the adjournment of the special meeting, if
necessary, to permit further solicitation and vote of proxies if
there are insufficient votes at the time of the special meeting
to approve the Merger Proposal (the Adjournment
Proposal).
3. To transact such other business as may properly come
before the meeting or any adjournment or postponement of the
special meeting.
Only stockholders who owned shares of our common stock and
Series A voting preferred stock at the close of business on
August 30, 2010 will be entitled to notice of, and to vote
at, the meeting or any adjournments or postponements of the
meeting. A complete list of stockholders entitled to vote at the
meeting will be available for examination by any stockholder,
for any purpose relating to the meeting, during ordinary
business hours at our principal offices located at 399 Park
Avenue, 38th Floor, New York, New York 10022 at least ten
days before the special meeting.
We urge you to read the accompanying proxy statement carefully
as it sets forth details of each proposal to be voted on,
including the proposed merger and other important information
related to the merger.
Under Delaware law, if the merger is completed, holders of our
common stock who do not vote in favor of the Merger Proposal and
who otherwise properly perfect their demand for appraisal under
Delaware law will have the right to seek appraisal of the fair
value of their shares as determined by the Delaware Court of
Chancery. In order to exercise your appraisal rights, you must
(i) submit to GLG a written demand for an appraisal prior
to the stockholder vote on the Merger Proposal, (ii) not
vote in favor of the Merger Proposal, nor consent thereto in
writing, (iii) continue to hold your shares until the
consummation of the merger and (iv) comply with other
Delaware law procedures explained in the accompanying proxy
statement.
Your vote is important and we urge you to submit your proxy for
voting at the special meeting on the Internet, by telephone or
by completing, signing, dating and returning your proxy card as
promptly as possible by mail, whether or not you expect to
attend the special meeting. If you are unable to attend in
person and you submit your proxy on the Internet, by telephone
or by returning your properly executed proxy card in time for
the special meeting, your shares will be voted at the special
meeting in accordance with your instructions as reflected on
your proxy. Properly executed proxies that do not contain voting
instructions will be voted FOR the approval of the
Merger Proposal and FOR approval of the Adjournment
Proposal. If your shares are held in street name by
your broker, bank or other nominee, only that holder can vote
your shares unless you obtain a valid legal proxy from your
broker, bank or nominee. You should follow the directions
provided by your broker, bank or nominee regarding how to
instruct such broker, bank or nominee to vote your shares.
The merger is described in the accompanying proxy statement,
which we urge you to read carefully. Copies of the merger
agreement, the amendment to the merger agreement, the share
exchange agreement and the other transaction-related documents
are attached as appendices to the proxy statement.
Your Board of Directors recommends that you vote in favor of the
Merger Proposal and the Adjournment Proposal. Please refer to
the proxy statement for detailed information on each of the
proposals.
By Order of the Board of Directors,
Alejandro R. San Miguel
Secretary
New York, New York
August , 2010
TABLE OF
CONTENTS
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iii
Summary
Term Sheet
References to GLG, the Company,
we, our or us in this proxy
statement refer to GLG Partners, Inc. and its subsidiaries
unless otherwise indicated by context. The following summary,
together with Questions and Answers About the Merger and
the Special Meeting of Stockholders, highlights selected
information contained in this proxy statement. You should
carefully read this entire proxy statement and the other
documents to which this proxy statement refers you for a more
complete understanding of the matters being considered at the
special meeting of stockholders. In addition, this proxy
statement incorporates by reference important business and
financial information about GLG. You may obtain the information
incorporated by reference into this proxy statement without
charge by following the instructions under Where You Can
Find More Information. References to $ in this
proxy statement refer to U.S. dollars.
The
Acquisition
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On May 17, 2010, we agreed to be acquired by Man Group plc
subject to, among other things, the approval of the respective
stockholders of Man and GLG as described in this proxy
statement. The proposed acquisition is contemplated to be made
through two concurrent transactions:
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a cash merger under an agreement and plan of merger dated as of
May 17, 2010, as amended, among Man, Escalator Sub 1 Inc.
and GLG; and
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a share exchange (which will occur immediately prior to the
merger) under a share exchange agreement dated as of
May 17, 2010 among Man and the following:
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Noam Gottesman, Pierre Lagrange and Emmanuel Roman, whom we
refer to collectively as the Individual Principals;
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the Gottesman GLG Trust, the Roman GLG Trust and its wholly
owned subsidiary Jackson Holdings Services Inc., and the
Lagrange GLG Trust and its wholly owned subsidiary Point
Pleasant Ventures Ltd., which together with the Individual
Principals and TOMS International Ltd. (TOMS), a
wholly owned subsidiary of the Gottesman GLG Trust, we refer to
collectively as the Principals;
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Sage Summit LP and Lavender Heights Capital LP, which are
limited partnerships that held shares of GLG common stock for
the benefit of non-Principal members of GLGs senior
management and key investment personnel based principally in the
UK who are participants in GLGs equity participation plan
who were allocated interests in a percentage of the cash and
shares of GLG common stock paid as consideration in the reverse
acquisition by Freedom Acquisition Holdings, Inc. of GLG
Partners LP and certain affiliated entities in November
2007; and
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the permitted transferees of Sage Summit LP and Lavender Heights
Capital LP described in the next sentence, which together with
the Principals (other than TOMS), we refer to as the
Selling Stockholders. On June 21, 2010, Sage
Summit LP and Lavender Heights Capital LP transferred all of
their shares of GLG common stock to Blue Hill Trust and Green
Hill Trust, respectively, and these permitted transferees became
parties to the share exchange agreement and the voting and
support agreement.
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The
Parties to the Merger (Page 94 and
Appendix A)
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The parties to the merger agreement are the following:
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GLG Partners, Inc., a Delaware corporation, is a global asset
management company offering its clients a wide range of
performance-oriented investment products and managed account
services. GLGs primary business is to provide investment
management advisory services for various investment funds and
companies. Net assets under management as of June 30, 2010
were approximately $23.0 billion. GLG has an investment
management team and supporting staff of over 400 people.
GLGs common stock is traded on the New York Stock Exchange
under the symbol GLG.
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Man Group plc is a public limited company incorporated under the
laws of England and Wales. Man is a leading alternative
investment management business delivering a comprehensive range
of innovative guaranteed and open-ended products and tailor-made
solutions to private and institutional investors globally.
Mans investment products are designed to offer performance
across market cycles and are developed and structured internally
and through partnerships with other financial institutions. Man
has a global distribution network and an investment management
track record dating back more than 20 years. Funds under
management as of June 30, 2010 were $38.5 billion. Man
employs approximately 1,500 permanent employees worldwide, with
key centers in London and Pfaeffikon, Switzerland. Mans
ordinary shares are listed on the Official List of the Financial
Services Authority and traded on the London Stock Exchange (LSE:
EMG) and Man is a member of the FTSE 100 Index.
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Escalator Sub 1 Inc., which we refer to as Merger
Sub, is a Delaware corporation and wholly owned subsidiary
of Man Principal Strategies Holdings LLC, which we refer to as
Holdco. Holdco is a Delaware limited liability
company and wholly owned subsidiary of Man. Holdco was formed
solely for the purpose of owning Merger Sub. Merger Sub was
formed solely for the purpose of entering into the merger
agreement described below and consummating the transactions
contemplated by the merger agreement.
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The
Merger and its Effects (Page 94)
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You are being asked to vote to adopt the agreement and plan of
merger dated as of May 17, 2010, as amended, among GLG, Man
and Merger Sub, which we refer to as the Merger
Proposal.
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Pursuant to the merger agreement, Merger Sub will merge with and
into GLG.
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GLG will be the surviving corporation in the merger and will
continue to do business as GLG Partners, Inc.
following the merger.
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Upon completion of the proposed merger, GLG will cease to be a
publicly traded company and Man, indirectly through Holdco, will
own 100% of the outstanding shares of GLG common stock. As a
result, you will no longer have any direct or indirect equity
interest in GLG or any interest in our future earnings or
growth, if any.
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Following completion of the merger, the registration of our
common stock and our reporting obligations with respect to our
common stock under the Securities Exchange Act of 1934, as
amended, are expected to be terminated. In addition, upon
completion of the proposed merger, our shares of common stock
will no longer be listed on the New York Stock Exchange.
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Merger
Consideration (Page 95)
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As of the effective time of the merger, each issued and
outstanding share of our common stock (other than
(i) shares owned by GLG as treasury stock or owned by
certain subsidiaries of GLG, (ii) shares owned by Man or
Merger Sub (including the shares acquired from the Selling
Stockholders in the share exchange), (iii) shares held by
dissenting stockholders, (iv) restricted shares issued
under GLGs stock and incentive plans, and (v) awards
under GLGs stock and incentive plans representing a right
to receive shares of common stock of GLG) will be converted into
the right to receive $4.50 in cash, without interest, at which
time all such shares of GLG common stock will no longer be
outstanding and will automatically be canceled.
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Treatment
of GLG Equity Awards (Page 96)
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Immediately prior to the effective time of the merger, each
issued and outstanding share of restricted common stock of GLG
issued under GLGs stock and incentive plans will be
converted into the right to receive $4.50 in cash, without
interest, the receipt of which will be (except in the case of
restricted shares held by our non-employee directors) subject to
the same vesting terms and conditions and other rights and
restrictions that were applicable to such shares of restricted
common stock prior to the effective time, except in cases where
the acceleration of the vesting of such cash awards to the
effective time of the merger, in an
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amount sufficient to pay the income tax
and/or
employee national insurance contributions, may be necessary for
liability that arises as a result of the merger for U.K.
employees;
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Immediately prior to the effective time of the merger, all
outstanding restricted stock awards held by our non-employee
directors will be converted into the right to receive $4.50 per
share and the vesting of such restricted stock awards will be
accelerated to the effective time of the merger; and
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At the effective time of the merger, each outstanding award
under GLGs stock and incentive plans representing a right
to receive shares of common stock of GLG (other than shares of
restricted common stock) will be settled in ordinary shares of
Man, in an amount equal to the number of shares underlying such
stock rights multiplied by the exchange ratio set forth in the
share exchange agreement, or if our representation in the merger
agreement that each holder of such stock rights is a
non-U.S. resident
is not correct or if the assumption of the stock rights by the
surviving corporation is prohibited by applicable securities
laws, then such stock rights will instead be converted at the
effective time of the merger into a right to receive $4.50 in
cash, without interest, multiplied by the number of shares
covered by such stock rights. In either case, the ordinary
shares of Man or the cash amount will be subject to the same
vesting and other terms and conditions that were applicable to
such stock rights prior to the effective time of the merger.
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Interests
of Certain Persons in the Merger (Page 73)
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In considering the recommendation of the special committee of
our board of directors and our board of directors with respect
to the merger agreement, you should be aware that some of our
directors and executive officers have interests in the merger
that are different from, or in addition to, the interests of our
stockholders generally. These interests include, among others:
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the Selling Stockholders are parties to the share exchange
agreement pursuant to which they will transfer to Man,
immediately prior to the effective time of the merger, all of
their shares (subject to certain exceptions) of (a) our
common stock, (b) our Series A voting preferred stock,
(c) our subsidiary FA Sub 2 Limiteds exchangeable
Ordinary Class B Shares, which are exchangeable into shares
of our common stock (at which time the associated Series A
voting preferred stock is redeemed), and (d) any other
shares of our capital stock or such FA Sub 2 exchangeable shares
they acquire after the date of the share exchange agreement, in
exchange for ordinary shares of Man at an exchange ratio of
1.0856 ordinary shares of Man per share of our common stock
exchanged by the Selling Stockholders (which ratio may be
reduced prior to closing under certain circumstances), which
would represent a value of $3.50 per share of our common stock
based on the closing price of Man ordinary shares on May 14,
2010, the last trading day prior to the announcement of the
merger and share exchange, and the applicable currency exchange
rate on that date;
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following the consummation of the share exchange, as holders of
Man ordinary shares, the Selling Stockholders will be entitled
to receive dividends declared and paid by Man; for example, the
Man board intends to recommend a dividend of at least
22 cents per Man ordinary share in its fiscal year ending
March 31, 2011;
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each of Messrs. Gottesman, Lagrange and Roman will enter into
employment or service agreements with Man entities providing
for, among other things, the payment of an annual base salary of
$1,000,000, which is equal to the annual base salary currently
being paid to each such person pursuant to their respective
employment agreements with GLG, certain employee benefits, and,
in certain circumstances, a payment of severance of up to
$1,000,000 in lieu of 12 months advance written notice of
termination of employment, such that the payment is calculated
by reference to their base salary for the whole or any unexpired
part of the notice period to which they are entitled;
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each of Messrs. Gottesman, Lagrange and Roman, under the terms
of a non-competition and non-solicitation agreement or a deed of
vendor covenant, has agreed to be bound by certain restrictive
covenants relating to competition with GLGs business or
solicitation of GLGs employees and directors beginning on
the date of the closing of the share exchange and ending on the
third anniversary of such date in exchange for a $100,000
payment (payable within 14 days after the date of the closing of
the share exchange);
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each of Messrs. Gottesman, Lagrange and Roman, through
their respective trusts, hold our 5.00% dollar-denominated
convertible subordinated notes due May 15, 2014, which
pursuant to their terms upon conversion during a specified
period following the merger will be entitled to a make-whole
premium, in addition to the right to receive a cash amount equal
to the merger consideration for each share of common stock into
which the notes are convertible, which aggregate principal
amount and make-whole premium are described under Special
Factors Interests of Certain Persons in the
Merger A Portion of Our 5.00% Dollar-Denominated
Convertible Subordinated Notes are Held by the Principals
below;
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outstanding restricted stock awards held by our non-employee
directors will be accelerated and paid a cash amount equal to
the merger consideration for each restricted share as a result
of the merger, which outstanding restricted stock award amounts
are described under Special Factors Interests
of Certain Persons in the Merger Treatment of Awards
Under the Restricted Stock Plan, 2007 Long Term Incentive Plan,
2009 Long Term Incentive Plan and the Equity Participation
Plan below;
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indemnification and directors and officers liability
insurance coverage will continue to be provided by the surviving
corporation in the merger to GLGs current and former
officers and directors;
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pursuant to the terms of the merger agreement, we are required
to use reasonable best efforts to launch a tender offer to
purchase all of our outstanding warrants to purchase shares of
our common stock, including warrants held by certain of our
directors described under Special Factors
Interests of Certain Persons in the Merger Warrant
Tender Offer below, at a price of $0.129 per warrant;
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certain of our executive officers and senior employees are
entitled to severance payments in the event their employment is
terminated under specified circumstances subsequent to the
consummation of the merger in the estimated aggregate amount of
approximately $ , plus an amount,
if any, to pay or reimburse any excise tax imposed on severance
payments, as described under Special Factors
Interests of Certain Persons in the Merger
Amendments to Certain Employment Agreements with GLG
below; and
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compensation will be paid to the directors serving on the
special committee in the amounts of $150,000 for the chairman of
the special committee and $75,000 for each other member of the
special committee, as described under Special
Factors Interests of Certain Persons in the
Merger Compensation Paid to Members of the Special
Committee below.
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The special committee and our board of directors were aware of
these interests and considered them, among other matters, in
reaching their decision to approve the merger agreement and
recommend that GLGs stockholders vote in favor of the
Merger Proposal.
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Required
Vote for Merger Proposal (Page 92)
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The approval of the Merger Proposal will require the affirmative
vote of:
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(i)
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the holders of a majority of all of GLGs outstanding
shares of common stock and Series A voting preferred stock
as of the record date for the meeting voting as a single class,
which vote we refer to as the Statutory Stockholder
Approval; and
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(ii)
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the holders of a majority of GLGs outstanding shares of
common stock as of the record date for the special meeting,
other than shares of common stock held by:
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the Selling Stockholders and their affiliates;
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Man and its affiliates;
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GLG and its affiliates (other than directors on the special
committee); and
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employees of GLG.
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We refer to the vote described in clause (ii) as the
Minority Stockholder Approval.
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Pursuant to the terms of a voting and support agreement dated as
of May 17, 2010 among Man, Merger Sub, the Selling
Stockholders and TOMS, the Selling Stockholders and TOMS have
agreed to vote their shares of common stock and Series A
voting preferred stock in favor of the Merger Proposal. Our
other directors and executive officers have informed us that
they intend to vote all of their shares of common stock and
Series A
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voting preferred stock in favor of the Merger Proposal for the
reasons described more fully in Special
Factors Fairness of the Merger and Recommendations
of the Special Committee and the GLG Board. Except as
described in this proxy statement, to GLGs knowledge,
after making reasonable inquiry, none of GLGs directors,
officers or affiliates has made any public recommendation either
in support of or opposed to the merger. Because the Selling
Stockholders and our other directors and executive officers
collectively hold approximately 51.5% of the combined shares of
our common stock and Series A voting preferred stock as of
the record date for the special meeting, we expect that the
Statutory Stockholder Approval will be obtained.
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Abstentions and broker non-votes in the case of both the
Statutory Stockholder Approval and the Minority Stockholder
Approval will have the same effect as votes against the Merger
Proposal.
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Recommendation
of the Special Committee and the Board of Directors
(Page 31)
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The special committee is a committee of our board of directors
that was formed on April 29, 2010. The special committee
has authority, among other things, to:
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establish, approve, modify, monitor and direct the process,
procedures and activities relating to the review, evaluation and
negotiation of one or more proposals made to GLG by Man for a
potential transaction and any alternative transaction;
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review, consider, evaluate, respond to, negotiate, reject,
recommend or approve on behalf of GLG or the GLG board (except
as otherwise required by law) a potential transaction with Man
or an alternative transaction;
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if it determines that continuing GLGs business without
engaging in a potential transaction with Man or an alternative
transaction is in the best interest of GLG, reject any such
potential transaction with Man or an alternative transaction;
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determine whether any such potential transaction with Man or an
alternative transaction is advisable and is fair to, and in the
best interests of, GLG and its stockholders (other than the
Selling Stockholders); and
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recommend to the GLG board of directors what action, if any,
should be taken in connection with any such potential
transaction with Man or an alternative transaction.
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The special committee has unanimously:
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determined that (i) it is in the best interests of GLG and
its stockholders for GLG to enter into the merger agreement, and
(ii) the transactions contemplated by the merger agreement,
including the merger, the share exchange agreement and the
voting and support agreement are advisable and fair to GLG and
its unaffiliated stockholders;
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approved the waiver of the restrictions on transfer applicable
to shares of capital stock of GLG held by the Selling
Stockholders under the GLG Shareholders Agreement (described
under Important Information Regarding the
Principals GLG Shareholders
Agreement); and
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recommended that the GLG board of directors (i) determine
it is in the best interests of GLG and its stockholders for GLG
to enter into the merger agreement, (ii) authorize and
approve the execution, delivery and performance by GLG of the
merger agreement (subject to the Minority Stockholder Approval),
(iii) waive the restrictions on transfer applicable to
shares of GLG capital stock held by the Selling Stockholders
under the GLG Shareholders Agreement, as requested by the
Selling Stockholders, (iv) approve the share exchange
agreement and the consummation of the transactions contemplated
thereby, (v) submit the adoption of the merger agreement to
a vote at a special meeting of GLG stockholders called for that
purpose, and (vi) recommend that stockholders of GLG vote
to adopt the merger agreement at the special meeting.
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Our board of directors, acting upon the unanimous recommendation
of the special committee, unanimously:
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determined that the merger agreement and the transactions
contemplated thereby are advisable and fair to and in the best
interests of, GLG and its stockholders;
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authorized and approved the execution, delivery and performance
by GLG of the merger agreement (subject to the Minority
Stockholder Approval);
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approved the waiver of all the restrictions on transfer
applicable to shares of GLG capital stock held by the Selling
Stockholders under the GLG Shareholders Agreement, as requested
by the Selling Stockholders;
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approved the share exchange agreement and the consummation of
the transactions contemplated thereby;
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determined to submit the adoption of the merger agreement to a
vote at a special meeting of stockholders called for that
purpose; and
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recommended that stockholders of GLG vote to adopt the merger
agreement at the special meeting of stockholders.
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Opinion
of Moelis & Company LLC (Page 37 and
Appendix D)
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Moelis & Company LLC, the special committees
financial advisors, delivered to the special committee an oral
opinion, subsequently confirmed by delivery of a written opinion
dated May 16, 2010 that, as of May 16, 2010 and based
upon and subject to the limitations and qualifications set forth
therein, the consideration of $4.50 per share in cash to be
received by the GLG stockholders (other than the Selling
Stockholders) in the merger was fair from a financial point of
view to such holders other than the Selling Stockholders.
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The full text of the written opinion of Moelis dated
May 16, 2010 is attached as Appendix D to this proxy
statement. The written opinion of Moelis sets forth, among other
things, the assumptions made, procedures followed, matters
considered and limitations on the reviews undertaken in
connection with rendering the opinion. Moelis provided its
opinion for the information and assistance of the special
committee in connection with its consideration of the merger
agreement. The Moelis opinion is not a recommendation as to how
any holder of our common stock should vote with respect to the
merger or any other matter. Under the terms of the engagement
letter between Moelis and GLG, GLG agreed to pay Moelis
(i) a nonrefundable work fee of $500,000 which will be
offset, to the extent previously paid, against the transaction
fee described below, (ii) an opinion fee of
$1.5 million, which became payable upon delivery of the
Moelis opinion described above, and which fee will be offset, to
the extent previously paid, against the transaction fee and
(iii) a transaction fee of $4.5 million plus 0.6% of
the equity value (as defined in the engagement letter) in excess
of the equity value implied at a price of $4.50 per share
payable upon the closing of the transaction.
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Opinion
of Goldman Sachs International (Page 46 and
Appendix E)
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Goldman Sachs International delivered its oral opinion, which
was subsequently confirmed in writing, to the GLG board of
directors that, as of May 17, 2010 and based upon and
subject to the factors and assumptions set forth in its written
opinion, the Aggregate Consideration (described under
Special FactorsOpinion of GLGs Financial
Advisor) to be paid to the holders (other than Man and its
affiliates) of shares of GLG common stock, FA Sub 2 exchangeable
shares and convertible notes pursuant to the share exchange
agreement and merger agreement was fair from a financial point
of view to such holders.
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The full text of the written opinion of Goldman Sachs, dated
May 17, 2010, which sets forth assumptions made, procedures
followed, matters considered and limitations on the review
undertaken in connection with the opinion, is attached as
Appendix E. Goldman Sachs provided its opinion for the
information and assistance of the GLG board of directors in
connection with its consideration of the transactions
contemplated by the share exchange agreement and the merger
agreement. The Goldman Sachs opinion is not a recommendation as
to how any holder of shares of GLG common stock, FA Sub 2
exchangeable shares
and/or
convertible notes should vote with respect to the share exchange
agreement and the merger agreement or any other matter. Pursuant
to an engagement letter between GLG and Goldman Sachs, GLG has
agreed to pay Goldman Sachs a transaction fee of approximately
$4 million, with $1 million of the transaction fee
having been payable upon the execution of the share exchange
agreement and merger agreement and the remainder of the fee
being payable upon consummation of the share exchange and the
merger.
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6
Restrictions
on Solicitation of Other Offers (Page 100)
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We have agreed not to, and to cause our subsidiaries not to, and
to not authorize or permit our or our subsidiaries
officers, directors, employees, advisors, agents and
representatives to:
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solicit, facilitate or encourage the making of an alternative
takeover proposal involving 15% or more of our common stock or
other equity securities or assets; or
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engage in any negotiations or discussions with any third party
regarding such an alternative takeover proposal.
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However, if prior to the approval of the Merger Proposal by our
stockholders, we or our subsidiaries or our representatives
receive an unsolicited takeover proposal that does not involve a
breach of the merger agreement or any standstill agreement, and
our board of directors (or any authorized committee thereof)
reasonably determines in good faith (after consultation with
outside legal counsel and an outside financial advisor) that
such takeover proposal constitutes or is reasonably likely to
lead to a superior proposal (as described below
under The Merger Agreement Restrictions on
Solicitations of Other Offers) and its failure to take
action would be inconsistent with its fiduciary duties to our
stockholders, then we may engage in discussions and negotiations
regarding such takeover proposal if we comply with certain
requirements to provide information to Man.
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Conditions
to the Completion of the Merger (Page 106)
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Before completion of the merger, a number of closing conditions
must be satisfied or, to the extent permitted by law and the
merger agreement, waived. These conditions are described more
fully below under The Merger Agreement
Conditions to the Completion of the Merger and they
include, among others, obtaining GLG and Man stockholder
approvals (including the Minority Stockholder Approval),
obtaining any required governmental authorizations and the
absence of any law or governmental order prohibiting or
enjoining the merger.
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If these and other conditions are not satisfied or, to the
extent permitted by law or the merger agreement, waived, the
merger will not be completed, even if our stockholders approve
the Merger Proposal.
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Termination
of the Merger Agreement (Page 107)
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The merger agreement may be terminated at any time by the mutual
written consent of us and Man, and under certain circumstances
by us or by Man, as more fully described below under The
Merger Agreement Termination of the Merger
Agreement.
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If the merger agreement is terminated, then the share exchange
agreement and the voting and support agreement will be
automatically terminated.
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If the Merger Proposal is not approved by our stockholders, or
if the merger is not completed for any other reason, our
stockholders will not receive any payment for their shares
pursuant to the merger agreement. Instead, GLG will remain as a
public company and our common stock will continue to be
registered under the Exchange Act and listed and traded on the
New York Stock Exchange. Under specified circumstances, we may
be required to pay Man a termination fee
and/or
reimburse Man for certain fees and expenses, or Man may be
required to pay us a termination fee or reimburse us for certain
fees and expenses, as described in The Merger
Agreement Termination Fees and Expense
Reimbursement.
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In addition, failure to complete the merger could have a
negative impact on the market price of our common stock, as the
price of those shares may decline to the extent that the current
market price reflects a market assumption that the merger will
be completed. We will be required to pay significant costs
incurred in connection with the merger, whether or not the
merger is completed. In addition, we may be obligated to pay Man
its
out-of-pocket
expenses
and/or a
termination fee if the merger is not completed for certain
reasons, as discussed below.
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7
Fees
Payable Upon a Termination of the Merger Agreement
(Page 109)
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We will be required to pay Man a termination fee equal to
$26 million (inclusive of any applicable value added tax or
its equivalent) if:
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(A) an alternative takeover proposal involving 15% or more
of our common stock or other equity securities or assets is made
to GLG or any third party announces an intention to make any
such proposal, and (B) following such event the merger
agreement is terminated as a result of certain specified events,
and (C) within nine (9) months of the date the merger
agreement is terminated, we enter into one or more definitive
agreements with respect to, or consummate a transaction
contemplated by, any alternative takeover proposal involving 40%
or more of our common stock or other equity securities or assets;
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the merger agreement has been terminated by Man because our
board of directors has either (x) withdrawn, qualified or
changed in a manner adverse to Man its recommendation that our
stockholders adopt the merger agreement or (y) failed to
reject a publicly disclosed alternative takeover proposal
involving 15% or more of our common stock or other equity
securities or assets and to reconfirm its recommendation that
the stockholders adopt the merger agreement following a request
from Man that it do so, or similar events occur, except in
certain circumstances; or
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we have terminated the merger agreement in order to enter into a
transaction pursuant to which a third party would acquire more
than 50% of our equity securities or all or substantially all of
our assets on terms and conditions which the board of directors
determines to be more favorable from a financial point of view
to our stockholders than the merger and the merger agreement,
and concurrently with such termination we enter into one or more
definitive agreements providing for such transaction.
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Man will be required to pay us a termination fee equal to
$26 million (inclusive of any applicable value added tax or
its equivalent) if Mans board of directors has either,
except in certain circumstances:
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not made a recommendation that Mans shareholders approve
the transactions contemplated by the merger agreement, the share
exchange agreement and the voting and support agreement in the
shareholder circular for the Man shareholders meeting
called for such purpose; or
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withdrawn, qualified or adversely modified such recommendation
once contained in the shareholder circular.
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Expense
Reimbursement (Page 109)
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If the merger agreement is terminated because the Statutory
Stockholder Approval and the Minority Stockholder Approval were
not obtained (except in certain circumstances), or because we
failed to perform or breached certain obligations under the
merger agreement, and no termination fee is payable by us to Man
at the time of such termination, we will be required to
reimburse Man for its
out-of-pocket
fees and expenses in connection with the proposed merger up to
$15 million. We will remain obligated to pay the
termination fee described above if it becomes payable, less the
amount of expenses actually paid by us to Man pursuant to the
previous sentence.
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If the merger agreement is terminated due to Mans failure
to obtain the affirmative vote of the holders of a majority of
Mans outstanding ordinary shares present and voting at a
meeting of its shareholders in favor of approving the
transactions contemplated by the merger agreement (except in
certain circumstances), Man will be required to reimburse us for
our
out-of-pocket
fees and expenses in connection with the proposed merger up to
$15 million.
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Share
Ownership of Directors and Executive Officers
(Page 129)
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As of August 30, 2010, the record date for the special
meeting, our directors and executive officers had the right to
vote, in the aggregate, 87,044,209 shares of our common
stock and 58,904,993 shares of our Series A voting
preferred stock, which together represented approximately 47.0%
of the combined voting power of our securities on the record
date for the special meeting.
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Pursuant to the terms of the voting and support agreement, the
Selling Stockholders and TOMS have agreed to vote their shares
of common stock and Series A voting preferred stock
FOR the Merger Proposal and FOR the
Adjournment Proposal.
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Our other directors and executive officers have informed us that
they intend to vote all of their shares of common stock
FOR the approval of the Merger Proposal and
FOR the Adjournment Proposal.
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As of the record date for the special meeting, our directors and
executive officers (other than the Selling Stockholders) had the
right to vote, in the aggregate, 8,491,340 shares of our
common stock, which represented approximately 2.7% of the
combined voting power of our securities on the record date for
the special meeting.
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Share
Exchange Agreement (Page 111 and Appendix B)
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Under the share exchange agreement, the Selling Stockholders
agreed with Man to exchange all of their shares of (a) our
common stock, (b) our Series A voting preferred stock,
(c) our subsidiary FA Sub 2 Limiteds exchangeable
Ordinary Class B Shares which are exchangeable into shares
of our common stock (at which time the associated Series A
voting preferred stock is redeemed), and (d) any other
shares of our capital stock or such exchangeable stock they
acquire after the date of the share exchange agreement, in
exchange for ordinary shares of Man at an exchange ratio of
1.0856 ordinary shares of Man per share of our common stock
exchanged by the Selling Stockholders (which ratio may be
reduced prior to closing under certain circumstances).
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The shares subject to the share exchange agreement will not
include any shares of our common stock acquired by a Selling
Stockholder upon conversion of our 5.00% dollar-denominated
convertible subordinated notes due 2014, or any shares of our
common stock acquired by a Selling Stockholder in the open
market prior to the date of the share exchange agreement.
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Before completion of the share exchange, which is expected to
occur immediately prior to the completion of the merger, a
number of closing conditions must be satisfied or waived. These
conditions are described more fully below under
Descriptions of Other Transaction Agreements
Share Exchange Agreement Conditions to the
Completion of the Share Exchange.
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Voting
and Support Agreement (Page 118 and
Appendix C)
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Under the voting and support agreement, the Selling Stockholders
and TOMS have agreed with Man and Merger Sub to vote or cause to
be voted all of the shares of our common stock and Series A
voting preferred stock held by them as of the date of the voting
and support agreement and acquired after such date, at any
meeting of our stockholders (or any adjournment thereof) or upon
any action by written consent in lieu of a meeting:
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in favor of the Merger Proposal;
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against any alternative takeover proposal involving 15% or more
of our consolidated assets or to which 15% or more of our
revenues or earnings on a consolidated basis are attributable,
acquisition of beneficial ownership of 15% or more of our
outstanding common stock, a tender offer or exchange offer that
if consummated would result in any third party owning 15% or
more of our outstanding common stock or merger, consolidation,
share exchange, business combination, recapitalization,
liquidation, dissolution or similar transaction involving us, in
each case other than the merger agreement, the transactions
contemplated by the merger agreement, the voting and support
agreement and the share exchange transaction; and
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against any agreement (including, without limitation, any
amendment of any agreement), amendment of our organizational
documents or other action that is intended or could reasonably
be expected to prevent, impede, interfere with, delay, postpone
or discourage the consummation of the merger.
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Warrant
Tender Offer (Page 76)
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We have agreed to, and to cause our subsidiaries to, use
reasonable best efforts to commence, prior to the closing date,
offers to purchase all of the outstanding warrants to purchase
shares of our common stock at a price of $0.129 per warrant. The
offers will be conditioned upon completion of the merger.
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9
Rights of
Appraisal (Page 144)
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Holders of our common stock who object to the merger may elect
to pursue their appraisal rights to receive the judicially
determined fair value of their shares, which could
be more or less than, or the same as, the per share merger
consideration for the common stock, but only if they comply with
the procedures required under Delaware law. In order to qualify
for these rights, you must (1) not vote in favor of the
Merger Proposal, nor consent thereto in writing, (2) make a
written demand to GLG for appraisal prior to the taking of the
vote on the adoption of the merger agreement at the special
meeting, (3) continue to hold your shares until the
consummation of the merger and (4) otherwise comply with
the Delaware law procedures for exercising appraisal rights. For
a summary of these Delaware law procedures, see Appraisal
Rights.
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An executed proxy that is not marked AGAINST or
ABSTAIN will be voted for approval of the Merger
Proposal and will disqualify the stockholder submitting that
proxy from demanding appraisal rights. A copy of
Section 262 of the General Corporation Law of the State of
Delaware is also attached as Appendix F to this proxy
statement. Failure to follow the procedures set forth in
Section 262 will result in the loss of appraisal rights.
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Market
Price of Our Common Stock (Page 132)
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On May 14, 2010, the last trading day before we announced
the execution of the merger agreement, the high and low sales
prices of our common stock were $2.99 and $2.90, respectively.
The merger consideration of $4.50 per share represents a premium
of approximately 55% over the closing trading price of $2.91 per
share on May 14, 2010, and approximately 41% over the
average closing prices of our common stock for the
30-trading
day period ending on May 14, 2010. On
August , 2010, the most recent practicable date
before the printing of this proxy statement, the high and low
reported sales prices of our common stock were
$ and
$ , respectively. On May 14,
2010, the closing price of our publicly traded warrants was
$0.129. You are urged to obtain a current market price quotation
for our common stock.
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Material
United States Federal Income Tax Consequences
(Page 83)
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For U.S. federal income tax purposes, the receipt of the
cash merger consideration in exchange for shares of GLG common
stock in the merger by a U.S. holder will be a taxable
transaction. The amount of the gain or loss recognized will be
measured by the difference, if any, between the cash received in
the merger and the holders tax basis in the shares of GLG
common stock. Any gain realized by a
non-U.S. holder
as a result of the receipt of the cash merger consideration will
generally not be subject to U.S. federal income tax, except
in certain situations.
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None of GLG, Man, Holdco or Merger Sub will recognize any gain
or loss for U.S. federal income tax purposes as a result of
the merger.
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For U.S. federal income tax purposes, the receipt of
ordinary shares of Man by the Selling Stockholders in exchange
for shares of our common stock pursuant to the share exchange
agreement (and the receipt of cash by TOMS if it converts
convertible notes into shares of our common stock prior to the
merger) will be a taxable transaction even though the Selling
Stockholders are receiving ordinary shares of Man instead of
cash.
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You should consult your own tax advisor regarding the
U.S. federal income tax considerations relevant to the
merger, as well as the effects of your state, local and foreign
tax laws.
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10
QUESTIONS
AND ANSWERS ABOUT THE MERGER AND
THE SPECIAL MEETING OF STOCKHOLDERS
The following questions and answers are intended to address
briefly some commonly asked questions regarding the merger and
the special meeting. These questions and answers may not address
all questions that may be important to you as a GLG stockholder.
Please refer to the Summary Term Sheet and the more
detailed information contained elsewhere in this proxy
statement, the appendices to this proxy statement and the
documents referred to or incorporated by reference in this proxy
statement, which you should read carefully.
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When and where is the special meeting? |
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The special meeting will be held on September ,
2010, at 10:00 a.m., Eastern Time, at the offices of
Chadbourne & Parke LLP, 30 Rockefeller Plaza, New
York, New York 10112. |
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What matters will be voted on at the special meeting? |
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At the special meeting and any postponements or adjournments
thereof, you will be asked to consider and vote on the following
matters: |
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To approve the Merger Proposal;
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To approve the Adjournment Proposal; and
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To transact such other business as may properly come
before the meeting or any adjournment or postponement of the
meeting.
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Who is entitled to attend and vote at the special meeting? |
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Stockholders of record holding GLGs voting securities as
of the close of business on August 30, 2010, the record
date for the special meeting, are entitled to vote at the
special meeting. As of the record date, there were
251,883,013 shares of GLG common stock outstanding and
58,904,993 shares of Series A voting preferred stock
outstanding. Every holder of GLG common stock is entitled to one
vote per share of our common stock held as of the record date
and every holder of GLGs Series A voting preferred
stock is entitled to one vote per share of our Series A
voting preferred stock held as of the record date. |
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If you want to attend the special meeting and your shares are
held in street name by your broker, bank or other
nominee, you must bring to the special meeting a proxy from the
record holder (your broker, bank or other nominee) of the shares
authorizing you to vote at the special meeting. |
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What constitutes a quorum for the special meeting? |
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The presence in person or by proxy of a majority of the combined
shares of our common stock and Series A voting preferred
stock outstanding on the record date is required for a quorum.
Shares that are voted FOR, AGAINST, or
ABSTAIN a matter are treated as being present at the
special meeting for purposes of establishing a quorum. In the
event that there are not sufficient shares present for a quorum,
the special meeting may be adjourned in order to permit further
solicitation of proxies. However, the presence in person or by
proxy of the Selling Stockholders and our other directors and
executive officers, who collectively hold approximately 51.5% of
the combined shares of our common stock and Series A voting
preferred stock as of the record date for the special meeting,
will assure that a quorum is present at the meeting. |
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What vote is required to approve the Adjournment Proposal? |
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Approval of the Adjournment Proposal requires the affirmative
vote of the holders of a majority of the combined shares of our
common stock and Series A voting preferred stock, voting as
a single class, present in person or by proxy and entitled to
vote on the matter. |
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Who is soliciting my vote? |
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The enclosed proxy is being solicited on behalf of our board of
directors for use in voting at the special meeting, including
any postponements or adjournments thereof. We are paying for the
proxy solicitation. In addition, we have retained Morrow &
Co., LLC, Stamford, Connecticut, which we refer to as
Morrow, to assist in the solicitation. We will pay
Morrow $10,000 plus
out-of-pocket
expenses for its assistance. Our directors, officers and
employees may also solicit proxies by personal interview, mail,
e-mail,
telephone, facsimile or by other means of communication. These
persons will not be paid additional compensation for their
efforts. We will also request brokers and other fiduciaries to
forward proxy solicitation material to the beneficial owners of
shares of our common stock that the brokers and fiduciaries hold
of record. We will reimburse them for their reasonable
out-of-pocket
expenses. |
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What do I need to do now? |
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After you carefully read this proxy statement, please consider
how the merger affects you and then vote or provide voting
instructions as described below. Even if you plan on attending
the special meeting, we urge you to vote now by giving us your
proxy. This will ensure that your vote is represented at the
meeting. If you do attend the special meeting, you can change
your vote at that time, if you then desire to do so. Do NOT
enclose or return your stock certificate(s) with your proxy. |
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How do I vote my shares? |
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You may vote using one of the following methods if you hold your
shares in your own name as stockholder of record: |
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Internet. You may submit a proxy
to vote on the Internet up until 11:59 p.m. Eastern Time on
September , 2010 by going to the website for
Internet voting on your proxy card (www.proxyvote.com) and
following the instructions on your screen. Have your proxy card
available when you access the web page. If you vote by the
Internet, you should not return your proxy card.
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Telephone. You may submit a proxy
to vote by telephone by calling the toll-free telephone number
on your proxy card, 24 hours a day and up until
11:59 p.m. Eastern Time on September ,
2010, and following the prerecorded instructions. Have your
proxy card available when you call. If you vote by telephone,
you should not return your proxy card.
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Mail. You may submit a proxy to
vote by mail by marking the enclosed proxy card, dating and
signing it, and returning it in the postage-paid envelope
provided, or to GLG Partners, Inc.,
c/o Broadridge,
51 Mercedes Way, Edgewood, NY 11717 as long as your proxy card
is received by September , 2010. If you own
shares in various registered forms, such as jointly with your
spouse, as trustee of a trust or as custodian for a minor, you
will receive, and will need to sign and return, a separate proxy
card for those shares because they are held in a different form
of record ownership. Shares held by a corporation or business
entity must be voted by an authorized officer of the entity.
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In Person. You may vote your
shares in person by attending the special meeting and submitting
your vote at the meeting.
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If you hold your shares in street name through a
broker, bank or other nominee, then you received this proxy
statement from the nominee, along with the nominees
instruction card which includes voting instructions and
instructions on how to change your vote. |
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How will my proxy be voted? |
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If you use our Internet or telephone voting procedures or duly
complete, sign and return a proxy card to authorize the named
proxies to vote your shares, your shares will be voted as
specified. If your proxy card is signed but does not contain
specific instructions, your shares will be voted as recommended
by our board of directors FOR the Merger Proposal
and FOR the Adjournment Proposal. In addition, if
other matters come |
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before the special meeting, the persons named as proxies will
vote in accordance with their best judgment with respect to such
matters. |
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If my shares are held in street name, how will my
broker, bank or other nominee vote? |
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If your broker, bank or other nominee is the holder of record of
your shares (i.e., your shares are held in street
name), you will receive voting instructions from the
holder of record. You must follow these instructions in order
for your shares to be voted. We urge you to instruct your
broker, bank or other nominee how to vote your shares by
following those instructions. The broker, bank or other nominee
is required to vote those shares in accordance with your
instructions. If you do not give instructions to the broker,
bank or other nominee, the broker, bank or other nominee may
not have discretion to vote your shares with respect to
the proposals. |
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In addition, because any shares you may hold in street
name will be deemed to be held by a different stockholder
than any shares you hold of record, shares held in street name
will not be combined for voting purposes with shares you hold of
record. To be sure your shares are voted, you should instruct
your broker, bank or other nominee to vote your shares. |
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May I revoke my proxy? |
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For stockholders of record, whether you vote via the Internet,
by telephone or by mail, you may revoke your proxy at any time
before it is voted at the special meeting by: |
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delivering a written notice of revocation to the
Secretary of GLG;
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casting a later vote using the Internet or telephone
voting procedures;
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submitting a properly signed proxy card with a later
date; or
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voting in person at the special meeting.
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If your shares are held in street name, you must
contact your broker, bank or other nominee to revoke your proxy.
Your proxy is not revoked simply because you attend the special
meeting. |
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Will my vote be confidential? |
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It is our policy to keep confidential all proxy instructions and
proxy cards, ballots and voting tabulations that identify
individual stockholders, except as may be necessary to meet any
applicable legal requirements and, in the case of any contested
proxy solicitation, as may be necessary to permit proper parties
to verify the propriety of proxies presented by any person and
the results of the voting. The independent inspector of election
and any employees involved in processing proxy instructions and
cards or ballots and tabulating the vote are required to comply
with this policy of confidentiality. |
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What do I do if I receive more than one proxy or set of
voting instructions? |
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If you receive more than one proxy, it means that you hold
shares that are registered in more than one account. To ensure
that all of your shares are voted, you will need to submit each
proxy you receive. |
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When is the merger expected to be completed? |
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We are working toward completing the merger as quickly as
possible, and we anticipate that it will be completed by the end
of September 2010 or as soon as practicable thereafter. In order
to complete the merger, we must obtain GLG and Man stockholder
approvals (including the Minority Stockholder Approval) and the
other closing conditions under the merger agreement must be
satisfied or, to the extent permitted by law and the merger
agreement, waived. See The Merger Agreement
Conditions to the Completion of the Merger. |
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Should I send my stock certificate now? |
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No. After the merger is completed, you will be sent a
letter of transmittal with detailed written instructions for
exchanging your shares of GLG common stock for the merger
consideration. If your shares are held in street |
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name by your broker, bank or other nominee you will
receive instructions from your broker, bank or other nominee as
to how to effect the surrender of your street name
shares in exchange for the merger consideration. Please do
not send your certificates now. |
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Q: |
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How can I obtain additional information about GLG? |
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A: |
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GLG maintains an Internet website at www.glgpartners.com. Our
annual reports on
Form 10-K,
quarterly reports on
Form 10-Q,
current reports on
Form 8-K
and amendments to such reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act, along with our
annual report to stockholders and other information related to
GLG filed with the Securities and Exchange Commission
(SEC), are available free of charge on this site as
soon as reasonably practicable after we electronically file or
furnish this information with the SEC. The information provided
on our website is not part of this proxy statement, and
therefore is not incorporated by reference herein, except to the
extent expressly set forth below under Incorporation by
Reference. |
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Who can help answer my questions? |
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A: |
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If you have additional questions about the merger or the other
proposals to be voted on at the special meeting after reading
this proxy statement or need assistance voting your shares,
please call our proxy solicitor, Morrow, toll-free at
800-607-0088.
Banks and brokers should contact Morrow at
203-658-9400. |
14
SPECIAL
FACTORS
Background
of the Merger
Prior to becoming a U.S. publicly traded company in
November 2007, GLG explored various alternative transactions and
engaged in substantive discussions with Man, among others,
concerning a potential transaction involving the two companies.
Although no transaction was pursued at the time, Man and GLG
executives continued to have regular interactions at industry
conferences and other industry-related events. In addition, each
of Messrs. Roman and Clarke is presently a trustee of The
Hedge Fund Standards Board.
During 2008, the complexion of GLGs business changed
substantially against a backdrop of redemptions by investors,
severe capital market dislocations, and decreased investment
performance. In response to this and significant declines in
GLGs own assets under management (AUM), GLG
undertook various initiatives and weighed strategic options to
strengthen its platform. Among these was the April 2009
acquisition of Société Générale Asset
Management UK (SGAM UK), which added approximately
$7.0 billion of AUM, including approximately
$3.0 billion of AUM that GLG had been managing under a
sub-advisory
arrangement with SGAM UK since the December 2008 announcement of
the SGAM UK acquisition. While the acquisition of SGAM UK and
other measures increased GLGs overall AUM and improved its
cost structure, profitability remained below historical levels,
reflecting greater representation of long-only AUM and fewer
funds and managed accounts in a position to earn performance
fees. At the same time, GLGs infrastructure and asset
management capabilities continued to be able to support much
greater AUM. These factors, together with concerns regarding the
potentially protracted recovery of higher fee-yielding assets,
uncertainty about the prospects of geographic expansion outside
of GLGs historic U.K. and European markets and a
challenging macroeconomic environment, led the Individual
Principals to discussions among themselves during 2009 as to
whether GLG should seek a strategic alliance or other
combination with another sizeable asset manager with a
complementary business.
Mans AUM also declined in 2008 and 2009 but throughout the
period Man reported a strong capital surplus. For example, for
the six months ended September 30, 2009, Man reported a
regulatory capital surplus of approximately $1.6 billion
and cash balances of approximately $2.1 billion and these
capital resources positioned Man strongly to address
opportunities in its industry and invest further in its
business. Of particular interest to Man in this regard were
growth opportunities, including through acquisition, consistent
with Mans strategy to acquire high quality discretionary
investment management capability providing the potential to
broaden the range of diversified, liquid strategies for the
benefit of its investors and to provide a more diversified
source of income for Man shareholders.
In March 2009, Emmanuel Roman, Co-Chief Executive Officer of
GLG, met with Peter Clarke, Chief Executive Officer of Man, at
Mans offices in London to discuss generally areas where
their businesses might work together. The discussions between
the parties were general and preliminary, did not contain
specific details with respect to a transaction and did not
progress further at that time.
On May 15, 2009, Pierre Lagrange, Senior Managing Director
of GLG Partners LP and a member of GLGs board of directors
(the GLG Board), met Lance Donenberg, Head of
Strategic Investments for Mans Principal Strategies Group,
at Mans Chicago offices. Messrs. Lagrange and
Donenberg had preliminary discussions about the business
strategies of their respective companies. Thereafter,
Messrs. Lagrange and Donenberg continued to talk from time
to time; however, there were no specific discussions regarding
the structure of a potential transaction.
In September 2009, Mr. Roman asked representatives of
Goldman Sachs to help GLG develop an understanding of Mans
business and whether there may be potential for a business fit,
including an assessment of strategic rationale and a range of
possible transaction structures without focusing on any specific
structure.
On October 1, 2009, representatives of Goldman Sachs made a
presentation to Messrs. Lagrange and Roman to help them
develop a better understanding of Mans business and
whether there was potential for a business fit, including an
analysis of Mans business fundamentals and preliminary
valuation, strategic, structure and capital markets
considerations.
On October 7, 2009, John Rowsell, Head of Mans
Principal Strategies Group, called Mr. Lagrange to engage
in further preliminary discussions about their respective
companies, including about GLGs evolution, development and
infrastructure. The conclusion of these discussions was to have
a further meeting in person.
15
On November 4, 2009, Messrs. Rowsell, Donenberg and
Urs Alder, Head of Product Strategy for Mans Principal
Strategies Group, met with Messrs. Lagrange, Roman and Mark
Jones of GLG at GLGs offices in London, England and had
further preliminary discussions about the investments and
portfolios of their respective companies. The conclusion of
these discussions was to engage in discussions with respect to
the potential for a transaction.
In connection with Mans search for opportunities to
diversify its business, one of the topics discussed at the
annual strategic review meeting of the board of directors of Man
(the Man Board) in December 2009 was Mans
acquisition strategy, and GLG was identified as one of a number
of potential acquisition targets.
On January 21, 2010, Messrs. Clarke and Lagrange met
and had preliminary discussions about their respective
companies, potential opportunities for the businesses to work
together, the financial markets, Mans market positioning
and GLGs and Mans respective market penetration,
geographies and investment styles. The conclusion of these
discussions was to continue discussions on these same matters.
On January 24, 2010, Messrs. Lagrange and Donenberg
met at an industry conference and had further preliminary
discussions regarding possible strategic alternatives involving
the two companies, including joint or cross distribution
arrangements whereby the two companies would distribute each
others respective products, a non-controlling investment
by Man in GLG, and possible asset management joint ventures.
Mr. Lagrange inquired about Mans sales capabilities
and process during this meeting.
On February 4, 2010, Messrs. Lagrange, Roman and Noam
Gottesman, Chairman and Co-Chief Executive Officer of GLG, met
with Messrs. Clarke and Rowsell to discuss whether there
was sufficient interest in pursuing a possible transaction to
warrant a preliminary exchange of information between Man and
GLG for due diligence purposes.
On February 9, 2010, Mr. Roman met with
representatives of Goldman Sachs to inform them about the
exploratory discussions held between GLGs and Mans
principals regarding possible strategic alternatives involving
the two companies described above.
On February 12, 2010, Alejandro San Miguel, the General
Counsel and Corporate Secretary of GLG, received a call from
Stephen Ross, the General Counsel of Man. Mr. Ross informed
Mr. San Miguel that Man was in the process of
retaining bankers and counsel to evaluate a possible transaction
between the two companies and that he would be arranging for
delivery to Mr. San Miguel of a draft of a mutual
non-disclosure agreement. Thereafter, Mr. San Miguel
advised Messrs. Gottesman, Roman and Lagrange of his call
with Mr. Ross and engaged Chadbourne & Parke LLP
to assist in negotiating the mutual non-disclosure agreement. On
the same day, Mr. Roman communicated to
Messrs. Gottesman, Lagrange and San Miguel that he
proposed that GLG appoint Goldman Sachs as its financial advisor
in connection with the transaction.
On February 16, 2010, Man delivered an initial draft of the
mutual non-disclosure agreement to Mr. San Miguel.
On February 22, 2010, at a meeting of the GLG Board,
Messrs. Gottesman, Roman and Lagrange reported to the other
board members the substance of their preliminary discussions
with Man and their desire to initiate exploratory discussions
regarding a possible transaction with Man.
Mr. San Miguel reported on his conversation with
Mr. Ross and the terms of the draft mutual non-disclosure
agreement delivered to him by Man. The GLG Board authorized
execution of a mutual non-disclosure agreement and a limited
exchange of information but reserved judgment on the issue as to
whether GLG should allow full due diligence on GLG or conduct
full due diligence on Man until further analysis of issues
relating to any possible transaction had been developed.
On February 23, 2010, representatives of Goldman Sachs
delivered to Messrs. San Miguel and Rojek presentation
materials containing a review of GLG and Man financial
projections based on research analyst estimates, preliminary
financial analyses, including market performance, selected
companies and pro forma transaction analyses and analysis at
various prices, a discussion of potential sources of synergies
and preliminary areas of investigation of Man.
On February 25, 2010, Messrs. Clarke and Lagrange
spoke by telephone about GLGs governance process in
relation to a possible transaction.
16
Also on February 25, Messrs. San Miguel, Jones
and Jeffrey Rojek, Chief Financial Officer of GLG, met with
Messrs. Ross and Jasveer Singh, Head of Legal of Man, to
discuss the mutual non-disclosure agreement and process matters
relating to timing, accounting reconciliation,
U.S. securities registration requirements and other
matters, including regulatory approvals and other deal mechanics
based on various hypothetical transaction structures.
Over the course of the following week, several drafts of the
non-disclosure agreement were exchanged and its terms
negotiated, including the addition of a standstill provision
restricting Mans ability to make a proposal to acquire GLG
without the consent of GLG for a period of eighteen months
following the execution of the non-disclosure agreement. GLG and
Man entered into a mutual non-disclosure and standstill
agreement dated as of March 1, 2010.
Between March 2 and March 26, 2010,
Messrs. San Miguel and Rojek provided informal updates
from time to time to non-executive members of the GLG Board
regarding the status of discussions with Man. During the same
period, Messrs. Clarke and Lagrange had phone calls from
time to time to discuss the status of the discussions between
the two companies.
On March 5, 2010, Messrs. Gottesman, Roman and
San Miguel spoke by telephone with Mr. Clarke to
discuss establishing a process for structuring a possible
transaction involving GLG and Man. The representatives of GLG
also stated that any transaction should have a significant stock
component in the consideration. The parties also discussed that
the Individual Principals should become significant shareholders
of Man as a result of any transaction in order to align their
interests with those of shareholders post-acquisition. The GLG
representatives suggested that therefore, Man should consider
registering its shares for issuance in order to facilitate a
share-for-share
exchange, even if Man subsequently decides to deregister the
shares. The GLG representatives also indicated that it was
important that there be a well thought out retention plan in
place below the board level before any announcement of a
transaction.
On March 6, 2010, representatives of Goldman Sachs had a
telephone discussion with Messrs. Roman, San Miguel, Rojek
and Jones regarding materials provided by Goldman Sachs
containing an updated review of GLG and Man financial
projections based on research analyst estimates and preliminary
financial analyses, including market performance, selected
companies and pro forma transaction analyses and analysis at
various prices.
On March 8, 2010, Messrs. Clarke, Ross and Singh of
Man and Messrs. Roman, Lagrange, San Miguel and Jones
of GLG met in London, England to discuss the structure of a
possible transaction involving the two companies. The GLG
representatives expressed their desire to structure any possible
transaction as a merger pursuant to which all holders of GLG
stock would receive cash and shares of Man at a negotiated
exchange ratio. Man representatives indicated their view that
GLGs proposed approach would not be viable because the Man
Board would not approve a transaction that would require Man to
register its shares in the U.S. and become subject to
reporting requirements under U.S. federal securities laws,
due to the significant costs and administrative effort required
to comply with both the U.K. and U.S. regulatory regimes,
given that Man is already subject to U.K. regulatory oversight
and review. Man indicated it would be willing to issue shares in
a transaction that was exempt from registration in the
U.S. and to pay part of the aggregate consideration in
cash. The Man representatives stated that in the case of a share
exchange the premium to GLG stockholders would be modest whereas
Man would be willing to pay a higher premium in a cash
transaction. The Man representatives also indicated that in any
transaction Man would require that the Individual Principals
receive Man ordinary shares in exchange for their shares of GLG
common stock and FA Sub 2 exchangeable shares in order
to align the interests of the Individual Principals with
Mans shareholders and also would require that each
Individual Principal agree to transfer restrictions on their Man
ordinary shares, non-competition covenants and other provisions
that would reflect a long-term commitment to, including by
taking ongoing roles in, the combined business by the Individual
Principals.
On March 9, 2010, the Man Board held a meeting at which
there was a discussion of a potential transaction with GLG and a
committee of the Man Board was established to further consider
such a transaction. Perella Weinberg Partners, Mans
financial advisor, also gave a presentation to the Man Board
regarding various financial analyses it had performed. See
Financial Analyses of the Financial Advisor to
Man below.
On March 10, 2010, representatives of Chadbourne and Weil,
Gotshal & Manges LLP, Mans U.S. counsel,
had a telephone call during which they discussed a transaction
structure in which all GLG stockholders would receive a
combination of cash and Man ordinary shares as consideration and
an alternative bifurcated structure in which the Selling
Stockholders would receive Man ordinary shares and the public
stockholders of GLG other than the Selling Stockholders (which
are referred to as the unaffiliated stockholders)
would receive cash as consideration.
17
On March 11, 2010, Messrs. San Miguel, Rojek and
Jones of GLG, Messrs. Ross, Singh, Oliver Stern, U.K. Legal
Counsel of Man, and Robert Aitken, Head of Global Compliance of
Man, and Ms. Orly Lax, Head of U.S. Legal &
Product Legal of Man, and representatives of Chadbourne, Weil,
Clifford Chance LLP, Mans U.K. counsel, and
Allen & Overy LLP, GLGs U.K. regulatory counsel,
met by teleconference to discuss whether a transaction could be
structured in compliance with applicable law whereby the
Principals would receive Man ordinary shares in exchange for
their shares of GLG common stock and FA Sub 2
exchangeable shares in a transaction exempt from registration
under U.S. securities laws, and the unaffiliated
stockholders would receive cash in a merger. During the
teleconference, the participants also discussed procedures that
Chadbourne representatives indicated they believed would be
advisable to protect the unaffiliated stockholders, if the
parties pursued a transaction based upon such a structure,
including establishing a special committee to negotiate any
possible transaction and requiring that there be a nonwaivable
condition in any merger agreement that holders of a majority of
the outstanding shares of GLG common stock (other than the
Selling Stockholders, Man, GLG and their respective affiliates
(with certain exceptions) and employees of GLG) approve the
merger. Clifford Chance had previously provided legal advice to
GLG and its affiliates with respect to U.K. employment and
partnership law matters, and GLG and Man waived conflicts with
regard to Clifford Chances representation of Man in the
transaction.
On March 15, 2010, representatives of Goldman Sachs and
Perella Weinberg had an introductory teleconference with respect
to a potential transaction between Man and GLG. Also on
March 15, representatives of Goldman Sachs delivered a
preliminary due diligence list on behalf of GLG to
representatives of Perella Weinberg.
On March 17, 2010, representatives of Perella Weinberg
delivered a preliminary due diligence list on behalf of Man to
representatives of Goldman Sachs.
On March 18, 2010, Mr. San Miguel informed
Mr. Ross by telephone that the GLG Board would not permit
management to commence discussions with Man concerning a
potential transaction until some indication of Mans
proposed valuation of GLG was made but would permit due
diligence sufficient for Man to develop such an indication.
On March 19, 2010, representatives of Chadbourne and Weil
had a telephone call during which they discussed the feasibility
of a bifurcated transaction structure between Man and GLG and
certain due diligence matters.
On March 22, 2010, Messrs. Clarke, Ross and Singh met
with Messrs. Roman, Lagrange and Jones to discuss
Mans and GLGs respective business, preliminary areas
where synergies may be explored, possible forms of bifurcated
deal structure and a high level approach to due diligence.
On March 23, 2010, Messrs. Roman, Lagrange, Clarke and
Martin Franklin, a director of GLG who was in London on other
business, had a meeting in London to make personal introduction
between Messrs. Franklin and Clarke. The parties discussed
Mans and GLGs respective businesses and that
appropriate governance procedures to ensure fairness would be
necessary if discussions were to proceed.
On March 24, 2010, representatives of Perella Weinberg and
Goldman Sachs met to discuss process matters and potential
transaction structures involving a share exchange and a merger.
Goldman Sachs representatives communicated GLGs
expectations that there be a significant premium paid to
GLGs unaffiliated stockholders in any transaction.
Between March 16 and March 26, 2010, representatives and
various advisors of GLG and Man conducted limited due diligence,
and the legal advisors of Man and GLG held conference calls to
discuss potential forms of bifurcated transaction structures.
During this period, directors of GLG continued informal
discussions among themselves regarding the advisability of
pursuing a transaction with Man and on what terms such a
transaction would be acceptable. The Individual Principals also
communicated to other directors of GLG their expectation that if
a bifurcated structure involving a share exchange and a cash
merger were pursued, the unaffiliated stockholders receiving
cash would receive a significant premium over GLGs current
share price, whereas the Individual Principals and any others
who might receive Man ordinary shares would only receive a
modest premium.
On March 26, 2010, representatives of Perella Weinberg
notified representatives of Goldman Sachs that Bloomberg News
had published an article about Mans search for an
acquisition target, noting that GLG was named as a potential
target. Other news publications subsequently published similar
articles. The GLG Board met by conference call to discuss the
press articles and Mans disclosure obligations arising as
a consequence of such press
18
articles in the United Kingdom. Later that day and prior to the
opening of trading in New York, GLG formally discontinued
further discussions with Man. In making a decision to
discontinue discussions, the GLG Board took into account the
fact that discussions were in very preliminary stages and that
Bank of America Merrill Lynch, Mans U.K. listed company
corporate broker, had informed GLG that the U.K. Listing
Authority (UKLA) had taken the position that, in
light of the media speculation, Man must publicly affirm if it
continued to be in discussions with GLG. The GLG Board concluded
that it had not reached sufficient consensus to consider
pursuing a transaction and that discussions with Man were so
preliminary that they did not warrant public disclosure to that
effect. Between March 26 and March 28, 2010
Messrs. Clarke and Lagrange exchanged telephone messages
before finally speaking by telephone about the discontinuation
of discussions.
On March 29, 2010, the above-mentioned Man Board committee
held a meeting in which they noted the discontinuation of both
discussions with GLG and the preparatory work done in connection
with a potential transaction.
In the month following the publication on March 26, 2010 of
the various press articles speculating about a possible
transaction between GLG and Man, GLG was contacted by several
investment banking firms offering their services in connection
with a potential transaction. No alternative potential bidders
for GLG emerged during this time frame or subsequently.
On April 14, 2010, representatives of Goldman Sachs
initiated a meeting with representatives of Perella Weinberg. At
the meeting, the two firms reviewed the recently discontinued
discussions between GLG and Man.
On April 26, 2010, the Man Board held a meeting at which
Mr. Clarke was authorized to re-engage GLG with regards to
a potential transaction and, in connection with a management
presentation, Perella Weinberg discussed various financial
analyses it performed with the Man Board (see
Financial Analyses of the Financial Advisor to
Man). The Man Board determined that the structure should
not require Man to register its shares in the U.S. and
become subject to reporting requirements under U.S. federal
securities laws, due to the significant costs and administrative
effort required to comply with both the U.K. and
U.S. regulatory regimes, as Man is already subject to U.K.
regulatory oversight and review. The Man Board agreed that Bank
of America Merrill Lynch should inform the UKLA at the
appropriate time of Mans re-engagement with GLG.
On April 26, Mr. Clarke called Mr. Lagrange to
advise him that Man was still interested in a possible
transaction with GLG and that he had received approval from the
Man Board to seek to re-engage GLG in discussions regarding a
possible transaction. Mr. Clarke indicated that Man would
be prepared to present a written non-binding expression of
interest that would have a bifurcated structure involving a
share exchange with the Selling Stockholders for their shares of
GLG common stock and FA Sub 2 exchangeable shares and a
cash merger with the unaffiliated stockholders. He indicated
that the Man Board had definitively determined it would not
pursue any transaction that would require Man to register its
shares in the U.S. Mr. Lagrange communicated this
information to members of the GLG Board and members of GLG
management who had been involved in the prior discussions with
Man. The GLG Board members suggested to management that outside
counsel to Man and GLG discuss the key terms of the proposed
expression of interest letter before it was submitted and
authorized management to request a written expression of
interest if the legal advisors confirmed that the content was
consistent with what had been generally described to
Mr. Lagrange.
On April 27, 2010, representatives of Chadbourne and Weil
held a teleconference during which Weil described the key terms
of the expression of interest, the proposed structure and the
rationale for the structure. The outside counsel then reported
back to their respective clients and Mr. Lagrange notified
Mr. Clarke that a written expression of interest could be
sent by Man.
On April 28, 2010, Man submitted a letter signed by Kevin
Hayes, Finance Director of Man, to GLGs Chairman and Board
indicating a non-binding expression of interest to negotiate a
transaction or related transactions pursuant to which Man or one
of its subsidiaries would propose to acquire 100% of GLG. The
proposed structure involved two separate but related
transactions each of which was conditioned on the other. For the
first transaction, Man would negotiate an agreement with the
Selling Stockholders pursuant to which the Selling Stockholders
would be issued Man ordinary shares in exchange for their GLG
securities. Man also proposed discussing with the Individual
Principals at a later stage their continued involvement in the
post-closing business and the associated incentive and
retention/lock-up arrangements.
19
For the second transaction, Man proposed a merger agreement
pursuant to which the unaffiliated stockholders of GLG would
receive cash consideration for their shares of GLG common stock
in a merger. Mans letter indicated its expectation that if
the parties pursued such a transaction, GLG would establish a
special committee of independent directors to review and approve
or reject the proposed transaction on behalf of GLGs
unaffiliated stockholders, and that such special committee would
retain its own legal and financial advisors. Man indicated that
it expected the transaction to be fully contingent on the
unanimous approval of a special committee.
Mans non-binding letter proposed to offer (a) an
exchange of Man ordinary shares for the Principals shares
of GLG common stock in connection with the share exchange at an
exchange ratio representing a value of $3.40 per share of GLG
common stock; and (b) cash to GLGs unaffiliated
stockholders in a cash merger on the basis of a $3.75 per share
of GLG common stock. Man noted that its proposed price per share
offer to GLG unaffiliated stockholders represented a premium of
40% over GLGs closing stock price on March 25, 2010,
which was one day prior to the beginning of media speculation
about a transaction involving Man and GLG. Man proposed to pay
the entire cash consideration in the cash merger from its
available cash resources, and therefore, to include no financing
contingency in the merger agreement.
Man also proposed a target date for entering into definitive
agreements and announcing the transactions of no later than
May 26, 2010 to coincide with the announcement of
Mans 2010 annual results.
In the afternoon of April 28, the GLG Board held a meeting
by teleconference to review and discuss Mans expression of
interest. At the meeting, Mr. San Miguel provided an
outline of Mans letter to members of the GLG Board,
highlighting the key terms of Mans proposal.
Mr. San Miguel noted that the expression of interest
was non-binding and stated that Man proposed discussing with the
Individual Principals at a later stage their continued
involvement in the post-closing business and the associated
incentive and retention/lock-up arrangements.
Mr. San Miguel advised that the Individual Principals
would not seek to negotiate their personal employment
arrangements (which would be expected to have beneficial as well
as restrictive terms for the Individual Principals) until the
principal terms and conditions of any transaction had been
established. The directors discussed the advisability of
establishing a special committee, but each director indicated a
desire to review and consider the expression of interest
independently before further consideration by the GLG Board. The
directors decided to meet on April 29, 2010 to have a more
formal discussion of the expression of interest and to determine
whether to establish a special committee of the GLG Board to
consider whether or on what terms to pursue discussions with Man.
On April 29, 2010, Mr. Clarke called Mr. Lagrange
to confirm that Mr. Lagrange had received the non-binding
letter from Man.
On April 29, 2010, the GLG Board, with members of
GLGs senior management and representatives of Chadbourne
present, met to discuss the letter submitted by Man.
Mr. San Miguel presented a summary of the terms of the
letter and provided background information relating to the
letter. Mr. Rojek made a presentation regarding Man and its
business based on materials prepared by Goldman Sachs.
Representatives of Chadbourne made a presentation regarding the
fiduciary duties of the directors under Delaware law.
Mr. San Miguel disclosed potential client conflicts
for legal advisers in connection with the possible transaction
with Man. Mr. San Miguel indicated that
Allen & Overy, which regularly provides GLG and its
subsidiaries with U.K. law advice on matters unrelated to the
potential transaction, was proposed to represent the Principals
in connection with the possible transaction and to advise GLG on
technical U.K. legal and regulatory matters relating to the
potential transaction. He also reported that Chadbourne, which
regularly represents GLG and its affiliated entities on various
matters, was proposed to represent GLG in connection with the
potential transaction. Mr. San Miguel also noted that
Leslie J. Schreyer and Jeffrey A. Robins, each a partner of
Chadbourne, were the trustees of the Gottesman GLG Trust and the
Roman GLG Trust, respectively, and that Chadbourne represents
other Principals from time to time. The GLG Board waived any
conflicts of interest of Allen & Overy and Chadbourne
as legal advisors to GLG in connection with the possible
transaction arising out of their representation of, or roles
within, some or all of the Principals.
Mr. San Miguel also reported that, although not
formally engaged by GLG, Goldman Sachs had provided GLGs
management with assistance in evaluating Man and a possible
transaction with Man and through that work was familiar with GLG
and its business. He noted that while a special committee would
be empowered to engage its own financial advisor, GLG would be
interested in engaging its own financial advisor to assist GLG
in connection with a potential transaction with Man,
particularly with respect to diligence matters and delivery of a
fairness opinion, and proposed engaging Goldman Sachs, subject
to Goldman Sachs not otherwise having a conflict of interest,
and subject to negotiation of acceptable terms of engagement.
20
At the April 29, 2010 meeting and, pursuant to ratification
and approval at the May 16, 2010 meeting, the GLG Board
established the special committee consisting of Ian Ashken,
William Lauder and James Hauslein, each of whom is an
independent director of GLG under New York Stock Exchange rules
and each of whom affirmed that he was free of any material
direct or indirect interest in, or relationship with, Man or its
affiliates, the Principals or any other person or group which
could be deemed to be controlling stockholders of GLG (and their
affiliates), and did not expect to have any material interest in
or involvement with (other than as a GLG Board member and holder
of GLG securities) the possible transaction with Man. The GLG
Board granted the special committee the authority to take the
actions described in Fairness of the Merger
and Recommendations of the Special Committee and the GLG
Board The Special Committee, including broad
powers to review, negotiate and recommend or reject the possible
transaction or any alternative transaction. The GLG Board also
granted the special committee the authority to select and retain
its own financial advisor and legal counsel and such other
consultants and agents to perform such other services as it may
deem necessary, to obtain such opinions as the special committee
may request and to determine whether to waive any conflicts
relevant to the possible transaction or any other transaction.
In addition, the GLG Board delegated to the special committee
the right to waive the transfer restrictions under the terms of
the Shareholders Agreement dated June 22, 2007 among the
Selling Stockholders, other GLG stockholders party thereto and
GLG (the GLG Shareholders Agreement), which waivers
would be required in order to implement the transaction proposed
by Man. See Important Information Regarding the
Principals GLG Shareholders Agreement. The GLG
Board also authorized compensation and reimbursement for
out-of-pocket
expenses for members of the special committee. See
Interests of Certain Persons in the
Merger Compensation Paid to Members of the Special
Committee.
In the early afternoon on April 30, 2010,
Messrs. Ashken and Gottesman held a conference call with
Mr. Clarke in which they informed him that the special
committee had been formed and would meet later that day.
Later that same day, the special committee held a telephone
conference with representatives of Winston & Strawn
LLP present. Mr. Ashken was elected chair of the special
committee. Mr. Ashken reported to the special committee
that he had a conference call with Mr. Clarke earlier that
day during which he informed Mr. Clarke that the special
committee had been formed and would meet later that day. The
special committee then engaged Winston as legal counsel to the
special committee. Winston had on limited occasions in the past
provided legal advice to an affiliate of Man, which the special
committee determined did not impact Winstons independence.
After considering several candidates to serve as the special
committees financial advisor and determining that some
were conflicted, the special committee heard presentations from
Citigroup and Moelis & Company LLC. The special
committee then determined that Citigroup also was conflicted.
Moelis had not previously performed services for GLG, the
Principals or Man. The special committee considered the
experience and credentials of Moelis in providing financial
advice in similar situations and engaged Moelis as its financial
advisor.
Also on April 30, representatives of Chadbourne and Weil
had a telephone call in which Chadbourne advised Weil that
Winston had been selected as counsel and Moelis had been
selected as financial advisor to the special committee.
Chadbourne and Weil also discussed matters relating to deal
structure that should be addressed by the special committee,
including deal protection.
Also on April 30, representatives of Goldman Sachs
delivered to Messrs. San Miguel and Rojek presentation
materials containing preliminary financial analyses, including
implied transaction multiples and selected companies analyses
and analysis at various prices.
On May 1, 2010, the special committee held a meeting by
teleconference with Mr. San Miguel, Winston and
Moelis. Mr. San Miguel reviewed the history between
GLG and Man, and representatives of Winston reviewed with the
members of the special committee their duties and
responsibilities as members of the special committee and
relevant process matters.
Mr. San Miguel then left the meeting, and the special
committee and its advisors discussed strategies for evaluating
and responding to Mans letter. The special committee also
discussed the advisability of requiring that the vote of a
majority of the unaffiliated shares outstanding to approve any
transaction with Man and considered other ways to ensure the
fairness of a transaction to the unaffiliated stockholders. In
particular, the special committee and its advisors discussed the
possibility of negotiating a higher aggregate offer price from
Man, the potential for all stock consideration or a mix of stock
and cash consideration for the unaffiliated stockholders, an
increase in the premium to be paid to the unaffiliated
stockholders relative to the Selling Stockholders, and a share
21
price cap for the Selling Stockholders. The special committee
and its advisors also discussed possible market checks of
fairness of any offer from Man, including a broad pre-signing
auction process, a selected approach to potential buyers
pre-signing, a post-signing go shop period or a
carefully structured set of exceptions to deal protection
covenants that would enable the special committee to consider
potential topping bids post-signing. The special committee did
not make any decisions on these issues at its May 1 meeting.
In the afternoon of May 1, Messrs. Rojek and Jones and
representatives of Goldman Sachs and Moelis had a conference
call with representatives of Man, including Messrs. Rowsell,
Hayes and Singh, and representatives of Perella Weinberg to
discuss potential opportunities for synergies from the
transaction and reiterate that there should be a significant
premium paid to the GLG stockholders in the context of a
transaction. Representatives of Moelis informed representatives
of Perella Weinberg that the special committee has been
considering, among other things, that GLGs stock had
historically traded in the mid-$4.00s per share range for a
substantial period of time and had reached a 52-week high
(including
intra-day
trading) of $4.61 per share and that the market price for shares
of many financial institutions were trending upwards.
In the evening of May 1, Mr. Jones called
representatives of Moelis to provide them with background on the
proposed transaction, including an estimate range of cost
synergies with a low case of approximately $40 million and
a high case exceeding $50 million.
In the morning of May 2, 2010, Messrs. Rowsell, Hayes,
Jones and Simon White, the Chief Operating Officer of GLG, and
representatives of Goldman Sachs and Perella Weinberg held a
meeting, which was joined by representatives of Moelis by
conference call, during which they discussed preliminary
possible cost synergy estimates, ranging from approximately
$53.5 to $60.6 million, which were presented by GLG as a
basis for discussion. In its May 17, 2010 press release
announcing the potential transaction, Man estimated the annual
potential cost savings to be approximately $50 million.
In the afternoon of May 2, Messrs. Rojek, Jones,
Rowsell and Hayes had a conference call with representatives of
Goldman Sachs, Moelis and Perella Weinberg regarding potential
opportunities for revenue synergies. Representatives of GLG
presented reasons for assigning a positive value to revenue
synergies in evaluating the transaction, but representatives of
Man expressed reservations as to such approach on the grounds
that such synergies would be difficult to quantify for two
companies with different compensation and pricing structures.
The parties reached no understanding regarding revenue synergies
that could be achieved in the transaction.
Also on May 2, the special committee had a meeting by
teleconference with Winston and Moelis. Moelis representatives
reported that GLGs preliminary estimates of expense
synergies discussed with GLG the day before indicated annual
savings with a low case of approximately $40 million. The
special committee also discussed that the Principals apparently
had engaged in discussions with Man regarding a transaction
potentially based on a
market-to-market
share exchange for the Principals that would include a modest
premium over the GLGs share price. Moelis and the special
committee determined that the best strategy for receiving the
highest value in any transaction would be to negotiate directly
with Man for the highest price and best transaction reasonably
available for the unaffiliated stockholders, rather than
negotiating for an increase in the aggregate consideration to be
paid by Man to the Selling Stockholders and unaffiliated
stockholders.
On May 2, representatives of Chadbourne and Weil had a
telephone call in which Chadbourne advised Weil that the special
committees chair would be initiating direct dialogue with
Man and that the special committee would be negotiating the
structure and terms of any potential transaction.
In the afternoon of May 2, Mr. Ashken called
Mr. Clarke to inform him that the special committee had
elected Mr. Ashken as its chair and that the special
committee had retained Moelis as its financial advisor and
Winston as its legal advisor.
Throughout the first two weeks of May, the Individual
Principals, representatives of each of GLG and Man including
Messrs. San Miguel, Rojek, White, Jones, Rowsell,
Hayes, Ross and Singh, and their various legal and financial
advisors met in person and by telephone conference to discuss
various due diligence and process matters.
On May 3, 2010, the GLG Board held a meeting for the
purpose of reviewing GLGs first quarter 2010 financial
results. At the meeting, the directors also discussed the
proposed transaction with Man and received a report from the
special committee and discussed the high yield debt market
conditions in considering alternatives for refinancing its
existing debt, which management of GLG had been considering
since February 2010.
22
The Man Board also held a meeting on May 3, in which the
directors discussed deal valuation, due diligence and regulatory
matters, and Perella Weinberg gave a presentation regarding
various financial analyses it had performed. See
Financial Analyses of the Financial Advisor to
Man.
Also on May 3, Mr. Ashken called Mr. Clarke to
advise that GLG was not for sale and that the terms proposed by
Man in its letter dated April 28, 2010, in particular the
offer of $3.75 per share, were inadequate for the unaffiliated
stockholders due to the fact that GLG common stock had traded as
high as $4.61 per share in the past year. Mr. Ashken also
informed Mr. Clarke that the special committee and its
advisors would need between one to two weeks to fully evaluate
whether GLG was prepared to enter into any strategic transaction
as well as to complete its due diligence review. Mr. Ashken
told Mr. Clarke that a transaction involving an exchange
offer to all holders, not just the Selling Stockholders, was
preferable from the special committees point of view and
that if such a transaction was not feasible the special
committee would be looking for a larger premium over market
prices as well as in comparison to the price to be paid to the
Selling Stockholders. Mr. Ashken indicated that in any
potential transaction, the special committee would be seeking
something in the range of $5.00 per share in cash. The special
committee chose this amount as a beginning price for
negotiations because this price provided a significant premium
over the current GLG stock price and the special committee
believed that a demand for a price above the $5.00 range could
cause Man to withdraw its offer. Mr. Clarke responded by
reiterating Mans position that it was unwilling to offer
its shares to all of GLGs stockholders because doing so
would require it to register its shares in the U.S., become
subject to reporting requirements under U.S. federal
securities laws, and consequently to incur the significant costs
and administrative effort required to comply with both the U.K.
and U.S. regulatory regimes. Mr. Clarke indicated that
a price of $5.00 per share would not be justified based on
Mans valuation analyses. Mr. Clarke also indicated
that the transaction would require a Man shareholder vote under
the U.K. listing rules.
On May 4, 2010, Bank of America Merrill Lynch advised the
UKLA that Man was considering a potential transaction with GLG.
On May 4, the Individual Principals and Mr. Clarke had
a call to discuss communication strategies.
Also on May 4, representatives of Weil and Winston had a
series of calls to discuss process matters and structuring
considerations for any potential transaction, including deal
protection.
On May 5, 2010, Mr. Roman advised the U.K. Financial
Services Authority that GLG was considering a potential
transaction with Man.
On May 5, Mr. San Miguel, representatives of
Chadbourne and Messrs. Schreyer and Robins, acting in their
capacities as trustees of the Gottesman GLG Trust and Roman GLG
Trust, respectively, met with representatives of
Allen & Overy to confirm Allen &
Overys retention as counsel to the Principals.
On May 6, 2010, Mr. Aitken advised the U.K. Financial
Services Authority that Man was considering a potential
transaction with GLG.
In the morning of May 6, representatives of Weil circulated
initial drafts of the merger agreement, the share exchange
agreement and the voting and support agreement to legal counsel
for the special committee, GLG and the Principals.
During the afternoon of May 6, the special committee held a
meeting with Winston and Moelis at Moeliss offices in New
York. Representatives of Winston described the duties and
responsibilities of the special committee throughout the process
of considering and negotiating any transaction. Mr. Ashken
reported to the special committee on his May 3, 2010
conversations with Mr. Clarke and informed the special
committee that Man had begun its detailed due diligence review.
Representatives of Moelis provided a preliminary update on their
due diligence and valuation work, noting that the absence of a
cash-flow analysis for both Man and GLG was not unusual for
companies in the alternative asset management industry. The
special committee and its advisors also discussed the
flash crash that was occurring in the stock market
during the course of their meeting.
The special committee and its advisors discussed various
potential structures for a potential transaction and the
implications of each of these structures, including possible
strategies for achieving the best transaction reasonably
available to GLGs unaffiliated stockholders, whether from
Man or another party. In particular, the special committee and
its advisors discussed the possibility of conducting either a
broad pre-signing auction process or a more select approach to
potential buyers pre-signing. Based on discussions with
management, the special committee recognized that with the
environment then to date in 2010 of investors beginning to
redeploy cash
23
into alternative investments, any rumored potential acquisition
transaction or the announcement of an acquisition transaction
involving GLG could result in significant postponement of both
investments by new investors
and/or
additional investments by existing investors until the public
had more visibility on the outcome of any potential transaction.
In addition, the special committee members discussed the risk
that certain GLG funds and managed accounts require only short
periods of notice for redemptions
and/or the
key investment personnel could decide to serve notice to leave
GLG at any time, as well as the risk that GLGs proprietary
investment strategies might be revealed to potential bidders
during any due diligence process. As a result, the special
committee concluded that any pre-signing market check process,
whether broad or selective, that could lead to a disclosure of a
potential change of control transaction before the terms of any
such transaction had adequately been negotiated would create a
substantial risk of postponements of new or additional
investments in, or meaningful redemptions by investors from,
GLGs funds and managed accounts, a significant risk of the
loss of key investment personnel, the potential risk that
GLGs investment strategies may be revealed or otherwise
negatively impacted and a risk of losing the opportunity for a
transaction with Man with no assurance of another opportunity
for the unaffiliated stockholders to receive a premium
comparable to that offered by Man. The special committee noted
that although news of a potential transaction involving GLG and
Man had been the subject of rumor and speculation in the press
in March 2010, providing plenty of opportunities for other
potential bidders to approach GLG, no inquiries or expressions
of interest had been received other than inquiries from
investment bankers offering to assist GLG in any potential
transaction.
In consultation with its advisors, the special committee
determined that, given the level of premium to the current GLG
stock price that Man seemed willing to offer GLGs
unaffiliated stockholders, a focused process with Man that did
not include a grant of exclusivity would be an appropriate path
to pursue. The special committee discussed whether to request a
go-shop provision in the merger agreement and
determined that they did not believe a go-shop right
would be likely to result in a superior transaction, given the
economic and voting interest of the Selling Stockholders and the
importance to any buyer of retaining the Individual Principals
in an ongoing management role in GLGs business. After
consultation with its advisors, the special committee agreed
that a flexible, fair merger agreement with target-favorable
fiduciary out provisions would allow GLGs
unaffiliated stockholders to realize the benefits of an
attractive premium transaction while allowing GLG to consider
superior unsolicited third-party proposals. After a discussion,
the special committee authorized Moelis to continue its
valuation and due diligence activities and to pursue a potential
strategic transaction with Man on the terms and using the
approach discussed in the meeting, with goals of both achieving
a higher offer price from Man and a higher premium to be paid to
the unaffiliated stockholders relative to the price to be
received by the Selling Stockholders.
The special committee also discussed Winstons comments to
the drafts of the merger agreement, the share exchange agreement
and the voting and support agreement.
On May 10, 2010, the special committee held a meeting with
Winston and Moelis at Winstons New York offices. The
special committee and its advisors discussed the recent decline
of GLGs stock price as well as the recent dramatic
declines in the stock markets and the impact such declines might
have on a potential transaction, including the possibility that
Man could decide to withdraw or reduce its original proposal.
The special committee instructed the Moelis representatives to
request from Man and its financial advisor any and all
information that could yield better insight into the intrinsic
value of Mans ordinary shares and to assist the special
committee in analyzing such information.
The special committee also reviewed current drafts of the
transaction agreements with representatives of Winston and held
a general discussion regarding certain regulatory matters that
Man focused on in their due diligence review.
After the special committee meeting ended, the GLG Board held a
meeting by teleconference with Messrs. San Miguel and Rojek and
representatives of Winston and Chadbourne for the purpose of
receiving an update on the status of the special
committees negotiations.
Also on May 10, representatives of Winston circulated the
combined comments of Winston, Chadbourne and Allen &
Overy on the initial draft of the merger agreement.
On May 11, 2010, representatives of Allen & Overy
circulated the combined comments of Allen & Overy,
Winston and Chadbourne to the initial drafts of the share
exchange agreement and the voting and support
24
agreement. Representatives of Weil and Winston also had a
telephone call to discuss deal protection mechanisms and the
approach on the fairness opinions.
Also on May 11, Messrs. San Miguel and Rojek and
representatives of Chadbourne, Winston, and Allen &
Overy met by teleconference. The legal advisors collectively
concluded that because the merger agreement, on the one hand,
and the share exchange agreement and voting and support
agreement, on the other hand, each have closing conditions that
require that the other agreements closing conditions have
been satisfied and a number of other terms that are inextricably
linked to each other, counsel to the special committee, GLG and
the Principals would all participate in key teleconferences and
meetings with counsel to Man to negotiate key points in each
agreement on behalf of their respective clients and
constituencies.
On May 12, 2010, the Individual Principals and
Mr. Clarke had a call to discuss outstanding commercial
points relating to closing conditions and restrictive covenants
that impact the Individual Principals, as well as retention and
severance arrangements for key GLG employees, other than the
Individual Principals, whose services would be needed either to
complete the transaction or for purposes of GLGs business
post-closing.
Mr. Ashken (representing the special committee) and
Mr. Roman (representing the Principals) and
Messrs. Clarke and Singh of Man also met in person in
London on May 12 to discuss the status and terms of the proposed
transaction generally. During the course of the discussion, the
treatment of the outstanding warrants to purchase GLG common
stock was discussed. Mr. Ashken told Mr. Clarke that
based on the contractual terms of the warrants and the fact that
they were significantly
out-of-the-money,
the special committees intention was to value them at
zero, with the understanding that Man may decide in its
discretion to make an offer to purchase the warrants. The
parties discussed the fact that there were some potential issues
with having the warrants remain outstanding after the merger,
such as the potential of the surviving corporation remaining
subject to continued SEC reporting obligations after the merger,
the administrative burdens and expense of administering the
warrants that remain outstanding, and the potential for nuisance
claims from warrant holders whose warrants would be permanently
out-of-the-money
after the merger. Mr. Ashken also discussed proposed
severance and retention arrangements for key GLG personnel whose
services it was important to retain through closing.
Mr. Ashken stated his understanding that the value of any
such arrangements would be consistent with industry practice and
would not be material to the overall size of any transaction.
Mr. Ashken also asked Mr. Clarke to have Mans
representatives review matters relating to the warrants and
severance and retention arrangements with the advisors to the
special committee and GLG.
On May 12, Messrs. San Miguel, Rojek, Singh and
representatives of Weil, Winston, Chadbourne, Allen &
Overy and Clifford Chance had a series of calls to discuss the
draft transaction agreements, Mans shareholder circular
and various due diligence matters.
Also on May 12, Miriam McKay, Head of Investor Relations
for Man, and Andy Knox of Man had an initial meeting at Perella
Weinbergs London office with Messrs. Roman, Jones and
David Waller, Head of Communications for GLG, to discuss the
investor presentation to be distributed in connection with any
announcement of the proposed transaction. They met thereafter to
further refine the presentation.
On May 13, 2010, the special committee met by
teleconference with representatives of Winston and Moelis.
Mr. Ashken reported on his meeting with Mr. Clarke the
previous day. The special committee discussed Mans
positions and, in particular, the conditions to closing proposed
by Man and other items that might adversely affect the certainty
of the closing of the transactions.
Later that day, the GLG Board held a meeting by teleconference
with representatives of Winston for the purpose of receiving an
update on the status of the special committees
negotiations.
Also on May 13, the Man Board held a meeting in which it
reviewed the due diligence exercise carried out in relation to
GLG, received a presentation by Perella Weinberg regarding
various financial analyses it had performed (see
Financial Analyses of the Financial Advisor to
Man) and approved the transaction with GLG subject to
final negotiations. The Man Board then appointed a new committee
consisting of Jon Aisbitt, Chairman of the Man Board, and
Mr. Clarke, who were authorized to finalize and execute the
transaction documents, subject to reaching agreement on the
consideration to be paid and satisfactory review of a number of
due diligence and other issues.
On May 13, Michael Robinson, Head of Global Human Resources
for Man, and Claire Morland, Head of Compensation and Benefits
for Man, had a conference call with Messrs. San Miguel
and Schreyer to discuss a
25
proposal by GLGs management regarding severance and
retention arrangements for GLGs key personnel other than
the Individual Principals.
On May 14, 2010, Messrs. Ashken and Clarke spoke by
telephone to discuss the status of negotiations and the feedback
Mr. Clarke had received from the Man Board on the primary
open transaction terms.
Mr. Clarke told Mr. Ashken that Man was prepared to
offer $4.50 per share in cash in the merger and that this was
the most Man was willing to pay. Mr. Clarke also indicated
that such price was subject to Mans ability to reach an
agreement with each Individual Principal on the share exchange
agreement at the levels it anticipated. Mr. Clarke said
that Man was still negotiating with the Individual Principals.
Mr. Ashken said that this price was below what he was
hoping for and that ideally the price would be above GLGs
52-week
intra-day
high stock price of $4.61 per share. Mr. Clarke reported to
Mr. Ashken that there would be no movement in price.
Mr. Ashken noted that the special committee would discuss
the proposal and that any proposal would require the approval of
the special committee. Messrs. Ashken and Clarke also
discussed the potential use of a cap and floor on the
consideration to be received by the Selling Stockholders.
Mr. Ashken indicated that a cap on the consideration
received by the Selling Stockholders would be important in order
to protect the interests of the unaffiliated stockholders.
In the afternoon of May 14, the special committee held a
meeting by teleconference with representatives of Winston and
Moelis. The special committee discussed requesting that a cap on
the consideration received by the Selling Stockholders be
established (without a floor) to maintain the premium being
received by the unaffiliated stockholders compared to the
consideration to be paid to the Selling Stockholders. Moelis
also discussed with the special committee the offer price of
$4.50 in comparison to the current stock price of GLG, the
recent declines in the markets generally and other factors. The
special committee concluded that it would seek to obtain a price
of $4.61 per share (being the 52-week
intra-day
high price of GLG common stock).
The special committee then discussed the treatment of the GLG
warrants. Mr. Ashken reported that Man was considering
offering a nominal amount for the warrants, but had not finally
determined whether they would do this, and if they did at what
valuation level. The special committee asked Moelis to contact
Perella Weinberg to determine Mans proposal for treatment
of the warrants. Moelis and Winston both reported on their work
in reviewing, analyzing and negotiating the transaction
agreements and other materials.
The special committee discussed severance and retention
arrangements for key personnel and agreed that any such
arrangements must not affect the price paid to the unaffiliated
stockholders. The special committee agreed that Mr. Ashken
would request final proposals from GLGs senior management
including the Individual Principals to ensure that the special
committee had sufficient time to evaluate such proposals prior
to considering any overall transaction.
Also on May 14, the Individual Principals and
Messrs. Jones, Waller, Aisbitt, Clarke, Hayes and Browne
and Ms. McKay, and representatives of Perella Weinberg and
Bank of America Merrill Lynch attended a rehearsal for the
investor meeting. Also on May 14, after prior
conversations, Mr. Clarke met with Messrs. Gottesman
and Roman and agreed to core retention and alignment
arrangements for the Individual Principals and Mr. Clarke
proposed that the Principals would receive an implied value of
$3.50 per share of GLG common stock in the proposed share
exchange transaction, subject to a cap but without a floor,
provided that the special committee accepted $4.50 per share of
GLG common stock as the price in the merger.
Messrs. Gottesman and Roman agreed to the proposal for the
Selling Stockholders to receive Man ordinary shares with a value
of $3.50 per share of GLG common stock in the share exchange.
On May 14, Ms. Morland had a telephone call with
Mr. Rojek to discuss further GLGs proposal regarding
retention and severance arrangements for GLGs key
personnel other than the Individual Principals and to clarify
the calculation of the amounts payable under the arrangements.
Also on May 14, Clifford Chance circulated initial drafts
of the proposed employment agreements and service contracts
between affiliates of Man and each of the Individual Principals,
including non-competition agreements and share
lock-up
agreements. Weil circulated revised drafts of the merger
agreement, the share exchange agreement and the voting and
support agreement. Later that day, legal counsel for all the
parties had an all-hands lawyers teleconference to discuss
key open points in the transaction agreements. Subsequently,
Winston circulated the combined comments of Allen &
Overy, Winston and Chadbourne to the draft of the merger
agreement
26
circulated by Weil earlier that day. Allen & Overy
circulated the combined comments of Allen & Overy,
Winston and Chadbourne to drafts of the share exchange agreement
and the voting and support agreement.
Later on May 14, Mr. Gottesman and Mr. Clarke had
a telephone call following the clarifications discussed between
management of Man and GLG, to discuss GLGs proposal
regarding retention and severance arrangements for GLGs
key personnel other than the Individual Principals and
Mr. Clarke did not object to the proposed arrangements.
On May 14, in advance of the special committee and
compensation committee meetings scheduled for May 16, 2010,
Chadbourne sent to Winston for circulation to the special
committee, materials summarizing the proposed retention and
severance arrangements for GLGs key personnel other than
the Individual Principals.
On May 15, 2010, after discussion about the retention and
severance arrangements for GLGs key personnel other than
the Individual Principals, Mr. Clarke confirmed to
Mr. Ashken that Man was still prepared to continue to
proceed with a transaction in which the unaffiliated
stockholders would receive $4.50 in cash per share of GLG common
stock, which Man had previously indicated was the maximum amount
it was prepared to pay.
On May 15 and 16, 2010, legal counsel for Man, GLG, the special
committee and the Principals had several teleconference calls to
continue negotiations on the merger agreement, the share
exchange agreement and the voting and support agreement.
In the morning of May 16, 2010, Messrs. Ashken and
Clarke had a telephone call in which Mr. Ashken asked
Mr. Clarke to raise Mans offer price for the
unaffiliated stockholders from $4.50 per share to $4.61 per
share. Mr. Clarke reiterated that $4.50 was the maximum Man
was willing to offer the unaffiliated stockholders and noted
that this was a premium of approximately 55% over GLGs
closing stock price on Friday, May 14, 2010. After
continued effort to elevate the price, Mr. Ashken finally
told Mr. Clarke that he would accept the $4.50 per share
cash proposal, subject to unanimous approval of the special
committee and the GLG Board, receipt by the special committee
and the GLG Board of fairness opinions from Moelis and Goldman
Sachs, respectively and satisfactory resolution of all open
contractual matters.
Also on May 16, Mr. Ashken requested that
Mr. Clarke agree to reduce the termination fee to 2.5% of
the total transaction value based on the special
committees sensitivity to the lack of a go-shop provision.
Later in the morning of May 16, the special committee held
a telephone meeting with representatives of Winston, Moelis,
Chadbourne and Messrs. San Miguel and Rojek.
Mr. Ashken reported on his call that day with
Mr. Clarke. Winston and Chadbourne reported on the status
of negotiations of the agreements. Mr. San Miguel
reported on the status of negotiation of the representations,
warranties and covenants to be made by GLG as part of the
transaction. Mr. San Miguel also discussed his
understanding of the status of employment arrangements for the
Individual Principals. Mr. San Miguel stated that each
Individual Principal would be receiving the same level of
compensation from Man as they presently do from GLG, and also
would be agreeing to three-year non-competition agreements,
lock-ups of
Man ordinary shares received in the transaction and requirements
that they maintain personal investments in funds or accounts
managed by GLG of no less than a certain aggregate amount.
Representatives of Winston and Chadbourne provided a summary of
the terms of the proposed transaction with Man as negotiated to
date. The special committee discussed the principal economic
terms of the transaction. Mr. San Miguel then
explained GLGs approach to retaining its key portfolio
managers. Representatives of Chadbourne made a presentation
regarding proposed retention and severance arrangements for GLG
management other than the Individual Principals.
Messrs. San Miguel and Rojek left the meeting and
James Reda of James F. Reda & Associates, LLC,
independent compensation consultants retained by GLG, joined the
meeting. Mr. Reda presented his analysis of the proposed
compensation agreements for Messrs. San Miguel, Rojek
and Schreyer. Mr. Reda said that in his opinion, the
proposed arrangements with Messrs. San Miguel, Rojek
and Schreyer were reasonable and within market practice. After
Mr. Redas presentation, the special committee and its
advisors discussed these issues, the directors restricted
stock awards and other employment arrangements. Then,
Mr. Reda and representatives of Chadbourne left the meeting.
Moelis representatives presented their financial analyses
regarding the fairness to the unaffiliated stockholders of the
consideration to be received in the merger by such stockholders,
and the special committee discussed the same. After discussion,
representatives of Moelis delivered to the special committee an
oral opinion, subsequently confirmed by delivery of a written
opinion dated May 16, 2010 that, as of May 16, 2010
and based upon and subject
27
to the limitations and qualifications set forth therein, the
consideration of $4.50 per share in cash to be received by the
GLG stockholders (other than the Selling Stockholders) in the
merger was fair from a financial point of view to such holders
other than the Selling Stockholders. The full text of the
written opinion of Moelis dated May 16, 2010 is attached as
Appendix D to this proxy statement. The written opinion of
Moelis sets forth, among other things, the assumptions made,
procedures followed, matters considered and limitations on the
reviews undertaken in connection with rendering the opinion. See
Opinion of Moelis & Company
LLC.
The special committee then had a discussion with the Moelis
representatives regarding the value of Mans ordinary
shares. The special committee was concerned that there might be
intrinsic value in the Man ordinary shares that was not
reflected in their market price, or in any proposed economic
arrangements between Man Group and the Principals, that may
effectively increase the value of the consideration paid to the
Selling Stockholders. The Moelis representatives, at the request
of the special committee, had held discussions with
Mr. Hayes and representatives of Perella Weinberg and
reported back to the special committee that such discussions did
not reveal material economic value for Man that was not
reflected in publicly available information. The Moelis
representatives said that intrinsic value could arise at some
point in the future from AHL, Mans managed futures funds,
but noted that certain of those funds were presently below their
high water mark. At the request of the special committee,
representatives of Moelis submitted a supplemental written
presentation to the special committee regarding Man based on
such publicly available information.
The special committee then considered and discussed a number of
factors relating to the proposed transaction, which are
described in Fairness of the Merger and
Recommendations of the Special Committee and the GLG
Board The Special Committee.
The special committee then unanimously:
(1) determined that (i) it is in the best interests of
GLG and its unaffiliated stockholders for GLG to enter into the
merger agreement, and (ii) the transactions contemplated by
the merger agreement, including the merger, the share exchange
agreement and the voting and support agreement, are advisable
and fair to GLG and its unaffiliated stockholders;
(2) approved the waiver of the restrictions on transfer
applicable to shares of capital stock of GLG held by the Selling
Stockholders under the GLG Shareholders Agreement; and
(3) recommended that the GLG Board (i) determine it is
in the best interests of GLG and its stockholders for GLG to
enter into the merger agreement, (ii) authorize and approve
the execution, delivery and performance by GLG of the merger
agreement (subject to Minority Stockholder Approval),
(iii) waive the restrictions on transfer applicable to
shares of GLG capital stock held by the Selling Stockholders
under the GLG Shareholders Agreement, as requested by the
Selling Stockholders, (iv) approve the share exchange
agreement and the consummation of the transactions contemplated
thereby, (v) submit the adoption of the merger agreement to
a vote at a special meeting of GLG stockholders called for that
purpose, and (vi) recommend that stockholders of GLG vote
to adopt the merger agreement at the special meeting.
In the afternoon of May 16, a meeting of the GLG Board was
held by teleconference with all directors present. Messrs. San
Miguel and Rojek and representatives of Winston and Chadbourne
also attended the meeting. Chadbourne representatives reviewed
with the directors their fiduciary duties. Representatives of
Winston and Chadbourne provided a summary of the terms of the
transaction, including a discussion of the covenants, conditions
precedent and termination fees (up to $48 million) and
remaining negotiating points. Representatives of Winston
reported on the special committee meeting that had taken place
earlier that day in which the special committee approved the
transaction subject to the caveat that the transaction be
subject to Minority Stockholder Approval.
The GLG Board discussed the issue of the GLG warrants, and
concluded they would like all outstanding issues relating to the
warrants to be resolved by the time of execution of the merger
agreement.
Representatives of Goldman Sachs joined the meeting. Goldman
Sachs gave a financial presentation previously distributed to
members of the GLG Board describing, among other things, the
aggregate consideration of the transactions contemplated by the
share exchange agreement and merger agreement. Thereafter,
representatives of Goldman Sachs delivered its oral opinion,
which was subsequently confirmed in writing, to the GLG Board
that, as of May 17, 2010 and based upon and subject to the
assumptions made in its written opinion, the Aggregate
Consideration (as defined below) to be paid to the holders
(other than Man and its
28
affiliates) of shares of GLG common stock, FA Sub 2 exchangeable
shares and convertible notes pursuant to the share exchange
agreement and merger agreement was fair from a financial point
of view to such holders. The full text of the written opinion of
Goldman Sachs dated May 17, 2010 is attached as
Appendix E to this proxy statement. The written opinion of
Goldman Sachs sets forth, among other things, the assumptions
made, procedures followed, matters considered and limitations on
the reviews undertaken in connection with rendering the opinion.
See Opinion of Goldman Sachs
International.
The GLG Board then considered and discussed a number of factors
relating to the proposed transaction, which are described in
Fairness of the Merger and Recommendations of
the Special Committee and the GLG Board The GLG
Board.
The GLG Board then unanimously:
(1) determined that the merger agreement and the
transactions contemplated thereby are advisable and fair to and
in the best interests of, GLG and its stockholders;
(2) authorized and approved the execution, delivery and
performance by GLG of the merger agreement (subject to the
Minority Stockholder Approval);
(3) approved the waiver of all the restrictions on transfer
applicable to shares of GLG capital stock held by the Selling
Stockholders under the GLG Shareholders Agreement, as requested
by the Selling Stockholders;
(4) approved the share exchange agreement and the
consummation of the transactions contemplated thereby;
(5) determined to submit the adoption of the merger
agreement to a vote at a special meeting of stockholders called
for that purpose; and
(6) recommended that stockholders of GLG vote to adopt the
merger agreement at the special meeting of stockholders.
Immediately following the GLG Board meeting, a GLG Compensation
Committee meeting was held at which the employment and severance
arrangements for key personnel presented earlier in the day to
the special committee were approved. See
Interests of Certain Persons in the
Merger Amendments to Certain Employment Agreements
with GLG.
Also on May 16, the Man Board committee comprised of
Messrs. Aisbitt and Clarke held a meeting to discuss the
terms of the transaction, the directors fiduciary duties
and the termination fee. The Man Board committee then approved
the transaction and confirmed the satisfaction of the
outstanding due diligence and other issues.
After the Man Board committee meeting, Man requested that GLG
agree to make a tender offer to purchase all outstanding GLG
warrants at a purchase price equal to the closing price of
GLGs publicly traded warrants on the last trading day
prior to the signing of the merger agreement ($0.129 per warrant
on May 14, 2010) at or prior to the merger of GLG and Man,
subject to completion of the merger. Man indicated it would
agree to ensure that at the effective time of the merger, GLG as
the surviving corporation, would have all funds necessary in
connection with the warrant tender offer and to reimburse GLG
for reasonable out-of-pocket costs incurred by GLG and its
subsidiaries in connection with the warrant tender offer and to
indemnify GLG and its subsidiaries from claims, losses and
damages suffered or incurred in connection with the tender
offer. GLG agreed to Mans request. The parties also agreed
to reciprocal termination fees of $48 million (subsequently
reduced to $26 million) payable in certain circumstances.
Early in the morning of May 17, 2010, all terms of the
transaction documents were finalized and the parties entered
into the merger agreement, the share exchange agreement and the
voting and support agreement. See The Merger
Agreement, Descriptions of Other Transaction
Agreements Share Exchange Agreement and
Descriptions of Other Transaction Agreements
Voting and Support Agreement.
Later on May 17, Man issued a press release announcing the
transaction and held a meeting for investors and a meeting for
analysts in which the Individual Principals participated. GLG
subsequently issued a press release announcing the transaction
and providing a brief summary of the terms of the transaction on
the same day.
On May 24, 2010, Ron Duva, a stockholder of GLG, filed a
putative class action complaint in the Court of Chancery of the
State of Delaware (the Delaware Court) on behalf of
himself and all other similarly situated
29
stockholders of GLG, captioned Duva v. GLG Partners,
Inc., et al. (the Delaware Action). The second
amended complaint, filed on July 8, 2010, alleges that the
defendants in the Delaware Action breached their fair price,
fair process, disclosure and other fiduciary duties to
GLGs stockholders in connection with the transactions
contemplated by the Merger Proposal
and/or aided
and abetted in such breaches of fiduciary duty. The Delaware
Action seeks, among other things, an injunction enjoining the
transactions contemplated in the Merger Proposal and to rescind
any transactions contemplated by the Merger Proposal that may be
consummated. On May 27, 2010, discovery commenced in the
Delaware Action. On June 29, 2010, the Delaware Court
entered an order certifying a plaintiff class of GLG
stockholders. On July 2, 2010, the Delaware Court entered a
scheduling order providing for a hearing on the plaintiffs
motion to enjoin consummation of the merger on September 3,
2010.
On May 24, 2010, Akoleo S.A., a purported stockholder of
GLG, filed a putative class action complaint in New York Supreme
Court (the New York Court) on behalf of itself and
all other similarly situated stockholders of GLG, captioned
Akoleo S.A. v. GLG Partners, Inc., et al. (the
Akoleo Action). On May 24, 2010, Tanweer Zia, a
purported stockholder of GLG, filed a putative class action
complaint in New York Court on behalf of himself and all other
similarly situated stockholders of GLG, captioned Zia v.
GLG Partners, Inc., et al. (the Zia Action and,
together with the Akoleo Action, the New York
Actions). The complaints filed in each of the New York
Actions alleges that the defendants in the New York Actions
breached their fair price, fair process, disclosure and other
fiduciary duties to GLGs stockholders in connection with
the transactions contemplated by the Merger Proposal. On
June 28, 2010, the defendants to the New York Actions moved
to dismiss, or, in the alternative, to stay, each of the New
York Actions. On July 7, 2010, the parties to the New York
Actions entered into, and the New York Court ordered, a
stipulation staying all proceedings in the New York Actions
pending resolution of the Delaware Action.
On August 19, 2010, Man, GLG and GLGs directors
(collectively, the Defendants), as defendants in the
Delaware Action, and the Defendants (other than Man), as
defendants in the New York Actions, reached an agreement in
principle with the plaintiffs in the Delaware Action and the New
York Actions providing for the settlement of the Delaware Action
and the New York Actions on the terms and subject to the
conditions set forth in the memorandum of understanding dated
August 19, 2010 (the MOU), which terms include,
but are not limited to, an obligation by GLG to make certain
additional disclosures in this proxy statement and an obligation
by Man, Merger Sub and GLG to amend the merger agreement to
(a) reduce each of the Company Termination Fee and the
Parent Termination Fee (each, as defined in the merger
agreement) from $48 million to $26 million;
(b) reduce the period following a termination of the merger
agreement under certain circumstances during which the Company
Termination Fee (as defined in the merger agreement) is payable
from within twelve (12) months to within nine
(9) months; and (c) reduce the period of time in which
Man may amend the terms of the merger agreement so that a
Superior Proposal (as defined in the merger agreement) is no
longer superior from three (3) business days to two
(2) business days; provided that solely for the purposes of
such two business day time period, a U.K. bank holiday will not
be deemed a business day. The settlement is subject to the
execution of definitive settlement documentation and the
approval of the Delaware Court. Upon effectiveness of the
settlement, all claims which were or could have been asserted in
the Delaware Action or the New York Actions will be fully and
completely discharged and dismissed with prejudice.
Also on August 19, Man, Merger Sub and GLG entered into an
amendment to the merger agreement (the Amendment) to
effectuate the amendments contemplated in the MOU described
above. Except as otherwise specifically amended in the
Amendment, the merger agreement, as modified by the Amendment,
remains in full force and effect. A copy of the Amendment is
attached as
Appendix A-1
to this proxy statement.
On June 21, 2010, Sage Summit LP entered into an
unconditional rescindable purchase agreement with Ogier
Fiduciary Services (Cayman) Limited, acting solely in its
capacity as trustee of the Blue Hill Trust, and Lavender Heights
Capital LP entered into an unconditional rescindable purchase
agreement with Ogier Fiduciary Services (Cayman) Limited, acting
solely in its capacity as trustee of the Green Hill Trust
(collectively, the Purchase Agreements). Under the
Purchase Agreements, Sage Summit LP and Lavender Heights
Capital LP (collectively, the LPs) each sold its
entire holding of 8,460,854 shares and
5,640,570 shares of GLG common stock, respectively, to the
Blue Hill Trust and the Green Hill Trust (collectively, the
Remainder Trusts), respectively, in exchange for a
deferred payment obligation, payable in installments on
specified dates of delivery of (A) (i) ordinary shares
of Man received by the Remainder Trusts in exchange for the GLG
shares under the share exchange agreement or (ii) in lieu
of all or a portion of the ordinary shares of Man described in
30
clause (i) above, an amount in cash equal to the net
proceeds from the sale of ordinary shares of Man not otherwise
being delivered pursuant to the terms of clause (i), in ordinary
sales transactions on the London Stock Exchange, together
with (B) an amount in cash equal to the cumulative value of
all dividends, distributions and other income distributed by Man
in respect of the notional number of ordinary shares of Man
delivered by the Remainder Trusts to the LPs; provided, however,
that the installment dates and share amounts set forth in the
Purchase Agreements may be adjusted to the extent that
forfeitures
and/or
reallocations of membership interests held by certain members of
the LPs occur after the date of the Purchase Agreements in
accordance with the terms of the LPs limited partnership
agreements, as applicable. The LPs each have the right to
rescind their respective Purchase Agreements with the respective
Remainder Trusts and reacquire the shares prior to completion of
the merger (or such other date as agreed). By virtue of the
Joinder Agreement dated as of June 21, 2010 by and among
Man, Merger Sub, GLG, the LPs and Ogier Fiduciary Services
(Cayman) Limited, in its capacity as trustee of each of the
Remainder Trusts, joined as a party to the share exchange
agreement and the voting and support agreement and agreed to
perform the obligations of the LPs thereunder. The Joinder
Agreement is attached as Appendix I to this proxy statement.
Fairness
of the Merger and Recommendations of the Special Committee and
the GLG Board
The
Special Committee
On April 29, 2010, the GLG Board formed a special committee
consisting solely of independent directors. The GLG Board
delegated to the special committee the authority, among other
things, to:
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establish, approve, modify, monitor and direct the process,
procedures and activities relating to the review, evaluation and
negotiation of one or more proposals made to GLG by Man for a
potential transaction and any alternative transaction;
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review, consider, evaluate, respond to, negotiate, reject,
recommend or approve on behalf of GLG or the GLG Board (except
as otherwise required by law) a potential transaction with Man
or an alternative transaction;
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if it determines that continuing GLGs business without
engaging in a potential transaction with Man or an alternative
transaction is in the best interest of GLG, reject any such
potential transaction with Man or an alternative transaction;
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determine whether any such potential transaction with Man or an
alternative transaction is advisable and is fair to, and in the
best interests of, GLG and its stockholders (other than the
Selling Stockholders); and
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recommend to the board of directors what action, if any, should
be taken in connection with any such potential transaction with
Man or an alternative transaction.
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On May 16, 2010, the special committee, after discussion
and consideration of the terms of the merger agreement, the
share exchange agreement and the voting and support agreement,
and in each case the transactions contemplated thereby, and
following the receipt of a presentation from Moelis, and
Moeliss oral opinion subsequently confirmed by delivery of
a written opinion dated May 16, 2010 that, as of
May 16, 2010 and based upon and subject to the limitations
and qualifications set forth therein, the consideration of $4.50
per share in cash to be received by the GLG stockholders (other
than the Selling Stockholders) in the merger was fair from a
financial point of view to such holders other than the Selling
Stockholders, unanimously:
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determined that (i) it is in the best interests of GLG and
its stockholders for GLG to enter into the merger agreement, and
(ii) the transactions contemplated by the merger agreement,
including the merger, the share exchange agreement and the
voting and support agreement are advisable and fair to GLG and
its unaffiliated stockholders;
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approved the waiver of the restrictions on transfer applicable
to shares of capital stock of GLG held by the Selling
Stockholders under the GLG Shareholders Agreement; and
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recommended that the GLG Board (i) determine it is in the
best interests of GLG and its stockholders for GLG to enter into
the merger agreement, (ii) authorize and approve the
execution, delivery and performance by GLG of the merger
agreement (subject to the Minority Stockholder Approval),
(iii) waive the restrictions
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on transfer applicable to shares of GLG capital stock held by
the Selling Stockholders under the GLG Shareholders Agreement,
as requested by the Selling Stockholders, (iv) approve the
share exchange agreement and the consummation of the
transactions contemplated thereby, (v) submit the adoption
of the merger agreement to a vote at a special meeting of GLG
stockholders called for that purpose, and (vi) recommend
that stockholders of GLG vote to adopt the merger agreement at
the special meeting.
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In the course of reaching the determination and making the
recommendations described above, the special committee
considered and discussed a number of factors as generally
positive or favorable, including, but not limited to, the
following:
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the current and prospective conditions in the alternative
investment industry and the potential challenges that GLG faces
in attracting assets under management and maintaining or growing
management and performance fee revenues;
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the possible alternatives to a sale, including maintaining GLG
as an independent public company, conducting a stock repurchase
or undertaking a recapitalization, and the potential risks,
rewards and uncertainties associated with those alternatives,
including:
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the risks associated with remaining an independent company
arising from a decline in assets under management and related
management and performance fee revenue;
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the risks associated with the need to refinance GLGs
outstanding indebtedness under its credit facility and
convertible notes beginning as early as May 2011; and
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the need to pay GLGs investment professionals a
significant amount, including in the form of additional shares,
in order to retain these professionals, which could result in
additional dilution to GLGs stockholders;
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the process for maximizing stockholder value in a sale of GLG,
including:
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the special committees assessment, after consultation with
its financial advisor, of the relative likelihood that other
potential acquirors would submit competitive proposals absent a
pending transaction, given the limited number of potential
acquirors in the industry with the financial resources required
to consummate an acquisition of GLG;
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the potential harm to GLGs business of conducting a public
auction;
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the potential competitive harm to GLGs business of
providing potential bidders access to GLGs confidential
due diligence materials;
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the potential harm to GLGs business of engaging with a
bidder that did not present a significant likelihood of
achieving a successful transaction;
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the risk of loss of opportunity to enter into a transaction with
Man; and
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the lack of assurance that there would be another opportunity
for GLG stockholders (other than the Selling Stockholders) to
receive as significant a premium as that contemplated by the
proposed merger;
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the current and historical market prices for the shares of GLG
in comparison to the offer price of $4.50 per share, including
that the one-year average trading price of GLG stock was $3.40
and that GLG stock had traded as low as $2.58 and as high as
$4.61 in the past year, and that the merger would provide GLG
stockholders (other than the Selling Stockholders) with an
opportunity to receive an immediate cash payment for their
shares at a price that represents a premium of approximately 55%
over the closing price of $2.91 per share on May 14, 2010,
the last trading day prior to the public announcement of the
proposed merger, providing them with immediate liquidity without
the risks related to GLGs current business plan, which
could take an extended period of time to achieve positive
returns;
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the current market price for Man ordinary shares and that the
per share consideration in the merger represents a premium of $1
as of the date the proposed merger was publicly announced, over
the value of the per share consideration in the share exchange,
which premium may not be reduced to less than $0.25 per share on
the closing date;
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based on a range of estimates of the potential synergies
available with the combination of the two businesses, a
determination that the merger consideration included an
appropriate share of the total synergies value resulting from
the merger;
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the certainty of immediate cash that the merger would provide to
the GLG stockholders (other than the Selling Stockholders),
without incurring brokerage costs or other costs typically
associated with market sales, as well as the flexibility to
invest that cash in other assets, including in Man ordinary
shares;
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that as a result of the merger, GLG stockholders would no longer
be subject to the market, economic and other risks which arise
from owning an interest in a public company;
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that GLG is dependent on the continued services of the
Individual Principals and key personnel who, in addition to
voting their GLG shares against a proposed alternative
transaction, could preclude an alternative takeover by
discontinuing their services with GLG;
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the desire and willingness of the Selling Stockholders to sell
their shares at this time and enter into the share exchange with
Man, without which the merger transaction with Man would not
have been possible because Man was unwilling to offer GLG
stockholders (other than the Selling Stockholders) merger
consideration in the form of Man ordinary shares as doing so
would require Man to register its shares in the U.S., become
subject to reporting requirements under U.S.
federal securities laws and consequently to incur
significant costs and administrative effort required to comply
with both the U.K. and U.S. regulatory regimes, and
Mans desire to offer the Selling Stockholders
consideration in the form of Man ordinary shares to align the
interests of the Selling Stockholders with Mans
shareholders;
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the substantial market overhang of shares held by
the Selling Stockholders and the significant number of other
shares held by stockholders, employees and key personnel subject
to transfer restrictions under the GLG Shareholders Agreement
and other restricted stock agreements that would be free of such
restrictions within the next 12 to 18 months;
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that the Principals would be prohibited from selling any of the
Man ordinary shares they receive as merger consideration for two
years, and could sell only one-third of such shares in the third
year following the consummation of the merger;
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presentations by and discussions with senior management of GLG,
the Individual Principals, Man and the special committees
legal and financial advisors regarding the principal terms of
the merger agreement, the share exchange agreement and other
ancillary documents;
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the oral opinion of Moelis delivered to the special committee,
subsequently confirmed by delivery of a written opinion dated
May 16, 2010, that, as of May 16, 2010 and based upon
and subject to the limitations and qualifications set forth
therein, the consideration of $4.50 per share in cash to be
received by GLG stockholders (other than the Selling
Stockholders) in the merger was fair from a financial point of
view to such holders other than the Selling Stockholders, which
opinion is attached as Appendix D to this proxy statement,
and the presentation by, and the discussions with
representatives of Moelis as to matters relevant to such
opinion, as described under Background of the
Merger above, with the understanding that Moelis was
entitled to receive a fee upon delivery of its opinion and that,
upon the closing of the transaction, Moelis will become entitled
to a transaction fee in consideration of providing financial
advice to the special committee;
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the opinion of Goldman Sachs International delivered to the
board that, as of May 17, 2010 and based upon and subject
to the factors and assumptions set forth therein, the Aggregate
Consideration (defined below) to be paid to the holders (other
than Man and its affiliates) of shares of GLG common stock, FA
Sub 2 exchangeable shares and convertible notes pursuant to the
share exchange agreement and merger agreement was fair from a
financial point of view to such holders, which opinion is
attached as Appendix E to this proxy statement, and the
presentation by, and the discussions with representatives of
Goldman Sachs as to matters relevant to such opinion, as
described under Background of the Merger
above, with the understanding that Goldman Sachs was entitled to
receive a fee upon announcement of the execution of the share
exchange agreement and the merger agreement and that, upon the
closing of the transaction, Goldman Sachs will become entitled
to a transaction fee in consideration of providing financial
advice to the board;
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the absence of any alternative acquisition proposals, in
particular, during the period between March 26, 2010, when
a number of press articles appeared regarding a potential
acquisition by Man of certain U.S. alternative asset
managers, including GLG, and May 17, 2010, the date the
proposed merger was publicly announced;
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that GLG did not enter into any exclusivity arrangements with
Man, Holdco and Merger Sub prior to the execution and delivery
of the merger agreement;
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that the merger and the share exchange are not expected to close
for several months which would provide an adequate opportunity
for alternative proposals to be made, associated due diligence
to be conducted and definitive documentation to be negotiated
with respect thereto, and for the board to consider such
alternative proposals and agreements, if any;
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the business reputation, financial resources and historical
success of Man in structuring and completing complex
transactions;
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the terms and conditions of the merger agreement, including:
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GLGs ability, under certain circumstances, to provide
information to,
and/or
participate in discussions or negotiations with, third parties
regarding alternative takeover proposals;
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the ability of the GLG Board or the special committee, under
certain circumstances, to change its recommendation that the GLG
stockholders vote in favor of adoption and approval of the
merger agreement; and
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GLGs ability, under certain circumstances, to terminate
the merger agreement in order to enter into a definitive
agreement related to a superior proposal, subject to paying a
termination fee of $48 million (equal to approximately 3%
of the equity value of the combined merger and share exchange
transactions), which was subsequently reduced to
$26 million;
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that there are breakup fees and expense coverage payable by both
GLG and Man in certain circumstances;
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the merger is not subject to a financing condition, which
reduces the execution risk attached to the completion of the
merger and thus makes it more likely that the merger will be
consummated promptly upon satisfaction of the conditions to the
completion of the merger as described in this proxy statement;
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the availability of appraisal rights to GLG stockholders who
comply with all of the required procedures under Delaware law
for exercising appraisal rights, which allow such stockholders
to seek appraisal of the fair value of their stock as determined
by the Court of Chancery of the State of Delaware; and
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the likelihood of receiving the regulatory approvals required to
consummate the merger.
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In the course of reaching the determinations and making the
recommendations described above, the special committee
considered a number of factors to be generally negative or
unfavorable, including, but not limited to, the following:
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that the GLG stockholders, other than the Selling Stockholders,
will have no ongoing equity participation in us following the
merger, and that the GLG stockholders will cease to participate
in our future earnings or growth, if any, or to benefit from
increases, if any, in the value of our common stock, and will
not participate in any potential future sale of GLG to a third
party or any potential recapitalization of GLG which could
include a dividend to stockholders;
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that the Selling Stockholders could realize significant returns
on their equity investment in Man following the merger;
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the Selling Stockholders participation in the merger and
the share exchange and that they have interests in the
transactions that differ from, or are in addition to, those of
GLG stockholders unaffiliated with the Selling Stockholders;
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the risks and costs to GLG if the merger does not close,
including paying the fees and expenses associated with the
transaction in certain circumstances, the diversion of
management and employee attention, potential employee attrition
and the potential effect on business and customer relationships;
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that the merger consideration will generally be taxable for
U.S. federal income tax purposes to GLG stockholders who
surrender shares of our common stock in the merger;
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that the special committee did not solicit competing bids for us
from other potentially interested third parties prior to signing
the merger agreement with Man and Merger Sub, although the
special committee was satisfied that the merger agreement
provided GLG with the ability to consider and pursue certain
alternative takeover proposals;
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the risk that the merger and the share exchange might not be
completed in a timely manner or at all;
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the ability of the Selling Stockholders holding beneficial
ownership of approximately 48.8% of our voting stock to
potentially preclude an alternative takeover proposal and the
impact that could have on the interest of third parties in
making offers competitive with Mans offer;
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that the merger agreement contains restrictions on the conduct
of GLGs business prior to the completion of the merger,
generally requiring GLG to conduct our business only in the
ordinary course, subject to specific limitations, which may
delay or prevent GLG from undertaking business opportunities
that may arise pending completion of the merger and the length
of time between signing and closing when these restrictions are
in place; and
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the provisions in the merger agreement that require us to
reimburse Mans expenses up to $15 million if
(1) the merger agreement is terminated by us or Man because
our stockholders fail to approve and adopt the merger agreement
at the special meeting (except in certain circumstances) or (2)
the merger agreement is terminated by Man as a result of our
breach of our agreement to hold the special meeting, to prepare
the related proxy statement, to refrain from soliciting
alternative takeover proposals or to make and not change our
boards recommendation for the merger (except in certain
circumstances).
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In the course of reaching the determinations and decisions, and
making the recommendations, described above, the special
committee considered the following factors relating to the
procedural safeguards that the special committee believes were
present to ensure the fairness of the merger and to permit the
special committee to represent the interests of the GLG
stockholders (other than the Selling Stockholder), each of which
the special committee believes supports its decision and
provides assurance of the fairness of the merger to us and such
stockholders:
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the merger is subject to the nonwaivable condition of the
adoption of the merger agreement by GLG stockholders, including
the adoption of the merger agreement by the holders of a
majority of the then outstanding shares of our common stock,
other than shares owned by the Selling Stockholders, GLG, Man
and its affiliates (including Holdco and Merger Sub), GLG and
its affiliates (excluding directors serving on the special
committee) and GLG employees;
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that the special committee consists solely of independent,
non-employee directors;
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that the special committee members will be adequately
compensated for their services, the amount of which was
established before they commenced their consideration of
strategic alternatives, and that their compensation for serving
on the special committee was in no way contingent on their
approving the merger agreement and taking the other actions
described in the proxy statement;
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that the special committee retained and was advised by
Winston & Strawn LLP and Abrams & Bayliss LLP
(Delaware counsel) as its independent legal counsel and Moelis
as its independent financial advisor;
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that the special committee received from its financial advisor,
Moelis, an opinion delivered orally at the special committee
meeting on May 16, 2010, and subsequently confirmed by
delivery of a written opinion dated May 16, 2010 that, as
of May 16, 2010 and based upon and subject to the
limitations and qualifications set forth therein, the
consideration of $4.50 per share in cash to be received by the
GLG stockholders (other than the Selling Stockholders) in the
merger was fair from a financial point of view to such holders
(other than the Selling Stockholders);
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that the special committee was provided with full access to our
management and documentation in connection with the due
diligence conducted by its advisors;
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that the special committee, with the assistance of its legal and
financial advisors, negotiated extensively with Man and its
representatives;
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that the special committee had ultimate authority to decide
whether to proceed with a transaction or any alternative
transaction;
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that the special committee was authorized to consider all
strategic alternatives with respect to GLG to enhance
stockholder value, including the sale of GLG;
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that the special committee was aware that it had no obligation
to recommend any transaction and had the authority to reject any
transaction on behalf of the GLG stockholders (other than the
Selling Stockholders);
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that the special committee had the authority, through the
delegation of the GLG Boards powers, to waive the
restrictions on transfer applicable to shares of GLG common
stock held by the Selling Stockholders under the GLG
Shareholders Agreement; and
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that the special committee made its evaluation of the merger
agreement and the merger based upon the factors discussed in
this proxy statement, independent of the other members of our
board of directors, including the Individual Principals, and
with knowledge of the interests of the Individual Principals in
the merger.
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In evaluating whether to pursue a transaction with Man or any
strategic alternatives, including continuing to execute
GLGs business plan as a standalone company, the special
committee considered the fact that under the Voting Agreement
entered into in 2007 (as described under Important
Information Regarding the Principals Voting
Agreement), the Selling Stockholders and their affiliates
are able to determine the outcome of most matters requiring
stockholder approval (other than those requiring a
super-majority vote and other than matters for which they agreed
that the unaffiliated stockholders may have a separate vote)
and, as a result, without some form of minority voting
protection, the Selling Stockholders could cause or prevent a
change of control of GLG, possibly depriving the unaffiliated
stockholders of an opportunity to receive a premium for their
shares as part of a sale of GLG. The special committee further
considered the fact that the GLG board of directors had
delegated to the special committee broad powers to review,
negotiate and recommend or reject a possible transaction with
Man or any alternative transaction, which, taken together with a
separate majority-of-the-minority voting requirement, would, in
the special committees judgment, remove to the greatest
extent possible the Selling Stockholders potentially
conflicted influence and control over a potential transaction
with Man.
In evaluating Mans demand for a voting and support
agreement of the type ultimately negotiated with the Selling
Stockholders, the special committee considered the protective
effects of the delegation of board authority and the minority
voting requirement described above, together with the fact that:
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similar voting agreements are reasonably customary in public
company change of control transactions that involve significant
share ownership blocks;
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Man was unwilling to enter into a transaction that did not
involve a voting agreement with the Selling Stockholders;
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the proposed voting and share exchange agreements would
terminate upon the termination of the proposed merger agreement,
thereby protecting to the greatest extent possible the ability
of the special committee to terminate the merger agreement in
connection with a change in its recommendation to GLG
stockholders, as described under The Merger
Agreement Restrictions on Change of Recommendation
to Stockholders; and
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the proposed voting agreement would prevent the occurrence of a
scenario in which the Selling Stockholders voted against the
adoption of the merger agreement while a majority of the
unaffiliated stockholders voted in favor of the adoption of the
merger agreement.
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In analyzing the merger relative to our going concern value, the
special committee adopted the analysis and the opinion of
Moelis. The special committee did not consider liquidation value
as a factor because GLG is a viable going concern business and
the trading history of GLG common stock is an indication of its
value as such. In addition, due to the fact that GLG is being
sold as a going concern and that its most valuable assets are
its investment
36
professionals, the special committee did not consider GLGs
liquidation value relevant in its deliberations. Further, the
special committee did not consider net book value a material
indicator of GLGs value because such a valuation metric is
generally not meaningful for asset management firms, which are
typically valued based on assets under management and future
earnings potential. The net book value of GLG is merely
indicative of historical costs and as of March 31, 2010
represented a negative value.
The foregoing discussion of information and factors considered
and given weight by the special committee is not intended to be
exhaustive, but is believed to include substantially all of the
material factors, both positive and negative, considered by the
special committee. In view of the variety of factors considered
in connection with its evaluation of the merger agreement and
the merger, the special committee did not find it practicable
to, and did not, quantify or otherwise assign relative weights
to the specific factors considered in reaching its determination
and recommendation. In addition, individual special committee
members may have given different weights to factors. The special
committees recommendations were based upon the totality of
the information presented to and considered by it. The special
committee conducted extensive discussions of, among other
things, the factors described above, including asking questions
of our management and the special committees financial and
legal advisors.
The
GLG Board
On May 16, 2010, the GLG Board, after receiving the oral
opinion of its financial advisor Goldman Sachs, which was
subsequently confirmed in writing, that, as of May 17, 2010
and based upon and subject to the factors and assumptions set
forth therein, the Aggregate Consideration (defined below) to be
paid to the holders (other than Man and its affiliates) of
shares of GLG common stock, FA Sub 2 exchangeable shares and
convertible notes pursuant to the share exchange agreement and
merger agreement was fair from a financial point of view to such
holders, and acting upon the unanimous recommendation of the
special committee, unanimously:
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determined that the merger agreement and the transactions
contemplated thereby are advisable and procedurally and
substantively fair to and in the best interests of, GLG and its
stockholders (including its unaffiliated stockholders);
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authorized and approved the execution, delivery and performance
by GLG of the merger agreement (subject to the Minority
Stockholder Approval);
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approved the waiver of all the restrictions on transfer
applicable to shares of GLG capital stock held by the Selling
Stockholders under the GLG Shareholders Agreement, as requested
by the Selling Stockholders;
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approved the share exchange agreement and the consummation of
the transactions contemplated thereby;
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determined to submit the adoption of the merger agreement to a
vote at a special meeting of stockholders called for that
purpose; and
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recommended that stockholders of GLG vote to adopt the merger
agreement at the special meeting of stockholders.
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In the course of reaching the determination and making the
recommendations described above, the GLG Board considered and
discussed and adopted the following material factors:
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the unanimous determinations and recommendations of the special
committee;
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the factors considered by the special committee, including the
generally positive and favorable factors, as well as the
generally negative and unfavorable factors, and the factors
relating to procedural safeguards described above; and
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the fairness opinion of Goldman Sachs described under
Special Factors Opinion of GLGs
Financial Advisor above.
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Opinion
of Special Committees Financial Advisor
On May 16, 2010, at a meeting of the special committee held
to evaluate the transaction, Moelis delivered to the special
committee an oral opinion, subsequently confirmed by delivery of
a written opinion dated May 16, 2010
37
to the effect that, based upon and subject to the limitations
and qualifications set forth in the written opinion, as of the
date of the opinion the consideration of $4.50 per share in cash
to be received by the stockholders of GLG (other than the
Selling Stockholders) in the merger was fair from a financial
point of view to such stockholders.
The full text of the Moelis opinion describes the assumptions
made, procedures followed, matters considered and limitations on
the review undertaken by Moelis. The opinion is attached as
Appendix D to this proxy statement and is incorporated into
this proxy statement by reference. GLGs stockholders are
encouraged to read this opinion carefully in its entirety.
Moeliss opinion does not address GLGs underlying
business decision to effect the merger or the relative merits of
the merger as compared to any alternative business strategies or
transactions that might be available to GLG and does not
constitute a recommendation to any stockholder of GLG as to how
such stockholder should vote with respect to the merger or any
other matter.
At the direction of the special committee, Moelis was not asked
to, nor did it, offer any opinion as to (i) the material
terms of the merger agreement or the form of the merger or any
other contractual arrangement that the parties may enter into in
connection with the merger or (ii) the fairness of the
merger to, or any consideration that may be received in
connection therewith by, the Selling Stockholders, nor did
Moelis offer any opinion as to the relative fairness of the
consideration of $4.50 per share in cash to be received by the
stockholders of GLG (other than the Selling Stockholders) in the
merger and the consideration to be received by the Selling
Stockholders in the share exchange. Moelis also assumed, with
consent of the special committee, that the representations and
warranties of all parties to the merger agreement are true and
correct, that each party to the merger agreement will perform
all of the covenants and agreements required to be performed by
such party, that all conditions to the consummation of the
merger will be satisfied without waiver thereof, and that the
merger will be consummated in a timely manner in accordance with
the terms described in the merger agreement, without any
modifications or amendments thereto or any adjustment to the
merger consideration of $4.50 per share in cash to be received
by the stockholders of GLG (other than the Selling
Stockholders). In rendering its opinion, Moelis also assumed,
with the special committees consent, that the final
executed form of the merger agreement does not differ in any
material respect from the draft that Moelis examined. Moelis was
not authorized to and did not solicit indications of interest in
a possible transaction with GLG from any party.
Moelis, in arriving at its opinion, among other things:
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reviewed certain publicly available business and financial
information relating to GLG, including estimates of certain Wall
Street analysts with respect to GLG for 2010 and 2011, and Man;
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reviewed certain internal information relating to the business,
earnings, cash flow, assets, liabilities and prospects of GLG
furnished to Moelis by GLG;
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conducted discussions with members of senior management and
representatives of GLG and Man concerning the matters described
in the first two bullet points above, as well as the business
and prospects of GLG and Man generally;
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reviewed publicly available financial and stock market data,
including valuation multiples, for GLG and compared them with
those of certain other companies in lines of business that
Moelis deemed relevant;
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compared the proposed financial terms of the merger with the
financial terms of certain other transactions that Moelis deemed
relevant;
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reviewed a draft of the merger agreement dated May 16, 2010;
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participated in certain discussions and negotiations among
representatives of GLG and Man and their financial and legal
advisors; and
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conducted such other financial studies and analyses and took
into account such other information as Moelis deemed appropriate.
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In connection with its review, Moelis did not assume any
responsibility for independent verification of any of the
financial, legal, regulatory, tax, accounting and other
information supplied to, discussed with, or reviewed by
38
Moelis for the purpose of its opinion and, with the special
committees consent, relied on such information being
complete and accurate in all material respects. In addition, at
the special committees direction, Moelis did not make any
independent evaluation or appraisal of any of the assets or
liabilities (contingent, derivative, off-balance-sheet, or
otherwise) of GLG, nor was Moelis furnished with any such
evaluation or appraisal. For the purposes of its analysis and
opinion, Moelis was directed by the special committee to use the
average of the Wall Street analysts estimates referred to
above with certain additional assumptions provided by management
of GLG.
Moeliss opinion was necessarily based on economic,
monetary, market and other conditions as in effect on, and the
information made available to Moelis as of, the date of the
opinion.
In addition, the special committee did not ask Moelis to
address, and Moeliss opinion did not address, the fairness
to, or any other consideration of, the holders of any class of
securities, creditors or other constituencies of GLG, other than
the holders of GLG common stock that are not Selling
Stockholders. Moelis also did not express any opinion as to the
fairness of the amount or nature of any compensation to be
received by any of GLGs officers, directors or employees,
or any class of such persons, relative to the merger
consideration of $4.50 per share in cash to be received by
GLGs stockholders (other than the Selling Stockholders) in
the merger or otherwise.
Moelis provided its opinion for the use and benefit of the
special committee in its evaluation of the transaction. The
Moelis opinion was approved by a Moelis fairness opinion
committee.
Financial
Analyses
The following is a summary of the material financial analyses
presented by Moelis to the special committee on May 16,
2010, in connection with the delivery of the opinion described
above.
The summary set forth below does not purport to be a complete
description of the analyses performed and factors considered by
Moelis in arriving at its opinion, nor is the order of analyses
described below meant to indicate the relative weight or
importance given to those analyses by Moelis. The preparation of
a fairness opinion is a complex process involving various
determinations as to the most appropriate and relevant methods
of financial analysis and the application of those methods to
the particular circumstances; therefore, such an opinion is not
readily susceptible to partial analysis or summary description.
With respect to the comparable public companies analysis and the
precedent transactions analysis summarized below, no company,
business or transaction used in such analyses as a comparison is
either identical or directly comparable to GLG, GLGs
businesses or the proposed transaction, nor is an evaluation of
such analyses entirely mathematical. These analyses necessarily
involve complex considerations and judgments concerning
financial and operating characteristics and other factors. In
arriving at its opinion, Moelis did not attribute any particular
weight to any analysis or factor considered by it, but rather
made qualitative judgments as to the significance and relevance
of each analysis and factor. Accordingly, Moelis believes that
its analyses must be considered as a whole and that selecting
portions of its analyses and of the factors considered by it,
without considering all factors and analyses, would, in the view
of Moelis, create an incomplete and misleading view of the
analyses underlying Moeliss opinion.
Some of the summaries of financial analyses below include
information presented in tabular format. In order to understand
fully Moeliss analyses, the tables must be read together
with the text of each summary. The tables alone do not
constitute a complete description of the analyses performed by
Moelis. Considering the data described below without considering
the full narrative description of the financial analyses,
including the methodologies and assumptions underlying the
analyses, could create a misleading or incomplete view of
Moeliss analyses.
The analyses performed by Moelis include analyses based upon
forecasts of future results, which results might be
significantly more or less favorable than those upon which
Moeliss analyses were based. The analyses do not purport
to be appraisals or to reflect the prices at which GLGs or
Mans shares might trade at any time following the
announcement of the transaction. Because the analyses are
inherently subject to uncertainty, being based upon numerous
factors and events, including, without limitation, factors
relating to general economic and competitive conditions beyond
the control of the parties or their respective advisors, neither
Moelis nor any other person assumes responsibility if future
results or actual values are materially different from those
contemplated below.
39
Comparable
Public Companies Analysis
Moelis analyzed the market values and trading multiples of GLG
and generally comparable publicly traded alternative asset
management companies and traditional asset management companies.
Using publicly available information, Moelis selected and
analyzed the market values and trading multiples of GLG and the
corresponding trading multiples for the North American and
European publicly traded alternative and traditional asset
management companies listed below:
Alternative
Asset Management Companies
North American
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The Blackstone Group L.P.
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Fortress Investment Group LLC
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Och-Ziff Capital Management Group LLC
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European
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3i Group PLC
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Ashmore Group PLC
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BlueBay Asset Management plc
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Charlemagne Capital Limited
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Gottex Fund Management Holdings Limited
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Kohlberg Kravis Roberts & Co.
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Man
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Partners Group AG
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Polar Capital Holdings PLC
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Traditional
Asset Management Companies
North American
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Affiliated Managers Group, Inc.
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AllianceBernstein Holding L.P.
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Artio Global Investors Inc.
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BlackRock, Inc.
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Cohen & Steers, Inc.
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Eaton Vance Corp.
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Federated Investors, Inc.
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Franklin Resources, Inc.
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GAMCO Investors, Inc.
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Invesco Ltd.
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Janus Capital Group Inc.
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Legg Mason, Inc.
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Pzena Investment Management, Inc.
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40
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Sprott Inc.
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T. Rowe Price Group, Inc.
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Waddell & Reed Financial, Inc.
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European
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Aberdeen Asset Management PLC
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F&C Asset Management PLC
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Gartmore Investment Ltd.
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Henderson Group PLC
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Liontrust Asset Management PLC
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Schroders PLC
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Moelis calculated the range of trading multiples for all of the
selected companies listed above, as well as just for Och-Ziff
Capital, Fortress Investment Group, Ashmore Group, BlueBay and
Man, or the peer group companies, which it considered the most
directly comparable publicly traded companies to GLG relative to
the other companies selected for the analysis. All multiples
were based on the closing stock prices of the selected companies
on May 14, 2010. Moelis reviewed enterprise values of the
selected companies as multiples of, among other things,
estimated calendar year 2010 and estimated calendar year 2011
earnings before interest, taxes, depreciation and amortization,
or EBITDA. Moelis calculated enterprise value as the market
capitalization (or equity value), plus total debt and minority
interests and preferred stock, less cash and cash equivalents.
Moelis also reviewed price to earnings multiples, or P/E, which
is the per share equity value of the selected companies as a
multiple of earnings per share, or EPS.
Estimated financial data for the selected companies were based
on publicly available Wall Street research analysts
estimates. At the direction of GLGs management, estimated
financial data for GLG was based on the average of Wall Street
research analysts estimates and in the case of GLGs
estimated EPS, also included certain interest and tax
assumptions as per GLGs management.
The following table summarizes the range of trading multiples
for all selected companies and the range of trading multiples
for the peer group companies:
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Alternative Asset
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Traditional Asset
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Management
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Management
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Peer Group
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Companies
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Companies
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Companies
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Enterprise Value/2010E EBITDA
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4.1x 13.5x
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3.4x 13.1x
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4.1x 11.0x
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Enterprise Value/2011E EBITDA
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1.3x 11.4x
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2.9x 11.3x
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4.4x 9.4x
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2010E P/E
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5.9x 19.7x
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7.5x 25.6x
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9.4x 14.6x
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2011E P/E
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6.4x 15.6x
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6.2x 37.0x
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6.9x 13.0x
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Based upon the foregoing and qualitative judgments related
primarily to differing fund types and investment strategies,
growth prospects, profitability margins and relative recent
operating performance, Moelis selected multiple ranges for each
metric, applied the selected ranges to the relevant statistic
for GLG and calculated an implied range of GLG stock prices as
compared to the merger consideration of $4.50 per share in cash
to be received by GLGs stockholders (other than the
Selling Stockholders). The following table presents the results
of such analysis, assuming a $4.50 per share cash consideration
for all shares of GLG common stock in the merger and the share
exchange:
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GLG
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Implied Price per GLG Share
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Enterprise Value/2010E EBITDA
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8.0x 11.0x
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$
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1.56 $2.26
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Enterprise Value/2011E EBITDA
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8.0x 10.0x
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$
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3.06 $3.96
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2010E P/E
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11.0x 15.0x
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$
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2.12 $2.89
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2011E P /E
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9.0x 13.0x
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$
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2.69 $3.88
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41
Moelis noted that, in each case, the merger consideration of
$4.50 per share in cash to be received by GLGs
stockholders (other than the Selling Stockholders) was above
such range.
Precedent
Transaction Analysis
Moelis reviewed the financial terms of 22 precedent merger and
acquisition transactions involving alternative asset management
companies and 18 precedent merger and acquisition transactions
involving traditional asset management companies announced since
November 2007. Moelis selected the transactions based on a
number of criteria, including the nature of the target
companies business and assets under management, or AUM.
Moelis noted that the majority of precedent transactions
reviewed occurred under significantly different credit and
market conditions than those prevailing as of May 14, 2010,
the last trading day prior to the delivery of Moeliss
opinion. For purposes of certain of the analyses described below
Moelis selected eight of these transactions, two involving
alternative asset management companies and six involving
traditional asset management companies, because they were the
only precedent transactions that had publicly disclosed EBITDA
for the
12-month
period prior to announcement of the transaction, or LTM EBITDA.
The following table sets forth a list of all precedent
transactions reviewed (the eight selected precedent transactions
are identified in bold):
Precedent
Transactions
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Announcement Date
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Acquiror
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Target
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Alternative Asset Management Companies
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March 30, 2010
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Investec plc
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Rensburg Sheppards plc
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February 10, 2010
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Affiliated Managers Group Inc.
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Pantheon Ventures Inc.
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February 1, 2010
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Affiliated Managers Group Inc.
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Artemis Investment Management Ltd.
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January 8, 2010
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Aberdeen Asset Management PLC
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Investment Strategies division of RBS Asset Management
Limited
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October 9, 2009
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Occidental Petroleum Corp.
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Phibro LLC
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June 16, 2009
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Aquiline Capital Partners LLC
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Conning & Company
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November 10, 2008
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American Capital, Ltd.
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European Capital Limited
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September 29, 2009
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Electricite de France SA (EDF Group)
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Eagle Energy Partners I, L.P.
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February 20, 2009
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Agnelli Family (IFIL Group)
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Vision Investment Management Limited
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February 10, 2008
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Petershill Fund Offshore LP (a Goldman Sachs group fund)
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Capula Investment Management LLP
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January 31, 2008
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Deutsche Bank AG
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HedgeWorks, LLC
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January 10, 2008
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The Blackstone Group L.P.
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GSO Capital Partners, L.P.
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January 8, 2008
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Tailwind Financial Inc.
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Asset Alliance Corporation
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January 7, 2008
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ING Investment Management Americas
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Lincoln Vale
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December 31, 2007
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Trusco Capital Management, Inc.
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Alpha Equity Management LLC
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December 18, 2007
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Deerfield Triarc Capital Corp.
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Deerfield & Company LLC
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December 11, 2007
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Affiliated Managers Group, Inc.
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BlueMountain Capital Management
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December 10, 2007
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Citigroup, Inc.
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MetalMark Capital LLC
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November 26, 2007
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Skandinaviska Enskilda Banken AB
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Key Asset Management Group Limited
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November 19, 2007
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Eton Park Capital Management
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R6 Capital Management
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November 14, 2007
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Morgan Stanley
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Traxis Partners LP
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November 8, 2007
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Affiliated Managers Group, Inc.
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ValueAct Capital
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42
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Announcement Date
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Acquiror
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Target
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Traditional Asset Management Companies
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February 19, 2010
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Janus Capital Group Inc.
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INTECH Investment Management LLC
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February 12, 2010
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Hanwha Securities Company Ltd.
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Prudential Investment & Securities Co., Ltd.
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January 5, 2010
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Aviva PLC
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River Road Asset Management, LLC
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December 20, 2009
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Piper Jaffray Companies
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Advisory Research Holdings, Inc.
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December 14, 2009
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Affiliated Managers Group, Inc.
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Highbury Financial Inc.
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October 19, 2009
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Invesco Ltd.
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Morgan Stanley Retail Asset Management
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September 30, 2009
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Ameriprise Financial, Inc.
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Columbia Management Group, LLC
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September 5, 2009
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Pacific Century Group
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AIG Investments (American International Group Inc.s
investment advisory and asset management unit)
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August 17, 2009
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Macquarie Group Limited
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Delaware Management Holdings, Inc.
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August 12, 2009
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Bank of New York Mellon Corporation
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Insight Investment Management (Global) Limited
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July 29, 2009
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The Sumitomo Trust and Banking Company, Limited
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Nikko Asset Management Co., Ltd.
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June 12, 2009
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BlackRock, Inc.
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Barclays Global Investors
|
May 14, 2009
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Alternative Asset Management Acquisition Corp.
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Great American Group, LLC
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November 24, 2008
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Windy City Investments Holdings, LLC
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Winslow Capital Management, Inc.
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August 14, 2008
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Lazard Freres & Co. LLC
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Lazard Asset Management LLC
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July 14, 2008
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Federated Investors, Inc.
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Prudent Bear Fund and Prudent Global Income Fund
|
July 7, 2008
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Ameriprise Financial, Inc.
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J. & W. Seligman & Co. Incorporated
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April 16, 2008
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Pharos Capital Group LLC and TPG Capital, L.P.
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American Beacon Advisors, Inc.
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For each of the selected transactions identified above, Moelis
calculated the ratio of implied equity value to LTM EBITDA at
the time the transaction was announced. Moelis used equity value
and LTM EBITDA based on public filings and press releases. The
following table presents the results of such analysis:
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Implied Equity Value/LTM EBITDA
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Low
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High
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Mean
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Median
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Selected Alternative Asset Management Transactions
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8.1
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x
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8.5
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x
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8.3
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x
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8.3
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x
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Selected Traditional Asset Management Transactions
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7.0
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x
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17.7
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x
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9.5
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x
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8.1
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x
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Moelis noted that given the sharp decrease in 2009 earnings due
to global economic downturn, the use of LTM EBITDA for GLG would
not provide an accurate representation of the normalized cash
flow profile for GLG going forward. Thus, for purposes of this
analysis Moelis applied precedent transaction LTM EBITDA
multiples to calendar year 2010 and 2011 estimated EBITDA for
GLG (based on the average of Wall Street research analysts
estimates).
In addition, for the 22 precedent merger and acquisition
transactions involving alternative asset management companies
and 18 precedent merger and acquisition transactions involving
traditional asset management
43
companies reviewed, Moelis calculated the ratio of implied
equity value to AUM for the target company for the latest
available period at the time the transaction was announced.
Moelis used equity value and AUM data based on public filings
and press releases. The following table presents the results of
such analysis:
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Implied Equity Value/Target AUM
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Low
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High
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Mean
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|
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Median
|
|
|
Alternative Asset Management Transactions
|
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0.6
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%
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16.9
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%
|
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7.6
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%
|
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|
5.3
|
%
|
Traditional Asset Management Transactions
|
|
|
0.3
|
%
|
|
|
9.7
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%
|
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|
2.4
|
%
|
|
|
1.4
|
%
|
Based upon the foregoing and qualitative judgments related to
the characteristics of the selected precedent transactions,
Moelis selected a range of implied equity value to LTM EBITDA
multiples for the selected precedent transactions of 7.0x to
10.0x. Moelis then applied such multiple ranges to GLGs
2010 and 2011 estimated EBITDA, to derive an implied range of
equity values for each share of GLG common stock. Moelis also
selected a range of implied equity values as a percentage of
target AUM for the precedent transactions of 4% to 6% and
applied this range to GLGs AUM to derive an implied range
of equity values for each share of GLG common stock. The
following table sets forth the results of these calculations,
assuming equal per share consideration for all shares of GLG
common stock in the merger and the share exchange:
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|
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GLG
|
|
Implied Price per GLG Share
|
|
Implied Equity Value/2010E EBITDA
|
|
7.0x 10.0x
|
|
$1.65 $2.36
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Implied Equity Value/2011E EBITDA
|
|
7.0x 10.0x
|
|
$3.05 $4.28
|
Implied Equity Value/AUM
|
|
4% 6%
|
|
$2.78 $4.11
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Moelis noted that in each case, the merger consideration of
$4.50 per share in cash to be received by GLGs
stockholders (other than the Selling Stockholders) was above
such range.
Shares Traded
Analysis
Moelis reviewed the historical trading prices and volumes for
GLG common stock for the
12-month
period ended May 14, 2010. Moelis analyzed the merger
consideration of $4.50 per share in cash to be received by
GLGs stockholders (other than the Selling Stockholders) in
relation to such
12-month
periods high and low closing prices of GLG common stock,
which ranged from $2.58 to $4.52 per share. Moelis noted that
356.2 million shares of GLG common stock traded in the
12-month
period ended May 14, 2010 and approximately 99.5% of these
shares traded at or below $4.50 per share.
Purchase
Price Premium Analysis
Moelis performed a purchase price premium analysis based upon
the premiums paid in the 16 public company transactions that
were announced in the
12-month
period ended May 14, 2010 in which the target company was a
publicly traded North American company, the transaction value
was less than $3 billion and involved both stock and cash
consideration. For each transaction, Moelis calculated the
premium per share paid by the acquiror by comparing the
announced transaction value per share to the target
companys historical average closing share price during the
following periods: (i) one trading day prior to
announcement, (ii) five trading days prior to announcement
and (iii) 20 trading days prior to announcement. The
results of this analysis are summarized below:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
One Trading
|
|
Five Trading Day
|
|
20 Trading Day
|
|
|
Day Prior
|
|
Average Prior
|
|
Average Prior
|
|
Median Purchase Price Premium
|
|
|
26.7
|
%
|
|
|
24.9
|
%
|
|
|
30.1
|
%
|
The reasons for and the circumstances surrounding each of the
transactions analyzed in the purchase price premium analysis
were diverse and there are inherent differences in the business,
operations, financial conditions and prospects of GLG and the
companies included in the purchase price premium analysis. In
order to arrive at a single implied price per share range for
GLG common stock, Moelis selected a representative range of
implied premiums for the transaction of 25% to 35% and applied
this range of premiums to the closing price of GLG common stock
on May 14, 2010 of $2.91, the last trading day before the
announcement of the transaction. This range was selected because
it reflected the median purchase price premiums listed above,
with an increased high end in order to yield a more conservative
analysis. The results of this analysis implied a price per share
range for
44
GLG common stock of $3.64 to $3.93. Moelis noted that the merger
consideration of $4.50 per share in cash to be received by
GLGs stockholders (other than the Selling Stockholders)
was above such range.
Other
Information
The consideration to be paid in the merger to GLGs
stockholders (other than the Selling Stockholders) was
determined through negotiations between the special committee,
on the one hand, and Man, on the other hand, and the decision by
the special committee to enter into the merger agreement was
solely that of the special committee. Moelis acted as financial
advisor to the special committee in connection with and
participated in certain of the negotiations leading to the
merger. Moelis did not, however, recommend any specific amount
of consideration to GLG or the special committee or that any
specific amount of consideration constituted the only
appropriate consideration for the merger. The Moelis opinion and
financial analyses, taken together, were only one of many
factors considered by the special committee in its evaluation of
the merger and should not be determinative of the views of the
special committee or GLGs management with respect to the
merger or the merger consideration.
The special committee retained Moelis based upon Moeliss
experience and expertise. Moelis is an investment banking firm
with substantial experience in transactions similar to the
proposed merger. Moelis, as part of its investment banking
business, is continually engaged in the valuation of businesses
and securities in connection with business combinations and
acquisitions and for other purposes.
Under the terms of the engagement letter between Moelis and GLG,
GLG agreed to pay Moelis (i) a nonrefundable work fee of
$500,000 which will be offset, to the extent previously paid,
against the transaction fee described below, (ii) an
opinion fee of $1.5 million, which became payable upon
delivery of the Moelis opinion described above, and which fee
will be offset, to the extent previously paid, against the
transaction fee and (iii) a transaction fee of
$4.5 million plus 0.6% of the equity value (as defined in
the engagement letter) in excess of the equity value implied at
a price of $4.50 per share payable upon the closing of
(a) the sale of all of a majority of GLGs equity
securities to a third party acquiror, (b) the merger or
combination of GLG with that of a third party acquiror, or
(c) a third party acquirors acquisition of all or a
significant portion of the assets, properties or business of
GLG, which transaction fee is payable if, at any time prior to
the expiration of twelve months following the termination of
Moeliss engagement, GLG enters into an agreement that
results in a transaction described above, or consummates a
transaction described above. In addition, GLG agreed to pay
Moelis a termination fee of equal to 25% of any
termination fee,
break-up
fee, topping fee, expense
reimbursement or other form of compensation payable to GLG
or of the value of any option to purchase any securities or
assets that GLG is granted in the event that a transaction
described above fails to close following the execution of an
agreement with respect to such transaction, which termination
fee would be in lieu of and would not exceed the transaction fee
described above. In addition, GLG has agreed to indemnify Moelis
and its affiliates (and their respective directors, officers,
agents, employees and controlling persons) against certain
liabilities and expenses, including liabilities under the
federal securities laws, related to or arising out of
Moeliss engagement. Moelis may provide investment banking
services to GLG, Man and Mans affiliates in the future,
for which Moelis would expect to receive compensation.
Other
Written Presentations by Moelis
In addition to the presentation made to the special committee of
GLG on May 16, 2010 described above, Moelis submitted
additional written materials to the special committee on
May 6, 2010 and May 16, 2010. These written materials
have been filed as exhibits to the Schedule 13E-3 filed with the
SEC in connection with the merger, will be made available for
inspection and copying at the principal executive offices of GLG
during its regular business hours by any interested holder of
GLG common stock, and copies may be obtained by requesting them
in writing from GLG at the address provided under the caption
Where You Can Find More Information below. These
additional written materials do not constitute, or form the
basis of, an opinion of Moelis with respect to any matters.
Moelis provided these materials for the use and benefit of the
special committee in connection with the merger.
On May 6, 2010, Moelis made a written presentation to the
special committee to assist in the special committees
negotiations with Man. This presentation contained an outline of
the current status of the negotiations between the parties and
Moeliss preliminary valuation analyses (including a
comparable public companies analysis, a precedent transactions
analysis, a historical shares traded analysis, a purchase price
premium analysis and indications of market
45
value of GLG), using, at the direction of the special committee,
estimates for GLG sourced from one Wall Street research analyst.
The financial analyses in this presentation were based on
market, economic and other conditions as they existed as of the
date of the presentation, as well as other information that was
available at that time. Accordingly, the results of the
financial analyses presented on May 6, 2010 differed from
those in the May 16, 2010 presentation due to changes in
those conditions. Among other things, multiples attributable to
selected companies changed as those companies stock prices
changed, and implied transaction multiples changed as GLGs
and Mans financial results (as well as estimates prepared
by Wall Street research analysts) changed. In addition, in the
May 16, 2010 presentation and written opinion described
above GLG management directed Moelis to use the average of Wall
Street research analysts estimates for its analyses
instead of just one Wall Street research analyst.
On May 16, 2010, at the request of the special committee,
Moelis submitted a supplemental written presentation to the
special committee regarding Man based on publicly available
information that included (i) a current situation overview,
including reasons for Mans recent underperformance and
three-year stock price performance, (ii) a qualitative
comparison to GLG, including a high-water mark analysis, and
(iii) a summary of Wall Street research analysts estimates
and price targets.
On May 16, 2010, following the execution of the merger
agreement and at the request of the special committee, Moelis
updated its written presentation described above under
Opinion of Special Committees Financial
Advisor to include the final key terms of the merger
agreement and to revise certain non-material items.
Moeliss financial analyses in this presentation are in
substance the same as the financial analyses included in the
original May 16, 2010 presentation.
Opinion
of GLGs Financial Advisor
Goldman Sachs delivered its oral opinion, which was subsequently
confirmed in writing, to the GLG Board that, as of May 17,
2010 and based upon and subject to the factors and assumptions
set forth in its written opinion, the Aggregate Consideration
(defined below) to be paid to the holders (other than Man and
its affiliates) of shares of GLG common stock, FA Sub 2
exchangeable shares and convertible notes pursuant to the share
exchange agreement and merger agreement was fair from a
financial point of view to such holders. The Aggregate
Consideration is equal to the sum of the aggregate of
(i) the right to receive $4.50 in cash into which each
outstanding share of GLG common stock (other than the Rollover
Shares (defined below) and shares held by Man and its
subsidiaries not specified in the merger agreement) will be
converted under the merger agreement (the Public
Consideration), (ii) the right to receive $4.50 in
cash in the merger into which each share of GLG common stock
into which convertible notes are converted prior to the merger
will be converted under the merger agreement (the
Convertible Consideration), (iii) the Man
ordinary shares for which shares of GLG common stock received
upon the exchange of FA Sub 2 exchangeable shares (the
Exchanged Shares) will be exchanged under the share
exchange agreement (the Exchangeable Consideration)
and (iv) the Man ordinary shares for which shares of GLG
common stock held by the Principals and the LPs (collectively,
the Principal Stockholders) (other than shares into
which convertible notes were converted and any shares acquired
in open market purchases) will be exchanged (the Rollover
Consideration, and such shares of GLG common stock,
together with the Exchanged Shares, the Rollover
Shares).
The full text of the written opinion of Goldman Sachs, dated
May 17, 2010, which sets forth assumptions made, procedures
followed, matters considered and limitations on the review
undertaken in connection with the opinion, is attached as
Appendix E. Goldman Sachs provided its opinion for the
information and assistance of the GLG Board in connection with
its consideration of the transactions contemplated by the share
exchange agreement and merger agreement (the
Transactions). The Goldman Sachs opinion is not a
recommendation as to how any holder of shares of GLG common
stock, FA Sub 2 exchangeable shares
and/or
convertible notes should vote with respect to the Transactions
or any other matter.
In connection with rendering the opinion described above and
performing its related financial analyses, Goldman Sachs
reviewed, among other things:
|
|
|
|
|
the merger agreement;
|
|
|
|
the share exchange agreement;
|
|
|
|
certain other agreements entered into by GLG as of May 17,
2010 in connection with the Transactions;
|
46
|
|
|
|
|
annual reports to stockholders and Annual Reports on
Form 10-K
of GLG for the three fiscal years ended December 31, 2007,
2008 and 2009, and annual reports of Man for the three fiscal
years ended March 31, 2007, 2008 and 2009;
|
|
|
|
the proxy statement of Freedom Acquisition Holdings, Inc.
(Freedom), dated October 11, 2007, relating to
the acquisition by Freedom of GLG Partners LP and certain
affiliated entities;
|
|
|
|
certain interim reports to stockholders and Quarterly Reports on
Form 10-Q
of GLG and certain interim reports to stockholders and quarterly
reports of Man;
|
|
|
|
the prospectus for the convertible notes;
|
|
|
|
certain other communications from GLG and Man to their
respective stockholders;
|
|
|
|
publicly available research analyst reports for GLG and Man;
|
|
|
|
certain internal financial analyses and forecasts for GLG
prepared by its management, as approved for Goldman Sachs
use by GLG (the Forecasts); and
|
|
|
|
certain synergies projected by GLGs management to result
from the Transactions, as approved for Goldman Sachs use
by GLG (the Synergies).
|
Goldman Sachs also held discussions with members of the senior
management of GLG and Man regarding their assessment of the
strategic rationale for, and the potential benefits of, the
Transactions and the past and current business operations,
financial condition, and future prospects of their respective
companies; reviewed the reported price and trading activity for
the shares of GLG common stock and the Man ordinary shares;
compared certain financial and stock market information for GLG
and Man with similar information for certain other companies the
securities of which are publicly traded; reviewed the financial
terms of certain recent business combinations in the financial
and asset management industries specifically and in other
industries generally; and performed such other studies and
analyses, and considered such other factors, as it considered
appropriate.
For purposes of rendering the opinion described above, Goldman
Sachs relied upon and assumed, without assuming any
responsibility for independent verification, the accuracy and
completeness of all of the financial, legal, regulatory, tax,
accounting and other information provided to, discussed with or
reviewed by it, and Goldman Sachs did not assume any
responsibility for any such information. In that regard, Goldman
Sachs has assumed with the consent of GLG that the Forecasts and
the Synergies were reasonably prepared on a basis reflecting the
best then currently available estimates and judgments of the
management of GLG. As GLG was aware, the management of Man did
not make available its forecasts of the future financial
performance of Man. With the consent of GLG, for purposes of
rendering the opinion described above, Goldman Sachs relied upon
published research analyst estimates of Man. In addition,
Goldman Sachs did not make an independent evaluation or
appraisal of the assets and liabilities (including any
contingent, derivative or other off-balance-sheet assets and
liabilities) of GLG or Man or any of their respective
subsidiaries, and Goldman Sachs was not furnished with any such
evaluation or appraisal. Goldman Sachs assumed that all
governmental, regulatory or other consents and approvals
necessary for the consummation of the Transactions would be
obtained without any adverse effect on GLG or Man or on the
expected benefits of the Transactions in any way meaningful to
its analysis. Goldman Sachs also assumed that the Transactions
would be consummated on the terms set forth in the share
exchange agreement and merger agreement without the waiver or
modification of any term or condition the effect of which would
be in any way meaningful to Goldman Sachs analysis.
Goldman Sachs opinion did not address the underlying
business decision of GLG to engage in the Transactions, or the
relative merits of the Transactions as compared to any strategic
alternatives that may have been available to GLG; nor did it
address any legal, regulatory, tax or accounting matters.
Goldman Sachs was not requested to solicit, and did not solicit,
interest from other parties with respect to an acquisition of,
or other business combination with, GLG or any other alternative
transaction. Goldman Sachs opinion addressed only the
fairness from a financial point of view, as of May 17,
2010, of the Aggregate Consideration to be paid to the holders
(other than Man and its affiliates) of shares of GLG common
stock, FA Sub 2 exchangeable shares and convertible notes
pursuant to the share exchange agreement and merger agreement.
Goldman Sachs did not express any view on, and its opinion did
not address, any other term or aspect of the share exchange
agreement or merger agreement or the Transactions or any term or
aspect of any other agreement or instrument contemplated by the
share exchange agreement or merger agreement or entered into or
amended in connection with the Transactions, including, without
47
limitation, other agreements being entered into by GLG as of the
date of the opinion in connection with the Transactions, the
Warrant Offers (as defined in the merger agreement), the
fairness of the Transactions to, or any consideration received
in connection therewith by, the holders of any other class of
securities, creditors, or other constituencies of GLG; nor as to
the fairness of the consideration to be paid to the holders of
the GLG warrants as provided in the merger agreement or the
amount or nature of any compensation to be paid or payable to
any of the officers, directors or employees of GLG, or class of
such persons, in connection with the Transactions, whether
relative to the Aggregate Consideration to be paid to the
holders of shares of GLG common stock, FA Sub 2 exchangeable
shares and convertible notes pursuant to the share exchange
agreement and the merger agreement or otherwise; nor as to the
allocation of the Aggregate Consideration as among the Public
Consideration, the Convertible Consideration, the Exchangeable
Consideration and the Rollover Consideration. Goldman Sachs did
not express any opinion as to the prices at which Man ordinary
shares would trade at any time or as to the impact of the
Transactions on the solvency or viability of GLG or Man or the
ability of GLG or Man to pay their obligations when they come
due. Goldman Sachs opinion was necessarily based on
economic, monetary market and other conditions as in effect on,
and the information made available to it as of, the date of the
opinion, and Goldman Sachs assumed no responsibility for
updating, revising or reaffirming its opinion based on
circumstances, developments or events occurring after the date
of the opinion. Goldman Sachs opinion was approved by a
fairness committee of Goldman, Sachs & Co.
For purposes of its analysis and opinion, Goldman Sachs was
preliminarily directed by GLG to use the average of the publicly
available research analysts estimates for GLG for 2010 and
2011. Management of GLG subsequently adopted the estimates set
forth under Certain Forward-Looking Financial
Information Projections as management
projections and confirmed the use of these estimates for
purposes of Goldman Sachs fairness opinion.
The following is a summary of the material financial analyses
delivered by Goldman Sachs to the board of directors of GLG in
connection with rendering the opinion described above. The
following summary, however, does not purport to be a complete
description of the financial analyses performed by Goldman
Sachs, nor does the order of analyses described represent
relative importance or weight given to those analyses by Goldman
Sachs. Some of the summaries of the financial analyses include
information presented in tabular format. The tables must be read
together with the full text of each summary and are alone not a
complete description of Goldman Sachs financial analyses.
Except as otherwise noted, the following quantitative
information, to the extent that it is based on market data, is
based on market data as it existed on or before May 17,
2010 and is not necessarily indicative of current market
conditions.
Premiums to Market Capitalization and Implied Transaction
Multiples. Goldman Sachs reviewed and analyzed
the premium of the Public Consideration, Exchangeable
Consideration and Rollover Consideration collectively, in each
case calculated based on the closing price of Man ordinary
shares on May 14, 2010 and a USD/GBP exchange rate of
1.45555, on the one hand, to the market capitalization of GLG on
March 25, 2010 (the last trading day prior to the date on
which Man was reported to be in talks with potential targets,
including GLG); to the highest and lowest market capitalizations
of GLG over the twelve months prior to May 14, 2010; and to
the market capitalization of GLG on May 14, 2010, in each
case, on the other hand.
The following table presents the results of this analysis:
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|
|
|
|
|
|
|
|
|
|
|
|
Premium of Public,
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|
|
|
|
Exchangeable and
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|
|
|
|
Rollover
|
|
|
GLG Market
|
|
Consideration to GLG
|
|
|
Capitalization
|
|
Market Capitalization
|
|
|
($ Millions)
|
|
|
|
Based on March 25 closing price
|
|
|
827
|
|
|
|
51
|
%
|
Highest for twelve months ended May 14
|
|
|
1,395
|
|
|
|
(11
|
)%
|
Lowest for twelve months ended May 14
|
|
|
798
|
|
|
|
56
|
%
|
Based on May 14 closing price
|
|
|
903
|
|
|
|
38
|
%
|
Goldman Sachs calculated the enterprise value of GLG implied by
the Transactions and reviewed and analyzed multiples of such
enterprise value to the revenue of GLG for the twelve months
ended March 31, 2010 and to the estimated 2010 and 2011
earnings before interest, tax, depreciation and amortization, or
EBITDA, of GLG, based
48
on the Forecasts, and such enterprise value as a percentage of
assets under management of GLG as of March 31, 2010. The
following table presents the results of this analysis:
|
|
|
|
|
Enterprise Value(1) as a Percentage or Multiple of:
|
|
|
|
|
Assets Under Management
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|
|
7.0
|
%
|
Revenue for twelve months ended March 31, 2010
|
|
|
5.5
|
x
|
Estimated 2010 EBITDA
|
|
|
19.8
|
x
|
Estimated 2011 EBITDA
|
|
|
10.5
|
x
|
|
|
|
(1) |
|
Enterprise value calculated net of $7 million cash used to
fund self-tender of Warrants at $0.129 per Warrant pursuant to
the merger agreement. |
Goldman Sachs also calculated the Aggregate Consideration based
on the closing price of Man ordinary shares on May 14, 2010
and a USD/GBP exchange rate of 1.45555 and reviewed and analyzed
multiples of the Aggregate Consideration to estimated 2010 and
2011 net income of GLG, based on the Forecasts. The
following table present the results of this analysis:
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|
|
Aggregate Consideration as a Multiple of:
|
|
|
|
|
Estimated 2010 Net Income (as converted)(1)
|
|
|
22.6
|
x
|
Estimated 2011 Net Income (as converted)(1)
|
|
|
14.3
|
x
|
|
|
|
(1) |
|
This assumes all convertible notes had been converted into
shares of GLG common stock prior to January 1, 2010. |
Historical Exchange Ratio Analysis. Goldman
Sachs reviewed and considered the average implied historical
exchange ratios determined by dividing the daily closing prices
of shares of GLG common stock by the daily closing prices of the
Man ordinary shares, using the USD/GBP exchange rates in effect
on the relevant dates according to Bloomberg, during the period
from GLGs stock market debut via its merger with Freedom
on November 2, 2007 to May 14, 2010 and the two-year,
one-year, six-month, three-month and
year-to-date
periods ended May 14, 2010. In addition, Goldman Sachs
calculated the exchange ratio of the closing price of Man
ordinary shares to the closing price of shares of GLG common
stock on May 14, 2010. Goldman Sachs compared the
historical exchange ratios and average exchange ratios with the
exchange ratio received under the share exchange agreement. The
following table presents the results of this analysis:
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|
|
|
|
|
|
|
|
|
|
|
|
Exchange Ratio
|
|
|
Historical Average
|
|
Under Share
|
|
|
Exchange Ratio
|
|
Exchange Agreement
|
|
Closing prices on May 14, 2010
|
|
|
0.90
|
x
|
|
|
1.0856
|
x
|
Year-to-date
through May 14, 2010
|
|
|
0.78
|
x
|
|
|
1.0856
|
x
|
Three months ended May 14, 2010
|
|
|
0.81
|
x
|
|
|
1.0856
|
x
|
Six months ended May 14, 2010
|
|
|
0.73
|
x
|
|
|
1.0856
|
x
|
Twelve months ended May 14, 2010
|
|
|
0.77
|
x
|
|
|
1.0856
|
x
|
Two years ended May 14, 2010
|
|
|
0.76
|
x
|
|
|
1.0856
|
x
|
November 2, 2007 to May 14, 2010
|
|
|
0.84
|
x
|
|
|
1.0856
|
x
|
Historical Share Price Analysis. Goldman Sachs
also reviewed and considered the closing prices of shares of GLG
common stock on May 14, 2010; the average closing prices
for shares of GLG common stock during the period from GLGs
stock market debut via its merger with Freedom on
November 2, 2007 to May 14, 2010 and the twelve-month,
six-month, three-month and
year-to-date
periods ended May 14, 2010. Goldman Sachs compared the
49
historical and average closing prices of shares of GLG common
stock to the cash consideration per share of GLG common stock to
be received under the merger agreement. The following table
presents the results of this analysis:
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|
|
|
|
|
|
|
|
|
|
|
Cash Payable
|
|
|
GLG Average
|
|
Under Merger
|
|
|
Share Price ($)
|
|
Agreement ($)
|
|
Closing price on May 14, 2010
|
|
|
2.91
|
|
|
|
4.50
|
|
Year-to-date
through May 14, 2010
|
|
|
3.02
|
|
|
|
4.50
|
|
Three months ended May 14, 2010
|
|
|
2.99
|
|
|
|
4.50
|
|
Six months ended May 14, 2010
|
|
|
3.04
|
|
|
|
4.50
|
|
Twelve months ended May 14, 2010
|
|
|
3.39
|
|
|
|
4.50
|
|
November 2, 2007 to May 14, 2010
|
|
|
5.76
|
|
|
|
4.50
|
|
Selected Companies Analysis. Goldman Sachs
reviewed and compared certain financial ratios and public market
multiples for GLG and Man with corresponding financial ratios
and public market multiples for the following selected publicly
traded corporations:
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|
|
|
European alternative asset managers:
|
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|
|
|
|
Ashmore Group plc;
|
|
|
|
BlueBay Asset Management plc;
|
|
|
|
Gartmore Group Limited; and
|
|
|
|
Gottex Funds Management Holdings Limited;
|
|
|
|
|
|
North American alternative asset managers:
|
|
|
|
|
|
Fortress Investment Group LLC;
|
|
|
|
Och-Ziff Capital Management Group LLC; and
|
|
|
|
Sprott Inc.; and
|
|
|
|
|
|
United Kingdom traditional asset managers:
|
|
|
|
|
|
Aberdeen Asset Management plc;
|
|
|
|
Henderson Group plc; and
|
|
|
|
Schroders plc.
|
Although none of the selected companies is directly comparable
to GLG or Man, these selected companies were chosen because they
are publicly traded companies with operations that for purposes
of analysis may be considered similar to certain operations of
GLG and Man.
Goldman Sachs calculated and compared the financial ratios and
public market multiples for the selected companies based on
publicly available information, estimates from Institutional
Brokers Estimate System (IBES), USD/GBP
exchange rates in effect on the relevant dates according to
Bloomberg and closing prices of shares of the selected companies
on May 14, 2010. Goldman Sachs calculated the financial
ratios and public market multiples for GLG and Man based on
publicly available information, IBES estimates for Man and the
Forecasts for GLG, the closing prices of shares of GLG common
stock on March 25, 2010 (the last trading day prior to the
date on which Man was reported to be in talks with potential
targets, including GLG) and May 14, 2010, and the equity
market capitalization and enterprise value of GLG implied by the
Transactions. With respect to each of GLG, Man and the selected
companies, Goldman Sachs calculated:
|
|
|
|
|
multiples of equity market capitalization to estimated 2010 and
2011 net income;
|
|
|
|
multiples of enterprise value to estimated 2010 and 2011
EBITDA; and
|
|
|
|
multiples of enterprise value to assets under management.
|
50
The results of this analysis can also be summarized as follows:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Companies (Including
|
|
|
|
|
Man and Excluding GLG)
|
|
GLG
|
Equity Market Capitalization as a Multiple of:
|
|
Range
|
|
Median
|
|
Transaction
|
|
March 25
|
|
May 14
|
|
2010E Net Income
|
|
7.7x 16.7x
|
|
|
13.2
|
x
|
|
|
22.6
|
x
|
|
|
14.6
|
x
|
|
|
15.8
|
x
|
2011E Net Income
|
|
6.5x 14.0x
|
|
|
9.6
|
x
|
|
|
14.3
|
x
|
|
|
9.2
|
x
|
|
|
10.0
|
x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Companies (Including
|
|
|
|
|
|
|
Enterprise Value as a Percentage or
|
|
Man and Excluding GLG)
|
|
GLG
|
Multiple of:
|
|
Range
|
|
Median
|
|
Transaction
|
|
March 25
|
|
May 14
|
|
Assets under Management
|
|
1.1% 24.9%
|
|
|
2.4
|
%
|
|
|
7.0
|
%
|
|
|
4.6
|
%
|
|
|
5.2
|
%
|
2010E EBITDA
|
|
5.1x 11.9x
|
|
|
8.9
|
x
|
|
|
19.8
|
x
|
|
|
13.1
|
x
|
|
|
14.8
|
x
|
2011E EBITDA
|
|
3.9x 10.0x
|
|
|
7.1
|
x
|
|
|
10.5
|
x
|
|
|
6.9
|
x
|
|
|
7.8
|
x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Companies (Including GLG(1) and Excluding Man)
|
|
|
Equity Market Capitalization as a Multiple of:
|
|
Range
|
|
Median
|
|
Man
|
|
2010E Net Income
|
|
7.7x 16.7x
|
|
|
14.0
|
x
|
|
|
11.2
|
x
|
2011E Net Income
|
|
6.5x 14.0x
|
|
|
10.0
|
x
|
|
|
7.7
|
x
|
|
|
|
(1) |
|
Multiples for GLG are based on closing price on May 14,
2010. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Companies (including GLG(1) and Excluding Man)
|
|
|
Enterprise Value as a Percentage or Multiple of:
|
|
Range
|
|
Median
|
|
Man
|
|
Assets under Management
|
|
1.1% 24.9%
|
|
|
2.4
|
%
|
|
|
8.4
|
%
|
2010E EBITDA
|
|
6.2x 14.8x
|
|
|
9.4
|
x
|
|
|
5.1
|
x
|
2011E EBITDA
|
|
5.4x 10.0x
|
|
|
7.2
|
x
|
|
|
3.9
|
x
|
|
|
|
(1) |
|
Multiples and percentages for GLG are based on closing price on
May 14, 2010. |
Present Value of Future Value of GLG
Analysis. Goldman Sachs performed an illustrative
analysis of the implied present value of GLGs future
value, as reflected by GLGs future convertible
note-diluted market capitalization, using the Forecasts. Goldman
Sachs first calculated the implied future value of GLG as of
December 31, 2010, by applying a range of price to forward
earnings multiples of 11.3 x to 12.3 x to estimated
2011 net income (excluding interest payable on the
convertible notes), and then discounted each of these values
back to May 14, 2010, using a range of discount rates from
10.0% to 14.0%, reflecting estimates of GLGs cost of
equity. This analysis resulted in a range of implied present
values of GLG of $1,125 million to $1,248 million.
Present Value of Mans Future Share Price
Analysis. Goldman Sachs performed an illustrative
analysis of the implied present value of the future price of a
Man ordinary share using IBES estimates. Goldman Sachs first
calculated the implied future value of a Man ordinary share as
of December 31, 2010, by applying a range of price to
forward earnings multiples of 11.2 x to 14.2 x to the estimated
2011 U.S. dollar earnings per Man ordinary share, and then
discounted each of these values back to May 14, 2010, using
a range of discount rates from 9.0% to 13.0%, reflecting
estimates of Mans cost of equity. This analysis resulted
in a range of implied present values of Man ordinary shares of
$4.15 to $5.38.
Goldman Sachs also performed an illustrative analysis of the
implied present values of the future price of a Man ordinary
share pro forma for completion of the Transactions using IBES
estimates for Man, or a pro forma Man ordinary share, the
Forecasts and the Synergies. Goldman Sachs first calculated the
implied future values of a pro forma Man ordinary share as of
December 31, 2010, by applying Man and a range of blended
price to forward earnings multiples of 11.2 x to 11.8 x to the
estimated 2011 U.S. dollar earnings per pro forma Man
ordinary share, both with and without reflecting the earnings
per share accretion from the Synergies, and then discounted each
of
51
these values back to May 14, 2010, using a range of
discount rates from 9.0% to 13.0%, reflecting estimates of the
combined companys cost of equity. This analysis resulted
in a range of implied present values of pro forma Man ordinary
shares, without reflecting the earnings per share accretion from
the Synergies, of $4.51 to $4.88 and, with reflecting the
earnings per share accretion from the Synergies, of $4.69 to
$5.07.
Pro Forma Transaction Analysis. Goldman Sachs
prepared illustrative pro forma analyses of the potential
financial impact of the Transactions using the Synergies, the
Forecasts for GLG and the IBES estimates for Man, in each case
for fiscal year 2011. The Synergies included GLGs
estimated $50 million pre-tax synergies phased in at 25%
and 100% for the 2011 fiscal year, which, on the basis of the
blended tax rate estimated by GLG, would respectively result in
an estimated $10 million in post-tax phased in synergies
and $40 million in post-tax phased in synergies for the
2011 fiscal year. Using these figures, Goldman Sachs compared
the IBES estimate of earnings per Man ordinary share for fiscal
year 2011, on a standalone basis, to the projected earnings per
pro forma Man ordinary share for fiscal year 2011. Based on such
analyses, the Transactions would be accretive to Mans
shareholders on an earnings per share basis both before and
after the Synergies, whether phased in 25% or 100%, for fiscal
year 2011, which can be summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
With 25%
|
|
With Fully
|
|
|
Phased-in Synergies
|
|
Phased-in Synergies
|
|
|
(Estimated FY 2011)
|
|
(Estimated FY 2011)
|
|
Accretion / (Dilution) (Pre Synergies)
|
|
|
2.5
|
%
|
|
|
2.5
|
%
|
Accretion / (Dilution) (Post Synergies)
|
|
|
4.3
|
%
|
|
|
9.6
|
%
|
The preparation of a fairness opinion is a complex process and
is not necessarily susceptible to partial analysis or summary
description. Selecting portions of the analyses or of the
summary set forth above, without considering the analyses as a
whole, could create an incomplete view of the processes
underlying Goldman Sachs opinion. In arriving at its
fairness determination, Goldman Sachs considered the results of
all of its analyses and did not attribute any particular weight
to any factor or analysis considered by it. Rather, Goldman
Sachs made its determination as to fairness on the basis of its
experience and professional judgment after considering the
results of all of its analyses. No company or transactions used
in the above analyses as a comparison are directly comparable to
GLG or Man or the Transactions.
Goldman Sachs prepared these analyses for purposes of Goldman
Sachs providing its opinion to the GLG Board as to the
fairness from a financial point of view to holders (other than
Man and its affiliates) of shares of GLG common stock, FA Sub 2
exchangeable shares and convertible notes of the Aggregate
Consideration to be paid pursuant to the share exchange
agreement and merger agreement. These analyses do not purport to
be appraisals nor do they necessarily reflect the prices at
which businesses or securities actually may be sold. Analyses
based upon forecasts of future results are not necessarily
indicative of actual future results, which may be significantly
more or less favorable than suggested by these analyses. Because
these analyses are inherently subject to uncertainty, being
based upon numerous factors or events beyond the control of the
parties or their respective advisors, none of GLG, Man, Goldman
Sachs or any other person assumes responsibility if future
results are materially different from those forecast.
The Aggregate Consideration was determined through negotiations
among GLG, the special committee, the Principals and Man and was
approved by the special committee of the GLG Board and by the
GLG Board. Goldman Sachs provided advice to GLG during these
negotiations. Goldman Sachs did not, however, recommend any
specific amount or allocation of consideration to GLG or its
board of directors or that any specific amount or allocation of
consideration constituted the only appropriate consideration for
the Transactions.
As described above, Goldman Sachs opinion to the GLG Board
was one of many factors taken into consideration by the GLG
Board in making its determination to approve the share exchange
agreement and merger agreement. The foregoing summary does not
purport to be a complete description of the analyses performed
by Goldman Sachs in connection with the fairness opinion. The
foregoing summary is qualified in its entirety by reference to
the written opinion of Goldman Sachs attached as
Appendix E, but does describe all material bases for and
methods of arriving at the opinions findings.
Goldman Sachs International and its affiliates are engaged in
investment banking and financial advisory services, commercial
banking, securities trading, investment management, principal
investment, financial planning, benefits counseling, risk
management, hedging, financing, brokerage activities and other
financial and
non-financial
activities and services for various persons and entities. In the
ordinary course of these activities
52
and services, Goldman Sachs International and its affiliates may
at any time make or hold long or short positions and
investments, as well as actively trade or effect transactions,
in the equity, debt and other securities (or related derivative
securities) and financial instruments (including bank loans and
other obligations) of third parties, GLG, Man and any of their
respective affiliates and any affiliates of the Principal
Stockholders or any currency or commodity that may be involved
in the Transactions for their own account and for the accounts
of their customers. Goldman Sachs acted as financial advisor to
GLG in connection with, and has participated in certain of the
negotiations leading to, the Transactions. Goldman Sachs has
provided certain investment banking and other financial services
to GLG and its affiliates from time to time for which its
investment banking division has received, and may receive,
compensation. Goldman Sachs also has provided certain investment
banking and other financial services to Man and its affiliates
from time to time for which its investment banking division has
received, and may receive, compensation. Goldman Sachs also may
provide investment banking and other financial services to GLG,
Man, the Principal Stockholders and their respective affiliates
in the future for which its investment banking division may
receive compensation. However, except for GLGs engagement
of Goldman Sachs in connection with the Transaction, during the
two-year period ended May 17, 2010, Goldman Sachs has not
been engaged by GLG, Man or the Individual Principals to provide
investment banking and other financial services for which it has
received compensation. Certain Principal Stockholders are former
employees of Goldman Sachs International or its affiliates.
The board of directors of GLG selected Goldman Sachs as its
financial advisor because it is an internationally recognized
investment banking firm that has substantial experience in
transactions similar to the Transactions. Pursuant to a letter
agreement dated May 14, 2010 and amended on May 16,
2010, GLG engaged Goldman Sachs to act as its financial advisor
in connection with the possible sale of all of GLG. Pursuant to
the terms of this engagement letter, GLG has agreed to pay
Goldman Sachs a transaction fee of approximately
$4 million, with $1 million of the fee having been
payable upon the execution of the share exchange agreement and
merger agreement and the remainder of the fee being payable upon
consummation of the Transactions. In addition, GLG has agreed to
reimburse Goldman Sachs for its expenses arising, including
attorneys fees and disbursements, and to indemnify Goldman
Sachs and related persons against certain liabilities that may
arise out of, GLGs engagement of Goldman Sachs, including
liabilities under federal securities laws.
Other
Presentations by Goldman Sachs
In addition to the presentation made to the board of directors
of GLG on May 16, 2010 described above, Goldman Sachs also
prepared written materials for a presentation to the board of
GLG on April 29, 2010 and delivered written and oral
presentations to members of the management of GLG on
October 1, 2009, February 23, 2010, March 6, 2010
and April 30, 2010. Copies of these written materials have
been filed as exhibits to the
Schedule 13E-3
filed with the SEC in connection with the Transactions and will
be made available for inspection and copying at the principal
executive offices of GLG during its regular business hours by
any interested holder of GLG common stock. Copies may be
obtained by requesting them in writing from GLG at the address
provided under the caption Where You Can Find More
Information below.
None of these other written or oral presentations by Goldman
Sachs, alone or together, constitute, or form the basis of, an
opinion of Goldman Sachs with respect to the Aggregate
Consideration to be paid pursuant to the share exchange
agreement and merger agreement. Information contained in these
other written and oral presentations to GLG management is
substantially similar to the information provided in Goldman
Sachs written presentation to the board of directors of
GLG on May 16, 2010, as described above. The
October 1, 2009 materials contained an analysis of
Mans business fundamentals and preliminary valuation,
strategic, structure and capital markets considerations. The
February 23, 2010 materials contained a review of GLG and
Man financial projections based on research analyst estimates,
preliminary financial analyses, including market performance,
selected companies and pro forma transaction analyses and
analysis at various prices, a discussion of potential sources of
synergies and preliminary areas of investigation of Man. The
March 6, 2010 materials contained an updated review of GLG
and Man financial projections based on research analyst
estimates and preliminary financial analyses, including market
performance, selected companies and pro forma transaction
analyses and analysis at various prices. The April 29, 2010
materials contained an overview of Mans business and
preliminary financial analyses, including market performance,
selected companies and implied transaction multiples analyses
and analysis at various prices. The April 30, 2010
materials contained preliminary financial analyses, including
implied transaction
53
multiples and selected companies analyses and analysis at
various prices. These other written and oral presentations by
Goldman Sachs contained, among other things, the following types
of financial analyses:
|
|
|
|
|
market performance analysis;
|
|
|
|
analysis at various prices;
|
|
|
|
implied transaction multiples analysis;
|
|
|
|
pro forma transaction analysis; and
|
|
|
|
selected companies analysis.
|
Not all of the other written and oral presentations contained
all of the financial analyses listed above. The financial
analyses in these written presentations were based on market,
economic and other conditions as they existed as of the dates of
the respective presentations as well as other information that
was available at those times. Accordingly, the results of the
financial analyses differed due to changes in those conditions.
Among other things, multiples attributable to selected companies
changed as those companies stock prices changed, and
implied transaction multiples changed as GLGs and
Mans financial results (as well as projections based on
research analyst estimates) changed. Finally, Goldman Sachs
continued to refine various aspects of its financial analyses
with respect to GLG and Man over time.
Purpose
and Reasons for the Merger
Man,
Holdco and Merger Sub
Under the rules governing going private
transactions, Man, Holdco and Merger Sub are deemed to be
engaged in a going private transaction and are
required to provide certain information regarding the purposes
for the merger and share exchange and the reasons for the
structure of the merger and share exchange. Man, Holdco and
Merger Sub are making the statements included in this
sub-section
solely for the purposes of complying with the requirements of
Rule 13e-3
and related rules under the Exchange Act.
If the merger and share exchange are completed, Man will,
indirectly through Holdco, own 100% of GLG. For Man, Holdco and
Merger Sub, the purpose of the merger and share exchange is to
effectuate the transactions contemplated by the merger agreement
and share exchange agreement and allow Man to bear the rewards
and risks of such ownership after GLGs shares cease to be
publicly traded.
Man has had surplus capital and liquid resources at its disposal
for some time. From time to time, the Man Board considered
acquisitions that are complementary to Mans strategy, in
particular equity long/short managers. Man also evaluates
potential acquisition opportunities against strategic criteria
and, having considered such criteria, believes that GLG is a
strong strategic fit.
Man, Holdco and Merger Sub believe that the merger and share
exchange will provide substantial strategic and commercial
benefits to Man shareholders. These arise from the combination
of two established investment management businesses with
complementary investment strategies and the integration of
distribution and relationship management, structuring and
operations between the firms. The fund product offerings of GLG
are centered around the discretionary investment style of
GLGs trading teams. Mans fund product offerings
generally draw on Man subsidiary AHLs systematic managed
futures trading style and/or on its multi-manager business,
which allocates investor capital to a series of different hedge
fund strategies. In addition, the two businesses have a
complementary geography of distribution franchises and
investors, offering the opportunity to market products into new
markets and to new investors. After the closing of the merger
and the share exchange, Man has the potential to add significant
incremental funds under management through combining GLGs
investment offering with Mans structuring and distribution
expertise. The low correlation of performance between the
quantitative investment style of Man and the discretionary
investment style of GLG is expected to provide greater stability
in the combined performance fee prospects and the creation of
new high margin products for distribution. Additionally, Man,
Holdco and Merger Sub believe that the merger and the share
exchange will result in the expansion of the open-ended product
offerings in onshore markets in single manager and combination
formats to broaden and facilitate the raising of new assets in
those markets. Furthermore, Man, Holdco and Merger Sub believe
that there will be the potential for a subsequent organic build
out of discretionary investment strategies by Man following
completion of the merger and share exchange.
54
In addition, Man has identified potential annual run-rate cost
savings after completion of the merger and share exchange of
approximately $50 million with one-third of such savings
expected to be achieved in Mans fiscal year ending
March 31, 2011 and the balance expected to be achieved in
the first six months of the fiscal year ending March 31,
2012. Man expects that these cost savings will come from a
combination of eliminating overlapping central functions, the
integration of infrastructure and operational support areas such
as technology, selected real estate savings and the delisting
and deregistering of GLG in due course. The estimated cost of
achieving these potential annual cost savings is
$25 million.
After taking into consideration the Perella Weinberg sensitivity
analysis showing the impact on earnings accretion/dilution of
different levels of cost savings described under Financial
Analyses of the Financial Advisor to Man May 13th
Materials, and following Mans assessment of the
actions necessary to achieve the potential cost savings, Man
believes that the acquisition will be earnings accretive in the
financial year ending March 31, 2012 and earnings neutral
in the financial year ending March 31, 2011. Nothing in
this subsection is intended to be a profit estimate for any
period or a forecast of future profits, and statements relating
to earnings accretion should not be interpreted to mean that
Mans earnings per share for the current or future
financial periods will necessarily match or exceed Mans
historical published earnings per share. Statements included in
this subsection in relation to earnings accretion are stated
before amortization of intangibles arising from the acquisition.
Man, Holdco and Merger Sub believe that structuring the merger
and share exchange as a merger and a share exchange is
preferable to other transactions structures for the following
reasons:
|
|
|
|
|
the merger is preferable to other transaction structures for
acquiring the outstanding common stock of GLG held by
stockholders other than the Selling Stockholders (the
Publicly Held Stock) and GLG common stock held by
the Selling Stockholders not subject to the share exchange
because the merger:
|
|
|
|
|
|
enables Man to acquire all of the Publicly Held Stock at the
same time; and
|
|
|
|
represents an opportunity for GLGs stockholders (other
than the Selling Stockholders, except to the extent such Selling
Stockholders acquired shares (i) on the open market prior
to the signing of the share exchange agreement or
(ii) through conversion of their convertible notes prior to
the closing of the merger) to receive fair value in cash for
their shares of GLG common stock; and
|
|
|
|
the share exchange is preferable to other transaction structures
for acquiring the equity interests of the Selling Stockholders
not subject to the merger because the share exchange enables:
|
|
|
|
|
|
Man to align the interests of the Selling Stockholders with
Mans shareholders by providing them with Man ordinary
shares, which, in turn, also reflect an indirect continuing
investment in GLG, as the surviving corporation, in light of the
continuing roles which the Individual Principals will have in
Mans business after the merger and the share
exchange; and
|
|
|
|
Man to offer its ordinary shares as consideration in order to
achieve the alignment referred to above pursuant to an exemption
from the registration requirements under the Securities Act of
1933, as amended, which we refer to as the Securities
Act.
|
The
Principals
Under the rules governing going private
transactions, the Principals are deemed to be engaged in a
going private transaction and are required to
provide certain information regarding the purposes for the
merger and the share exchange and the reasons for the structure
of the merger and the share exchange. The Principals are making
the statements included in this
sub-section
solely for the purposes of complying with the requirements of
Rule 13e-3
and related rules under the Exchange Act.
The Principals believe that the acquisition of GLG by Man:
|
|
|
|
|
combines two highly complementary businesses, both focused on
delivering long-term investment performance;
|
|
|
|
strengthens and enhances the flexibility of the GLG platform;
|
|
|
|
adds additional distribution and structuring capabilities;
|
|
|
|
broadens the range of products and services for GLGs
investing clients;
|
55
|
|
|
|
|
deepens infrastructure and capital base;
|
|
|
|
preserves GLGs core investment philosophy and client
orientation; and
|
|
|
|
allows management (including the Individual Principals) to focus
on the business of GLG without the burden or distraction of
being a U.S. publicly traded company.
|
In addition, the bifurcated structure of the acquisition
transaction facilitated the accomplishment of the transaction
for all of the stockholders of GLG because (1) Man would
not have wanted to proceed with the transaction unless
(a) the Selling Stockholders would become significant
shareholders in Man, such that their incentives would be aligned
with those of Mans shareholders, and (b) Man could,
using this structure, offer its ordinary shares as consideration
pursuant to an exemption from the registration requirements
under the Securities Act, and (2) the special committee
would not have approved the share exchange transaction (and the
related waiver of transfer restrictions under the GLG
Shareholders Agreement) unless the unaffiliated stockholders
were to receive a significant premium to the trading price of
GLG common stock immediately prior to the public announcement of
the proposed merger.
The decision by the Principals to engage in the transaction at
the present time was influenced by the fact that GLGs
business had changed substantially during 2008 and 2009 against
a backdrop of severe capital market dislocations, redemptions by
investors in GLG funds and managed accounts, and decreased
investment performance. While GLG had undertaken various
initiatives to strengthen its platform, increase its overall AUM
and improve its cost structure, the Principals remained
concerned, given market conditions at such time, about the
potentially protracted recovery of higher fee-yielding assets,
uncertainty about the prospects of geographic expansion outside
of GLGs historic UK and European markets and a challenging
macroeconomic environment. They concluded that a transaction
with Man offered a better opportunity for an accelerated
recovery of GLGs core business by combining two highly
complementary businesses than pursuing a recovery on a
stand-alone basis.
The primary detriments of the acquisition transaction to the
Principals are that they will bear the risk of any possible
decrease in the earnings, growth or value of the combined Man
and GLG business following the merger, and that all of the
ordinary shares of Man to be received by them in the share
exchange will be subject to a Share
Lock-Up Deed
of Trust described under Special Factors
Interests of Certain Persons in the Merger Share
Lockup below.
As a result of the transaction, the interests of the Principals
in the net book value and net earnings of GLG will decrease from
a direct interest of approximately 44% (approximately negative
$126 million and negative $158 million, respectively)
to an indirect interest (though ownership of Man ordinary
shares) of approximately 10% (approximately negative
$29 million and negative $36 million, respectively),
Mans interest in the net book value and net earnings of
GLG will increase from 0% to 100% (approximately negative
$286 million and negative $359 million, respectively)
as a result of its acquisition of 100% of GLGs shares, and
the GLG unaffiliated stockholders interest in the net book
value and net earnings of GLG will decrease from approximately
51% (approximately negative $146 million and negative
$183 million, respectively) to 0% in exchange for the $4.50
per share in cash to be received upon the consummation of the
merger. The net book value numbers specified above are based on
GLGs June 30, 2010 financial statements and the net
earnings numbers specified above are based on GLGs 2009
annual financial statements.
The primary benefits and detriments of the merger to GLGs
unaffiliated shareholders are the positive and negative factors,
respectively, described under Special Factors
Fairness of the Merger and Recommendation of the Special
Committee and the GLG Board The Special
Committee above.
The primary benefits and detriments of the merger to GLG are the
positive and negative factors, respectively, considered by the
GLG Board as described under Special Factors
Fairness of the Merger and Recommendation of the Special
Committee and the GLG Board The GLG Board
above.
Position
as to the Fairness of the Merger
Man,
Holdco and Merger Sub
Man, Holdco and Merger Sub are making the statements included in
this section solely for the purposes of complying with the
requirements of
Rule 13e-3
and related rules under the Exchange Act. The views of Man,
56
Holdco and Merger Sub should not be construed as a
recommendation to any stockholder as to how that stockholder
should vote on the proposal to adopt the merger agreement.
Man, Holdco and Merger Sub endeavored to negotiate the terms of
a transaction that would be most favorable to them, and not to
the stockholders of GLG, and, accordingly, did not negotiate the
merger agreement with a goal of obtaining terms that were fair
to such stockholders. None of Man, Holdco or Merger Sub believes
that it has or had any fiduciary duty to GLG or its
stockholders, including with respect to the merger and its
terms. GLGs unaffiliated stockholders were, as described
elsewhere in this proxy statement, represented by the special
committee that negotiated with Man, Holdco and Merger Sub on
their behalf, with the assistance of independent legal and
financial advisors.
Accordingly, Man, Holdco and Merger Sub did not undertake an
independent evaluation of the merger or the share exchange or
engage a financial advisor, in each case, for the purpose of
evaluating the fairness of the merger or the share exchange to
GLG or its stockholders. Man, Holdco and Merger Sub did not
participate in the deliberations of the special committee
regarding, and did not receive advice from the special
committees independent legal or financial advisors as to,
the fairness of the merger or the share exchange to GLGs
unaffiliated stockholders. Man, Holdco and Merger Sub believe
that the proposed merger and the share exchange are
substantively fair to GLGs unaffiliated stockholders based
on the following factors:
|
|
|
|
|
the current and historical market prices of GLG common stock,
including the fact that the $4.50 per share consideration in the
merger represents a premium of approximately 55% to the closing
price on May 14, 2010 and approximately 41% over the
average closing prices for the
30-day
trading period ending on May 14, 2010, the last trading day
prior to the date on which the merger and share exchange were
publicly announced;
|
|
|
|
the merger consideration is all cash, allowing GLGs
unaffiliated stockholders to immediately realize a certain and
fair value for all their shares of GLG common stock;
|
|
|
|
the per share consideration in the merger represented a premium
of $1 as of the date the proposed merger was publicly announced,
over the value of the per share consideration in the share
exchange, which premium may not be reduced to less than $0.25
per share on the closing date;
|
|
|
|
the merger is not subject to a financing condition, which
reduces the execution risk attached to the completion of the
merger and thus makes it more likely that the merger will be
consummated promptly upon satisfaction of the conditions to the
completion of the merger as described in this proxy
statement; and
|
|
|
|
the merger will provide liquidity for GLGs unaffiliated
stockholders without incurring brokerage and other costs
typically associated with market sales.
|
Man, Holdco and Merger Sub also considered the following
potentially negative factors:
|
|
|
|
|
GLGs unaffiliated stockholders will receive consideration
in the merger in the form of cash in exchange for their shares
of GLG common stock and will cease to participate in the future
earnings or growth, if any, of GLG or benefit from increases, if
any, in the value of GLG following completion of the merger;
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the Selling Stockholders will receive consideration in the share
exchange in the form of Man ordinary shares, and will have an
indirect continuing investment in GLG, as the surviving
corporation, and will participate in the future earnings and
growth, if any, of GLG
and/or Man
and will benefit from increases, if any, in the value of GLG
and/or Man
following completion of the share exchange;
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the cash consideration to be received by GLGs unaffiliated
stockholders generally will be taxable; and
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there is a risk that conditions to the completion of either the
merger or the share exchange may not be satisfied and that, as a
result, neither the merger nor the share exchange will be
completed.
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Man, Holdco and Merger Sub believe that the merger and the share
exchange are procedurally fair to GLGs unaffiliated
stockholders based on the following factors, including the
factors considered by, and the findings of, the special
committee and the board of directors of GLG with respect to the
fairness of the merger and the share exchange, which Man, Holdco
and Merger Sub adopt:
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the GLG Board established the special committee to negotiate
with Man, Holdco and Merger Sub, which committee consists of
directors who are not officers or employees of GLG or Selling
Stockholders, or affiliated with the Selling Stockholders, Man,
Holdco or Merger Sub. Man, Holdco and Merger Sub believe that
the special committee was therefore able to negotiate a merger
agreement, which the special committee
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57
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believes to be fair to, and in the best interests of, GLGs
stockholders (other than the Selling Stockholders) without the
potential conflicts of interest that the foregoing relationships
otherwise would have presented;
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the special committee retained its own legal advisors,
Winston & Strawn LLP and Abrams & Bayliss LLP,
which in the special committees view had no relationship
that would compromise its independence;
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the special committee retained its own financial advisor,
Moelis & Company LLC, which, in the special
committees view, had no relationship that would compromise
its independence;
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the special committee had the authority to reject the merger and
the share exchange;
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the special committee unanimously (i) determined that
(1) it is in the best interests of GLG and its stockholders
for GLG to enter into the merger agreement, and (2) the
transactions contemplated by the merger agreement, including the
merger, the share exchange agreement and the voting and support
agreement are advisable and fair to GLG and its unaffiliated
stockholders, (ii) approved the waiver of the restrictions
on transfer applicable to shares of capital stock of GLG held by
the Selling Stockholders under the GLG Shareholders Agreement,
and (iii) recommended that the GLG Board (1) determine
it is in the best interests of GLG and its stockholders for GLG
to enter into the merger agreement, (2) authorize and
approve the execution, delivery and performance by GLG of the
merger agreement (subject to the Minority Stockholder Approval),
(3) waive the restrictions on transfer applicable to shares
of GLG capital stock held by the Selling Stockholders under the
GLG Shareholders Agreement, as requested by the Selling
Stockholders, (4) approve the share exchange agreement and
the consummation of the transactions contemplated thereby,
(5) submit the adoption of the merger agreement to a vote
at a special meeting of GLG stockholders called for that
purpose, and (6) recommend that stockholders of GLG vote to
adopt the merger agreement at the special meeting;
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the merger consideration and other terms and conditions of the
merger agreement were the result of extensive negotiations
between Man and the special committee and their respective
independent legal and financial advisors;
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Man did not participate in, or have any influence over, the
conclusions reached by the special committee or the negotiating
positions of the special committee;
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the members of the special committee have no financial interest
in the merger that is different from that of GLG unaffiliated
stockholders, other than as follows:
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pursuant to the terms of the merger agreement, GLG is required
to use reasonable best efforts to launch a tender offer to
purchase all of its outstanding warrants to purchase shares of
GLG common stock, including warrants held by certain directors
who are members of the special committee;
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indemnification and directors and officers liability
insurance coverage will continue to be provided by the surviving
corporation in the merger to the directors who are members of
the special committee; and
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compensation will be paid to the directors serving on the
special committee;
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GLG did not enter into any exclusivity arrangements with Man,
Holdco and Merger Sub prior to the signing of the merger
agreement;
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the special committee received from Moelis an oral opinion,
subsequently confirmed by delivery of a written opinion dated
May 16, 2010 to the effect that, as of that date and based
upon and subject to the limitations and qualifications set forth
therein, the consideration of $4.50 per share in cash to be
received by GLG stockholders (other than the Selling
Stockholders) in the merger was fair from a financial point of
view to such stockholders other than the Selling
Stockholders; and
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GLGs Board received an oral opinion, which was
subsequently delivered in writing, from Goldman Sachs
International, that, as of May 17, 2010 and based upon and
subject to the factors and assumptions set forth in its written
opinion, the Aggregate Consideration to be paid to holders
(other than Man and its affiliates) of shares of GLG common
stock, FA Sub 2 exchangeable shares and convertible notes
pursuant to the share exchange agreement and the merger
agreement was fair from a financial point of view to such
holders.
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58
Man, Holdco and Merger Sub believe the merger and the share
exchange are procedurally and substantively fair to GLGs
unaffiliated stockholders, for the reasons cited above, and in
particular:
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the merger agreement provides for a nonwaivable condition that
the merger agreement be adopted not only by the holders of a
majority of the outstanding shares of GLG common stock and
preferred stock, voting as a single class, but also by the
holders of a majority of the outstanding shares of GLG common
stock (other than the Selling Stockholders and their affiliates,
Man and its affiliates, GLG and its affiliates (other than the
directors who are members of the special committee) and
employees of GLG);
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GLGs and the Selling Stockholders ability, under
certain circumstances, to provide information to,
and/or
participate in discussions or negotiations with, third parties
regarding other proposals;
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GLGs ability, under certain circumstances, to terminate
the merger agreement in order to enter into a definitive
agreement related to a superior proposal, subject to paying a
termination fee of $48 million (equal to approximately 3%
of the equity value of the merger and the share exchange, which
was subsequently reduced to $26 million);
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the termination of the Selling Stockholders agreement to
vote in favor of the adoption of the merger agreement and
against other takeover proposals upon any termination of the
merger agreement by GLG to accept a superior proposal, thus
permitting the Selling Stockholders to support any such superior
proposal; and
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the availability of appraisal rights to GLG stockholders who
comply with all of the required procedures under Delaware law
for exercising appraisal rights, which allow such stockholders
to seek appraisal of the fair value of their stock as determined
by the Court of Chancery of the State of Delaware.
|
Man, Holdco and Merger Sub considered the historical and current
stock price of GLG and analyzed the value of GLG based on its
operation as a continuing business, and, to that extent, such
analyses could be characterized as forms of going concern
valuations. Man, Holdco and Merger Sub did not consider
GLGs net book value or liquidation value in their
evaluation of the fairness of the merger and the share exchange
to GLGs unaffiliated stockholders because Man, Holdco and
Merger Sub did not believe that GLGs net book value or
liquidation value were material or relevant to a determination
of the substantive fairness of the merger and the share
exchange. Man, Holdco and Merger Sub did not believe that
GLGs net book value was material to their conclusion
regarding the substantive fairness of the merger and the share
exchange because, in their view, net book value is not
indicative of GLGs market value since it is a purely
historical measurement of financial position in accordance with
U.S. generally accepted principles, or GAAP, and is not
forward-looking or wholly based on fair value. Man, Holdco and
Merger Sub did not consider the liquidation value of GLG because
of their belief that liquidation value does not present a
meaningful valuation for GLG and its business as GLGs
value is derived from cash flows generated from its continuing
operations rather than from the value of assets that might be
realized in a liquidation.
In making their determination as to the substantive fairness of
the merger and the share exchange to GLGs unaffiliated
stockholders, Man, Holdco and Merger Sub were not aware of any
firm offers during the prior two years by any person for the
merger or consolidation of GLG with another company, the sale or
transfer of all or substantially all of GLGs assets or a
purchase of GLGs assets that would enable the holder to
exercise control of GLG. Third party offers were therefore not
considered by Man, Holdco and Merger Sub in reaching their
conclusion as to fairness.
The foregoing discussion of the information and factors
considered and given weight by Man, Holdco and Merger Sub in
connection with the fairness of the merger and the share
exchange is not intended to be exhaustive, but is believed to
include all material factors considered by Man, Holdco and
Merger Sub. Man, Holdco and Merger Sub did not find it
practicable to assign, and did not assign, relative weights to
the individual factors considered in reaching its conclusion as
to the fairness of the merger and the share exchange. Rather,
their fairness determination was made after consideration of all
of the foregoing factors as a whole.
The
Principals
The Principals are making the statements included in this
section solely for the purposes of complying with the
requirements of
Rule 13e-3
and related rules under the Exchange Act. The views of the
Principals should not be construed as a recommendation to any
stockholder as to how that stockholder should vote on the
proposal to adopt the merger agreement and the merger.
59
While the Principals did not undertake an independent evaluation
of the merger or engage a financial advisor, in each case, for
the purpose of evaluating the fairness of the merger to GLG or
the GLG stockholders, the Individual Principals, in their
capacities as directors of GLG, participated in the
deliberations of the GLG Board regarding, and received advice
from the GLG Boards financial advisor as to the fairness
from a financial point of view to the holders (other than Man
and its affiliates) of shares of GLG common stock, FA Sub 2
exchangeable shares and convertible notes, of the Aggregate
Consideration to be paid pursuant to the share exchange
agreement and the merger agreement. The Principals adopted the
GLG Boards conclusion and analysis with respect to the
fairness of the merger and the share exchange, including the
factors discussed under Special Factors
Fairness of the Merger and Recommendations of the Special
Committee and the GLG Board The GLG Board, and
believe that the proposed merger and share exchange are
substantively and procedurally fair to GLGs stockholders
including the unaffiliated stockholders based on the factors
considered by the GLG Board, including the recommendation of the
special committee and the generally positive and favorable
factors, as well as the generally negative and unfavorable
factors, and the factors relating to procedural safeguards.
Financial
Analyses of the Financial Advisor to Man
Man retained Perella Weinberg to act as its lead financial
advisor in connection with the merger and the share exchange.
Man selected Perella Weinberg to act as its lead financial
advisor in connection with the merger and the share exchange
based on Perella Weinbergs qualifications, expertise and
reputation and its knowledge of the industries in which Man
conducts its business. Perella Weinberg, as part of its
investment banking business, is continually engaged in
performing financial analyses with respect to businesses and
their securities in connection with mergers and acquisitions,
leveraged buyouts and other transactions as well as for
corporate and other purposes.
On March 9, 2010, Perella Weinberg initially discussed
certain financial analyses with the Man Board. Perella Weinberg
then provided updates to the Man Board on April 26, 2010,
May 3, 2010 and May 13, 2010. References to the
March materials are to Perella Weinbergs
materials dated March 9, 2010. References to the
April analyses are to Perella Weinbergs
analyses presented to the Man Board on April 26, 2010 in
connection with the presentation made by the management of Man.
References to the May 3rd materials and
the May 13th materials are to Perella
Weinbergs materials dated May 3, 2010 and
May 13, 2010, respectively. References to the Man
board materials refer collectively to the March materials,
the April analyses, the May 3rd materials and the
May 13th materials. Copies of the March materials, the
May 3rd materials and the May 13th materials
are attached as exhibits to the
Schedule 13e-3,
will be made available for inspection and copying at the
principal executive offices of GLG during its regular business
hours by any interested holder of GLG common stock, and copies
may be obtained by requesting them in writing from GLG at the
address provided under the caption Where You Can Find More
Information below. The description of the analyses
performed by Perella Weinberg set forth below is qualified by
reference to the relevant Man board materials. The analyses
discussed are summarized below.
In preparing the Man board materials, Perella Weinberg, among
other things:
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reviewed certain publicly available financial statements and
other business and financial information with respect to Man and
GLG, including research analyst reports;
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reviewed certain publicly available financial forecasts relating
to Man and GLG;
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|
discussed the past and current business, operations, financial
condition and prospects of Man, including information relating
to certain strategic, financial and operational benefits
anticipated from the merger and the share exchange, with senior
executives of Man;
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reviewed the pro forma financial impact of, among other things,
the merger and the share exchange on the future financial
performance of Man, including the potential impact on Mans
estimated earnings per share and regulatory capital position;
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compared the financial performance of Man and GLG with that of
certain publicly-traded companies which it believed to be
generally relevant;
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reviewed the historical trading prices and trading activity for
shares of Man ordinary shares and GLG common stock, and compared
such price and trading activity of Man ordinary shares and
shares of GLG common stock with that of securities of certain
publicly-traded companies which it believed to be generally
relevant;
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reviewed drafts of the merger agreement and the share exchange
agreement; and
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60
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conducted such other financial studies, analyses and
investigations, and considered such other factors, as it deemed
appropriate.
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Perella Weinberg was not requested to, and did not, provide any
opinion as to the fairness of the merger and the share exchange
to Man or its shareholders, or to GLG or its stockholders. In
preparing the Man board materials, Perella Weinberg assumed and
relied upon, without independent verification, the accuracy and
completeness of the financial and other information reviewed by
or discussed with it and took into account the Man Boards
commercial assessment of the merger and the share exchange. In
preparing the Man board materials, Perella Weinberg did not make
any independent valuation or appraisal of the assets or
liabilities (including any contingent, derivative or
off-balance-sheet assets and liabilities) of Man or GLG, nor was
it furnished with such valuations or appraisals. The Man board
materials do not address Mans underlying business decision
to enter into the merger and the share exchange or the relative
merits of the merger and the share exchange as compared with any
other strategic alternatives which may be available to Man.
Perella Weinberg provided its analysis for the information and
assistance of Man in connection with, and for the purposes of,
its evaluation of the merger and the share exchange.
The Man board materials were not intended to be and do not
constitute a recommendation to any holder of Man ordinary shares
or holder of shares of GLG common stock as to how to vote or
otherwise act with respect to the merger and the share exchange
or any other matter and do not in any manner address the prices
at which shares of GLG common stock or Man ordinary shares will
trade at any time. The Man board materials were necessarily
based on financial, economic, market and other conditions as in
effect on, and the information made available to Perella
Weinberg as of, the date of the March materials, the April
analyses, the May
3rd
materials
and/or the
May 13th
materials, as applicable.
The following is a brief summary of the material financial
analyses performed by Perella Weinberg and reviewed by the Man
Board and does not purport to be a complete description of the
financial analyses performed by Perella Weinberg. The order of
analyses described below does not represent the relative
importance or weight given to those analyses by Perella
Weinberg. Some of the summaries of the financial analyses
include information presented in tabular format. In order to
fully understand Perella Weinbergs financial analyses, the
tables must be read together with the text of each summary. The
tables alone do not constitute a complete description of the
financial analyses. Considering the data below without
considering the full narrative description of the financial
analyses, including the methodologies and assumptions underlying
the analyses, could create a misleading or incomplete view of
Perella Weinbergs financial analyses. The public market
trading price targets published by brokers are estimates of
future prices, do not necessarily reflect current market trading
prices for Man ordinary shares or GLG common stock, as
applicable, and are subject to numerous uncertainties, including
the future financial performance of Man or GLG, as applicable,
and future financial market conditions.
March
Materials
On March 9, 2010, Perella Weinberg initially discussed the
following financial analyses with the Man Board.
Man
Broker Price Targets Statistics
Perella Weinberg reviewed and analyzed recent public market
trading price targets for Man ordinary shares prepared and
published by selected brokers during the period from
January 7, 2010 through March 1, 2010. These targets
reflect each brokers estimate of the future public market
trading price of Man ordinary shares and are not discounted to
reflect present values. The price targets of the selected
brokers ranged from 300 pence to 390 pence.
Selected
Publicly Traded Companies Analysis
Perella Weinberg reviewed and compared certain financial
information, ratios and public market multiples for Man and GLG
to corresponding financial information, ratios and public market
multiples for the following publicly traded companies in the
alternative asset management industry which, in the exercise of
its professional judgment and based on its knowledge of such
industry, Perella Weinberg determined to be the major publicly
traded alternative asset managers pursuing primarily liquid
strategies:
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Och-Ziff Capital Management Group LLC
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Ashmore Group plc
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BlueBay Asset Management plc
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61
Perella Weinberg calculated and compared financial information,
ratios and public market multiples of Man, GLG and each of the
selected companies based on the closing price per share as of
March 3, 2010, publicly available information and
information Perella Weinberg obtained from company disclosure
for historical information and public forecasts for forecasted
information.
With respect to Man, GLG and each of the selected companies,
Perella Weinberg reviewed, among other things:
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enterprise value (EV) as a multiple of EBITDA for
the year ended March 31, 2009 and estimated EBITDA for the
years ending March 31, 2010 and 2011;
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price per share as a multiple of earnings per share
(EPS) for the year ended March 31, 2009 and
estimated EPS for the years ending March 31, 2010 and
2011; and
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EV as a multiple of assets under management (AUM).
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Such multiples are summarized in the following table:
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EV-to-EBITDA
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Price-to-EPS
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Company
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EV
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AUM
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Mar-09 A
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Mar-10 E
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Mar-11 E
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Mar-09 A
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Mar-10 E
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Mar-11 E
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EV/AUM
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(Millions)
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(Billions)
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Man
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$
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4,333
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$
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42.4
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3.9x
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6.9x
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5.0x
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6.3x
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13.0x
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9.0x
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10.2
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%
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Och-Ziff Capital Management
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$
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5,611
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$
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23.5
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14.5x
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10.4x
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8.5x
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18.1x
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13.5x
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12.4x
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23.9
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%
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Ashmore Group plc
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$
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2,362
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$
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31.6
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9.3x
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9.1x
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7.7x
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14.2x
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14.0x
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12.1x
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7.5
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%
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BlueBay Asset Management plc
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$
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1,025
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$
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34.3
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12.2x
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8.6x
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6.7x
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21.7x
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14.4x
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11.5x
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3.0
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%
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GLG
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$
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1,285
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$
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22.2
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33.9x
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9.4x
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6.4x
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8.0x
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n/m
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12.9x
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5.8
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%
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Although the selected companies were used for comparison
purposes, no business of any selected company was either
identical or directly comparable to Mans business or
GLGs business.
Contribution
Analysis
Perella Weinberg analyzed the contribution of each of Man and
GLG to the pro forma combined company, not including any
synergies or other combination adjustments, with respect to each
companys AUM, market capitalization and EV and public
forecasts for each companys revenues, EBITDA and net
income for the years ending March 31, 2010, 2011 and 2012.
The analysis yielded the following results:
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Man
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GLG
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AUM
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66
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%
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34
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%
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Market capitalization
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88
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%
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12
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%
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EV
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77
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%
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23
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%
|
2010E Revenue
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79
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%
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|
|
21
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%
|
2011E Revenue
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77
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%
|
|
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23
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%
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2012E Revenue
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76
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%
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|
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24
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%
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2010E EBITDA
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|
98
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%
|
|
|
2
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%
|
2011E EBITDA
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89
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%
|
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|
11
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%
|
2012E EBITDA
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88
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%
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12
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%
|
2010E Net Income
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n/m*
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n/m*
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2011E Net Income
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91
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%
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9
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%
|
2012E Net Income
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88
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%
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12
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%
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* |
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The net income forecast used for GLG for this time period was
negative. |
Pro Forma
Accretion/Dilution Analysis
Perella Weinberg reviewed the potential pro forma financial
effects of a 50% cash/50% equity transaction at no premium to
GLGs then-current share price, without taking into account
any potential synergies and assuming (i) GLGs
warrants were acquired for cash and (ii) annual pre-tax
lost interest from Mans on-balance sheet cash at a rate of
2%. Estimated financial data for Man and GLG were based on
public forecasts. This analysis indicated that
62
such a transaction could be 1.5% and 4.7% accretive to
Mans shareholders for the years ending March 31, 2011
and 2012, respectively.
Perella Weinberg also performed a sensitivities analysis on the
accretion/dilution analysis assuming the transaction
consideration was at a premium of (10%) to 50% to the GLG common
stock price and the equity portion of the consideration was 0%
to 100%, which resulted in:
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a range from 12.3% dilution assuming a 50% premium and 100%
equity consideration to 7.9% accretion assuming a (10%) premium
and 0% equity consideration for the year ending March 31,
2011; and
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a range from 9.8% dilution assuming a 50% premium and 100%
equity consideration to 11.4% accretion assuming a (10%) premium
and 0% equity consideration for the year ending March 31,
2012.
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The actual results achieved by the combined company may vary
from projected results and the variations may be material.
Other
Analyses
Perella Weinberg also reviewed and considered other factors,
including the relationship between movements in the prices of
Man ordinary shares and GLG common stock during the one-year
period ended March 3, 2010, including the daily ratio of
the closing price of Man ordinary shares to the closing price of
GLG common stock during such period.
April
Analyses
On April 26, 2010, in connection with a presentation made
by the management of Man to the Man Board, Perella Weinberg
presented new analyses relating to historical stock trading of
GLG, public market trading price targets of GLG, discounted cash
flow and potential synergies. Additionally, Perella Weinberg
updated portions of its financial analyses from the March
materials relating to the selected publicly traded companies and
pro forma accretion/dilution analyses, as described more fully
below. Perella Weinberg did not otherwise update the March
materials.
Historical
Stock Trading Analysis
Perella Weinberg noted that the 52-week trading range, as of
April 22, 2010, of GLG common stock was $2.28 to $4.52, the
one-week trading range for the week ended March 25, 2010
(the unaffected stock price date) was $2.68 to $2.81 and the
one-week trading range for the week ended April 22, 2010
was $3.14 to $3.39.
GLG
Broker Price Target Statistics
Perella Weinberg reviewed and analyzed recent public market
trading price targets for GLG common stock prepared and
published by selected brokers as of April 22, 2010. These
targets reflect each brokers estimate of the future public
market trading price of GLG common stock and are not discounted
to reflect present values. Perella Weinberg noted that the
undiscounted broker price target for shares of GLG common stock
from the core broker, Barclays Capital, was $3.00 and the range
of undiscounted broker price targets for shares of GLG common
stock was $3.00 to $4.00.
Selected
Publicly Traded Companies Analysis
Perella Weinberg updated the portion of its selected public
traded companies analysis from the March materials relating to
price per share as a multiple of estimated EPS for the year
ending March 31, 2011 based on market data as of
April 22, 2010, which yielded a range of 11.3x to 15.6x and
applied such multiples to the corresponding data of GLG which
resulted in an implied price per share of $2.39 to $3.30.
Discounted
Cash Flow Analysis
Perella Weinberg performed an illustrative discounted cash flow
analysis on GLG to calculate the estimated present value as of
April 22, 2010 of the estimated standalone cash flows to
equity holders, based on public
63
forecasts. Perella Weinberg discounted these cash flows at a
12.0% cost of equity based on its estimates of the appropriate
equity market premium, equity market beta and risk free rate.
Perella Weinberg used (i) an equity market premium equal to
the expected market return for the United States less the risk
free rate for the United States (both as obtained from
Bloomberg); (ii) an equity market beta equal to the average
of the equity market betas for Och-Ziff Capital Management Group
LLC, Ashmore Group plc, BlueBay Asset Management plc, Man and
GLG (each as obtained from Bloomberg); and (iii) a risk
free rate equal to the risk free rate for the United States (as
obtained from Bloomberg). A perpetuity growth rate of 2% was
used, which was in line with the then-current growth rate in the
United States consumer price index. Perella Weinberg chose these
rates based on its experience working with corporations on
various merger and acquisition transactions. This analysis
indicated a reference range of implied price per share of GLG
common stock of approximately $3.56 to $6.51.
Pro Forma
Accretion/Dilution Analysis
Perella Weinberg updated its accretion/dilution analysis from
the March materials, using Mans share price of £2.59
(as of April 23, 2010), the GLG common stock price of $2.68
(as of March 25, 2010, the unaffected stock price date) and
a GBP/USD exchange rate of 1.54 (as of April 23,
2010) and assuming $50 million in annual run-rate
synergies (assuming $25 million phased-in in
2011) without including the effects of implementation
costs. The analysis was performed under two scenarios:
1. the Selling Stockholders receiving equity consideration
at no premium and the other GLG stockholders receiving cash at a
premium of (10%) to 60% to the GLG common stock price with full
run-rate synergies of $0 to $50 million, which resulted in:
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|
|
|
|
a range from 3.0% accretion assuming a 60% premium and $0 in
synergies to 7.4% accretion assuming a (10%) premium and
$50 million in synergies for the year ending March 31,
2011; and
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|
|
a range from 5.6% accretion assuming a 60% premium and $0 in
synergies to 11.2% accretion assuming a (10%) premium and
$50 million in synergies for the year ending March 31,
2012; and
|
2. the Selling Stockholders receiving equity consideration
at a premium of (10%) to 50% and the other GLG stockholders
receiving cash at a premium of (10%) to 60%, which resulted in:
|
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|
|
|
a range from 3.2% accretion assuming a 50% premium for the
Selling Stockholders and a 60% premium for the other GLG
stockholders to 8.0% accretion assuming a (10%) premium for both
the Selling Stockholders and the other GLG stockholders for the
year ending March 31, 2011; and
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|
a range from 7.1% accretion assuming a 50% premium for the
Selling Stockholders and a 60% premium for the other GLG
stockholders to 11.9% accretion assuming a (10%) premium for
both the Selling Stockholders and the other GLG stockholders for
the year ending March 31, 2012.
|
The actual results achieved by the combined company may vary
from projected results and the variations may be material.
Synergies
Analysis
Perella Weinberg calculated the capitalized value of synergies
(after tax at a rate of 28%, the current UK marginal corporate
tax rate at such time) that might be achieved by Man in the
merger and the share exchange on both a total and on a per
ordinary share of Man basis assuming the Selling Stockholders
receive equity consideration at no premium, full run-rate
synergies of $0 to $50 million and synergies multiples ranging
from 10.0x to 14.0x, which resulted in total capitalized
synergies ranging from $0 to $504 million and per ordinary
share capitalized synergies ranging from $0 to $1.57 per share.
May
3rd
Materials
On May 3, 2010, Perella Weinberg discussed certain
financial analyses with the Man Board. Perella Weinberg
discussed a new analysis of various blended offer prices and
updated portions of its financial analyses from the March
materials and April analyses, as applicable, relating to the
selected publicly traded companies, pro forma
64
accretion/dilution and synergies analyses, as described more
fully below. Perella Weinberg did not otherwise update the March
materials or the April analyses.
Selected
Publicly Traded Companies Analysis
Perella Weinberg updated its selected publicly traded companies
analysis from the March materials and the April analyses to
reflect financial information as of April 30, 2010 and also
included the following additional new multiples with respect to
Man, GLG and each of the selected companies in the alternative
asset management industry:
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EV as a multiple of estimated EBITDA for the year ending
March 31, 2012; and
|
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|
|
price per share as a multiple of estimated EPS for the year
ending March 31, 2012.
|
Such updated and new multiples are summarized in the following
table:
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EV-to-EBITDA
|
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Price-to-EPS
|
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Company
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EV
|
|
AUM
|
|
Mar-09A
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Mar-10E
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Mar-11E
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Mar-12 E
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Mar-09 A
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Mar-10 E
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Mar-11 E
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Mar-12 E
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EV/AUM
|
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(Millions)
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|
(Billions)
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Man
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$
|
4,556
|
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|
$
|
39.1
|
|
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4.1
|
x
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8.6
|
x
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6.8
|
x
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5.0
|
x
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6.5
|
x
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14.2
|
x
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11.3
|
x
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8.0
|
x
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11.7
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%
|
Och-Ziff Capital
|
|
$
|
6,838
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|
$
|
25.3
|
|
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17.7
|
x
|
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12.7
|
x
|
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10.4
|
x
|
|
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8.6
|
x
|
|
|
18.8
|
x
|
|
|
12.4
|
x
|
|
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10.9
|
x
|
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|
n.a
|
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27.0
|
%
|
Management Group LLC
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Ashmore Group plc
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$
|
2,625
|
|
|
$
|
33.0
|
|
|
|
9.8
|
x
|
|
|
9.5
|
x
|
|
|
8.3
|
x
|
|
|
7.1
|
x
|
|
|
14.3
|
x
|
|
|
14.1
|
x
|
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|
12.3
|
x
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|
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10.8
|
x
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|
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8.0
|
%
|
BlueBay Asset
|
|
$
|
1,041
|
|
|
$
|
37.0
|
|
|
|
13.3
|
x
|
|
|
9.2
|
x
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|
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7.6
|
x
|
|
|
n.a
|
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|
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20.9
|
x
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|
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13.7
|
x
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11.0
|
x
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10.1
|
x
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2.8
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%
|
Management plc
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GLG
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$
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1,449
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$
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22.2
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10.3
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x
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n/m
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13.2
|
x
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9.2
|
x
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9.6
|
x
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n/m
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15.5
|
x
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9.4
|
x
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|
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6.5
|
%
|
In addition, Perella Weinberg noted the maximum, mean, median
and minimum of such multiples and ratios which are summarized in
the following table:
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|
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|
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|
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|
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EV-to-EBITDA
|
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Price-to-EPS
|
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Mar-09A
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Mar-10E
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Mar-11E
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Mar-12 E
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Mar-09 A
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Mar-10 E
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Mar-11 E
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Mar-12 E
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EV/AUM
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Maximum
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17.7
|
x
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12.7
|
x
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13.2
|
x
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9.2
|
x
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20.9
|
x
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14.2
|
x
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15.5
|
x
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10.8
|
x
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27.0
|
%
|
Mean
|
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11.0
|
x
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10.0
|
x
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9.2
|
x
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7.5
|
x
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14.0
|
x
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13.6
|
x
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12.2
|
x
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9.6
|
x
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11.2
|
%
|
Median
|
|
|
10.3
|
x
|
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9.4
|
x
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|
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8.3
|
x
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7.9
|
x
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|
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14.3
|
x
|
|
|
13.9
|
x
|
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|
11.3
|
x
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9.8
|
x
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|
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8.0
|
%
|
Minimum
|
|
|
4.1
|
x
|
|
|
8.6
|
x
|
|
|
6.8
|
x
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|
5.0
|
x
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|
6.5
|
x
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12.4
|
x
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|
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10.9
|
x
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8.0
|
x
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|
2.8
|
%
|
Perella Weinberg also reviewed and compared financial
information, ratios and public market multiples for the
following publicly traded companies in the traditional asset
management industry which, in the exercise of its professional
judgment and based on its knowledge of such industry, Perella
Weinberg determined to be the major stand-alone European-focused
long-only asset managers:
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Invesco Ltd.
|
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Schroders PLC
|
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Aberdeen Asset Management PLC
|
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|
Henderson Group plc
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|
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|
Gartmore Group Limited
|
|
|
|
F&C Asset Management PLC
|
With respect to each of the selected traditional asset
management industry companies, Perella Weinberg reviewed, among
other things:
|
|
|
|
|
EV as a multiple of estimated EBITDA for the years ending
December 31, 2010, 2011 and 2012;
|
|
|
|
price per share as a multiple of estimated EPS for the years
ending December 31, 2010, 2011 and 2012; and
|
65
|
|
|
|
|
EV as a multiple of AUM.
|
Such multiples and their means are summarized in the following
table:
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EV-to-EBITDA
|
|
Price-to-EPS
|
|
|
Company
|
|
EV
|
|
AUM
|
|
Dec-10 E
|
|
Dec-11 E
|
|
Dec-12 E
|
|
Dec-10 E
|
|
Dec-11 E
|
|
Dec-12 E
|
|
EV/AUM
|
|
|
(Millions)
|
|
(Billions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Invesco Ltd.
|
|
£
|
6,712
|
|
|
£
|
338
|
|
|
|
7.9
|
x
|
|
|
5.5
|
x
|
|
|
5.5
|
x
|
|
|
18.1
|
x
|
|
|
14.3
|
x
|
|
|
12.8
|
x
|
|
|
2.0
|
%
|
Schroders PLC
|
|
£
|
2,566
|
|
|
£
|
148
|
|
|
|
8.8
|
x
|
|
|
7.1
|
x
|
|
|
6.4
|
x
|
|
|
17.4
|
x
|
|
|
14.2
|
x
|
|
|
12.2
|
x
|
|
|
1.7
|
%
|
Aberdeen Asset
|
|
£
|
1,734
|
|
|
£
|
161
|
|
|
|
9.0
|
x
|
|
|
7.6
|
x
|
|
|
6.7
|
x
|
|
|
12.3
|
x
|
|
|
10.6
|
x
|
|
|
9.3
|
x
|
|
|
1.1
|
%
|
Management PLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henderson Group plc
|
|
£
|
1,285
|
|
|
£
|
58
|
|
|
|
11.8
|
x
|
|
|
10.3
|
x
|
|
|
9.3
|
x
|
|
|
15.4
|
x
|
|
|
13.3
|
x
|
|
|
11.6
|
x
|
|
|
2.2
|
%
|
Gartmore Group Limited
|
|
£
|
655
|
|
|
£
|
22
|
|
|
|
7.4
|
x
|
|
|
6.5
|
x
|
|
|
5.7
|
x
|
|
|
7.5
|
x
|
|
|
6.2
|
x
|
|
|
5.5
|
x
|
|
|
2.9
|
%
|
F&C Asset
|
|
£
|
446
|
|
|
£
|
106
|
|
|
|
6.1
|
x
|
|
|
5.5
|
x
|
|
|
5.7
|
x
|
|
|
9.6
|
x
|
|
|
7.9
|
x
|
|
|
7.2
|
x
|
|
|
0.4
|
%
|
Management PLC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mean
|
|
|
|
|
|
|
|
|
|
|
8.5
|
x
|
|
|
7.1
|
x
|
|
|
6.5
|
x
|
|
|
13.4
|
x
|
|
|
11.1
|
x
|
|
|
9.8
|
x
|
|
|
1.7
|
%
|
As previously noted, although the selected companies were used
for comparison purposes, no business of any selected company was
either identical or directly comparable to Mans business
or GLGs business.
Pro Forma
Accretion/Dilution Analysis
Perella Weinberg updated its accretion/dilution analysis from
the April analyses based on data as of April 30, 2010. This
analysis was performed under three different scenarios:
1. equity consideration of $3.60 per share for the Selling
Stockholders and cash consideration of $4.02 per share for the
other GLG shareholders, which resulted in a blended offer price
of $3.86 and accretion of 5.02% and 9.05% for the years ending
March 31, 2011 and 2012, respectively;
2. equity consideration of $3.50 per share for the Selling
Stockholders and cash consideration of $4.50 per share for the
other GLG shareholders, which resulted in a blended offer price
of $4.14 and accretion of 4.99% and 9.11% for the years ending
March 31, 2011 and 2012, respectively; and
3. equity consideration of $3.75 per share for the Selling
Stockholders and cash consideration of $4.50 per share for the
other GLG shareholders, which resulted in a blended offer price
of $4.22 and accretion of 4.38% and 8.47% for the years ending
March 31, 2011 and 2012, respectively.
The actual results achieved by the combined company may vary
from projected results and the variations may be material.
Synergies
Analysis
Perella Weinberg updated its synergies analysis from the April
analyses to include an illustrative analysis of full run-rate
synergies of up to $100 million, which resulted in total
capitalized synergies ranging from $0 to $1,008 million and
per share capitalized synergies ranging from $0 to $2.59 per Man
ordinary share. This analysis was for illustrative purposes only
and did not represent Perella Weinbergs or anyone
elses view of what synergies could be obtained in
connection with the merger and the share exchange.
Analysis
at Various Blended Offer Prices (AVP
analysis)
Perella Weinberg also performed an AVP analysis, which produces
the multiples that would result from a range of offer prices,
based on the number of shares of GLG common stock outstanding on
April 30, 2010, the impact of GLGs convertible notes
and a blended offer price ranging from $3.24 to $5.00 per share
of GLG common stock, which resulted in:
|
|
|
|
|
price to estimated EPS multiples (excluding synergies) of 15.4x
to 23.3x for the year ending March 31, 2011 and 9.8x to
14.9x for the year ending March 31, 2012; and
|
66
|
|
|
|
|
price to estimated EPS multiples (including $25 million in
pre-tax synergies in 2011 and $50 million in pre-tax
synergies in 2012) of 12.4x to 18.7x for the year ending
March 31, 2011 and 7.5x to 11.3x for the year ending
March 31, 2012.
|
May
13th Materials
On May 13, 2010, Perella Weinberg discussed certain
financial analyses with the Man Board. Perella Weinberg updated
portions of its financial analyses from the May
3rd
materials relating to the pro forma accretion/dilution and
synergies analyses, as described more fully below. Perella
Weinberg did not otherwise update the May
3rd
materials.
Pro Forma
Accretion/Dilution Analysis
Perella Weinberg updated its accretion/dilution analysis from
the May
3rd
materials based on data as of May 12, 2010. This analysis
was performed under three different scenarios:
1. equity consideration of $3.25 per share for the Selling
Stockholders and cash consideration of $4.25 per share for the
other GLG shareholders, which resulted in a blended offer price
of $3.85 and accretion of 8.62% and 11.26% for the years ending
March 31, 2011 and 2012, respectively;
2. equity consideration of $3.50 per share for the Selling
Stockholders and cash consideration of $4.50 per share for the
other GLG shareholders, which resulted in a blended offer price
of $4.10 and accretion of 7.80% and 10.51% for the years ending
March 31, 2011 and 2012, respectively; and
3. equity consideration of $3.75 per share for the Selling
Stockholders and cash consideration of $4.50 per share for the
other GLG shareholders, which resulted in a blended offer price
of $4.20 and accretion of 7.14% and 9.88% for the years ending
March 31, 2011 and 2012, respectively.
The actual results achieved by the combined company may vary
from projected results and the variations may be material.
Synergies
Analysis
Perella Weinberg updated its synergies analysis from the May
3rd
materials to include synergies multiples ranging from 9.0x to
11.0x, which resulted in total capitalized synergies ranging
from $0 to $792 million and per share capitalized synergies
ranging from $0 to $2.10 per ordinary share.
Miscellaneous
The preceding discussion is a summary of the material financial
analyses furnished by Perella Weinberg to the Man Board, but it
does not purport to be a complete description of the analyses
performed by Perella Weinberg or of its presentations to the Man
Board. The preparation of financial analyses is a complex
process and is not necessarily susceptible to partial analysis
or summary description. Selecting portions of the analyses or of
the summary set forth herein, without considering the analyses
or the summary as a whole, could create an incomplete view of
the processes underlying Perella Weinbergs financial
analyses. No company or transaction used in the analyses
described herein as a comparison is directly comparable to Man,
GLG or the merger and the share exchange.
Perella Weinberg prepared the analyses described herein solely
for purposes of analyzing the merger and the share exchange and
they were provided to the Man Board in that connection. These
analyses do not purport to be appraisals or a fairness opinion
nor do they necessarily reflect the prices at which businesses
or securities actually may be sold. Perella Weinbergs
analyses were based in part upon public forecasts, which are not
necessarily indicative of actual future results, and which may
be significantly more or less favorable than suggested by
Perella Weinbergs analyses. Because these analyses are
inherently subject to uncertainty, being based upon numerous
factors or events beyond the control of the parties to the
merger agreement and the exchange agreement or their respective
advisors, none of Man, Perella Weinberg or any other person
assumes responsibility if future results are materially
different from those forecasted.
67
As described above, the financial analyses provided by Perella
Weinberg to the Man Board were one of many factors taken into
consideration by the Man Board in making its determination to
approve the merger and the share exchange. Perella Weinberg was
not asked to, and did not, recommend the specific merger
consideration provided for in the merger or the specific
exchange ratio provided for in the share exchange, which merger
consideration and exchange ratio were determined through
negotiations between Man, on the one hand, and the special
committee and the Principals, on the other hand.
Man has agreed to pay Perella Weinberg a fee of
(i) $2 million payable on the date that Man announced
the merger and the share exchange and (ii) $8 million
payable promptly upon the closing of the merger and the share
exchange. In addition, Man agreed to reimburse Perella Weinberg
for its reasonable expenses, including attorneys fees and
disbursements and to indemnify Perella Weinberg and related
persons against various liabilities. Prior to the engagement of
Perella Weinberg with respect to the GLG transaction, Man has
engaged Perella Weinberg to provide financial advisory services
with respect to its acquisition strategy, as well as for
corporate and other purposes, from time to time.
In the ordinary course of its business activities, Perella
Weinberg or its affiliates may at any time hold long or short
positions, and may trade or otherwise effect transactions, for
its own account or the accounts of customers, in debt or equity
or other securities (or related derivative securities) or
financial instruments (including bank loans or other
obligations) of Man or GLG or any of their respective
affiliates. Perella Weinberg and its affiliates have in the past
provided, currently are providing, and in the future may
provide, investment banking and other financial services to Man
and GLG and their respective affiliates for which they have
received, or would expect to receive, compensation, including
£75,000 in November 2008 with respect to analysis and
advisory services provided to Man regarding its strategic
alternatives. Perella Weinberg also advised GLG with respect to
its reverse acquisition transaction with Freedom Acquisition
Holdings, Inc. in 2007. In addition, one of the founding
partners of Perella Weinberg served on the board of GLG from
November 2007 until May 2009.
Plans for
GLG After the Merger
If the merger is completed, Merger Sub will be merged with and
into GLG and GLG will continue as the surviving corporation.
Following such completion, it is currently expected that the
operations of GLG will be conducted substantially as they
currently are being conducted, except that: (i) GLG will
cease to have publicly traded equity securities and will instead
be a wholly owned subsidiary of Holdco and, indirectly, a wholly
owned subsidiary of Man; (ii) certain functions of GLG and
Man will be integrated following the completion of the merger,
including, without limitation, compliance and risk management,
operations, as well as product structuring, client services,
distribution and relationship management; and (iii) it may
be necessary to repay in full certain indebtedness of GLG in
connection with the closing of the merger and the share exchange.
On completion of the merger or shortly thereafter, Holdco
expects to transfer 100% of the equity in the surviving
corporation to Man.
Except as otherwise described in this proxy statement, Man has
informed us that it has no current plans or proposals and is
engaged in no negotiations that relate to or would result in: an
extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving GLG or any of its
subsidiaries; a purchase, sale or transfer of a material amount
of assets of GLG or any of its subsidiaries; a material change
in GLGs present dividend rate or policy, indebtedness or
capitalization; a change in the composition of the board of
directors or management of GLG; or any other material change in
GLGs corporate structure or business. Man may initiate
from time to time reviews of GLGs assets, corporate
structure, capitalization, operations, properties, management
and personnel to determine what changes, if any, would be
desirable following the consummation of the merger. Man
expressly reserves the right to make any changes it deems
appropriate in light of such evaluation and review or in light
of future developments.
Man announced on August 24, 2010 that Luke Ellis,
non-executive chairman of GLGs Multi-Manager business and
manager of the GLG Multi-Strategy Fund, will assume the role of
Head of Mans Multi-Manager business when the proposed
acquisition either closes or terminates.
68
Financing
of the Merger
Mans obligations to complete the merger are not
conditioned upon its ability to obtain financing for the merger.
Man estimates that the total amount of cash funds necessary to
complete the proposed merger and related transactions is
approximately $1 billion. The cash consideration payable to
GLGs stockholders pursuant to the terms of the merger
agreement, together with fees and expenses associated with the
merger and related transactions, will be funded from Mans
existing cash resources. Based on the exchange ratio on the date
of signing and announcement of the merger agreement and share
exchange agreement, Man will issue to the Selling Stockholders
approximately 163 million ordinary shares in aggregate
(representing approximately 9 percent of the fully diluted
share capital of Man as enlarged by the merger and share
exchange). The number of Man ordinary shares to be issued in
connection with the share exchange stated in this proxy
statement has been determined by applying the exchange ratio of
1.0856 ordinary shares of Man per share of GLG common stock
exchanged by the Selling Stockholders. The number of Man
ordinary shares to be issued at the closing of the share
exchange may be lower than that stated in this proxy statement.
This is a result of the fact that the Selling Stockholders will
receive an amount of Man ordinary shares for each of their
shares of GLG common stock subject to the share exchange by
applying the exchange ratio determined at closing of the share
exchange. In the event that the implied value of a share of GLG
common stock subject to the share exchange would exceed $4.25
under the share exchange (applying the exchange ratio of 1.0856)
at closing of the share exchange, the number of Man ordinary
shares issued in respect of each share of GLG common stock
subject to the share exchange will be reduced to maintain a
maximum implied value of $4.25 per share of GLG common stock
subject to the share exchange at closing.
Certain
Forward-Looking Financial Information
GLG does not, as a matter of course, publicly disclose financial
projections as to future financial performance, earnings or
other results and is especially cautious of making financial
forecasts for extended periods because of the unpredictability
of the underlying assumptions and estimates. However, our
management does regularly provide to the GLG Board revenue and
expense forecasts using sensitivity analyses applying various
gross performance and net performance scenarios and assuming
certain AUM growth rates and compensation expense to revenue
ratios.
The inclusion of the information described below under
Sensitivity Analyses and Projections
should not be regarded as an indication that the GLG Board, the
special committee, their respective advisors or any other person
considered, or now considers, such sensitivity analyses or
projections to be material or to be a reliable prediction of
actual future results. Our managements internal financial
analyses are subjective in many respects. There can be no
assurance that these scenarios will be realized or that actual
results will not be significantly higher or lower than shown. As
a result, the inclusion of the sensitivity analyses or
projections in this proxy statement should not be relied on as
necessarily predictive of actual future events.
In addition, the sensitivity analyses were prepared solely for
internal use in assessing strategic direction and other
management decisions and not with a view toward public
disclosure or toward complying with generally accepted
accounting principles, which we refer to as GAAP, the published
guidelines of the SEC regarding projections and the use of
non-GAAP measures or the guidelines established by the American
Institute of Certified Public Accountants for preparation and
presentation of prospective financial information.
The sensitivity analyses and projections included below are the
responsibility of our management. Neither our independent
registered public accounting firm, nor any other independent
registered public accounting firm, has compiled, examined or
performed any procedures with respect to the financial
information contained herein, nor expressed any opinion or any
other form of assurance on such information or its
achievability. The report of the independent registered public
accounting firm, which is incorporated by reference in this
proxy statement, relates to GLGs historical financial
information. It does not extend to the sensitivity analyses or
projections described below and should not be read to do so.
These sensitivity analyses and projections were based on
numerous variables and assumptions that are inherently uncertain
and may be beyond the control of GLG. Important factors that may
affect actual results and cause these financial scenarios to not
be achieved include, but are not limited to, risks and
uncertainties relating to
69
GLGs business (including with respect to inflows,
performance, compensation rates and fee rates over the
applicable periods), industry performance, general business and
economic conditions and other factors described under
Special Note Regarding Forward-Looking Statements.
In addition, the sensitivity analyses and projections do not
reflect revised prospects for GLGs business, changes in
general business or economic conditions, or any other
transaction or event that has occurred or that may occur and
that was not anticipated at the time the sensitivity analyses
and projections were prepared. Accordingly, there can be no
assurance that these scenarios will be realized or that
GLGs future financial results will not materially vary
from these scenarios.
No one has made or makes any representation to any stockholder
or anyone else regarding the information included in the
sensitivity analyses and projections set forth below. Readers of
this proxy statement are cautioned not to rely on this
forward-looking financial information. We have not updated and
do not intend to update, or otherwise revise the sensitivity
analyses or projections to reflect circumstances existing after
the date when made or to reflect the occurrence of future
events, even in the event that any or all of the assumptions are
shown to be in error. GLG has made no representation to Man,
Merger Sub or any other person in the merger agreement or
otherwise, concerning these sensitivity analyses or projections.
The sensitivity analyses and projections may be forward-looking
statements. For information on factors that may cause GLGs
future financial results to materially vary, see Special
Note Regarding Forward-Looking Statements.
Sensitivity
Analyses
The following is a summary of the 2010 sensitivity analyses
prepared by GLGs management and initially presented to the
GLG board on February 8, 2010 as part of a regularly
prepared package of board materials independent of any potential
transaction. These sensitivity analyses are for four gross
performance and net performance scenarios, in each case assuming
either 10% or 20% AUM growth and a 55% compensation expense to
revenue ratio.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM Growth
|
|
|
10%
|
|
20%
|
SCENARIO
|
|
1
|
|
2
|
|
3
|
|
4
|
|
1
|
|
2
|
|
3
|
|
4
|
|
|
($ in millions)
|
|
Gross Performance
|
|
|
20
|
%
|
|
|
15
|
%
|
|
|
10
|
%
|
|
|
0
|
%
|
|
|
20
|
%
|
|
|
15
|
%
|
|
|
10
|
%
|
|
|
0
|
%
|
Net Performance
|
|
|
17
|
%
|
|
|
13
|
%
|
|
|
8
|
%
|
|
|
(1
|
)%
|
|
|
18
|
%
|
|
|
13
|
%
|
|
|
8
|
%
|
|
|
(1
|
)%
|
Opening Net AUM
|
|
$
|
22,284
|
|
|
$
|
22,284
|
|
|
$
|
22,284
|
|
|
$
|
22,284
|
|
|
$
|
22,284
|
|
|
$
|
22,284
|
|
|
$
|
22,284
|
|
|
$
|
22,284
|
|
Net Inflows
|
|
|
1,801
|
|
|
|
1,759
|
|
|
|
1,717
|
|
|
|
1,627
|
|
|
|
3,821
|
|
|
|
3,736
|
|
|
|
3,647
|
|
|
|
3,467
|
|
Net Performance
|
|
|
3,832
|
|
|
|
2,815
|
|
|
|
1,790
|
|
|
|
(280
|
)
|
|
|
3,986
|
|
|
|
2,926
|
|
|
|
1,860
|
|
|
|
(292
|
)
|
Closing Net AUM
|
|
|
27,917
|
|
|
|
26,858
|
|
|
|
25,791
|
|
|
|
23,631
|
|
|
|
30,091
|
|
|
|
28,946
|
|
|
|
27,791
|
|
|
|
25,459
|
|
Average Net AUM
|
|
|
24,931
|
|
|
|
24,437
|
|
|
|
23,932
|
|
|
|
22,893
|
|
|
|
25,849
|
|
|
|
25,328
|
|
|
|
24,798
|
|
|
|
23,704
|
|
EBITDA
|
|
$
|
95.8
|
|
|
$
|
68.5
|
|
|
$
|
43.8
|
|
|
$
|
2.4
|
|
|
$
|
106.3
|
|
|
$
|
77.4
|
|
|
$
|
50.7
|
|
|
$
|
6.1
|
|
Non-GAAP Adjusted Net Income
|
|
|
59.5
|
|
|
|
38.4
|
|
|
|
19.4
|
|
|
|
(12.5
|
)
|
|
|
67.6
|
|
|
|
45.3
|
|
|
|
24.7
|
|
|
|
(9.6
|
)
|
Adjusted Non-GAAP Adjusted Net Income
|
|
|
70.9
|
|
|
|
49.8
|
|
|
|
30.8
|
|
|
|
(12.5
|
)
|
|
|
79
|
|
|
|
56.7
|
|
|
|
36.2
|
|
|
|
(9.6
|
)
|
Adjusted EPS
|
|
|
0.19
|
|
|
|
0.13
|
|
|
|
0.08
|
|
|
|
(0.04
|
)
|
|
|
0.21
|
|
|
|
0.15
|
|
|
|
0.1
|
|
|
|
(0.03
|
)
|
Key Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management & Administration Fee Yield
|
|
|
0.86
|
%
|
|
|
0.86
|
%
|
|
|
0.86
|
%
|
|
|
0.87
|
%
|
|
|
0.86
|
%
|
|
|
0.86
|
%
|
|
|
0.86
|
%
|
|
|
0.87
|
%
|
Compensation Ratio
|
|
|
55
|
%
|
|
|
55
|
%
|
|
|
55
|
%
|
|
|
55
|
%
|
|
|
55
|
%
|
|
|
55
|
%
|
|
|
55
|
%
|
|
|
55
|
%
|
70
GLGs management provided to the GLG Board a 2010 summary
that was derived from a base case scenario. The
base case scenario expanded scenario #2 in the
table above, assuming 20% AUM growth and 55% compensation
expenses to revenue ratio, into quarterly amounts for 2010, as
set forth below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY
|
|
|
($ in millions)
|
|
Opening AUM
|
|
$
|
22,284
|
|
|
$
|
23,535
|
|
|
$
|
25,201
|
|
|
$
|
26,962
|
|
|
$
|
22,284
|
|
Net Inflows
|
|
|
596
|
|
|
|
962
|
|
|
|
1,007
|
|
|
|
1,171
|
|
|
|
3,736
|
|
Net Performance
|
|
|
655
|
|
|
|
704
|
|
|
|
755
|
|
|
|
812
|
|
|
|
2,926
|
|
FX
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Closing Net AUM
|
|
|
23,535
|
|
|
|
25,201
|
|
|
|
26,962
|
|
|
|
28,945
|
|
|
|
28,946
|
|
Average Net AUM
|
|
|
22,910
|
|
|
|
24,368
|
|
|
|
26,082
|
|
|
|
27,954
|
|
|
|
25,328
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY
|
|
|
($ in thousands)
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management & Administration Fees
|
|
$
|
49,147
|
|
|
$
|
52,546
|
|
|
$
|
56,025
|
|
|
$
|
59,829
|
|
|
$
|
217,547
|
|
Performance Fees
|
|
|
2,000
|
|
|
|
71,526
|
|
|
|
2,000
|
|
|
|
100,642
|
|
|
|
176,168
|
|
Other Revenues
|
|
|
750
|
|
|
|
1,000
|
|
|
|
1,000
|
|
|
|
1,000
|
|
|
|
3,750
|
|
Total Revenues
|
|
|
51,897
|
|
|
|
125,072
|
|
|
|
59,025
|
|
|
|
161,471
|
|
|
|
397,465
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation(1)
|
|
|
(33,737
|
)
|
|
|
(65,411
|
)
|
|
|
(38,308
|
)
|
|
|
(81,149
|
)
|
|
|
(218,606
|
)
|
G&A
|
|
|
(25,261
|
)
|
|
|
(25,444
|
)
|
|
|
(25,354
|
)
|
|
|
(25,357
|
)
|
|
|
(101,416
|
)
|
Total Expenses
|
|
|
(58,998
|
)
|
|
|
(90,855
|
)
|
|
|
(63,662
|
)
|
|
|
(106,506
|
)
|
|
|
(320,022
|
)
|
EBITDA
|
|
|
(7,101
|
)
|
|
|
34,217
|
|
|
|
(4,637
|
)
|
|
|
54,965
|
|
|
|
77,443
|
|
Depreciation
|
|
|
(1,125
|
)
|
|
|
(1,125
|
)
|
|
|
(1,125
|
)
|
|
|
(1,125
|
)
|
|
|
(4,500
|
)
|
Net Interest Expense
|
|
|
(3,486
|
)
|
|
|
(3,502
|
)
|
|
|
(3,539
|
)
|
|
|
(3,555
|
)
|
|
|
(14,082
|
)
|
Profit before tax
|
|
|
(11,712
|
)
|
|
|
29,590
|
|
|
|
(9,301
|
)
|
|
|
50,285
|
|
|
|
58,861
|
|
Effective taxes
|
|
|
1,523
|
|
|
|
(6,806
|
)
|
|
|
1,209
|
|
|
|
(9,463
|
)
|
|
|
(13,537
|
)
|
Non-GAAP Adjusted Net Income
|
|
|
(10,189
|
)
|
|
|
22,784
|
|
|
|
(8,092
|
)
|
|
|
40,822
|
|
|
|
45,324
|
|
Convertible Debt finance charge
|
|
|
|
|
|
|
2,856
|
|
|
|
|
|
|
|
2,856
|
|
|
|
11,425
|
|
Adjusted Non-GAAP Adjusted Net
|
|
|
(10,189
|
)
|
|
|
25,640
|
|
|
|
(8,092
|
)
|
|
|
43,678
|
|
|
|
56,749
|
|
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
FY
|
|
Key Financial Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average diluted shares (in thousands
|
|
|
310,000
|
|
|
|
370,000
|
|
|
|
310,000
|
|
|
|
370,000
|
|
|
|
370,000
|
|
EPS(2)
|
|
$
|
(0.03
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.12
|
|
|
$
|
0.15
|
|
Management & Administration fee yield
|
|
|
0.87
|
%
|
|
|
0.86
|
%
|
|
|
0.85
|
%
|
|
|
0.85
|
%
|
|
|
0.86
|
%
|
Compensation ratio
|
|
|
65
|
%
|
|
|
52
|
%
|
|
|
65
|
%
|
|
|
50
|
%
|
|
|
55
|
%
|
Effective tax rate
|
|
|
13.0
|
%
|
|
|
23.0
|
%
|
|
|
13.0
|
%
|
|
|
18.8
|
%
|
|
|
23.0
|
%
|
|
|
|
(1) |
|
Excludes Acquisition-related compensation expense. |
|
(2) |
|
Estimated average diluted share count for Q2, Q4 and full year
2010 includes shares associated with the convertible notes
however average diluted share count for Q1 and Q3 excludes the
shares associated with the convertible notes as including them
would have an anti-dilutive effect during the period. |
Following the completion of the first fiscal quarter of 2010, on
May 3, 2010 GLGs management provided to the GLG Board
an updated base case scenario from the
February 8, 2010 presentation, reflecting actual first
71
quarter results and assuming a 58% (instead of 55%) compensation
expense to revenue ratio for the remainder of the fiscal year,
which is set forth below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
|
Q1 Actual
|
|
|
Q2 (E)
|
|
|
Q3 (E)
|
|
|
Q4 (E)
|
|
|
FY (E)
|
|
|
|
($ in millions)
|
|
|
Opening AUM
|
|
$
|
22 175
|
|
|
$
|
23,667
|
|
|
$
|
25,078
|
|
|
$
|
26,660
|
|
|
$
|
22,175
|
|
Net Inflows
|
|
|
953
|
|
|
|
786
|
|
|
|
918
|
|
|
|
1,065
|
|
|
|
3,722
|
|
Net Performance
|
|
|
1,292
|
|
|
|
625
|
|
|
|
664
|
|
|
|
702
|
|
|
|
3,283
|
|
FX
|
|
|
(753
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(753
|
)
|
Closing Net AUM
|
|
|
23,667
|
|
|
|
25,078
|
|
|
|
26,660
|
|
|
|
28,427
|
|
|
|
28,427
|
|
Average New AUM
|
|
|
22,921
|
|
|
|
24,373
|
|
|
|
25,869
|
|
|
|
27,544
|
|
|
|
25,177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 Actual
|
|
|
Q2 (E)
|
|
|
Q3 (E)
|
|
|
Q4 (E)
|
|
|
FY (E)
|
|
|
|
($ in thousands)
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management & Administration Fees
|
|
$
|
50,021
|
|
|
$
|
54,000
|
|
|
$
|
57,000
|
|
|
$
|
61,000
|
|
|
$
|
222,021
|
|
Performance Fees
|
|
|
2,717
|
|
|
|
75,000
|
|
|
|
1,000
|
|
|
|
100,000
|
|
|
|
178,717
|
|
Other Revenues
|
|
|
982
|
|
|
|
500
|
|
|
|
500
|
|
|
|
500
|
|
|
|
2,482
|
|
Total Revenues
|
|
|
53,720
|
|
|
|
129,500
|
|
|
|
58,500
|
|
|
|
161,500
|
|
|
|
403,220
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation(1)
|
|
|
(34,933
|
)
|
|
|
(73,000
|
)
|
|
|
(38,000
|
)
|
|
|
(86,000
|
)
|
|
|
(231,933
|
)
|
General and administrative costs
|
|
|
(23,101
|
)
|
|
|
(24,500
|
)
|
|
|
(24,750
|
)
|
|
|
(25,500
|
)
|
|
|
(97,851
|
)
|
Sublease Exceptional Expense
|
|
|
(4,092
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,092
|
)
|
Fair value movement in trading securities
|
|
|
477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
477
|
|
Total Expenses
|
|
|
(61,649
|
)
|
|
|
(97,500
|
)
|
|
|
(62,750
|
)
|
|
|
(111,500
|
)
|
|
|
(333,399
|
)
|
EBITDA
|
|
|
(7,929
|
)
|
|
|
32,000
|
|
|
|
(4,250
|
)
|
|
|
50,000
|
|
|
|
69,821
|
|
Depreciation
|
|
|
(886
|
)
|
|
|
(1,125
|
)
|
|
|
(1,125
|
)
|
|
|
(1,125
|
)
|
|
|
(4,261
|
)
|
Net Interest Expense
|
|
|
(3,046
|
)
|
|
|
(3,500
|
)
|
|
|
(3,500
|
)
|
|
|
(3,600
|
)
|
|
|
(13,646
|
)
|
Profit before tax
|
|
|
(11,861
|
)
|
|
|
27,375
|
|
|
|
(8,875
|
)
|
|
|
45,275
|
|
|
|
51,914
|
|
Effective taxes
|
|
|
8,807
|
|
|
|
(6,296
|
)
|
|
|
1,154
|
|
|
|
(9,055
|
)
|
|
|
(5,390
|
)
|
Non-GAAP Adjusted Net Income
|
|
|
(3,054
|
)
|
|
|
21,079
|
|
|
|
(7,721
|
)
|
|
|
36,220
|
|
|
|
46,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 Actual
|
|
|
Q2 (E)
|
|
|
Q3 (E)
|
|
|
Q4 (E)
|
|
|
FY (E)
|
|
|
Key Financial Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average diluted shares (in thousands)
|
|
|
305,000
|
|
|
|
370,000
|
|
|
|
305,000
|
|
|
|
370,000
|
|
|
|
370,000
|
|
EPS(2)
|
|
$
|
(0.01
|
)
|
|
$
|
0.06
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.11
|
|
|
$
|
0.16
|
|
Management & Administration fee yield
|
|
|
0.87
|
%
|
|
|
0.89
|
%
|
|
|
0.88
|
%
|
|
|
0.89
|
%
|
|
|
0.88
|
%
|
Compensation ratio
|
|
|
65
|
%
|
|
|
56
|
%
|
|
|
65
|
%
|
|
|
53
|
%
|
|
|
58
|
%
|
Effective tax rate
|
|
|
74.3
|
%
|
|
|
23.0
|
%
|
|
|
13.0
|
%
|
|
|
20.0
|
%
|
|
|
10.4
|
%
|
|
|
|
(1) |
|
Excludes Acquisition-related compensation expense. |
|
(2) |
|
Estimated average diluted share count for Q2, Q4 and full year
2010 includes shares associated with the convertible notes
however average diluted share count for Q1 and Q3 excludes the
shares associated with the convertible notes as including them
would have an anti-dilutive effect during the period. |
Projections
and Research Analysts Estimates
For purposes of the financial advisors analyses and
opinions, GLG management preliminarily advised each of Moelis
and Goldman Sachs to use the average of publicly available
research analysts estimates for GLG for 2010 and 2011.
72
Moelis. For purposes of its analysis and
opinion, Moelis was directed by the special committee to use the
average of the Wall Street analysts estimates for 2010 and
2011 with projected interest and tax assumptions provided by
management of GLG, as set forth below:
|
|
|
|
|
|
|
|
|
(In millions, except per share amounts)
|
|
2010E
|
|
|
2011E
|
|
|
Revenues
|
|
$
|
413
|
|
|
$
|
536
|
|
Expenses
|
|
|
(326
|
)
|
|
|
(374
|
)
|
Cost/Income Ratio
|
|
|
78.8
|
%
|
|
|
69.8
|
%
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
88
|
|
|
$
|
162
|
|
Depreciation & Amortization
|
|
$
|
(4
|
)
|
|
$
|
(5
|
)
|
Interest Expense
|
|
|
(14
|
)
|
|
|
(21
|
)
|
|
|
|
|
|
|
|
|
|
EBT
|
|
$
|
70
|
|
|
$
|
137
|
|
Income Tax
|
|
|
(7
|
)
|
|
|
(34
|
)
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
63
|
|
|
$
|
102
|
|
Shares Outstanding, Fully diluted
|
|
|
372
|
|
|
|
372
|
|
EPS, Fully Diluted
|
|
$
|
0.19
|
|
|
$
|
0.30
|
|
Goldman Sachs. For the purposes of Goldman
Sachs analysis and opinion, management of GLG adopted the
following estimates as management projections and confirmed the
use of these estimates for purposes of Goldman Sachs
fairness opinion:
|
|
|
|
|
|
|
|
|
(In millions, except per share amounts)
|
|
2010E
|
|
|
2011E
|
|
|
Revenues
|
|
$
|
406
|
|
|
$
|
536
|
|
Expenses
|
|
|
(322
|
)
|
|
|
(378
|
)
|
Cost/Income Ratio
|
|
|
79
|
%
|
|
|
71
|
%
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
84
|
|
|
$
|
158
|
|
|
|
|
|
|
|
|
|
|
Depreciation & Amortization
|
|
$
|
(4
|
)
|
|
$
|
(5
|
)
|
Interest Expense
|
|
|
(14
|
)
|
|
|
(21
|
)
|
ow/ Convertible Interest Expense
|
|
|
(11
|
)
|
|
|
(11
|
)
|
Profit Before Tax
|
|
|
66
|
|
|
|
133
|
|
Tax Expense
|
|
|
(6
|
)
|
|
|
(33
|
)
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
60
|
|
|
$
|
100
|
|
Net Income (As Converted)
|
|
|
68
|
|
|
|
108
|
|
|
|
|
|
|
|
|
|
|
Basic Number of Shares
|
|
|
310.1
|
|
|
|
310.1
|
|
Basic EPS
|
|
$
|
0.19
|
|
|
$
|
0.32
|
|
Fully Diluted Number of Shares (As Converted)
|
|
|
371.6
|
|
|
|
371.6
|
|
Fully Diluted EPS (As Converted)
|
|
$
|
0.18
|
|
|
$
|
0.29
|
|
Interests
of Certain Persons in the Merger
In considering the recommendation of the special committee and
our board of directors with respect to the merger agreement, you
should be aware that some of our directors and executive
officers have interests in the merger that are different from,
or in addition to, the interests of our stockholders generally,
as more fully described below. The special committee and our
board of directors were aware of these interests and considered
them, among other matters, in reaching their decision to approve
or recommend approval of the merger agreement (as the case may
be) and recommend that GLGs stockholders vote in favor of
the Merger Proposal.
73
Share
Exchange Agreement
Under the share exchange agreement, the Selling Stockholders
agreed with Man to exchange all of their shares (subject to
certain exceptions) of (a) our common stock, (b) our
Series A voting preferred stock, (c) our subsidiary FA
Sub 2 Limiteds exchangeable Ordinary Class B Shares,
which are exchangeable into shares of our common stock, and
(d) any other shares of our capital stock or such
exchangeable stock they acquire after the date of the share
exchange agreement, in exchange for ordinary shares of Man at an
exchange ratio of 1.0856 ordinary shares of Man per share of our
common stock exchanged by the Selling Stockholders (which ratio
may be reduced prior to closing under certain circumstances). We
refer to the shares subject to the share exchange agreement as
the Subject Shares.
However, the Subject Shares will not include any shares of our
common stock issued to a Selling Stockholder upon conversion of
our 5.00% dollar-denominated convertible subordinated notes due
May 15, 2014, and any shares of our common stock acquired
by a Selling Stockholder in the open market prior to the date of
the share exchange agreement. Before completion of the share
exchange and the other transactions contemplated by the share
exchange agreement, a number of closing conditions must be
satisfied or waived.
Following the consummation of the share exchange, as holders of
Man ordinary shares, the Selling Stockholders will be entitled
to receive dividends declared and paid by Man; for example, the
Man board intends to recommend a dividend of at least 22 cents
per Man ordinary share in its fiscal year ending March 31,
2011.
The Share Exchange Agreement is described more fully below under
Descriptions of Other Transaction Agreements
Share Exchange Agreement.
Voting
and Support Agreement
Under the voting and support agreement, the Selling Stockholders
and TOMS have agreed with Man and Merger Sub to vote or cause to
be voted all of the shares of our common stock and preferred
stock held by them as of the date of the voting and support
agreement and acquired after such date, at any meeting of our
stockholders (or any adjournment thereof) or upon any action by
written consent in lieu of a meeting:
|
|
|
|
|
in favor of the Merger Proposal;
|
|
|
|
against any alternative takeover proposal involving 15% or more
of our consolidated assets or to which 15% or more of our
revenues or earnings on a consolidated basis are attributable,
acquisition of beneficial ownership of 15% or more of our
outstanding common stock, a tender offer or exchange offer that
if consummated would result in any third party owning 15% or
more of our outstanding common stock or merger, consolidation,
share exchange, business combination, recapitalization,
liquidation, dissolution or similar transaction involving us, in
each case other than the merger agreement, the transactions
contemplated by the merger agreement, the voting and support
agreement and the share exchange agreement; and
|
|
|
|
against any agreement (including, without limitation, any
amendment of any agreement), amendment of our organizational
documents or other action that is intended or could reasonably
be expected to prevent, impede, interfere with, delay, postpone
or discourage the consummation of the merger.
|
The Voting and Support Agreement is more fully described below
under Descriptions of Other Transaction
Agreements Voting and Support Agreement.
The
Individual Principals Agreements with Man
The following is a summary of the material terms and
provisions of the employment and service agreements expected to
be entered into by Man entities with each of Noam Gottesman,
Emmanuel Roman and Pierre Lagrange.
Employment
and Service Agreements
Noam Gottesman will enter into an employment agreement with Man
Investments USA Holdings Inc. and Emmanuel Roman and Pierre
Lagrange will both enter into service agreements with Man Group
Services Ltd. effective as of the closing of the share exchange.
Under the terms of the each of the agreements, each Individual
Principal will receive an annual base salary of $1,000,000,
employee benefits including, but not limited to
74
reimbursement of reasonable business expenses, 30 paid vacation
days per year, and health, life and disability insurance
coverage, and, in the case of Mr. Roman and
Mr. Lagrange only, participation in the Man Group Personal
Pension Plan without any employer contribution.
In addition, each of the agreements provide that either the
Individual Principal or the Man employer entity may terminate
such Individual Principals employment by giving the other
party 12 months advance written notice. The relevant
Man employer entity may, in its discretion, provide such
Individual Principal with payment of severance in lieu of
notice, such that it shall make payment in respect of the
Individual Principals base salary for any unexpired part
of the notice period to which he is entitled. No notice or
severance in lieu of notice is required in the event of a
termination of employment for any reason set forth in the
summary termination section of the agreements and, in the case
of Noam Gottesman, a termination due to death or disability. The
agreements will include restrictive covenants granted by each
executive in favor of Man.
Restrictive
Covenant Agreements
On May 17, 2010, Noam Gottesman entered into a
non-competition and non-solicitation agreement and Emmanuel
Roman and Pierre Lagrange entered into deeds of vendor covenant
with GLG and Man, in each case, contingent on the closing of the
transactions contemplated by the merger agreement and share
exchange agreement.
Under the terms of the respective agreements, each of the
Individual Principals has agreed to be bound by certain
restrictive covenants relating to competition with GLGs
business or solicitation of GLGs employees and directors
beginning on the date of the closing of the share exchange and
ending on the third anniversary of such date in exchange for a
$100,000 payment (payable within 14 days after the date of
the closing of the share exchange). During this period, each
Individual Principal will not alone, or jointly, directly or
indirectly own, be employed or engaged by or in, or otherwise
assist or have any stake or interest in, any business that is
carried on in competition with the Business (as
defined below under Descriptions of Other Transaction
Agreements Restrictive Covenant Agreements)
anywhere within the United States, England, Scotland, Wales and
Northern Ireland, the Cayman Islands, and any other country or
territory in which any GLG Entity (as defined below under
Descriptions of Other Transaction Agreements
Restrictive Covenant Agreements) had material operations
as of the date of the closing of the share exchange. However,
the Individual Principals are permitted to be shareholders or
equity owners of not more than 3% of the shares of any company
whose shares are quoted on any recognized investment exchange.
Additionally, the Individual Principals have agreed not to,
either alone or jointly, directly or indirectly in connection
with the carrying on of any business that is in competition with
the Business, engage in certain other actions that are described
below under Descriptions of Other Transaction
Agreements Restrictive Covenant Agreements.
The Restrictive Covenant Agreements are described more fully
below under Descriptions of Other Transaction
Agreements Restrictive Covenant Agreements.
A
Portion of Our 5.00% Dollar-Denominated Convertible Subordinated
Notes are Held by the Principals
As of June 21, 2010, the following Principals held 5.00%
dollar-denominated convertible subordinated notes convertible
into shares of our common stock (the convertible
notes).
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$10 million aggregate principal amount of our convertibles
notes, held by TOMS, an affiliate of the Gottesman GLG Trust
established for the benefit of beneficiaries of such trust,
which are convertible into 2,688,172 shares of our common
stock.
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$15 million aggregate principal amount of our convertibles
notes, held by Point Pleasant Ventures Ltd., an affiliate of the
Lagrange GLG Trust established for the benefit of beneficiaries
of such trust, which are convertible into 4,032,258 shares
of our common stock.
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$5 million aggregate principal amount of our convertibles
notes, held by Jackson Holding Services Inc., an affiliate of
the Roman GLG Trust established for the benefit of beneficiaries
of such trust, which are convertible into 1,344,086 shares
of our common stock.
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The convertible notes (and the shares of our common stock
issuable upon conversion thereof) are not subject to the share
exchange agreement. If the convertible notes are surrendered for
conversion prior to the merger, they
75
would be converted into shares of GLG common stock, and would be
entitled to the right to receive $4.50 in cash per share upon
the completion of the merger. If the convertible notes are
surrendered for conversion after the completion of the merger,
they will be converted into an amount of cash equal to $4.50 for
each share of GLG common stock that the convertible notes were
convertible into immediately prior to the merger. However, if
the convertible notes are surrendered for conversion during a
specified period following the completion of the merger, then
holders would also be entitled to a make-whole premium of
approximately $90 to $95 per $1,000 principal amount of the
convertible notes held by such holders.
Share
Lock-Up
All of the ordinary shares of Man to be received by the
Principals in the share exchange will be subject to a Share
Lock-Up Deed
of Trust, pursuant to which such Man ordinary shares are
restricted from being disposed of for a period of three years
from the date of the consummation of the merger, subject to the
right to dispose of up to one-third of such Man ordinary shares
after the second anniversary of the consummation of the merger
and other exceptions for covering tax obligations and/or other
tax and estate planning purposes. The ordinary shares of Man
received by Sage Summit and Lavender Heights Capital or their
respective permitted transferees will not be subject to a
lock-up but
will continue to be subject to the same vesting and other terms
and conditions which were applicable to the GLG shares
immediately prior to the share exchange.
Warrant
Tender Offer
GLG has agreed to, and to cause our subsidiaries to, use
reasonable best efforts to commence, prior to the closing date,
offers to purchase all of the outstanding warrants to purchase
GLG common stock at a purchase price of $0.129 per warrant, net
to the seller in cash, without interest thereon, for a total
purchase price of $7,016,913.33, upon the terms and subject to
the conditions to be set forth in the offer to purchase. On
May 14, 2010, the closing price of our publicly traded
warrants was $0.129. The offer will be conditioned upon
completion of the merger. Man agreed to reimburse us for costs
incurred in connection with the Warrant offers and to indemnify
us and our subsidiaries from claims, losses and damages arising
in connection with the Warrant offers.
As of August 25, 2010, we have 54,394,677 issued and
outstanding warrants, each of which represents the right to
purchase one share of GLG common stock at an exercise price of
$7.50 per share. Upon completion of the merger, each warrant
would represent the right to receive $4.50 per share upon
exercise. Accordingly, all of the warrants, whether exercisable
or not, are
out-of-the-money
and will have no economic value after the merger. Certain of the
warrants held by certain of our directors are not publicly
traded. Although our publicly traded warrants are listed on the
New York Stock Exchange, they are not actively traded. The offer
will provide all of the warrant holders with an opportunity to
obtain liquidity as a result of the merger. For the holders of
our publicly traded warrants, the offer price represents a 2.75%
premium over the
30-trading
day average closing price of the publicly traded warrants ending
on May 14 , 2010, the last trading day prior to the public
announcement of the merger agreement. All warrants tendered in
the offer will no longer be outstanding and will be cancelled by
GLG.
Ian Ashken, Martin Franklin, James N. Hauslein and William P.
Lauder currently beneficially own, directly or through
affiliates, 2,134,640, 8,538,560, 51,201 and 51,201 of our
warrants, respectively, and if they elect to tender any of their
warrants under the tender offer, they will be entitled to
receive cash consideration of $0.129 per warrant.
FA Sub
2 Exchangeable Share Dividend Rights
As holders of FA Sub 2 exchangeable shares, Noam Gottesman and
the Gottesman GLG Trust receive a cumulative dividend based on
GLGs estimate of the net taxable income of FA Sub 2
allocable to such holders multiplied by an assumed tax rate.
Upon the exchange of the FA Sub 2 exchangeable shares for Man
ordinary shares at the effective time, such right to receive
such cumulative dividend will terminate.
Treatment
of Awards Under the Restricted Stock Plan, 2007 Long Term
Incentive Plan, 2009 Long Term Incentive Plan and the Equity
Participation Plan
At the effective time of the merger, each issued and outstanding
share of restricted common stock of GLG issued under GLGs
stock and incentive plans will be converted into the right to
receive $4.50 in cash, without interest, the receipt of which
will be (except in the case of restricted shares held by our
non-employee directors)
76
subject to the same vesting terms and conditions and other
rights and restrictions that were applicable to such shares of
restricted common stock prior to the effective time.
At the effective time of the merger, each outstanding award
under GLGs stock and incentive plans representing a right
to receive shares of common stock of GLG (other than shares of
restricted common stock) will be settled in ordinary shares of
Man, in an amount equal to the number of shares underlying such
stock rights multiplied by the exchange ratio set forth in the
share exchange agreement, or if our representation in the merger
agreement that each holder of such stock rights is a
non-U.S. resident
is not correct or if the assumption of the stock rights by the
surviving corporation is prohibited by applicable securities
laws, then such stock rights will instead be converted at the
effective time into a right to receive $4.50 in cash, without
interest, multiplied by the number of shares covered by such
stock rights. In either case, the ordinary shares of Man or the
cash amount will be subject to the same vesting and other terms
and conditions that were applicable to such stock rights prior
to the effective time.
At the effective time of the merger, all outstanding restricted
stock awards held by our non-employee directors will be
converted into the right to receive $4.50 per share and the
vesting of such right will be accelerated to the effective time.
The following sets forth all unvested restricted stock awards
held by our executive officers and non-employee directors and
the trustee of the Gottesman GLG Trust as of August 25,
2010.
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Value of Unvested
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Restricted Share Awards
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Aggregate Number of
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(Based on Merger
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Unvested Restricted
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Consideration of $4.50
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Name
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Stock Awards
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per Share)
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Alejandro San Miguel
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276,253
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$
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1,243,139
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Jeffrey M. Rojek
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267,820
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1,205,190
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Simon White
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27,133
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122,099
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Martin E. Franklin
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244,788
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1,101,546
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Ian G.H. Ashken
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48,860
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219,870
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James N. Hauslein
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40,717
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183,227
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William P. Lauder
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40,717
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183,227
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Leslie J. Schreyer
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402,831
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1,812,740
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In recognition of his contributions in connection with the
restructuring of GLGs credit facility and the issuance of
GLGs convertible notes in May 2009, Mr. Franklin
received an award of 300,000 restricted shares of GLG common
stock under GLGs 2009 Long-Term Incentive Plan. Because
Mr. Franklin received this award of restricted shares
outside of his capacity as a director, he was no longer
considered an independent director as defined in
Section 303A.02 of the New York Stock Exchange Listed
Company Manual.
In addition, Mr. White participates in the limited partner
profit share arrangement and equity participation plan for
GLGs key personnel. Under this arrangement, Mr. White
has direct or indirect profits interests in certain GLG
entities, which entitles Mr. White to receive distributions
of profits derived from the fees earned by these GLG entities.
Mr. White received an allocation of the equity
participation plan on November 2, 2007 of
440,000 shares of our common stock and $2 million in
cash. Of these allocations to Mr. White,
110,000 shares of GLG common stock and $500,000 in cash
remain unvested and are scheduled to vest on November 2,
2010. In February 2010, Mr. White received additional
limited partnership interests in Sage Summit LP representing the
right to receive 100,000 shares of our common stock as a
portion of his annual bonus compensation for 2009, which shares
will vest in three equal installments on March 31, 2011,
2012 and 2013. See The Merger Agreement
Treatment of Equity Awards.
Directors
and Officers Insurance
The merger agreement provides that for six years from the
effective time of the merger, Man and the surviving corporation
must maintain in effect GLGs current directors and
officers liability insurance covering acts or omissions
occurring at or prior to the effective time of the merger of
those persons who are currently covered by our directors
and officers liability insurance policy. Alternatively,
Man may maintain in effect for six years from the effective time
of the merger directors and officers insurance with
benefits and levels of coverage at least as
77
favorable as provided in our existing policies; provided, that
the aggregate annual premium for such insurance does not exceed
300% of the current annual premium. In lieu of the foregoing,
GLG may obtain directors and officers insurance tail
policies applicable for the period of six years commencing at
the effective time of the merger and ending on the sixth year
anniversary of the effective time of the merger providing at
least the same coverage with respect to amounts, scope, terms
and conditions as the current directors and officers
insurance; provided, that the aggregate annual premium for such
insurance does not exceed 300% of the current annual premium.
Indemnification will continue to be provided by Man and the
surviving corporation in the merger to GLGs current and
former officers and directors. See The Merger
Agreement Indemnification and Insurance.
Amendments
to Certain Employment Agreements with GLG
On May 16, 2010, the Compensation Committee approved
certain amendments to the employment agreements for Jeffrey M.
Rojek, Alejandro R. San Miguel, Simon White and Leslie J.
Schreyer. These amendments further amended the employment
agreements of Messrs. Rojek, San Miguel and White
which had been amended in March 2010 in order to better align
with each other the terms and conditions of such employment
agreements. The March 2010 amendments were authorized by the GLG
Board in December 2009, prior to significant and substantive
discussions with Man regarding a potential transaction which
began in February 2010.
Due to the conditionality of the proposed transaction and the
potentially extended pre-closing period, these retention and
severance arrangements would provide protection for the key
personnel critical to implement certain steps necessary for a
transaction to reach a conclusion, without concern that their
decisions and actions made in the interest of the Company would
put at risk their financial situation immediately after
completion of the transaction. These arrangements would also
incentivize the key personnel to remain focused on the Company
and its business and not on seeking other employment.
The May 2010 amendments provide the following enhanced benefits
to Messrs. Rojek, San Miguel and Schreyer (described
in more detail below): (i) for Mr. San Miguel,
enhancements of his existing change of control severance
benefits, including changing the formula for the severance
payment to two times his average annual compensation over a
specified number of prior years (capped at $5 million);
(ii) for Messrs. Rojek and Schreyer, additions of
change of control severance benefits, including a payment equal
to two times the individuals average annual compensation
over a specified number of prior years (capped at
$3 million and $4 million for Messrs. Rojek and
Schreyer, respectively) and the vesting of outstanding equity
awards; (iii) an expanded change of control trigger which
includes a potential change of control (i.e., the
pendency of a transaction that would constitute a change of
control if consummated); (iv) expanded termination
situations under which severance is payable which include death
or disability following a change of control or during the
pendency of a potential change of control, provided that a
change of control transaction is ultimately consummated;
(v) payment or reimbursement of excise tax imposed on
severance payments in excess of specified limits under
Sections 280G and 4999 of the Internal Revenue Code;
(vi) for Mr. Schreyer, addition of a cause
definition; (vii) expansion of the good reason
definition for Mr. San Miguel to include a voluntary
resignation for any reason during the one-year period following
a change of control and addition of a similar good
reason definition and corresponding severance payment
provision for Messrs. Rojek and Schreyer who did not
previously have them; (viii) for Mr. San Miguel,
removal of GLGs ability to consider limitations on the
deductibility of his minimum annual bonus payment in setting his
annual bonus; and (ix) providing that bonus payments will
be paid no later than December 31 of the calendar year in which
the bonus is earned.
For Mr. White, the May 2010 amendments amended his existing
severance arrangement to provide an enhanced change of control
payment of $1.5 million for a termination without cause or
for good reason in lieu of any other severance amounts under the
agreement, subject to the enhanced severance benefits expiring
in the event a change of control does not occur before
December 31, 2010. In addition, on May 16, 2010,
Mr. White was allocated interests in shares of GLG common
stock as a limited partner in each of Sage Summit LP and
Lavender Heights Capital LP, in the amounts of
164,288 shares and 131,747 shares, respectively. The
share allocations will vest and be distributed to Mr. White
on the later of November 2, 2010 or the date of a change of
control, provided the additional share allocations will be
forfeited if a change of control does not occur on or before
December 31, 2010, or certain termination events related to
Mr. Whites employment with GLG have occurred prior to
the distribution to Mr. White of the additional share
allocations.
78
The estimated aggregate amount of severance payments to
Messrs. Rojek, San Miguel, White and Schreyer would be
approximately
$ ,
assuming termination of employment immediately after the
consummation of the merger (other than for cause) and without
giving effect to any discretionary bonus amounts that may be
paid, plus an estimated amount up to approximately
$ ,
depending on whether and to what extent payment or reimbursement
of excise tax imposed on severance benefits under
Sections 280G and 4999 of the Internal Revenue Code would
be applicable. The amount and extent of the excise tax imposed
on severance benefits will depend on factors such as the actual
closing date of the merger, applicable federal rates on the
closing date of the merger, reasonable compensation assessments,
and the value ascribed to each employees non-competition
provision.
Jeffrey
M. Rojek
On May 16, 2010, with effect from January 1, 2010, we
entered into an amended and restated employment agreement with
Mr. Rojek. Pursuant to his employment agreement with us,
Mr. Rojek has served as our Chief Financial Officer since
March 18, 2008 and receives: an annual salary of $400,000;
an annual bonus equal to at least $600,000; and other benefits
as set forth in the employment agreement, including
reimbursement of reasonable business expenses and eligibility to
participate in employee benefit plans. Mr. Rojek is also
eligible to receive a discretionary bonus and to receive equity
incentive awards under the 2009 Long Term Incentive Plan.
Mr. Rojeks employment agreement has a term of one
year and will automatically renew for additional one-year
periods absent an election by Mr. Rojek or GLG not to renew
by written notice provided at least six months prior to the end
of the term of the agreement or unless terminated earlier in
accordance with the agreement. Mr. Rojeks employment
agreement contains post-employment covenants related to
confidentiality, non-competition, non-dealing and
non-solicitation/no-hire. His non-competition covenant extends
for twelve months following termination of employment. His
non-dealing and non-solicitation/no-hire covenants cover clients
and employees, and extend for six, twelve or eighteen months
following termination of employment.
In addition, Mr. Rojeks employment agreement provides
that, in the event of the termination of his employment GLG
without cause upon six months written notice, or a non-renewal
of his employment, he will be entitled to the following:
(i) his annual bonus and any awarded discretionary bonus
for the prior year, to the extent it has not already been paid
to him; (ii) a pro rata portion of his annual bonus for the
year in which his employment is terminated; (iii) 50% of
his annual base salary; (iv) 50% of his minimum annual
bonus; and (v) two years of continued coverage under
GLGs health insurance plan. Alternatively, in lieu of
providing him with six months advance written notice, GLG may
elect to terminate Mr. Rojeks employment without
cause at any time and with immediate effect by paying
Mr. Rojek the sum of 100% of his annual base salary, 100%
of his minimum annual bonus, and the amounts set forth in
clauses (i) and (ii) above.
Mr. Rojeks employment agreement further provides
that, in the event of a termination of his employment without
cause or for good reason (each as defined in the employment
agreement) following a change of control or during a potential
change of control (each as defined below), or in the event of a
termination of Mr. Rojeks employment for death or
disability within one year of a change of control or during a
potential change of control which results in a change of
control, he will be entitled to the following: (i) his
annual bonus and any awarded discretionary bonus for the prior
year, to the extent it has not already been paid to him;
(ii) a pro-rata portion of his annual bonus for the year in
which his employment is terminated, and in GLGs
discretion, a discretionary bonus for the year in which his
employment is terminated; (iii) a payment equal to the
lesser of (1) two times the average of
Mr. Rojeks total compensation for 2008 and 2009, as
set forth in the Total column of the Summary
Compensation Table contained in GLGs proxy statement for
the 2010 Annual Meeting of Shareholders, as filed with the SEC,
and (2) $3 million; (iv) two years of continued
coverage under GLGs health insurance plan;
(v) immediate vesting of any outstanding equity incentive
awards, including under the 2007 Long Term Incentive Plan; and
(vi) payment or reimbursement for any federal excise tax
imposed on any parachute payment under Section 4999 of the
Internal Revenue Code and certain additional taxes imposed on or
borne by the employee relating to certain change of control
payments and related tax audit or litigation expenses.
Under Mr. Rojeks employment agreement, a change
of control means the earliest to occur of the following
events:
(1) the acquisition of ownership by any person of
beneficial ownership of GLGs combined voting power in
excess of the greater of (A) 25% of GLGs outstanding
voting securities, or (B) the then outstanding voting
79
securities beneficially owned by the Individual Principals and
their Trusts (including by their respective families,
partnerships and charitable foundations controlled by any of the
Individual Principals), except for (x) any acquisition by
any employee benefit plan (or related trust) of GLG or a
subsidiary, (y) any acquisition pursuant to the exchange of
Exchangeable Class B Ordinary Shares of FA Sub 2 Limited
for shares of common stock of GLG, or (z) any acquisition
pursuant to a transaction that complies with each of clauses
(x), (y), and (z) of the following paragraph (2); or
(2) GLGs reorganization, merger or consolidation, or
sale or other disposition of all or substantially all of its
assets, or the acquisition of assets of another entity, unless
(x) the beneficial owners of GLGs outstanding voting
securities continue to own more than 50% of the combined voting
power of the resulting corporation, (y) no person (except
any employee benefit plan or related trust of GLG or a
subsidiary) acquires beneficial ownership of voting securities
in excess of the greater of (1) 25% of GLGs
outstanding voting securities or (2) the then outstanding
voting securities beneficially owned by the Individual
Principals and their Trusts (including by their respective
families, partnerships and charitable foundations controlled by
any of the Individual Principals), and (z) at least a
majority of the GLG Board remain the directors of the resulting
corporation; or
(3) a change in the composition of a majority of the board
of directors in office on the start date of the executives
employment with GLG or whose election or nomination was approved
by at least a majority of the directors then comprising the
board of directors as of the start date of the executives
employment with GLG and directors who were so approved by at
least a majority of such directors (the Incumbent
Board); or
(4) approval by GLGs shareholders of a complete
liquidation or dissolution of GLG.
Under Mr. Rojeks employment agreement, a
potential change of control means:
(1) the commencement of a tender or exchange offer by any
third person of GLGs outstanding voting securities in
excess of the greater of (A) 25% of GLGs outstanding
voting securities, or (B) the then outstanding voting
securities beneficially owned by the Individual Principals and
their Trusts (including by their respective families,
partnerships and charitable foundations controlled by any of the
Individual Principals); or
(2) the execution of an agreement by GLG which would result
in the occurrence of a change of control; or
(3) the public announcement by any person of an intention
to take or to consider taking actions that, if consummated,
would constitute a change of control; or
(4) the adoption by the board of directors of GLG of a
resolution to the effect that a potential change of control has
occurred.
A potential change of control will be deemed pending from the
occurrence of the event giving rise to the potential change of
control until the earlier of (A) the first anniversary of
the date on which such potential change of control first
occurred or (B) the date the board of directors of GLG
determines in good faith that such events will not result in the
occurrence of a change of control.
Alejandro
San Miguel
On May 16, 2010, with effect from January 1, 2010, we
entered into an amended and restated employment agreement with
Mr. San Miguel. Pursuant to his employment agreement
with us, Mr. San Miguel serves as our General Counsel
and Corporate Secretary and receives: an annual salary of
$500,000; an annual bonus equal to at least $1 million; and
other benefits as set forth in the employment agreement,
including reimbursement of reasonable business expenses and
eligibility to participate in employee benefit plans.
Mr. San Miguel is also eligible to receive a
discretionary bonus and to receive equity incentive awards under
the 2009 Long Term Incentive Plan.
Mr. San Miguels employment agreement has a term
of one year and will automatically renew for additional one-year
periods absent an election by Mr. San Miguel or GLG
not to renew by written notice provided at least six months
prior to the end of the term of the agreement or unless
terminated earlier in accordance with the agreement.
Mr. San Miguels employment agreement contains
post-employment covenants related to confidentiality,
non-competition, non-dealing and non-solicitation/no-hire. His
non-competition covenant extends for twelve months following
termination of employment. His non-dealing and
non-solicitation/no-hire covenants cover clients and employees,
and extend for twelve or eighteen months following termination
of employment. Mr. San Miguel has
80
also committed not to work on any matter that is adverse to us
for three years following termination of employment and, as an
attorney, he remains at all times subject to any applicable
ethical rules or codes.
In addition, Mr. San Miguels employment
agreement provides that, in the event of the termination of his
employment by GLG without cause (as defined in the employment
agreement) upon six months written notice,
Mr. San Miguels resignation from employment with
good reason (as defined in the employment agreement), or a
non-renewal of his employment, he will be entitled to the
following payments: (i) his annual bonus and any awarded
discretionary bonus for the prior year, to the extent it has not
already been paid to him; (ii) a pro rata portion of his
annual bonus for the year in which his employment is terminated;
(iii) 50% of his annual base salary; and (iv) 50% of
his minimum annual bonus. If Mr. San Miguel resigns
due to good reason or GLG terminates
Mr. San Miguels employment without cause at any
time and with immediate effect (in lieu of providing him with
six months advance written notice), Mr. Miguel will be
entitled to the sum of 100% of his annual base salary, 100% of
his minimum annual bonus, and the amounts set forth in
clauses (i) and (ii) above.
Mr. San Miguels employment agreement further
provides that, in the event of a termination of
Mr. San Miguels employment without cause or for
good reason following a change of control or during a potential
change of control (each as described below), or in the event of
a termination of Mr. San Miguels employment for
death or disability within one year of a change of control or
during the pendency of a potential change of control which
results in a change of control, he will be entitled to the
following: (i) his annual bonus and any awarded
discretionary bonus for the prior year, to the extent it has not
already been paid to him; (ii) a pro-rata portion of his
annual bonus for the year in which his employment is terminated,
and in GLGs discretion, a discretionary bonus for the year
in which his employment is terminated; (iii) a payment
equal to the lesser of (1) two times the average of
Mr. San Miguels total compensation for 2007,
2008, and 2009, as set forth in the Total column of
the Summary Compensation Table contained in GLGs proxy
statement for the 2010 Annual Meeting of Shareholders, as filed
with the SEC, and (2) $5 million; (iv) two years
of continued coverage under GLGs health insurance plan;
(v) immediate vesting of any outstanding equity incentive
awards, including under the 2007 Long Term Incentive Plan; and
(vi) payment or reimbursement for any federal excise tax
imposed on any parachute payment under Section 4999 of the
Internal Revenue Code and certain additional taxes imposed on or
borne by the employee relating to certain change of control
payments and related tax audit or litigation expenses.
Under Mr. San Miguels employment agreement,
change of control and potential change of
control have the same definitions as under
Mr. Rojeks employment agreement described above.
Simon
White
On March 17, 2010, with effect from January 1, 2010,
we entered into an amended and restated employment agreement
with Mr. White. Mr. Whites employment agreement
was further amended on May 16, 2010. Pursuant to his
employment agreement with us, Mr. White served as our Chief
Financial Officer from November 2, 2007 to March 18,
2008 and has served as our Chief Operating Officer since
March 18, 2008. Under the terms of his employment
agreement, Mr. White receives an annual salary of $500,000
and other benefits as set forth in the employment agreement,
including reimbursement of reasonable business expenses.
Mr. White is also eligible to receive a discretionary bonus
and to receive equity incentive awards under the 2009 Long Term
Incentive Plan.
Mr. Whites employment agreement has a term of one
year and will automatically renew for additional one-year
periods absent an election by Mr. White or GLG not to renew
by written notice provided at least six months prior to the end
of the term of the agreement or unless terminated earlier in
accordance with the agreement. Mr. Whites employment
agreement contains post-employment covenants related to
confidentiality, non-competition, non-dealing and
non-solicitation. His non-competition covenants extends for
twelve months following termination of employment. His
non-dealing and non-solicitation covenants covers clients,
prospective clients, intermediaries, prospective intermediaries
and employees, and extends for six to eighteen months following
termination of employment.
In addition, Mr. Whites employment agreement provides
that, in the event of the termination of his employment by GLG
without cause upon six months written notice, Mr. White
will be entitled to a severance payment equal to 50% of his
annual base salary. Alternatively, in lieu of providing him with
six months advance
81
written notice, GLG may elect to terminate Mr. Whites
employment without cause (as defined in the amendment) at any
time and with immediate effect by paying Mr. White 100% of
his annual base salary.
The amendment to Mr. Whites employment agreement
provides that, in the event of a termination of his employment
without cause or for good reason (as defined in the amendment)
following a change of control (as described below), he will be
entitled to a payment of $1.5 million (in lieu of any
payments described in the preceding paragraph). The amendment to
Mr. Whites employment agreement expires by its terms
in the event a change of control does not occur before
December 31, 2010.
Under Mr. Whites employment agreement, change
of control has the same definition as under
Mr. Rojeks employment agreement described above,
except that for purposes of Mr. Whites employment
agreement, the date to determine the Incumbent Board is
May 16, 2010.
Leslie J.
Schreyer
On May 16, 2010, with effect from January 1, 2010, we
entered into an amended and restated employment agreement with
Leslie J. Schreyer. Pursuant to his employment agreement with
us, Mr. Schreyer serves as an advisor to us and is employed
by us on a part-time basis. Mr. Schreyer receives an annual
base salary of $1.5 million, $500,000 of which is paid in
monthly installments and the balance of which is paid in
December of the calendar year in which the services are
performed. Mr. Schreyer is also eligible for a
discretionary bonus, to receive equity incentive awards under
the 2009 Long Term Incentive Plan, and to receive other benefits
as set forth in the employment agreement, including
reimbursement of reasonable business expenses and eligibility to
participate in employee benefit plans.
Mr. Schreyers employment agreement has a term of one
year and will automatically renew for additional one-year
periods unless terminated earlier in accordance with the
agreement. Mr. Schreyers employment agreement
provides that, in the event of his death or disability or the
termination of his employment upon 90 days prior written
notice (1) for any reason prior to a change of control and
not during a potential change of control (each as described
below), or (2) by GLG with cause or by Mr. Schreyer
without good reason (each as defined in the employment
agreement) following a change of control or during a potential
change of control, Mr. Schreyer will be entitled to the
following payments: (i) his monthly salary through the date
of termination (and, to the extent it has not already been paid
to him, for any prior year); (ii) a pro rata portion of his
annual $1 million payment for the year in which his
employment is terminated through the date of termination (and,
to the extent it has not already been paid to him, for any prior
year); and (iii) any awarded discretionary bonus for the
prior year, to the extent it has not already been paid to him.
Mr. Schreyers employment agreement contains
post-employment covenants related to confidentiality and
non-competition. His non-competition covenants extends for
twelve months following termination of employment.
Mr. Schreyer has also committed not to work on any matter
that is adverse to us for three years following termination of
employment and, as an attorney, he remains at all times subject
to any applicable ethical rules or codes.
Mr. Schreyers employment agreement further provides
that, in the event of a termination of Mr. Schreyers
employment by GLG without cause or by Mr. Schreyer with
good reason following a change of control or during a potential
change of control, or in the event of a termination of
Mr. Schreyers employment for death or disability
within one year of a change of control or during the pendency of
a potential change of control which results in a change of
control, Mr. Schreyer will be entitled to the following:
(i) his monthly salary through the date of termination
(and, to the extent it has not already been paid to him, for any
prior year); (ii) a pro rata portion of his annual
$1 million payment for the year in which his employment is
terminated through the date of termination (and, to the extent
it has not already been paid to him, for any prior year);
(iii) any awarded discretionary bonus for the prior year,
to the extent it has not already been paid to him; (iv) in
GLGs discretion, a discretionary bonus for the year in
which his employment is terminated; (v) a payment equal to
the lesser of (1) two times Mr. Schreyers
average annual compensation (as calculated under the employment
agreement) for the five calendar years immediately preceding the
year in which the change of control occurs, and
(2) $4 million; (vi) two years of continued
coverage under GLGs health insurance plan;
(vii) immediate vesting of any outstanding equity incentive
awards, including under the 2007 Long Term Incentive Plan; and
(viii) payment or reimbursement for any federal excise tax
imposed on any parachute payment under Section 4999 of the
Internal Revenue Code and certain
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additional taxes imposed on or borne by the employee relating to
certain change of control payments and related tax audit or
litigation expenses.
Mr. Schreyer is also trustee of the Gottesman GLG Trust and
a partner of Chadbourne & Parke LLP, one of our
principal outside law firms.
Under Mr. Schreyers employment agreement,
change of control and potential change of
control have the same definitions as under
Mr. Rojeks employment agreement described above.
Compensation
Paid to Members of the Special Committee
Mr. Ian G. H. Ashken will receive $150,000 for his service
as chairman of the special committee. Each of Messrs. James
N. Hauslein and William P. Lauder will receive $75,000 for their
service as members of the special committee.
Certain
Business Relationships
In connection with GLGs private placement of convertible
notes in May 2009, GLG selectively approached potential
investors through existing contacts and introductions by
affiliates including its directors. Peter Weinberg, a
director of GLG until May 11, 2009, offered for Perella
Weinberg to help GLG place some of the convertible notes, and
Perella Weinberg entered into a non-disclosure agreement with
GLG in connection with receiving confidential offering materials
of GLG. There was not, however, any formal engagement or
engagement letter between GLG and Perella Weinberg, and
ultimately Perella Weinberg did not place any of the convertible
notes. In addition, during 2008 GLG consulted Perella Weinberg
from time to time regarding potential acquisition candidates for
GLG but did not engage or make any payment to Perella Weinberg
in connection with such consultations.
Each of the Individual Principals and Mr. Weinberg was
formerly employed by an affiliate of Goldman Sachs.
Mr. Weinberg was elected a Partner at Goldman Sachs in
1992, founded the Financial Sponsors Group, headed Investment
Banking Services and the Communications, Media and Telecom
Group, co-headed the Global Investment Banking Division, and was
Chief Executive Officer of Goldman Sachs International.
Mr. Weinberg left Goldman Sachs in January 2006.
Mr. Roman served as co-head of Worldwide Equity Derivatives
at Goldman Sachs from 1996 to 2000. In 1998, Mr. Roman was
elected a partner of Goldman Sachs after two years as a Managing
Director. In 2003, Mr. Roman also became co-head of the
European Equities Division and a member of the European
Management Committee, a position he held until April 2005.
Mr. Roman served as a co-head of Worldwide Global
Securities Services of Goldman Sachs International Limited from
2000 to April 2005. Mr. Gottesman was an Executive Director
of Goldman Sachs International prior to 1995, where he managed
global equity portfolios in the private client group.
Mr. Lagrange also worked at Goldman Sachs prior to 1995,
where he managed global equity portfolios.
According to the Holdings Report on Form 13F filed with the
SEC for the fiscal quarter ending March 31, 2010, Goldman
Sachs Group and its affiliated institutional investment
managers, including Goldman Sachs, collectively had investment
discretion and sole voting power over 1,973,968 shares of
our common stock and 28,918 of our publicly traded warrants and
had investment discretion and no voting power over an additional
150,000 shares of our common stock as of March 31,
2010. These shares and warrants may be held by Goldman Sachs and
its affiliates for their own account or for the accounts of
their customers. In addition, Goldman Sachs affiliate initially
held an aggregate loan commitment of $40 million under the
credit agreement dated as of October 30, 2007 by and among
GLG, its FA Sub 1 Limited, FA Sub 2 Limited and FA Sub 3 Limited
subsidiaries, Citigroup Global Markets Inc., as book manager and
arranger, Citicorp USA, Inc., as administrative agent, and the
other lenders party thereto. The entire $40 million of the
Goldman Sachs affiliates commitment was assigned to an
affiliate of GLG on May 15, 2009 and to the knowledge of
GLG none of Goldman Sachs or any of its affiliates has
reacquired any interest in the credit facility.
Material
United States Federal Income Tax Consequences of the
Merger
The following is a summary of the material U.S. federal
income tax consequences of the merger that are relevant to
beneficial holders of GLG common stock whose shares will be
converted to cash in the merger and who will not own (actually
or constructively) any shares of GLG common stock after the
merger. The following discussion does not purport to consider
all aspects of U.S. federal income taxation that might be
relevant to
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beneficial holders of GLG common stock. The discussion is based
on current provisions of the Internal Revenue Code of 1986, as
amended, which we refer to as the Code, existing,
proposed, and temporary regulations promulgated under the Code,
and rulings, administrative pronouncements, and judicial
decisions as in effect on the date of this proxy statement,
changes to which could materially affect the tax consequences
described below and could be made on a retroactive basis. The
discussion applies only to beneficial holders of GLG common
stock in whose hands the shares are capital assets within the
meaning of Section 1221 of the Code and may not apply to
beneficial holders who acquired their shares pursuant to the
exercise of stock options or other compensation arrangements
with GLG or who hold their shares as part of a hedge, straddle,
conversion or other risk reduction transaction or who are
subject to special tax treatment under the Code (such as dealers
in securities or foreign currency, insurance companies, other
financial institutions, regulated investment companies,
tax-exempt entities, former citizens or long-term residents of
the United States, S corporations, partnerships and
investors in S corporations and partnerships, and taxpayers
subject to the alternative minimum tax). In addition, this
discussion does not consider the effect of any state, local, or
foreign tax laws.
For purposes of this discussion, the term
U.S. holder means a beneficial owner of GLG
common stock that is, for U.S. federal income tax purposes,
any of the following:
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a citizen or individual resident of the United States;
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a corporation, or other entity treated as a corporation for
U.S. federal income tax purposes, created in or under the
laws of the United States or of any state (including the
District of Columbia);
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an estate, the income of which is subject to U.S. federal
income taxation regardless of its source; or
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a trust, if a court within the United States is able to exercise
primary supervision over the administration of the trust and one
or more U.S. persons have the authority to control all
substantial decisions of the trust, or a trust that has a valid
election in effect under applicable U.S. Treasury
Regulations to be treated as a U.S. person.
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For purposes of this discussion, the term
non-U.S. holder
means a beneficial owner of GLG common stock that is not a
U.S. holder.
Characterization
of the Merger
For U.S. federal income tax purposes, the merger of Merger
Sub into GLG will be treated as a taxable purchase by Man of the
shares of GLG common stock from holders.
U.S.
Holders
The receipt of cash in exchange for GLG common stock pursuant to
the merger agreement will be a taxable transaction for
U.S. federal income tax purposes. In general, subject to
the discussion in the next paragraph, a U.S. holder who
receives cash in exchange for shares pursuant to the merger will
recognize gain or loss for U.S. federal income tax purposes
equal to the difference, if any, between the amount of cash
received and the U.S. holders adjusted tax basis in
the shares surrendered for cash pursuant to the merger. Gain or
loss will be determined separately for each block of shares
(i.e., shares acquired at the same price per share in a single
transaction) surrendered for cash pursuant to the merger. Such
gain or loss will be capital gain or loss and will be long-term
capital gain or loss if the U.S. holders holding
period for such shares is more than one year at the time of
consummation of the merger. The maximum federal income tax rate
on net long-term capital gain recognized by individuals is 15%
under current law. Deduction of capital losses may be subject to
certain limitations.
Holders will receive in the merger an amount of cash per share
of GLG common stock that exceeds the value of the Man ordinary
shares per share of GLG common stock that the Selling
Stockholders will receive in the share exchange. It is possible
that the Internal Revenue Service could seek to treat such
excess per-share consideration as being constructively paid to
the Selling Stockholders who then constructively pay such excess
per-share consideration to the holders in exchange for their
consent to the merger. If the Internal Revenue Service
successfully asserted such position, the Internal Revenue
Service might seek to rely on the reasoning of Rev. Rul.
73-233,
1973-1 C.B.
179 in asserting that such excess per-share consideration is
taxable to U.S. holders receiving cash in the merger as
ordinary income rather than as described in the preceding
paragraph. Under Rev.
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Rul. 73-233,
1973-1 C.B.
179, the determination of whether there has been such a taxable
payment is based on the facts and circumstances relating to the
merger transaction. GLG believes that the facts in the 1973
revenue ruling are materially different than the applicable
facts here. GLG intends to treat the entire amount of per share
consideration as received by the holders in exchange for the
shares of GLG common stock, giving rise to the U.S. federal
income tax consequences described in the preceding paragraph.
Holders are encouraged to review the validity of the ruling and
its application in this situation with their tax advisors.
Non-U.S.
Holders
A
non-U.S. holder
generally will not be subject to U.S. federal income tax
with respect to gain recognized pursuant to the merger unless
one of the following applies:
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The gain is effectively connected with a
non-U.S. holders
conduct of a trade or business within the United States and, if
a tax treaty applies, the gain is attributable to a
non-U.S. holders
U.S. permanent establishment. In such case, the
non-U.S. holder
will, unless an applicable tax treaty provides otherwise,
generally be taxed on its net gain derived from the merger at
regular graduated U.S. federal income tax rates, and in the
case of a foreign corporation, may also be subject to the branch
profits tax; or
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A
non-U.S. holder
who is an individual holds GLG common stock as a capital asset,
is present in the United States for 183 or more days in the
taxable year of the merger, and certain other conditions are
met. In such a case, the
non-U.S. holder
will be subject to a flat 30% tax on the gain derived from the
merger, which may be offset by certain U.S. capital losses.
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Information
Reporting and Backup Withholding
Cash payments made pursuant to the merger will be reported to
the recipients and the Internal Revenue Service to the extent
required by the Code and applicable U.S. Treasury
Regulations. In addition, certain non-corporate beneficial
owners may be subject to backup withholding at a 28% rate on
cash payments received in connection with the merger. Backup
withholding will not apply, however, to a beneficial owner who
(a) furnishes a correct taxpayer identification number and
certifies that he, she or it is not subject to backup
withholding on the
Form W-9
or successor form, (b) provides a certification of foreign
status on
Form W-8
or successor form or (c) is otherwise exempt from backup
withholding. Backup withholding is not an additional tax. Any
amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your U.S. federal
income tax liability provided the required information is timely
furnished to the Internal Revenue Service.
Tax
Consequences to GLG, Man, Holdco, Merger Sub, the Selling
Stockholders and TOMS
None of GLG, Man, Holdco or Merger Sub will recognize any gain
or loss for U.S. federal income tax purposes as a result of
the merger.
For U.S. federal income tax purposes, the receipt of
ordinary shares of Man by the Selling Stockholders in exchange
for shares of our common stock pursuant to the share exchange
agreement (and the receipt of cash by TOMS if it converts
convertible notes into shares of our common stock prior to the
merger) will be a taxable transaction even though the Selling
Stockholders are receiving ordinary shares of Man instead of
cash. The U.S. federal income tax treatment to the Selling
Stockholders and TOMS generally follows that described above
under the heading Material United States Federal Income
Tax Consequences of the Merger, and instead of actually
receiving cash in the share exchange, a Selling Stockholder is
effectively treated as receiving cash in an amount equal to the
fair market value of Man shares received.
The discussion set forth above is included for general
information only. Each beneficial owner of shares of GLG common
stock should consult his, her or its own tax advisor with
respect to the specific tax consequences of the merger to him,
her or it, including the application and effect of state, local
and foreign tax laws.
Fees and
Expenses of the Merger
Except as described below, under the merger agreement, each of
the parties will bear all fees and expenses that it incurs in
connection with the merger and the merger agreement, whether or
not the transaction is consummated.
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We estimate that we will incur, and will be responsible for
paying, transaction-related fees and expenses, including
financial, legal, accounting and other advisory fees, SEC filing
fees and other related charges for both GLG and the special
committee, totaling approximately $18.5 million. This
amount includes the following estimated fees and expenses:
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Description
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Amount to be Paid
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SEC filing fee
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$
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102,704
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Printing, proxy solicitation and mailing expenses
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1,100,000
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Legal, accounting and other advisory fees
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7,900,000
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Financial advisor fees
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9,000,000
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Miscellaneous
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397,296
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Total
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$
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18,500,000
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Under certain circumstances, Man has agreed to pay us for our
reasonable documented
out-of-pocket
fees and expenses incurred in connection with the merger
agreement up to $15 million in the aggregate. See The
Merger Agreement Termination Fees and Expense
Reimbursement.
In addition, it is expected that Man, Holdco and Merger Sub will
incur approximately $24.4 million of transaction-related
fees and expenses, including financial, legal and other advisory
fees. If the merger agreement is terminated under certain
circumstances, described under The Merger
Agreement Termination Fees and Expense
Reimbursement, we have agreed to pay Man for its
reasonable documented
out-of-pocket
fees and expenses incurred in connection with the merger
agreement up to $15 million in the aggregate.
Provisions
for the Unaffiliated Stockholders
No provision has been made to grant GLGs unaffiliated
stockholders access to the files of GLG, Man, Holdco Merger Sub
or the Selling Stockholders or to obtain counsel or appraisal
services at the expense of any of the foregoing.
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SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
In addition to historical information, this proxy statement
contains and incorporates by reference statements relating to
our future results (including certain projections and business
trends) that are forward-looking statements. Our
actual results may differ materially from those projected as a
result of certain risks and uncertainties. Our forward-looking
statements include, but are not limited to, statements regarding
our expectations, hopes, beliefs, intentions or strategies
regarding the future. In addition, any statements that refer to
projections, forecasts or other characterizations of future
events or circumstances, including any underlying assumptions,
are forward-looking statements. The words
anticipates, believe,
continue, could, estimate,
expect, intend, may,
might, plan, possible,
potential, predict, project,
should, would and similar expressions
may identify forward-looking statements, but the absence of
these words does not mean that a statement is not
forward-looking.
The forward-looking statements contained and incorporated by
reference in this proxy statement are based on our expectations
and beliefs as of the date of these statements concerning future
developments and their potential effects on us and speak only as
of the date of such statement. There can be no assurance that
future developments affecting us will be those that we have
anticipated. These forward-looking statements involve a number
of risks, uncertainties (some of which are beyond our control)
or other assumptions that may cause actual results or
performance to be materially different from those expressed or
implied by these forward-looking statements. These risks and
uncertainties include, but are not limited to, those factors
described under Part I, Item 1A, Risk
Factors in our Annual Report on
Form 10-K
for the year ended December 31, 2009, Part II,
Item 1A, Risk Factors in our Quarterly Reports
on
Form 10-Q
for the quarters ended March 31, 2010 and June 30,
2010 (except that the safe harbor under Section 21E of the
Exchange Act referenced in such
Form 10-K
and
Forms 10-Q
does not apply to any forward-looking statements we make in
connection with the merger and share exchange) and the following:
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failure to satisfy the conditions of the pending merger,
including failure to obtain the required approvals of GLGs
and Mans stockholders by the requisite vote, including the
Minority Stockholder Approval;
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the costs and expenses associated with the pending merger;
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contractual restrictions on the conduct of our business included
in the merger agreement;
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the potential loss of key personnel, disruption of our business
or any impact on our relationships with third parties as a
result of the pending merger;
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any delay in consummating the proposed merger or the failure to
consummate the transaction;
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the outcome of, or expenses associated with, any litigation
which may arise in connection with the pending merger, including
the purported class action suits filed to date;
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the volatility in the financial markets;
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our financial performance;
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market conditions for the investment funds and managed accounts
we manage;
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performance of the investment funds and managed accounts we
manage, the related performance fees and the associated impacts
on revenues, net income, cash flows and fund inflows/outflows;
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the impact of net inflows on our mix of assets under management
and the associated impacts on revenues;
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the cost of retaining our key investment and other personnel or
the loss of such key personnel;
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risks associated with the expansion of our business in size and
geographically;
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operational risk, including counterparty risk;
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litigation and regulatory enforcement risks, including the
diversion of management time and attention and the additional
costs and demands on our resources;
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risks associated with the use of leverage, investment in
derivatives, availability of credit, interest rates and currency
fluctuations,
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as well as other risks and uncertainties, including those set
forth herein and those detailed from time to time in our Annual
Reports on
Form 10-K,
Quarterly Reports on
Form 10-Q
and other SEC filings. These forward-looking statements are made
only as of their respective dates, and we undertake no
obligation to update or revise the forward-looking statements,
whether as a result of new information, future events or
otherwise, except that, as required by
Rule 13e-3(d)(2)
or otherwise required by law, we will amend this proxy statement
to reflect any material changes to the forward looking
information included in this proxy statement.
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THE
SPECIAL MEETING
This proxy statement is furnished in connection with the
solicitation of proxies by our board of directors in connection
with the special meeting of our stockholders.
Date,
Time and Place of the Special Meeting
We will hold the special meeting at the offices of
Chadbourne & Parke LLP, 30 Rockefeller Plaza, New
York, New York 10112, at 10:00 a.m., local time, on
September , 2010.
Purpose
of the Special Meeting
At the special meeting, we will ask the holders of our common
stock and Series A voting preferred stock to (i) approve
the Merger Proposal, and (ii) approve the Adjournment
Proposal.
Record
Date; Shares Entitled to Vote; Quorum
Only holders of record of our common stock and Series A
voting preferred stock at the close of business on
August 30, 2010, the record date, are entitled to notice
of, and to vote at, the special meeting. On the record date,
there were 251,883,013 shares of our common stock and
58,904,993 shares of our Series A voting preferred
stock issued and outstanding. Each holder of shares of common
stock is entitled to one (1) vote per share and each holder
of shares of our Series A voting preferred stock is
entitled to one (1) vote per share on each proposal
presented in this proxy statement.
The presence in person or by proxy of a majority of the combined
shares of our common stock and Series A voting preferred
stock outstanding on the record date is required for a quorum.
Shares that are voted FOR, AGAINST or
ABSTAIN a matter are treated as being present at the
special meeting for purposes of establishing a quorum. In the
event that there are not sufficient shares present for a quorum,
the special meeting may be adjourned in order to permit further
solicitation of proxies. However, the presence in person or by
proxy of the Selling Stockholders and our other directors and
executive officers, who collectively hold approximately 51.5% of
the combined shares of our common stock and Series A voting
preferred stock as of the record date for the special meeting
(the voting stock), will assure that a quorum is
present at the meeting.
Voting of
Proxies
You may vote using one of the following methods if you hold your
shares in your own name as stockholder of record:
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Internet. You may submit a proxy to vote on
the Internet up until 11:59 p.m. Eastern Time on
September , 2010 by going to the website for
Internet voting on your proxy card (www.proxyvote.com) and
following the instructions on your screen. Have your proxy card
available when you access the web page. If you vote by the
Internet, you should not return your proxy card.
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Telephone. You may submit a proxy to vote by
telephone by calling the toll-free telephone number on your
proxy card, 24 hours a day and up until 11:59 p.m.
Eastern Time on September , 2010, and following
the prerecorded instructions. Have your proxy card available
when you call. If you vote by telephone, you should not return
your proxy card.
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Mail. You may submit a proxy to vote by mail
by marking the enclosed proxy card, dating and signing it, and
returning it in the postage-paid envelope provided, or to GLG
Partners, Inc.,
c/o Broadridge,
51 Mercedes Way, Edgewood, NY 11717 as long as your proxy card
is received by September , 2010. If you own
shares in various registered forms, such as jointly with your
spouse, as trustee of a trust or as custodian for a minor, you
will receive, and will need to sign and return, a separate proxy
card for those shares because they are held in a different form
of record ownership. Shares held by a corporation or business
entity must be voted by an authorized officer of the entity.
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In Person. You may vote your shares in person
by attending the special meeting and submitting your vote at the
meeting.
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For stockholders of record, an executed proxy that is not marked
AGAINST or ABSTAIN will be voted for
approval of the Merger Proposal and will disqualify the
stockholder submitting that proxy from demanding appraisal
rights. If you do not return your proxy card, provide voting
instructions via the Internet or telephone or attend the special
meeting and vote in person, it will have the same effect as if
you voted AGAINST approval of the Merger Proposal.
If your broker, bank or other nominee is the holder of record of
your shares (i.e., your shares are held in street
name), you will receive voting instructions from the
holder of record. You must follow these instructions in order
for your shares to be voted. We urge you to instruct your
broker, bank or other nominee how to vote your shares by
following those instructions. The broker is required to vote
those shares in accordance with your instructions. If you do not
give instructions to the broker, the broker may not vote
your shares with respect to any of the proposals. If you plan to
attend the special meeting, you will need a proxy from your
broker, bank or nominee in order to be given a ballot to vote
the shares.
In addition, because any shares you may hold in street
name will be deemed to be held by a different stockholder
than any shares you hold of record, shares held in street name
will not be combined for voting purposes with shares you hold of
record. To be sure your shares are voted, you should instruct
your broker, bank or other nominee to vote your shares.
For stockholders who hold in street name, if you do
not return your brokers, banks or other
nominees voting form, provide voting instructions via the
Internet or telephone through your broker, bank or other
nominee, if possible, or attend the special meeting and vote in
person with a proxy from your broker, bank or other nominee, it
will have the same effect as if you voted AGAINST
approval of the Merger Proposal.
Revocability
of Proxies
For stockholders of record, whether you submit a proxy to vote
via the Internet, by telephone or by mail, you may revoke your
proxy at any time before it is voted at the special meeting by:
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delivering a written notice of revocation to the Secretary of
GLG;
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casting a later vote using the Internet or telephone voting
procedures;
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submitting a properly signed proxy card with a later
date; or
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voting in person at the special meeting.
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If your shares are held in street name, you must
contact your broker, bank or other nominee to revoke your proxy.
Your proxy is not revoked simply because you attend the special
meeting.
Attendance
at the Special Meeting
Admission to the meeting is limited to stockholders and their
proxies and seating will be limited. Each stockholder may be
asked to present valid picture identification such as a
drivers license or passport. Please note that if you hold
your shares through a broker, bank or other nominee in
street name, you will need to provide a copy of a
brokerage or bank statement reflecting your stock ownership as
of the record date to be admitted to the meeting. Cameras,
recording devices and other electronic devices will not be
permitted at the meeting.
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Solicitation
of Proxies
This proxy solicitation is being made and paid for by GLG on
behalf of its board of directors. In addition, we have retained
Morrow to assist in the solicitation. We will pay Morrow $10,000
plus
out-of-pocket
expenses for its assistance. Our directors, executive officers
and employees may also solicit proxies by personal interview,
mail,
e-mail,
telephone, facsimile or other means of electronic communication.
These persons will not be paid additional compensation for their
efforts. We will also request brokers and other fiduciaries to
forward proxy solicitation material to the beneficial owners of
shares of our common stock that the brokers and fiduciaries hold
of record. We will reimburse them for their reasonable
out-of-pocket
expenses. In addition, we will indemnify Morrow against any
losses arising out of that firms proxy soliciting services
on our behalf.
Other
Business
We are not currently aware of any business to be acted upon at
the special meeting other than the matters discussed in this
proxy statement.
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ADOPTION
OF THE MERGER AGREEMENT
Proposal
You are being asked to consider and vote upon a proposal to
adopt the Agreement and Plan of Merger dated as of May 17,
2010, as amended, among GLG, Man and Merger Sub. If the merger
is completed, GLGs stockholders (other than parties to the
Share Exchange Agreement (with respect to the Subject Shares),
Man and its subsidiaries, GLG and certain of its subsidiaries,
stockholders who properly exercise and perfect their appraisal
rights under Delaware law, and holders of restricted shares and
other awards to receive shares of our common stock under our
stock incentive plans) will have the right to receive, for each
share of our common stock they hold at the time of the merger,
$4.50 in cash.
GLG Partners, Inc., a Delaware corporation, is a global asset
management company offering its clients a wide range of
performance-oriented investment products and managed account
services. GLGs primary business is to provide investment
management advisory services for various investment funds and
companies.
Man Group plc, a public limited company existing under the laws
of England and Wales, is a leading alternative investment
management business delivering a comprehensive range of
innovative guaranteed and open-ended products and tailor-made
solutions to private and institutional investors globally.
Escalator Sub 1 Inc., which we refer to as Merger
Sub, is a Delaware corporation and wholly owned subsidiary
of Man Principal Strategies Holdings LLC, which we refer to as
Holdco. Holdco is a Delaware limited liability
company and wholly owned subsidiary of Man. Holdco was formed
solely for the purpose of owning Merger Sub. Merger Sub was
formed solely for the purpose of entering into the merger
agreement described below and consummating the transactions
contemplated by the merger agreement.
Vote
Required
The approval of the Merger Proposal will require the affirmative
vote of:
(i) the holders of a majority of GLGs outstanding
shares of voting stock voting as a single class, which vote we
refer to as the Statutory Stockholder
Approval; and
(ii) the holders of a majority of GLGs outstanding
shares of common stock, other than shares of common stock held
by:
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the Selling Stockholders;
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Man and its affiliates;
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GLG and its affiliates (other than directors on the special
committee); and
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employees of GLG.
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We refer to the vote described in clause (ii) as the
Minority Stockholder Approval.
Obtaining the Statutory Stockholder Approval and the Minority
Stockholder Approval are conditions to the completion of the
merger and the failure to satisfy such conditions cannot be
waived.
Abstentions, failures to vote and broker non-votes in the
case of both the Statutory Stockholder Approval and the Minority
Stockholder Approval will have the same effect as votes against
the approval of the Merger Proposal.
As of August 30, 2010, the record date for the special
meeting, our directors and executive officers had the right to
vote, in the aggregate, 87,044,209 shares of our common
stock and 58,904,993 shares of our Series A voting
preferred stock, which represented approximately 47.0% of the
outstanding shares of our voting stock on the record date for
the meeting. Pursuant to the terms of the voting and support
agreement, the Selling Stockholders and TOMS have agreed to vote
their shares of common stock and Series A voting preferred
stock FOR the approval of the Merger Proposal and
FOR the Adjournment Proposal. Our other directors
and executive officers have informed us that they intend to vote
all of their shares of common stock FOR the approval
of the Merger Proposal and FOR the Adjournment
Proposal. Because the Selling Stockholders, TOMS and our other
directors and executive officers
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collectively hold approximately 51.5% of our voting stock as of
the record date for the special meeting, we expect that the
Statutory Stockholder Approval will be obtained.
Rights of
Stockholders Who Object to the Merger
Our stockholders are entitled to appraisal rights under
Section 262 of the DGCL in connection with the merger. This
means that if you properly perfect your demand for appraisal
under Delaware law you are entitled to have the value of your
shares determined by the Delaware Court of Chancery and to
receive payment based on that valuation. The ultimate amount you
receive as a dissenting stockholder in an appraisal proceeding
may be more than, the same as or less than the amount you would
have received under the merger agreement.
In order to exercise your appraisal rights, you must
(i) submit a written demand to GLG for an appraisal prior
to the stockholder vote on the merger agreement, (ii) not
vote in favor of adoption of the merger agreement, nor consent
thereto in writing, (iii) continue to hold your shares
until the consummation of the merger and (iv) comply with
other Delaware law procedures explained in the proxy statement.
Your failure to follow exactly the procedures specified under
Delaware law will result in the loss of your appraisal rights.
See Appraisal Rights and the text of the Delaware
appraisal rights statute reproduced in its entirety as
Appendix F.
Recommendation
of the Board
The special committee has unanimously recommended that the board
of directors (i) determine it was in the best interests of
GLG and its stockholders for GLG to enter into the merger
agreement, (ii) authorize and approve the execution,
delivery and performance by GLG of the merger agreement (subject
to the Minority Stockholder Approval), (iii) waive the
restrictions on transfer applicable to shares of GLG capital
stock held by the Selling Stockholders under the GLG
Shareholders Agreement, as requested by the Selling
Stockholders, (iv) approve the share exchange agreement and
the consummation of the transactions contemplated thereby,
(v) submit the adoption of the merger agreement to a vote
at a special meeting of GLG stockholders called for that
purpose, and (vi) recommend that stockholders of GLG vote
to adopt the merger agreement at the special meeting.
THE BOARD OF DIRECTORS, ACTING UPON THE UNANIMOUS
RECOMMENDATION OF THE SPECIAL COMMITTEE, UNANIMOUSLY RECOMMENDS
THAT THE STOCKHOLDERS VOTE FOR APPROVAL OF THE
MERGER PROPOSAL.
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THE
MERGER AGREEMENT
The following is a summary of the material terms and
provisions of the merger agreement, but does not purport to
describe all of the terms and provisions of the merger
agreement. The following summary is qualified in its entirety by
reference to the complete text of the merger agreement and
Amendment No. 1 to the merger agreement, which are attached
as Appendices A and A-1 to this proxy statement and
incorporated into this proxy statement by reference. We urge you
to read the full text of the merger agreement and the amendment
to the merger agreement for a more complete description of the
terms and conditions of the merger. All references to the merger
agreement in the following summary are to the merger agreement
as amended.
The merger agreement and this summary of its terms and
provisions have been included to provide you with information
regarding the terms and provisions of the merger agreement. The
representations and warranties made in the merger agreement may
not accurately characterize the current actual state of facts
with respect to us, Man or Merger Sub because they were made
only for purposes of the merger agreement and as of the specific
dates set forth therein and may be subject to important
exceptions, qualifications, limitations and supplemental
information agreed upon by the contracting parties, including
being qualified by disclosures made in confidential disclosure
schedules delivered by the contracting parties in connection
with negotiating the merger agreement. Moreover, some of those
representations and warranties may have been used for the
purposes of allocating contractual risk among the parties to the
merger agreement, instead of establishing these matters as
facts, and may be subject to standards of materiality applicable
to the contracting parties that differ from those applicable to
public filings made with the SEC. Factual disclosures about us,
Man or Merger Sub contained in this proxy statement or in our
public reports filed with the SEC may supplement, update or
modify the factual disclosures about us, Man or Merger Sub
contained in the merger agreement.
The
Merger
Under the merger agreement, Merger Sub, a wholly owned
subsidiary of Holdco, and, indirectly, a wholly owned subsidiary
of Man, will merge with and into us. After the merger, the
separate corporate existence of Merger Sub will cease, and we
will continue as the surviving corporation and a wholly owned
subsidiary of Holdco, and, indirectly, a wholly owned subsidiary
of Man.
At the effective time of the merger, our certificate of
incorporation and our bylaws in effect immediately prior to the
effective time of the merger will be amended and restated at and
as of the effective time as to be in the forms attached as
exhibits to the merger agreement and will be the certificate of
incorporation and the bylaws, respectively, of the surviving
corporation, until amended as provided therein or by applicable
law.
Following the merger, the directors of Merger Sub will be the
directors of the surviving corporation, until their respective
successors are duly elected or appointed and qualified or their
earlier death, resignation or removal in accordance with the
certificate of incorporation and bylaws of the surviving
corporation. Prior to the closing date, all of our directors
will resign from our board of directors, effective no later than
the effective time of the merger. Following the merger, our
officers will be the initial officers of the surviving
corporation, until their respective successors are duly
appointed and qualified or their earlier death, resignation or
removal in accordance with the certificate of incorporation and
bylaws of the surviving corporation.
Effective
Time
The merger will be effective at the time, which we refer to as
the effective time, when the certificate of merger
is filed with the Secretary of State of the State of Delaware
(or at such later time as is agreed upon by the parties to the
merger agreement and specified in the certificate of merger).
The closing of the merger will take place no later than the
third business day after the satisfaction or waiver (to the
extent permitted) of all closing conditions stated in the merger
agreement (other than those conditions that by their nature are
to be satisfied at the closing, but subject to the satisfaction
or waiver (to the extent permitted) of such conditions), but
immediately after the consummation of the transactions set forth
in the share exchange agreement, which we refer to as the
share exchange transactions, or as otherwise agreed
in writing by the parties.
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From and after the effective time, the merger will have the
effects set forth in the applicable provisions of the General
Corporation Law of the State of Delaware, or the DGCL.
Notwithstanding the foregoing, at the effective time, all of our
properties, rights, privileges, powers and franchises will vest
in the surviving corporation and all of the debts, liabilities
and duties of us and Merger Sub will become the debts,
liabilities and duties of the surviving corporation.
Merger
Consideration
Other than the excluded shares described below, each share of
our common stock issued and outstanding immediately prior to the
effective time of the merger will be converted at the effective
time of the merger into the right to receive $4.50 in cash,
without interest, which we refer to as the merger
consideration. At the effective time of the merger, all
shares of our common stock will be automatically cancelled and
shall cease to exist, and each holder of a stock certificate or
book-entry shares will cease to have any rights with respect to
such shares, except for the right to receive the merger
consideration to be paid with respect to surrender of such stock
certificate or
book-entry
shares. At the effective time of the merger, each issued and
outstanding share of capital stock of Merger Sub will be
converted into and become one validly issued, fully paid and
non-assessable share of common stock of the surviving
corporation.
The following shares will be excluded shares and will receive
the following treatment in the merger:
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shares owned by Man or Merger Sub (including the shares acquired
from the Selling Stockholders in the share exchange), us
(including treasury shares) or certain of our wholly owned
subsidiaries will be automatically cancelled without payment of
any consideration;
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shares of our preferred stock will be automatically cancelled
without payment of any consideration;
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shares held by any of our stockholders who did not vote in favor
of the merger and are entitled to and who have properly
exercised and not withdrawn a demand for, or lost their right
to, appraisal rights under the DGCL will have the right to
receive the payment described under Appraisal
Rights below; and
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restricted shares issued under our stock and incentive plans,
and other awards under our stock and incentive plans
representing a right to receive shares of our common stock upon
satisfaction of vesting conditions, will have the treatments
described under Treatment of Equity
Awards below.
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If we change the number of shares of our common stock issued and
outstanding prior to the effective time of the merger as a
result of a stock dividend, stock split, reclassification,
combination, exchange of shares or similar transaction, the
merger consideration will be appropriately adjusted to reflect
the change.
Payment
and Exchange Procedures
Man will select a bank or trust company (reasonably acceptable
to us) as agent to receive the aggregate merger consideration
for the benefit of the holders of shares of our common stock
converted at the effective time into the right to receive merger
consideration. At the effective time of the merger, Man will
deposit with the agent an amount in cash equal to the aggregate
merger consideration. The agent shall invest such cash as
directed by Man, subject to certain limitations, and any net
profit resulting from, or interest or income produced by, such
deposited amounts will be payable to Man or as Man otherwise
directs.
Promptly after the effective time of the merger, Man and the
surviving corporation will cause the agent to mail to each
holder of our common stock of record entitled to receive merger
consideration a letter of transmittal and instructions advising
how to surrender or exchange stock certificates or book-entry
shares for the merger consideration.
Upon surrender of a stock certificate or delivery of an
agents message in the case of book-entry
shares to the agent in accordance with the terms of the letter
of transmittal, together with a signed letter of transmittal,
and any other documents specified in the letter of transmittal,
the holder of the stock certificate or book-entry shares will
receive in exchange a cash amount for each share surrendered
equal to the merger consideration. The agent will reduce the
amount of any merger consideration paid to the holder by any
applicable withholding taxes and no interest will be paid or
accrued with respect to the merger consideration. The stock
certificate or book-entry shares so surrendered will be
cancelled. Until surrendered, each stock certificate will only
represent after the effective time the right to receive merger
consideration, without interest.
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In the event of a transfer of ownership of shares that is not
registered in our transfer records, payment may be issued to the
transferee only upon surrender of the stock certificate formerly
representing such shares to the agent, accompanied by all
documents evidencing the transfer and evidencing to the
reasonable satisfaction of the agent and the surviving
corporation that any applicable transfer and other taxes have
been paid or are not applicable.
At close of business on the day of the effective time of the
merger, we will close our stock transfer books. After that time,
there will be no further transfer of shares of our common stock
that were outstanding immediately prior to the effective time of
the merger.
If a stock certificate has been lost, stolen or destroyed, the
agent will deliver the merger consideration in exchange for the
lost, stolen or destroyed stock certificate only upon the making
of an affidavit of loss and, if required by Man, the posting of
a bond, in such a reasonable amount as Man may direct, as
indemnity against any claim that may be made against Man with
respect to the lost, stolen or destroyed stock certificate.
Any cash deposited with the agent (including the proceeds of any
investments thereof and any amount of additional consideration
deposited) that remains unclaimed one year after the closing
date will be delivered to the surviving corporation or Man at
the request of either of them. Subject to any applicable
unclaimed property laws, after that time, any holder of shares
will be entitled to look only to the surviving corporation for
payment of the merger consideration upon surrender of its stock
certificates. If any amounts remain unclaimed by such holders at
the time at which such amounts would otherwise escheat to or
become property of a governmental authority, those amounts will
become the property of Man, free and clear of all claims of
interest, to the extent permitted by law.
Appraisal
Rights
Shares of our common stock issued and outstanding immediately
prior to the effective time of the merger that are held by any
stockholder who did not vote in favor of the merger (or consent
thereto in writing) and has perfected a demand for appraisal
rights with respect to such shares will not be converted into
the right to receive the merger consideration. Instead, such
stockholder will only be entitled to payment of the appraised
value of such shares in accordance with the DGCL. At the
effective time of the merger, all such shares will automatically
be cancelled and will cease to exist or be outstanding, and each
holder will cease to have any rights with respect to the shares,
except for rights granted under Section 262 of the DGCL. In
the event a stockholder fails to perfect or effectively
withdraws or loses the right to appraisal under the DGCL, then
the rights of such holder will be deemed to have been converted
into the right to receive, at the effective time of the merger,
the merger consideration described above. We have agreed to
provide Man with notice of any demands for appraisal rights or
attempted withdrawals of such demands, and Man has the right to
participate in and direct all negotiations and proceedings with
respect to demands for appraisal under the DGCL. We may not,
without Mans prior written consent, voluntarily make any
payment with respect to, or settle or offer to settle, any
demands for payment, or waive any failure to timely deliver a
written demand for appraisal or timely take any other action to
perfect appraisal rights. If any portion of the merger
consideration was set aside with the agent to pay for shares of
our common stock, and appraisal rights are perfected with
respect to those shares, such merger consideration will be
returned to Man upon its request.
These rights in general are discussed more fully under
Appraisal Rights below.
Treatment
of Equity Awards
Immediately prior to the effective time, each issued and
outstanding share of restricted common stock issued under our
stock and incentive plans will be converted into the right to
receive from the surviving corporation an amount in cash equal
to the merger consideration, the receipt of which will be
(except in the case of restricted shares held by our
non-employee directors where such vesting will be accelerated to
the effective time) subject to the same vesting terms and
conditions and other rights and restrictions that were
applicable to such shares of restricted common stock prior to
the effective time. As of the effective time of the merger and
upon the conversion described above, all shares of restricted
common stock will be automatically cancelled and will cease to
exist, and each holder of certificated or book-entry shares will
cease to have any rights with respect to such shares, except for
the right to receive the merger consideration to be paid with
respect to such shares, subject to the applicable vesting
conditions. In addition, the vesting of cash awards may be
accelerated to the effective time in an amount sufficient to pay
the
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income tax
and/or
employee national insurance contributions liability that arises
as a result of the merger for U.K. employees.
At the effective time, each outstanding award under our stock
and incentive plans representing a right to receive shares of
common stock (other than shares of restricted common stock
described above) subject to vesting conditions will be assumed
by the surviving corporation, subject to the same vesting and
other terms and conditions that were applicable to the stock
rights immediately prior to the effective time. These stock
rights will be settled in ordinary shares of Man, in an amount
equal to the number of shares underlying such stock rights
multiplied by the exchange ratio set forth in the share exchange
agreement. However, if our representation in the merger
agreement that each holder of such stock rights is a
non-U.S. resident
is not correct, or if the assumption of the stock rights by the
surviving corporation is prohibited by applicable securities
laws, the stock rights will be converted at the effective time
into a right to receive an amount in cash equal to the merger
consideration, multiplied by the number of shares covered by
such stock rights. In either case, the ordinary shares of Man or
the cash amount will be subject to the same vesting and other
terms and conditions that were applicable to the stock rights
prior to the effective time.
We have agreed to take all actions necessary to ensure that we
will not, at the effective time, be bound by any options, stock
appreciation rights, restricted stock rights, restricted stock
units, phantom equity awards, warrants or other rights
agreements (other than the shares of restricted common stock and
stock rights described above) which would entitle any third
party other than Man and its subsidiaries to own any equity
interest in the surviving corporation or to receive any payment
in respect thereof.
Representations
and Warranties
The merger agreement contains representations and warranties
made by us to and for the benefit of Man and Merger Sub and by
Man and Merger Sub to and for our benefit. The assertions
embodied in those representations and warranties may be
qualified by disclosures in our SEC documents filed with the SEC
from and after March 2, 2009 but prior to May 17, 2010
(but excluding certain risk factor disclosures or other
forward-looking statements) and information contained in
confidential disclosure schedules provided by the parties in
connection with signing the merger agreement that modify,
qualify and create exceptions to the representations and
warranties contained in the merger agreement.
We make various representations and warranties in the merger
agreement that are subject, in some cases, to exceptions and
qualifications (including exceptions that would not reasonably
be expected to constitute a Company Material Adverse Effect) as
defined under Definition of Company Material
Adverse Effect below. Our representations and warranties
relate to, among other things:
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due organization, corporate power to own and lease properties
and assets and to carry on our business as presently conducted,
good standing, and qualification;
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our capitalization and certain related matters;
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our corporate authority to enter into, and carry out the
obligations under, the merger agreement and to consummate the
transactions contemplated by the merger agreement and voting and
support agreement, and enforceability of the merger agreement;
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board of directors and special committee approvals and
recommendations of the merger agreement, and approvals of the
voting and support agreement and the share exchange agreement;
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the absence of violations of, conflicts with, or defaults under,
our organizational documents or those of our subsidiaries,
applicable laws and other contracts as a result of the merger
transaction and the share exchange transactions;
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required regulatory filings and the absence of other required
governmental consents and approvals;
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the accuracy of information supplied by us for the proxy
statement or proxy solicitation materials, or supplied by us to
Man for its shareholder circular or prospectus;
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the absence of brokers and finders fees in
connection with the merger transaction, other than those of
certain specified financial advisors;
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receipt by the special committee and our board of directors of
fairness opinions of their separate financial advisors;
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our ownership of the capital stock or other equity interests in
our subsidiaries, the capitalization of our subsidiaries, and
the qualification and good standing of our subsidiaries;
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our filings with the SEC, our financial statements, the absence
of certain undisclosed liabilities, and our maintenance of
disclosure controls and procedures;
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the conduct of our business (including of our subsidiaries) in
the ordinary course of business consistent with past practice
since March 31, 2010;
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the absence of any change, development, occurrence, event or
state of facts since March 31, 2010 that constitutes a
Company Material Adverse Effect;
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litigation and other legal proceedings;
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compliance by us, our subsidiaries and funds managed by us or
our subsidiaries, with laws and compliance with, and adequacy
of, permits and other registrations, certifications and
approvals;
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material contracts and restrictive contracts;
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tax matters;
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employee benefits and labor matters;
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intellectual property matters;
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title to properties and assets;
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insurance policies;
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funds managed by us or our subsidiaries, and our compliance with
applicable laws and our performance with respect to the
management of the funds;
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environmental matters; and
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the absence of representations and warranties by us other than
our representations and warranties contained in the merger
agreement, and no liability with respect to financial
projections, forecasts, estimates, budgets or prospect
information, or information presented to Man, Merger Sub or
their affiliates in the course of due diligence and negotiation
of the merger agreement.
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The merger agreement also contains various representations and
warranties made by Man and Merger Sub that are subject, in some
cases, to exceptions and qualifications. The representations and
warranties of Man and Merger Sub relate to, among other things:
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their due organization, good standing and qualification;
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Mans ownership of Merger Sub and the formation purpose and
business activities of Merger Sub;
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their corporate authority to enter into, and carry out the
obligations under, the merger agreement and to consummate the
transactions contemplated by the merger agreement and voting and
support agreement, and enforceability of the merger agreement;
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the absence of violations of, conflicts with, or defaults under,
their organizational documents, applicable law and other
contracts as a result of the merger transaction and the share
exchange transactions;
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required regulatory filings and the absence of other required
governmental consents and approvals;
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the accuracy of information they supplied us for the proxy
statement or proxy solicitation materials, or supplied by them
for their shareholder circular or prospectus;
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the absence of brokers and finders fees in
connection with the merger transaction, other than those
previously paid by Man or Merger Sub;
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the sufficiency of funds to pay the aggregate merger
consideration and other fees and expenses required to be paid by
them in accordance with the merger transaction and the share
exchange transactions;
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the absence of their ownership of any of our capital stock;
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litigation and other legal proceedings;
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contracts and arrangements between them and any of our directors
or major stockholders; and
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the absence of representations and warranties by Man other than
its representations and warranties contained in the merger
agreement, and no liability with respect to financial
projections, forecasts, estimates, budgets or prospect
information, or information presented to us, our subsidiaries or
affiliates in the course of due diligence and negotiation of the
merger agreement.
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The representations and warranties of the parties will not
survive consummation of the merger.
Definition
of Company Material Adverse Effect
Many of the representations and warranties made by us in the
merger agreement and certain conditions to performance by Man
and Merger Sub of their obligations under the merger agreement
are qualified by reference to whether the item in question would
constitute a Company Material Adverse Effect. The
merger agreement provides that a Company Material Adverse
Effect means, with respect to us, any change, development,
occurrence, event or state of facts that is, or would reasonably
be expected to be, materially adverse to the financial
condition, assets, liabilities, business or results of
operations of us and our subsidiaries, taken as a whole.
However, none of the following will constitute a Company
Material Adverse Effect:
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any change in the United States or European economy, financial
markets, political or regulatory conditions generally;
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any change, development, occurrence or event generally affecting
the alternative investment management industry in Europe;
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the negotiation, execution or announcement of the transactions
contemplated by the merger agreement, the voting and support
agreement and the share exchange agreement, or any changes,
developments, occurrences, events or states of fact arising
therefrom;
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any change in applicable laws, generally accepted accounting
principals or accounting standards, or any change in general
legal, regulatory or political conditions;
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any acts of war, sabotage or terrorism, or any escalation or
worsening of any such acts of war, sabotage or terrorism
threatened or underway as of the date of the merger agreement;
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any actions taken by us or our subsidiaries required by the
merger agreement or taken with Mans written
consent; and
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any decline in the market price, or change in trading volume, of
our capital stock, or any failure to meet internal or publicly
announced revenue or earnings projections.
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The first, second, fourth and fifth bullets above may
constitute, and may be taken into account in determining the
occurrence or expected occurrence of, a Company Material Adverse
Effect, to the extent they adversely affect us or our
subsidiaries taken as a whole in a disproportionate manner
relative to other participants in the alternative investment
management industry in Europe.
The third bullet above does not apply to our representations and
warranties with respect to: the absence of conflicts with
organizational documents, applicable laws and contracts;
regulatory filings, consents and government approvals; and
material contracts; and it does not apply to Mans
representations and warranties with respect to the absence of
conflicts with organizational documents, applicable laws and
contracts.
With respect to the last bullet above, any such decline, change
or failure will not prevent a determination that the underlying
cause of the decline, change or failure is a Company Material
Adverse Effect.
99
Stockholders
Meeting and Man Shareholders Meeting
We have agreed to take all reasonable action to call, give
notice of, convene and hold a special meeting of our
stockholders as promptly as practicable after the execution of
the merger agreement to adopt the merger agreement. We have
agreed, through our board of directors, to recommend to our
stockholders that they adopt the merger agreement, and to
include the recommendation of our board of directors in the
proxy statement.
We have agreed to prepare and file with the SEC a preliminary
proxy statement with respect to the stockholders meeting
and, subject to the right of board of directors to change its
recommendation as defined below, to include in such proxy
statement the recommendation of our board of directors that our
stockholders adopt the merger agreement. We have agreed to
respond to any comments of the SEC as promptly as practicable,
to mail the proxy statement to our stockholders as promptly as
practicable after it has been cleared by the SEC for mailing,
and to notify Man of any comments or any correspondence with the
SEC. We have agreed to supplement or amend the proxy statement
when a supplement or amendment is needed to make the proxy
statement not misleading.
Man has agreed to prepare and file with the United Kingdom
Financial Services Authority a shareholder circular, and a
prospectus in connection with the ordinary shares of Man to be
issued in connection with the share exchange agreement. The
shareholder circular will include a recommendation by the Man
Board that the shareholders of Man approve the merger agreement,
the share exchange agreement and the voting and support
agreement and, in the case of each agreement, the transactions
contemplated thereby, provided that to do so is not inconsistent
with the fiduciary duties to Man of its board of directors under
applicable law (as reasonably determined by such board of
directors in good faith after consultation with outside legal
counsel). Man has agreed to call and hold a meeting of its
shareholders to approve the merger agreement, the share exchange
agreement and the voting and support agreement and, in the case
of each agreement, the transactions contemplated thereby.
Restrictions
on Solicitations of Other Offers
We have agreed not to, and to cause our subsidiaries not to, and
to not authorize or permit our or our subsidiaries
officers, directors, employees, financial advisors, investment
bankers, agents and representatives (which we refer to
collectively as representatives) to, directly or
indirectly, solicit, facilitate or encourage the making of an
alternative takeover proposal relating to, in a single
transaction or series of related transactions, any
(a) acquisition of 15% or more of our consolidated assets
or to which 15% or more of our revenues or earnings on a
consolidated basis are attributable, (b) acquisition of
beneficial ownership of 15% or more of our outstanding common
stock or any other class of our equity securities,
(c) tender offer or exchange offer that if consummated
would result in any third party beneficially owning 15% or more
of our outstanding common stock or (d) merger,
consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar
transaction involving us (in each case, other than the merger
agreement, the transactions contemplated by the merger
agreement, the voting and support agreement and the share
exchange transaction), or engage in any negotiations or
discussions with any third party regarding such a takeover
proposal.
However, if prior to the adoption of the merger agreement by our
stockholders, we or our subsidiaries or our representatives
receive an unsolicited takeover proposal that does not involve a
breach of the merger agreement or any standstill
agreement, and our board of directors (or any authorized
committee thereof) reasonably determines in good faith (after
consultation with outside legal counsel and an outside financial
advisor) that such takeover proposal constitutes or is
reasonably likely to lead to a superior proposal
(described below) and its failure to take action would be
inconsistent with its fiduciary duties to our stockholders under
applicable law, then we may engage in discussions and
negotiations regarding such takeover proposal, provided, among
other things, that we notify Man, enter into a confidentiality
agreement with the third party making the takeover proposal
(which confidentiality agreement must allow for us to comply
with our obligations described under this section), and
concurrently provide to Man any non-public information with
respect to us and our subsidiaries that we provide to such third
party which was not previously provided to Man or its
representatives.
A superior proposal means any bona fide
written offer made to us by a third-party entered into after
the date of the merger agreement not involving a breach of the
merger agreement or any standstill agreement, to
acquire, directly or indirectly, more than 50% of our equity
securities or all or substantially all of our assets and the
assets of our subsidiaries on a consolidated basis, which offer
is on terms and conditions which our board of directors or any
100
authorized committee thereof reasonably determines in good
faith, after consultation with outside legal counsel and an
outside financial advisor, to be more favorable from a financial
point of view to the holders of our common stock (in their
capacity as such) than the merger, taking into account all the
terms and conditions of such proposal (including the likelihood
and timing of consummation thereof based upon, among other
things, the availability of financing and the expectation of
obtaining required approvals) and the merger agreement
(including any changes to the terms of the merger agreement
committed to by Man to us in writing).
Restrictions
on Change of Recommendation to Stockholders
Our board of directors has (upon the unanimous recommendation of
the special committee) unanimously resolved to recommend that
our stockholders adopt the merger agreement.
We have agreed that our board of directors (or a committee
thereof) may not, except under certain circumstances set forth
below, (a) withdraw, qualify or change (or publicly propose
to withdraw, qualify or change), in a manner adverse to Man, our
boards recommendation that our stockholders adopt the
merger agreement, (b) approve or recommend a takeover
proposal or an indication of interest, (c) authorize us or
any of our subsidiaries to enter into any merger, acquisition,
share exchange or other agreement (other than a confidentiality
agreement) with respect to a takeover proposal, or
(d) authorize or take any action to make any applicable
anti-takeover law inapplicable to any transaction contemplated
by a takeover proposal, or release any third party from, waive,
terminate or fail to enforce any standstill or
similar obligation of any third party. We refer to any action
described in clause (a) and clause (b) as an
Adverse Recommendation Change.
Notwithstanding these restrictions, at any time prior to
obtaining stockholder approval required to adopt the merger
agreement, our board of directors may effect an Adverse
Recommendation Change
and/or enter
into one or more definitive agreements with respect to a
takeover proposal if we have received a takeover proposal that
our board of directors or an authorized committee thereof
reasonably determines in good faith, after consultation with
outside legal counsel and an outside financial advisor, to be a
superior proposal, provided that we terminate the merger
agreement as described in clause (2) of the fourth bullet
under Termination of the Merger
Agreement and we pay to Man the termination fee described
in Termination Fees and Expense
Reimbursement. Prior to any such termination and payment
of the termination fee, we must first provide Man with two
business days prior written notice (except in certain
circumstances) of our intention to terminate the merger
agreement, make an Adverse Recommendation Change
and/or enter
into one or more definitive agreements with respect to a
superior proposal, which notice shall specify the terms and
conditions of the superior proposal and the identity of the
third party or parties making the superior proposal, and upon
Mans request, we must enter into good faith negotiations
with Man during such notice period to amend the merger agreement
in a manner such that the failure by our board of directors to
make an Adverse Recommendation Change or to terminate the merger
agreement would not be inconsistent with its fiduciary duties
under applicable law. In determining whether to make any Adverse
Recommendation Change, we have agreed that the board of
directors will take into account any changes to the terms of the
merger agreement and the share exchange agreement proposed by
Man.
Notwithstanding the occurrence of an Adverse Recommendation
Change, the merger agreement and our obligations thereunder will
not terminate except in accordance with the termination
provisions of the merger agreement described below under
Termination of the Merger Agreement and
until the merger agreement is terminated in accordance with
those provisions, our board of directors will be obligated to
submit the adoption of the merger agreement to our stockholders
at the stockholders meeting.
In order to enter into an acquisition agreement with respect to
a superior proposal, we must terminate the merger agreement in
accordance with the terms of the merger agreement. See
Termination of the Merger Agreement and
Termination Fees and Expense
Reimbursement below.
Notwithstanding these restrictions, subject to certain
conditions, our board of directors may make certain disclosures
to our stockholders regarding its position in connection with
the merger contemplated by the U.S. securities laws or other
applicable laws if our board of directors determines in good
faith, after consultation with outside legal counsel, that
failure to so disclose such position would constitute a
violation of applicable law.
101
Reasonable
Best Efforts
We, Man and Merger Sub have agreed to cooperate and use our
reasonable best efforts to take or cause to be taken all
actions, and to do or cause to be done all things, necessary to
satisfy the conditions to closing under the merger agreement and
applicable law, and to consummate and make effective the merger
and the other transactions contemplated by the merger agreement,
in the most expeditious manner practicable, including preparing
and filing promptly and fully all documentation to effect all
necessary filings, notices, petitions, statements,
registrations, submissions of information, applications and
other documents, and to obtain all approvals, consents,
registrations, permits, authorizations and other confirmations
required to be obtained from any third party or any governmental
entity necessary, proper or advisable to consummate the merger
transaction.
We, Man and Merger Sub have also agreed to use our reasonable
best efforts to:
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make any required filing pursuant to the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, to take or cause
to be taken all actions necessary to cause the expiration or
termination of the applicable waiting period under the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, to take all
action necessary to ensure that no state takeover statute
becomes applicable to the merger transaction or the share
exchange transactions, and to take all actions necessary to
consummate such transactions if such a law becomes applicable;
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cooperate in connection with any filing or submission to
governmental authorities in connection with the merger
transaction or any investigation or other inquiry by or before a
governmental authority relating to the merger transaction, to
keep the other parties informed of all material communications
with governmental authorities, and to consult with the other
parties with respect to filings made with or written materials
submitted to any third party or governmental authority or in
advance of any meeting or conference with any governmental
authority; and
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resolve any objections that may be raised by a governmental
authority with respect to the merger transaction, subject to
certain exceptions.
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We have agreed to, and to cause our subsidiaries to, use our
commercially reasonable efforts to obtain as promptly as
practicable after the date of the merger agreement the approval
of the Irish Financial Services Regulatory Authority to the
continued management of certain Irish funds by certain of our
subsidiaries following the closing. We have also agreed, when
required by applicable law, agreement or the relevant documents
of any fund we or our subsidiaries manage and as promptly as
practicable after the date of the merger agreement, to, and to
cause our subsidiaries to, send a notice of the merger
transactions (and request consent if necessary) to any investor
in a fund we or our subsidiaries manage or to any party to an
advisory agreement pursuant to which we provide management or
advisory services.
Covenants
Relating to the Conduct of our Business
We have agreed that, from the date of the merger agreement until
the effective time of the merger or the earlier termination of
the merger agreement, subject to certain exceptions and except
as expressly contemplated by the merger agreement or required by
law or consented to in writing by Man (which consent will not be
unreasonably withheld, delayed or conditioned), we will, and we
will cause our subsidiaries to:
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conduct our respective businesses in all material respects in
the ordinary course of business consistent with past
practice; and
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use reasonable best efforts to maintain existing relationships
with clients, intermediaries, employees, consultants and other
parties with whom we have material business relationships.
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We have also agreed that, from the date of the merger agreement
until the effective time of the merger or the earlier
termination of the merger agreement, subject to certain
exceptions and except as expressly contemplated by
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the merger agreement or required by law or consented to in
writing by Man (which consent will not be unreasonably withheld,
delayed or conditioned), we will not, and will cause our
subsidiaries not to:
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issue, sell or grant any shares of our capital stock, equity or
equity-based interests, or any securities or rights convertible
into, exchangeable or exercisable for, or evidencing the right
to subscribe for such capital stock or equity interests, or
warrants, options or rights to acquire such securities, or amend
any terms of any of our currently outstanding capital stock or
rights to acquire such securities (other than issuances required
upon the exercise or conversion of certain warrants, the
conversion of certain convertible notes and the exchange of
certain exchangeable shares, each existing on the date of the
merger agreement);
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redeem, purchase or otherwise acquire any outstanding shares of
our or our subsidiaries capital stock or equity interests,
or any rights, warrants or options to acquire such capital stock
or equity interests, other than (a) pursuant to certain of
our material contracts, or (b) for withholding taxes
incurred in connection with restricted shares or the forfeiture
of equity awards under our stock and incentive plans and
outstanding as of the date of the merger agreement;
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declare, set aside for payment or pay any dividend on, or make
any other distribution in respect of, our capital stock, or make
any payments to stockholders or other equity holders, other than
(a) dividends paid by any of our subsidiaries to us or such
subsidiarys parent or (b) cumulative dividends with
respect to certain FA Sub 2 exchangeable shares in the ordinary
course of business consistent with past practice;
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split, combine, subdivide or reclassify any shares of our
capital stock or the capital stock of our subsidiaries;
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incur or assume any indebtedness for borrowed money, issue or
sell any debt securities, guarantee any indebtedness or enter
into any agreement to maintain any financial commitment of a
third party, other than (a) borrowings in the ordinary
course of business consistent with past practice under our
existing credit facility and guarantees of such borrowings
issued by our subsidiaries, (b) borrowings between us and
our wholly owned subsidiaries in the ordinary course of business
consistent with past practice, and (c) in connection with
letters of credit in the ordinary course of business and not
greater than $1,000,000 in the aggregate;
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make any loans or advances to a third party, other than to
ourselves or our wholly owned subsidiaries, and other than
travel and similar advances to our employees and advances to our
customers, in each case, in the ordinary course of business
consistent with past practice;
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make any capital expenditures for the purchase of real property,
or greater than $2,000,000 individually or $5,000,000 in the
aggregate, except as budgeted in our 2010 capital expenditure
plan;
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sell, dispose of, transfer, lease, license out, pledge, mortgage
or otherwise encumber any of our material properties or assets,
including securities of our subsidiaries, other than
(a) sales, leases or licenses in the ordinary course of
business consistent with past practice or up to $10,000,000 in
the aggregate, (b) pursuant to material contracts in effect
on the date of the merger agreement, (c) dispositions of
obsolete or worthless assets, and (d) liens, pledges,
mortgages or encumbrances permitted under the merger agreement;
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directly or indirectly acquire any third party or any division
of a third party by merger or stock or equity acquisition, or
directly or indirectly acquire any assets for consideration
greater than $5,000,000 in the aggregate except in the ordinary
course of business consistent with past practice, other than
acquisitions between us and our subsidiaries;
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increase the severance, compensation, distributions or benefits
payable to our current or former directors, officers, employees
or consultants, or establish, adopt, enter into, amend or
terminate any stock or incentive plan or employment or other
agreement with respect to such individuals, other than as
required by existing plans, agreements or laws, or increases
made in the ordinary course of business consistent with past
practice;
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pay or accrue any compensation, distributions or bonuses in
advance of when such amounts would otherwise be due, paid or
accrued in the ordinary course of business and in a manner
consistent with past practice;
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enter into, terminate or amend any material contract other than
in the ordinary course of business consistent with past
practice, or enter into any agreement or extend the term or
scope of any agreement restricting us or our subsidiaries from
engaging in business or geographic area;
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amend or modify certain engagement letters, or enter into any
agreement that would be breached by, or require the consent of a
third party to continue in full force following, the merger
transaction or share exchange transactions, or release any third
party from, or modify or waive any provisions of, a
confidentiality or standstill agreement;
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make any material changes in financial or tax accounting
methods, principles or practices, except as may be required
under generally accepted accounting principles or by applicable
law;
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except as may be required by applicable law, make, change or
revoke any material tax election, or settle or compromise any
material tax liability, surrender any tax refund, amend any tax
return, or file any tax return not prepared in accordance with
past practice;
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amend our organizational documents or the organizational
documents of our subsidiaries;
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adopt a plan or agreement of complete or partial liquidation or
dissolution other than with respect to wholly owned subsidiaries;
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commence, settle or compromise any material legal, regulatory,
arbitral or administrative proceeding, claim, suit or action;
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redeem, repurchase, prepay, defease or cancel any indebtedness
for borrowed money, other than as required in accordance with
the terms of such indebtedness;
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except as required by law, court judgment or any material
agreement in effect on the date of the merger agreement, pay,
discharge, settle or satisfy any material claims, liabilities or
obligations, other than (a) in the ordinary course of
business as disclosed, reflected or reserved against in our most
recent audited financial statements, or incurred since the date
of our financial statements in the ordinary course of business,
or (b) costs and expenses related to the merger agreement,
the share exchange agreement, the voting and support agreement,
or the transactions contemplated thereunder; or
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agree to take any of the foregoing actions or any action which
would reasonably be expected to prevent, materially delay or
impede any of the conditions to closing of the merger
transaction.
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Indemnification
and Insurance
The merger agreement provides that from and after the effective
time of the merger, Man and the surviving corporation will
jointly and severally indemnify and hold harmless each present
and former director and officer of ours and our subsidiaries
against any claims, liabilities, losses, damages, judgments,
fines, penalties, costs and expenses (including fees of legal
counsel, experts and litigation consultants and costs of any
appeal bonds) in connection with any claim, suit, action,
proceeding or investigation, arising out of the fact that any
indemnified person is or was a director, officer or employee of
ours or of our subsidiaries, or arising out of the acts or
omissions by any indemnified person in his or her capacity as a
director or officer of ours or of our subsidiaries, or taken at
the request of us or our subsidiaries, in each case occurring at
or prior to the effective time of the merger, to the fullest
extent permitted under law, our certificate of incorporation and
by-laws and any indemnification agreements as in effect on the
date of the merger agreement to indemnify such person. The
surviving corporation will advance all fees and expenses of an
indemnified person in connection with any proceeding as
incurred. From and after the effective time, Man will cause the
organizational documents of the surviving corporation to contain
provisions no less favorable to the indemnified persons with
respect to limitation of liabilities of directors and officers,
indemnification and advancement of expenses than are set forth
as of the date of the merger agreement in our organizational
documents (which provisions will not be amended, repealed or
otherwise modified in a manner that would adversely affect the
rights thereunder of the indemnified persons).
Man and the surviving corporation will maintain the extension of
the directors and officers liability coverage of our
existing directors and officers insurance policies
for a period of not less than six years from the effective
104
time of the merger with respect to claims arising in whole or in
part from facts or events that actually or allegedly occurred on
or before the effective time. Man and the surviving corporation
may substitute policies of substantially equivalent coverage and
amounts, containing terms no less favorable to the covered
persons, and if the policies expire or are terminated or
cancelled through no fault of Man or the surviving corporation,
Man and the surviving corporation will obtain substantially
similar insurance, provided that Man will not be required to pay
aggregate annual premiums for such insurance in excess of 300%
of the current annual premium. In lieu of the foregoing, we may
obtain one or more prepaid and non-cancelable directors
and officers insurance tail policies in effect for a
period of six years from the effective time of the merger, with
benefits and levels of coverage at least as favorable as
provided in our existing policies, provided that the aggregate
annual premiums for such prepaid policies shall not exceed 300%
of the current annual premium. If we are unable to obtain such
insurance tail policies prior to the effective time, we may
instead obtain prior to the effective time as much comparable
insurance for such six year period as reasonably practicable for
an aggregate policy premium not exceeding 300% of the current
annual premium.
Under the merger agreement, if Man or the surviving corporation
or any of their successors or assigns consolidates with or
merges into any other person or entity and is not the surviving
corporation of such consolidation or merger, or transfers all or
substantially all of its properties and assets to another person
or entity, then the surviving corporation will cause proper
provision to be made so that the successors and assigns of Man
or the surviving corporation assume all of the obligations to
provide indemnification and insurance described above.
Warrant
Tender Offers
We have agreed to, and to cause our subsidiaries to, use
reasonable best efforts to commence, prior to the closing date,
offers to purchase all of the outstanding warrants to purchase
shares of our common stock at a price of $0.129 per warrant. The
offers will be conditioned upon completion of the merger. Man
will reimburse us for reasonable
out-of-pocket
costs incurred in connection with the warrant offers and will
indemnify us and our subsidiaries from claims, losses and
damages arising in connection with the warrant offers.
Other
Covenants
The merger agreement contains additional agreements between us,
Man and Merger Sub relating to, among other things:
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coordination of press releases and other public announcements or
filings relating to the merger;
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access to information and confidentiality;
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reporting requirements under Section 16(a) of the Exchange
Act;
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de-listing of our securities from the New York Stock Exchange
and de-registration under the Exchange Act;
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notification of certain matters;
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cooperation in connection with the defense or settlement of any
securityholder litigation; and
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amend certain of our and our subsidiaries contracts so
that the funds under management by us or our subsidiaries would
not be required to be included in Mans consolidated
accounts immediately following the closing.
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105
Conditions
to the Completion of the Merger
The obligations of GLG, Man and Merger Sub to consummate the
merger are subject to the satisfaction or, to the extent
permissible under applicable law, waiver (other than with
respect to the first bullet, which is not waivable) of the
following conditions on or prior to the effective date of the
merger:
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the affirmative vote (in person or by proxy) to adopt the merger
agreement at a stockholders meeting (or any adjournment or
postponement thereof) duly called and held for such purpose by:
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(1) holders holding at least a majority of our outstanding
shares of common stock and preferred stock entitled to vote,
voting as a single class; and
(2) holders holding at least a majority of our outstanding
shares of common stock entitled to vote, other than such shares
held by the Selling Stockholders and their affiliates, Man and
its affiliates, us and our affiliates (except directors who are
members of the special committee) and our employees;
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the affirmative vote (in person or by proxy) to approve the
merger agreement and the share exchange agreement and, in each
case, the transactions contemplated thereby and by the voting
and support agreement, by holders of at least a majority of
Mans outstanding ordinary shares, present and voting at a
meeting of Mans shareholders (or any adjournment or
postponement thereof) duly called and held for such purpose;
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the expiration or termination of the applicable waiting period
under the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended;
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the expiration or termination of certain other antitrust waiting
periods, the receipt of all governmental consents, approvals or
authorizations under relevant antitrust laws, and the receipt of
all required approvals of any governmental entity or
authority; and
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the absence of any law, injunction, order, judgment, ruling or
decree that enjoins, restrains, prevents or otherwise prohibits
the consummation of the merger transaction or the share exchange
transactions or makes such transactions illegal.
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In addition, the obligations of Man and Merger Sub to complete
the merger are subject to the satisfaction or, to the extent
permissible under applicable law, waiver of the following
conditions at or prior to the effective time of the merger:
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our representations and warranties made in the merger agreement
with respect to (a) the absence of changes constituting a
Company Material Adverse Effect and (b) the absence of
notice of violation of securities laws must be, in each case,
true and correct on the date of the merger agreement and on and
as of the closing date as if made on and as of the closing date;
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our representations and warranties made in the merger agreement
with respect to (a) organization, existence and good
standing, (b) capitalization, (c) corporate authority
and enforceability, (d) the absence of conflicts with our
and our subsidiaries organizational documents,
(e) the absence of brokers and finders fees,
and (f) opinions of financial advisors must be true and
correct as of the date of the merger agreement and on and as of
the closing date as if made on and as of the closing date (or,
to the extent given as of a specific date, as of such date),
except for de minimis inaccuracies;
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our representations and warranties made in the merger agreement
with respect to our ownership of the capital stock or other
equity interests in our subsidiaries and the capitalization of
our subsidiaries, disregarding all qualifications and exceptions
relating to materiality or material adverse effect, must be true
and correct in all material respects as of the date of the
merger agreement and on and as of the closing date as if made on
and as of the closing date (or, to the extent given as of a
specific date, as of such date);
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all other of our representations and warranties made in the
merger agreement, disregarding all qualifications and exceptions
relating to materiality or material adverse effect, must be true
and correct in all material respects as of the date of the
merger agreement and on and as of the closing date as if made on
and as of the closing date (or, to the extent given as of a
specific date, as of such date), except for such failures to be
true
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106
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and correct that, individually and in the aggregate, would not
be reasonably expected to have a Company Material Adverse Effect;
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our performance, in all material respects, of all obligations
required to be performed by us in the merger agreement at or
prior to the closing date;
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the completion of the transactions contemplated by the share
exchange agreement;
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the receipt of a certificate signed on our behalf by one of our
executive officers certifying that all of the conditions with
respect to our representations and warranties and obligations
under the merger agreement described above have been
satisfied; and
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the receipt of a Foreign Investment in Real Property Tax Act of
1980 certificate dated as of the date of the completion of the
share exchange transactions.
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In addition, our obligation to complete the merger is subject to
the satisfaction or, to the extent permissible under applicable
law, waiver of the following conditions at or prior to the
closing date of the merger:
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the representations and warranties made by Man and Merger Sub in
the merger agreement, disregarding all qualifications and
exceptions relating to materiality, must be true and correct as
of the date of the merger agreement and on and as of the closing
date as if made on and as of the closing date (or, to the extent
given as of a specific date, as of such date), except for such
failures to be true and correct that, individually and in the
aggregate, do not prevent Man or Merger Sub from consummating
the merger;
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the performance by Man and Merger Sub, in all material respects,
of all obligations required to be performed by them under the
merger agreement at or prior to the closing date of the
merger; and
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the receipt of a certificate signed by an executive officer of
Man certifying that all of the conditions with respect to the
representations and warranties and obligations of Man and Merger
Sub under the merger agreement described above have been
satisfied.
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Termination
of the Merger Agreement
The merger agreement may be terminated at any time prior to the
effective time of the merger, whether before or after receipt of
our stockholders approval:
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by mutual written consent of us and Man;
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by either us or Man:
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(1) if the merger has not been consummated on or before the
termination date of December 31, 2010, except that neither
party may terminate for this reason if the principal cause of
the failure of the merger to be consummated on or before such
date was the material breach of the merger agreement by the
party seeking to terminate;
(2) if a final, non-appealable law, injunction, order,
judgment, ruling or decree enjoins, restrains, prevents or
prohibits consummation of the merger or the share exchange
transactions or makes the consummation of the merger or the
share exchange illegal or if there is any final, non-appealable
denial by a governmental authority with respect to any order or
ruling required to consummate the merger, except that neither
party may terminate for this reason if the principal cause of
the issuance of such final, non-appealable law, injunction,
order, judgment, ruling or decree or the issuance of such denial
with respect to any required order or ruling, was the material
breach of the merger agreement by the party seeking to terminate;
(3) if the adoption of the merger agreement by our
stockholders has not been obtained at a stockholders
meeting (or any adjournment or postponement thereof) duly called
and held for such purpose, except in the circumstances described
in clause (3) in the third bullet in this
Termination of the Merger Agreement section; or
(4) if the approval and adoption of the merger agreement by
the shareholders of Man has not been obtained at a
shareholders meeting (or any adjournment or postponement
thereof) duly called and held for
107
such purpose, except in the circumstances described in
clause (3) in the fourth bullet in this
Termination of the Merger Agreement section.
(1) if we have breached or failed to perform our covenants
set forth in the merger agreement with respect to (a) the
meeting of our stockholders called for the purpose of approving
the merger and approving and adopting the merger agreement,
(b) the preparation of the proxy statement, and
(c) non-solicitation of takeover proposals and board
recommendations, except that Man may not terminate if it is in
material breach of the merger agreement;
(2) if we have breached or failed to perform any of our
representations, warranties or covenants or agreements made in
the merger agreement (other than those described in paragraph
(1) above), which breach or failure would cause certain
conditions to our obligation to effect the merger set forth in
Conditions to the Completion of the
Merger not to be satisfied and which cannot be cured by
December 31, 2010, or if capable of being cured, which has
not been cured within 20 calendar days after receipt of
Mans written notice to us of such breach and of Mans
intention to terminate the merger agreement, except that Man may
not terminate if it is in material breach of the merger
agreement;
(3) if, except in the circumstances described in
clause (1) and clause (3) in the fourth bullet in this
Termination of the Merger Agreement
section, (a) an Adverse Recommendation Change occurs,
(b) we fail to include the boards recommendation to
our stockholders to adopt the merger agreement in the proxy
statement, or (c) the board has not rejected any publicly
disclosed takeover proposal within 10 days of its public
disclosure (including by taking no position with respect to a
tender offer or exchange offer) and has not publicly reconfirmed
the boards recommendation to our stockholders to adopt the
merger agreement within 5 days after receipt of Mans
written request to do so after a publicly disclosed takeover
proposal; or
(4) if, after May 17, 2010, a Company Material Adverse
Effect occurred.
(1) if Man or Merger Sub has breached or failed to perform
any of their representations, warranties, covenants or
agreements made in the merger agreement, which breach or failure
would cause certain conditions to their obligation to effect the
merger set forth in Conditions to the
Completion of the Merger not to be satisfied and which
cannot be cured by December 31, 2010, or if capable of
being cured, which has not been cured within 20 calendar days
after receipt of our written notice to Man of such breach and of
our intention to terminate the merger agreement, except that we
may not terminate if we are in material breach of the merger
agreement;
(2) if, prior to our stockholders approving the merger and
approving and adopting the merger agreement, we enter into one
or more definitive agreements concurrently with the termination
of the merger agreement in order to enter into a transaction
that is a superior proposal and if we pay to Man the termination
fee described below, provided that we may not terminate unless
we have complied in all with respects with conditions we are
first required to satisfy with respect to takeover proposals and
acceptance of superior proposals; or
(3) if the Man Board has either not made a recommendation
to Mans shareholders to approve the merger agreement and
the share exchange agreement, and in each case, the transactions
contemplated thereby and by the voting and support agreement, in
Mans shareholder circular, or withdraws, qualifies or
adversely modifies its recommendation to Mans shareholders
to approve the merger agreement and the share exchange
agreement, and in each case, the transactions contemplated
thereby and by the voting and support agreement, that was once
contained in Mans shareholder circular, except in the
circumstances described in the third bullet in this
Termination of the Merger Agreement
section.
108
Termination
Fees and Expense Reimbursement
Except as provided below, whether or not the merger is
consummated, under the merger agreement, each of the parties
will bear all fees and expenses it incurs in connection with the
merger and the merger agreement, except that we and Man will
share equally all expenses incurred in connection with the
printing and mailing of the proxy statement and notices and
other filings with governmental authorities under antitrust laws.
We have agreed to pay Man a termination fee equal to
$26 million (inclusive of any applicable value added tax or
its equivalent):
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if after May 17, 2010 (a) a takeover proposal is made
to us (or our stockholders generally) or any third party
announces or makes known to our board of directors an intention,
whether or not conditional, to make a takeover proposal;
and (b) following such event the merger agreement is
terminated by us or Man as described in clause (1) or
clause (3) of the second bullet under
Termination of the Merger Agreement or
by Man as described in clause (1) or clause (2) of the
third bullet under Termination of the Merger
Agreement (provided that in the case of termination under
clause (3) of the second bullet, such event shall have
occurred prior to our stockholders meeting); and
(c) within nine months of the date the merger
agreement is terminated, we enter into one or more definitive
agreements with respect to, or we consummate a transaction
contemplated by, any takeover proposal involving 40% or more of
our common stock or assets;
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if the merger agreement has been terminated by Man as described
in clause (3) of the third bullet under
Termination of the Merger
Agreement; or
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if the merger agreement has been terminated by us as described
in clause (2) of the fourth bullet under
Termination of the Merger Agreement.
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If the merger agreement is terminated by us as described in
clause (3) of the fourth bullet under
Termination of the Merger Agreement, Man
has agreed to pay us a termination fee equal to $26 million
(inclusive of any applicable value added tax or its equivalent).
If the merger agreement is terminated by us or by Man as
described in clause (3) of the second bullet under
Termination of the Merger Agreement, or
by Man as described in clause (1) of the third bullet under
Termination of the Merger Agreement
prior to our stockholders meeting, and no termination fee
is payable by us at the time of such termination, then we have
agreed to pay to Man all
out-of-pocket
fees and expenses (including fees and expenses of counsel,
accountants, financial advisers and investment bankers) incurred
by or on behalf of Man or its affiliates in connection with or
related to the authorization, preparation, negotiation,
execution and performance of the merger agreement (and the
filing of any required notices under applicable antitrust laws
or other regulations), up to a maximum of $15 million. We
will remain obligated to pay the termination fee described above
if it becomes payable, less the amount of expenses actually paid
by us to Man pursuant to the previous sentence.
If the merger agreement is terminated by us or by Man as
described in clause (4) of the second bullet under
Termination of the Merger Agreement,
then Man has agreed to pay us all
out-of-pocket
fees and expenses (including fees and expenses of counsel,
accountants, financial advisers and investment bankers) incurred
by or on behalf of us or our affiliates in connection with or
related to the authorization, preparation, negotiation,
execution and performance of the merger agreement (and the
filing of any required notices under applicable antitrust laws
or other regulations), up to a maximum of $15 million.
109
Amendment
and Waiver
At any time prior to the effective time, the parties to the
merger agreement may modify or amend the merger agreement by a
written agreement executed by each of the parties, provided that
after approval of the merger by our stockholders, there can be
no amendment to the merger agreement that would require further
approval of our stockholders under applicable law unless such
further stockholder approval has first been obtained.
At any time prior to the effective time, any party may waive
inaccuracies in any other partys representations and
warranties, extend the time for the other party to perform its
obligations, waive compliance by any other party with any of the
agreements in the merger agreement, or waive its own conditions
(except where the merger agreement provides that a condition may
not be waived). No failure by any party in exercising any of its
rights under the merger agreement will constitute a waiver, and
no single or partial exercise of any of its rights will preclude
any other or further exercise of its rights.
Man will ensure that neither the share exchange agreement nor
the voting and support agreement will be amended, modified or
waived in any manner prior to the effective time of the merger
without our written consent and the approval of the special
committee.
110
DESCRIPTIONS
OF OTHER TRANSACTION AGREEMENTS
The agreements described in this section and the following
summary of their terms and provisions have been included to
provide you with information regarding the terms and provisions
of these agreements. The representations and warranties made in
any such agreement may not accurately characterize the current
actual state of facts with respect to the Selling Stockholders
or Man because they were made only for purposes of such
agreement and as of the specific dates set forth therein and may
be subject to important exceptions, qualifications, limitations
and supplemental information agreed upon by the contracting
parties, including being qualified by disclosures made in
confidential disclosure schedules delivered by the contracting
parties in connection with negotiating the share exchange
agreement. Moreover, some of those representations and
warranties may have been used for the purposes of allocating
contractual risk between the parties to these agreements,
instead of establishing these matters as facts, and may be
subject to standards of materiality applicable to the
contracting parties that differ from those applicable to public
filings made with the SEC. Factual disclosures about the Selling
Stockholders or Man contained in this proxy statement or in our
public reports filed with the SEC may supplement, update or
modify the factual disclosures about the Selling Stockholders or
Man contained in these agreements.
Share
Exchange Agreement
The following is a summary of the material terms and
provisions of the share exchange agreement. The complete text of
the share exchange agreement is attached as Appendix B to
this proxy statement and incorporated into this proxy statement
by reference. We urge you to read the full text of the share
exchange agreement for a more complete description of the terms
and conditions of the share exchange transactions.
The
Share Exchange
Under the share exchange agreement, the Selling Stockholders
agreed with Man to exchange, assign, transfer and deliver,
immediately prior to the effective time of the merger, all of
their shares (except as described below) of (a) our common
stock, (b) our Series A voting preferred stock,
(c) our subsidiary FA Sub 2 Limiteds exchangeable
Ordinary Class B Shares, which are exchangeable into shares
of our common stock, and (d) any other shares of our
capital stock or such exchangeable stock they acquire after the
date of the share exchange agreement, in exchange for ordinary
shares of Man at an exchange ratio, effective as of the date of
the share exchange agreement, of 1.0856 ordinary shares of Man
per share of our common stock exchanged by the Selling
Stockholders. We refer to the shares subject to the share
exchange agreement as Subject Shares.
The Subject Shares will not include any shares of our common
stock acquired by a Selling Stockholder upon conversion of our
5.00% dollar-denominated convertible subordinated notes due
May 15, 2014, and any shares of our common stock acquired
by a Selling Stockholder in the open market prior to the date of
the share exchange agreement. All of the ordinary shares of Man
to be received by the Principals will be subject to a Share
Lock-Up Deed
of Trust, pursuant to which such Man ordinary shares are
restricted from being disposed of for a period of three years
from the date of the consummation of the merger, subject to the
right to dispose of up to
one-third of
such Man ordinary shares after the second anniversary of the
consummation of the merger and other exceptions for covering tax
obligations and other tax and estate planning purposes. The
ordinary shares of Man received by Sage Summit and Lavender
Heights Capital or their respective permitted transferees will
not be subject to a
lock-up but
will continue to be subject to the same vesting and other terms
and conditions which were applicable to the GLG shares
immediately prior to the share exchange.
The exchange ratio, which equals 1.0856 ordinary shares of Man
per each share exchanged by the Selling Stockholders, may change
prior to closing if the average of the daily volume-weighted
average price of an ordinary share of Man on the London Stock
Exchange for the 10 trading days prior to the date of the
exchange, converted daily from pounds sterling to
U.S. dollars, multiplied by the 1.0856, is greater than
$4.25. If such amount is greater than $4.25, then the adjusted
exchange ratio will equal the quotient obtained by dividing
$4.25 by the
10-day
average closing price (in U.S. dollars) described above.
111
Share
Exchange Closing
The closing of the share exchange will take place after the
satisfaction or waiver (to the extent permitted) of all closing
conditions set forth in the share exchange agreement, including
the closing conditions set forth in the merger agreement (other
than consummation of the transactions contemplated by the share
exchange agreement), other than those conditions that by their
nature are to be satisfied at the closing, but subject to the
satisfaction or waiver (to the extent permitted) of those
conditions at such time, or as otherwise agreed by the parties
in writing.
Representations
and Warranties
The share exchange agreement contains representations and
warranties made by the Selling Stockholders and by Man to and
for the benefit of each other party. The assertions embodied in
those representations and warranties may be qualified by
information contained in confidential disclosure schedules
provided by the Selling Stockholders and Man in connection with
signing the share exchange agreement that modify, qualify and
create exceptions to the representations and warranties
contained in the share exchange agreement.
The Selling Stockholders make various representations and
warranties, severally and not jointly, in the share exchange
agreement that are subject, in some cases, to exceptions and
qualifications. Their representations and warranties relate to,
among other things:
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their corporate, partnership, limited liability, trust or
individual authority or capacity to execute, deliver and perform
their obligations under, the share exchange agreement;
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their authorization and approval to execute, deliver and perform
their obligations under the share exchange agreement, and
enforceability of the share exchange agreement;
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the absence of (i) violations of or conflicts with their
organizational documents (if they are not a natural person),
(ii) violations in any material respects of any laws,
injunctions, orders, judgments, rulings or decrees of any
governmental authority, or (iii) violations, conflicts,
defaults, circumstances giving rise to a right of termination,
cancellation or redemption, acceleration or performance
required, loss of benefits or the creation of any liens on the
Selling Stockholders Subject Shares, under the terms,
conditions or provisions of any contract or permit to which such
Selling Stockholder is a party;
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the absence of consents or approvals of, or filings,
declarations or registrations with, any governmental authority
in connection with their performance under the share exchange
agreement;
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their beneficial ownership of the shares of our common stock and
preferred stock, and of FA Sub 2 exchangeable shares, free of
encumbrances other than those disclosed on the disclosure
schedules to the share exchange agreement and those imposed by
applicable securities laws;
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the absence of brokers and finders fees in
connection with the share exchange agreement other than those
paid by us and disclosed in the merger agreement;
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their acquisition of the ordinary shares of Man for their own
account and not with a view to, or for offer or sale in
connection with, any distribution or sale of the ordinary shares
of Man in violation of the Securities Act and the rules and
regulations thereunder and no Selling Stockholder has a present
or contemplated agreement, understanding, arrangement,
obligation or commitment providing for the disposition of the
ordinary shares of Man, other than in compliance with the
Securities Act;
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their capacity to protect their own interests in connection with
the share exchange transactions, and their ability to bear the
economic risk of the investment in the ordinary shares of Man
and to sustain a total loss in such investment without economic
hardship;
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their receipt of all information they consider necessary or
appropriate to decide whether to acquire the ordinary shares of
Man, and acknowledgement of the opportunity to ask questions and
receive answers from Man regarding the terms and conditions of
the ordinary shares of Man and the business and financial
condition of Man and to obtain additional information necessary
to verify the accuracy of any information furnished to them;
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an acknowledgement that the Man ordinary shares have not been
registered under the Securities Act or any other applicable
U.S. federal or state securities laws and that the Man
ordinary shares may not be sold unless such disposition is
registered under the Securities Act and applicable state
securities laws or is exempt from registration, and status of
the Selling Stockholders as accredited investors;
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no ownership of any ordinary shares of Man, interests therein or
rights under a derivative referenced to any ordinary shares of
Man, other than in connection with the share exchange
transactions; and
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the accuracy of information supplied by the Selling Stockholders
in the case of Mans shareholder circular at the date it is
mailed or at the time of Mans shareholder meeting and in
the case of Mans shareholder prospectus at the date it is
published.
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The share exchange agreement also contains various
representations and warranties made by Man that are subject, in
some cases, to exceptions and qualifications. The
representations and warranties of Man relate to, among other
things:
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its due organization;
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its qualification and good standing;
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its capitalization and certain related matters;
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its corporate authority to execute, deliver and perform its
obligations under the share exchange agreement, the due approval
by Mans shareholders and board of directors and the
enforceability of the share exchange agreement;
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the absence of violations of or conflicts with its
organizational documents;
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the absence of violations in any material respects of any laws,
injunctions, orders, judgments, rulings or decrees of any
governmental authority, or violations, conflicts, defaults or
the creation of any liens on any of its properties or assets;
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the absence of consents or approvals of, or filings,
declarations or registrations with, any governmental authority
in connection with its execution and delivery of the share
exchange agreement, except for (a) the admission of the Man
ordinary shares to listing on the official list of the U.K.
Listing Authority and to trading on the London Stock Exchange,
(b) any filings required under and compliance with the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, (c) the
filing of Mans shareholder circular and prospectus, and
(d) consents, approvals, filings, declarations or
registrations that, if not obtained, made or give, would not
reasonably be expected to have a material adverse effect on Man
or to prevent or materially delay the consummation of the share
exchange;
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the absence of brokers and finders fees in
connection with the share exchange transactions other than those
paid by Man;
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the filing of its required regulatory filings on a timely basis
or the receipt of a valid extension and compliance in all
material respects with the requirements of the relevant listing
rules, prospectus rules
and/or
disclosure and transparency rules, compliance of its financial
statements with applicable governmental authorities and in
accordance with international financial reporting standards and
the absence of certain undisclosed liabilities;
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the conduct of its business in all material respects in the
ordinary course of business consistent with past practice since
September 30, 2009, except for the execution and
performance of the share exchange agreement, the merger
agreement and the merger agreement transactions;
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the absence of any change, development, occurrence, event or
state of facts since September 30, 2009 that constitutes a
material adverse effect on Man;
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litigation and other legal proceedings;
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due authorization, valid issuance and freedom from encumbrances
and preemptive rights of the Man ordinary shares when registered
and issued;
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113
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its acquisition of the Subject Shares for its own account and
not with a view to, or for offer or sale in connection with, any
distribution or sale of the Subject Shares in violation of the
Securities Act and Man has no present or contemplated agreement,
understanding, arrangement, obligation or commitment providing
for the disposition of the Subject Shares;
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its capacity to protect its own interests in connection with the
share exchange transactions, and its ability to bear the
economic risk of the investment in the Subject Shares and to
sustain a total loss in such investment without economic
hardship;
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its receipt of all information it considers necessary or
appropriate to decide whether to acquire the Subject Shares, and
acknowledgement of the opportunity to ask questions and receive
answers from the Selling Stockholders regarding the terms and
conditions of the Subject Shares and our business and financial
condition and to obtain additional information necessary to
verify the accuracy of any information furnished to it;
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an acknowledgement that certain of the Subject Shares have not
been registered under the Securities Act and that they may not
be sold unless such disposition is registered under the
Securities Act and applicable state securities laws or is exempt
from registration;
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legends to be applied to unregistered Subject Shares;
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acknowledgement of exclusivity of the Selling Stockholders
representations and warranties set forth in the share exchange
agreement and the voting and support agreement; and
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the absence of representations and warranties by the Parent
other than the representations and warranties set forth in the
share exchange agreement.
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Covenants
Man and the Selling Stockholders have agreed on certain
additional covenants in the share exchange agreement, including:
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the Selling Stockholders have agreed, following receipt of
approval by the Cayman Islands Monetary Authority and prior to
the share exchange closing, to exchange all FA Sub 2
exchangeable shares into shares of our common stock;
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the Selling Stockholders have agreed to waive their right to
withdraw their acceptance to receive Man ordinary shares
pursuant to the share exchange, and to exchange, assign,
transfer and deliver their Subject Shares for Man ordinary
shares even if they have exercised any right of withdrawal
pursuant to the United Kingdom Financial Services and Markets
Act 2000;
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until the share exchange agreement is terminated in accordance
with its terms, and except pursuant to the share exchange, the
exchange of FA Sub 2 exchangeable shares or certain permissible
transfers to affiliates or to facilitate the share exchange, the
Selling Stockholders have agreed not to sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter any contract,
option or other arrangement with respect to the transfer of,
their Subject Shares;
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the Selling Stockholders have agreed to, and to cause their
affiliates and their representatives to, cease discussions or
negotiations with any third party with respect to any takeover
proposal, and to use best efforts to obtain the return or cause
the destruction of all confidential information provided to such
parties. Until the termination of the share exchange agreement
in accordance with its terms, the Selling Stockholders have
agreed not to, and to cause or authorize their representatives
not to, directly or indirectly, solicit, facilitate or encourage
the making of, or any inquiries regarding, or the making of any
proposal that is reasonably likely to lead to a takeover
proposal, or engage in, continue or otherwise participate in any
discussions or negotiations with any third party regarding a
takeover proposal, unless our board is permitted to participate
in such discussions or negotiations pursuant to the merger
agreement and our board requests that a Selling Stockholder
participate in such negotiations or discussions. Until the
termination of the share exchange agreement, the Selling
Stockholders have agreed to notify Man in writing of any
proposal, offer, inquiry,
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information request, discussion or negotiation in respect of a
takeover proposal, including the identity of the proposing
person or group, the terms and conditions of such proposal,
offer, inquiry or request, together with copies of any draft
agreements and certain other materials received, and thereafter
keep Man informed of all material developments;
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the parties have agreed to use their reasonable best efforts to
take or cause to be taken all actions, and to do or cause to be
done all things, necessary, proper or advisable to consummate
and make effective the share exchange, including obtaining all
permits, consents, approvals, authorizations and actions or
nonactions required for or in connection with the consummation
of the share exchange, obtaining approvals, waivers or consents
from any third party or any governmental entity, and the
execution and delivery of any additional instruments necessary
to consummate the share exchange;
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Man has agreed to issue certificates to each Selling Stockholder
representing the Man ordinary shares, and each certificate will
bear appropriate legends;
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without the prior written consent of Man, the Selling
Stockholders have agreed not to issue any public release or
announcement with respect to the share exchange transactions or
the merger transaction, except as required by applicable law or
the rules and regulations of any applicable governmental
authority;
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the parties have agreed that each Selling Stockholder makes no
agreement or understanding in any capacity other than in each
Selling Stockholders capacity as a record holder and
beneficial owner of its Subject Shares and the share exchange
agreement will not limit or affect any action by a Selling
Stockholder in each Selling Stockholders capacity as one
of our officers and directors;
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prior to the share exchange closing, the Selling Stockholders
have agreed to amend certain shareholders and
principals agreements among them and their affiliates;
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the Selling Stockholders who are on our board of directors have
agreed to resign as directors as of the effective time of the
merger;
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the Selling Stockholders have agreed not to engage in any
dealing of Man ordinary shares or shares of our
capital stock until after the share exchange closing date, and
agreed not to acquire any shares of our capital stock or any
shares of FA Sub 2 exchangeable stock, except upon conversion of
convertible notes;
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the Selling Stockholders have agreed to notify Man of any event,
fact or information that should be set forth in an amendment or
supplement to Mans shareholder circular, or of any
significant new factor, material mistake or inaccuracy relating
to the information included in Mans prospectus that should
be set forth in a supplement to the prospectus, and to cooperate
with Man in the preparation of the shareholder circular and the
prospectus and any amendment or supplement;
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Man and certain of the Selling Stockholders have agreed to
negotiate in good faith and use their reasonable best efforts to
enter into employment agreements prior to the share exchange
closing date; and
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certain of the Selling Stockholders have agreed to maintain
specified amounts invested in investment funds managed by us for
3 years following the effective time of the merger.
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Conditions
to the Completion of the Share Exchange
The obligations of the Selling Stockholders and Man to effect
the share exchange are subject to:
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the satisfaction, by the party responsible for fulfilling the
obligation, or, to the extent permissible under applicable law,
waiver, by the party entitled to the benefit, of each of the
closing conditions to the merger agreement (other than the
completion of the transactions contemplated by the share
exchange agreement), provided that no waiver will be given
effect under the share exchange agreement unless a corresponding
waiver has been given under the merger agreement;
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the expiration or termination of the waiting period (and any
extension thereof) applicable to the share exchange under the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, the expiration
or
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termination of any applicable waiting period (and any extension
thereof) under other antitrust laws, and the receipt of other
required approvals of the share exchange by governmental
authorities;
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the absence of any law, injunction, order, judgment, ruling or
decree that restrains, enjoins, prevents or otherwise prohibits
the consummation of the share exchange transactions; and
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the admission of the Man ordinary shares to listing on the
official list of the U.K. Listing Authority and to trading on
the London Stock Exchange.
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In addition to the conditions for all parties to the share
exchange agreement, the obligations of Man to effect the share
exchange are subject to the satisfaction or, to the extent
permissible under applicable law, waiver of the following
conditions at or prior to the share exchange closing date:
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(i) the representations and warranties described in the
fourth and twelfth bullets listing the Selling
Stockholders representations under
Representations and Warranties,
disregarding all qualifications and exceptions relating to
materiality and material adverse effect, must be true and
correct as of the date of the share exchange agreement and on
and as of the share exchange closing date as if made on and as
of the share exchange closing date, except for such failures to
be true and correct that, individually and in the aggregate,
would not be reasonably expected to have a material adverse
effect with respect to any Selling Stockholder and (ii) the
other representations and warranties of the Selling Stockholders
made in the share exchange agreement must be true and correct as
of the date of the share exchange agreement, and on and as of
the share exchange closing date as if made on and as of the
share exchange closing date (or, if given as of a specific date,
as of such date), except for de minimis inaccuracies;
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the performance by the Selling Stockholders, in all material
respects, of all obligations required to be performed by them in
the share exchange agreement at or prior to the share exchange
closing date;
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the receipt by Man of a certificate signed by each Selling
Stockholder certifying that the conditions with respect to their
representations and warranties and obligations under the share
exchange agreement described above have been satisfied;
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receipt by the Selling Stockholders of all required
consents; and
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execution and delivery by the Selling Stockholders (other than
Sage Summit and Lavender Heights Capital) of
lock-up
agreements with respect to the Man ordinary shares received in
the share exchange transactions.
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In addition to the conditions for all parties to the share
exchange agreement, the obligations of the Selling Stockholders
to effect the share exchange are subject to the satisfaction, or
to the extent permissible under applicable law, waiver of the
following conditions at or prior to the share exchange closing
date:
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(i) the representations and warranties described in the
eleventh bullet listing Mans representations under
Representations and Warranties must be
true and correct as of the date of the share exchange agreement
and on and as of the share exchange closing date as if made on
and as of the share exchange closing date, (ii) the
representations and warranties described in the first, third,
fourth, fifth and eighth bullets listing Mans
representations under Representations and
Warranties must be true and correct as of the date of the
share exchange agreement and on and as of the share exchange
closing date as if made on and as of the share exchange closing
date (or, if given as of a specific date, as of such date),
except for de minimis inaccuracies (and in the case of
the third bullet, disregarding any inaccuracies arising from the
issue of Man ordinary shares pursuant to the share exchange
agreement at the share exchange closing) and (iii) the
other representations and warranties made by Man in the share
exchange agreement, disregarding all qualifications and
exceptions relating to materiality and material adverse effect,
must be true and correct in all respects as of the date of the
share exchange agreement and on and as of the share exchange
closing date as if made on and as of the share exchange closing
date (or, if given as of a specific date, as of such date),
except for such failures to be true and correct in certain
representations and warranties that, individually and in the
aggregate, would not be reasonably expected to have a material
adverse effect with respect to Man;
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the performance by Man, in all material respects, of all
obligations required to be performed by it under the share
exchange agreement at or prior to the share exchange closing
date;
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the receipt of a certificate signed by an authorized officer of
Man certifying that the conditions with respect to the
representations and warranties and obligations of Man under the
share exchange agreement described above have been
satisfied; and
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the release of audited financial statements of Man for the year
ended March 31, 2010, subject to an unqualified opinion of
Mans independent public accountants, and the absence of
any discrepancies between such financial statements and the
draft financial statements previously delivered to the Selling
Stockholders, except for such discrepancies which, individually
or in the aggregate, would not be reasonably expected to have a
material adverse effect with respect to Man.
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Survival
The representations, warranties, covenants and agreements in the
share exchange agreement will terminate at the share exchange
closing, except that the representations and warranties
described in the first, second and fifth bullets listing the
Selling Stockholders representations under
Representations and Warranties, and the
representations and warranties described in the fourth and
thirteenth bullets listing Mans representations under
Representations and Warranties, will
survive indefinitely, and certain covenants which contemplate
performance after the share exchange closing will survive the
share exchange closing.
Trustee
Liability
The following provisions apply to each party to the share
exchange agreement that is acting as trustee of a trust:
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no trustee will have any personal liability or obligations under
the share exchange agreement or any other document contemplated
by the merger agreement to which a trustee is a party and Man
has agreed to waive all personal liability of any trustee for
breaches by any Selling Stockholder of any obligations,
covenants or agreements;
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by executing the share exchange agreement and any other document
contemplated by the merger agreement, each trustee is acting
solely on behalf of, and the share exchange agreement and any
other document contemplated by the merger agreement to which a
trustee is a party, is solely an obligation of, and solely a
claim against the trust estate and assets of the trust
administered by the trustee;
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Man has agreed to irrevocably waive and release any claim or
right to proceed against a trustee individually, or the
individual property or assets of any trustee, and no recourse
under the share exchange agreement or any other document
contemplated by the merger agreement to which a trustee is a
party will be had against any such trustee or any of its assets
except to the extent of the trust estate and assets of the trust
administered by such trustee party from time to time, by the
enforcement of any assessment or by any legal or equitable
proceedings seeking to assert such recourse against the trustee
by virtue of any law or otherwise;
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a trustee is not prevented from making any distribution from,
investment, reinvestment, purchase, sale or other disposition
of, other transactions of any kind involving, the trust estate
and assets of the trust administered by the trustee other than
the Subject Shares, provided that Subject Shares may be
distributed or transferred to a permitted trust transferee under
certain conditions; and
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Man has irrevocably agreed that (i) it will not institute
against, or join any other third party in instituting against,
any trustee individually, or the individual property or assets
of any trustee, any bankruptcy, reorganization, insolvency or
liquidation proceeding, or other proceeding under any
international, national, federal or state bankruptcy or similar
law, in connection with any claim relating to the merger
agreement, the transactions contemplated by the merger agreement
and the voting and support agreement, (ii) in the event of
a reorganization under the Bankruptcy Reform Act of 1978, as
amended, of any trustee, it will make the election under
Section 111(b)(2) and (iii) if for any reason, it
recovers from a trustee individual property or assets of that
trustee, it will promptly return the asset or amount recovered
to the trustee.
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Termination,
Amendment and Waiver
The share exchange agreement will terminate on the earlier to
occur of (i) the termination of the merger agreement in
accordance with its terms and (ii) the written agreement by
the parties to terminate it. In addition, the holders of a
majority of the Subject Shares held by Noam Gottesman, Pierre
Lagrange and Emmanuel Roman, together with their related trusts
and affiliated entities may elect to terminate the share
exchange agreement upon the effectiveness of any amendment or
modification to the merger agreement, or any waiver by us of any
material covenant or condition thereof, that is effected without
the prior written consent of holders of a majority of the
Subject Shares held by such individuals and related trusts and
affiliated entities (provided such right will not apply to
amendments, modifications or waivers that are not adverse to us
or any of the Selling Stockholders).
The share exchange agreement may only be modified, amended,
altered or supplemented by a written agreement executed by each
of the parties. However, with respect to the obligations of any
single Selling Stockholder under the share exchange agreement,
the share exchange agreement may be amended with the approval of
such Selling Stockholder and Man, subject to the prior written
consent of the other Selling Stockholders (which consent will
not be unreasonably withheld or delayed).
No failure or delay by a Selling Stockholder or Man in
exercising any of its rights under the share exchange agreement
will constitute a waiver, and no single or partial exercise of
any of its rights will preclude any other or further exercise of
its rights.
Joinder
By virtue of the Joinder Agreement dated as of June 21,
2010 by and among Man, Merger Sub, GLG, the LPs and the
Remainder Trusts, each of the Remainder Trusts joined as a party
to the share exchange agreement and agreed to perform the
obligations of the LPs thereunder. The Joinder Agreement is
attached as Appendix I to this proxy statement.
Voting
and Support Agreement
The following is a summary of the material terms and
provisions of the voting and support agreement. The complete
text of the voting and support agreement is attached as
Appendix C to this proxy statement and incorporated into
this proxy statement by reference. We urge you to read the full
text of the voting and support agreement for a more complete
description of the terms and conditions of the matters
contemplated by the voting and support agreement.
Agreement
of Stockholders
Under the voting and support agreement, the Selling Stockholders
and TOMS have agreed with Man and Merger Sub to vote, cause to
be voted or execute written consents with respect to, all of the
shares of our common stock and preferred stock held by them as
of the date of the voting and support agreement and acquired
after such date, at any meeting of our stockholders (or any
adjournment thereof) or upon any action by written consent in
lieu of a meeting:
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in favor of the adoption of the merger agreement and the
approval of the transactions contemplated by the merger
agreement;
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against any alternative takeover proposal involving 15% or more
of our consolidated assets or to which 15% or more of our
revenues or earnings on a consolidated basis are attributable,
acquisition of beneficial ownership of 15% or more of our
outstanding common stock, a tender offer or exchange offer that
if consummated would result in any third party beneficially
owning 15% or more of our outstanding common stock or a merger,
consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar
transaction involving us, in each case, other than the merger
agreement, the transactions contemplated by the merger
agreement, the voting and support agreement and the share
exchange agreement; and
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against any agreement (including, without limitation, any
amendment of any agreement), amendment of our organizational
documents or other action that is intended or could reasonably
be expected to prevent, impede, interfere with, delay, postpone
or discourage the consummation of the merger.
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Restrictions
on Stockholders
Until the termination of the voting and support agreement in
accordance with its terms, the Selling Stockholders and TOMS
also agreed not to, directly or indirectly:
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sell, transfer, give, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other
arrangement or understanding with respect to the sale, transfer,
gift, pledge, encumbrance, assignment or other disposition of,
any of their shares of our common stock and preferred stock;
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deposit any of their shares of our common stock and preferred
stock into a voting trust or grant any proxies or enter into a
voting agreement, power of attorney or voting trust with respect
to such shares;
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permit any liens to be created on any of their shares of our
common stock and preferred stock;
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subject to each Selling Stockholder and TOMS acting solely in
their capacity as an owner of our common stock and preferred
stock, knowingly take any action that would make any of their
representations or warranties set forth in the voting and
support agreement untrue or incorrect in any material respect or
have the effect of preventing, disabling or delaying them from
performing any of their obligations under the voting and support
agreement; or
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agree (whether or not in writing) to do any of the foregoing.
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Stockholder
Waivers and Authorizations
The Selling Stockholders and TOMS have irrevocably waived and
agreed not to exercise or assert any rights of appraisal or
similar rights under Section 262 of the DGCL or other
applicable law in connection with the merger transaction.
The Selling Stockholders and TOMS have authorized Man and Merger
Sub to publish and disclose in the proxy statement, Mans
shareholder circular and prospectus, and any other required
filing with a governmental authority in connection with the
merger agreement or the share exchange agreement, after
reasonable opportunity to review and comment, their identities,
their ownership of shares of our common stock and preferred
stock, and the nature of the commitments, arrangements and
understandings under the voting and support agreement. Unless
required by applicable law or a governmental authority, neither
Man nor Merger Sub will make any other disclosures regarding any
Selling Stockholder or TOMS in any press release or otherwise
without the prior written approval of each Selling Stockholder
and TOMS (not to be unreasonably withheld or delayed).
The Selling Stockholders and TOMS have agreed not to issue or
cause the publication of any press release or make any other
public announcement (to the extent not previously issued or made
in accordance with the merger agreement or the share exchange
agreement) with respect to the voting and support agreement, the
merger agreement, the share exchange agreement, the merger
transaction or the share exchange transactions without the prior
written approval of Man (not to be unreasonably withheld or
delayed), unless required by applicable law or by any applicable
listing agreement with a national securities exchange, in which
case, TOMS or the applicable Selling Stockholder will not issue
or cause the publication of any press release or make any other
public announcement without prior consultation with Man.
Representations
and Warranties of Stockholders
The voting and support agreement contains representations and
warranties made by the Selling Stockholders and TOMS to and for
the benefit of each other party. The Selling Stockholders and
TOMS make various
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representations and warranties, severally and not jointly, in
the voting and support agreement that are subject, in some
cases, to exceptions and qualifications. Their representations
and warranties relate to, among other things:
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their corporate, partnership, limited liability, trust or
individual authority or capacity to execute, deliver and perform
their obligations under the voting and support agreement;
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their authorization and approval to execute, deliver and perform
their obligations under the voting and support agreement, and
enforceability of the voting and support agreement;
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the absence of consents or approvals of, or filings,
declarations or registrations with, any governmental authority
in connection with their performance under the voting and
support agreement;
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the absence of (i) violations of or conflicts with their
organizational documents (if they are not a natural person),
(ii) violations in any material respects of any laws,
injunctions, orders, judgments, rulings or decrees of any
governmental authority, or (iii) violations, conflicts,
defaults, circumstances giving rise to a right of termination or
cancellation, acceleration or performance required, loss of
benefits or the creation of any liens on TOMS or the Selling
Stockholders shares of our common stock and preferred
stock, under the terms, conditions or provisions of any contract
or permit to which TOMS or such Selling Stockholder is a party;
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their beneficial ownership of the shares of our common stock and
preferred stock, and of FA Sub 2 exchangeable shares, free of
encumbrances other than those disclosed in the disclosure
schedules to the share exchange agreement and those imposed by
applicable securities laws; and
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the absence of brokers and finders fees in
connection with the voting and support agreement other than
those paid by us and disclosed in the merger agreement.
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Termination
The voting and support agreement will terminate on the first to
occur of (1) the written agreement by the parties to
terminate it, (2) the termination of the merger agreement
in accordance with its terms, (3) the termination of the
share exchange agreement in accordance with its terms, and
(4) the effective time of the merger.
Action
in Stockholder Capacity Only
The parties have agreed that each Selling Stockholder and TOMS
entered into the voting and support agreement in its capacity as
an owner of our common stock and preferred stock and the voting
and support agreement will not restrict or limit any Selling
Stockholder or TOMS from taking or authorizing any action in
each Selling Stockholders or TOMS capacity as a
director, officer, trustee or other fiduciary of ours, our
subsidiaries or any of our employee benefit plans, including
participation in its capacity as a director of ours in any
discussions or negotiations in accordance with the merger
agreement.
Trustee
Liability
The following provisions apply to each party to the voting and
support agreement that is acting as trustee of a trust:
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no trustee will have any personal liability or obligations under
the voting and support agreement or any other document
contemplated by the merger agreement to which a trustee is a
party and Man and Merger Sub have agreed to waive all personal
liability of any trustee for breaches by any Selling Stockholder
or TOMS of any obligations, covenants or agreements;
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by executing the voting and support agreement and any other
document contemplated by the merger agreement, each trustee is
acting solely on behalf of, and the voting and support agreement
and any other document contemplated by the merger agreement to
which a trustee is a party, is solely an obligation of, and
solely a claim against the trust estate and assets of the trust
administered by the trustee;
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Man and Merger Sub have agreed to irrevocably waive and release
any claim or right to proceed against a trustee individually, or
the individual property or assets of any trustee, and no
recourse under the voting and support agreement or any other
document contemplated by the merger agreement to which a trustee
is a party will be had
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against any such trustee or any of its assets except to the
extent of the trust estate and assets of the trust administered
by such trustee party from time to time, by the enforcement of
any assessment or by any legal or equitable proceedings seeking
to assert such recourse against the trustee by virtue of any law
or otherwise;
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a trustee is not prevented from making any distribution from,
investment, reinvestment, purchase, sale or other disposition
of, other transactions of any kind involving, the trust estate
and assets of the trust administered by the trustee other than
our common stock and preferred stock, provided that such shares
may be distributed or transferred to a permitted trust
transferee under certain conditions; and
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Each of Man and Merger Sub has irrevocably agreed that
(i) it will not institute against, or join any other third
party in instituting against, any trustee individually, or the
individual property or assets of any trustee, any bankruptcy,
reorganization, insolvency or liquidation proceeding, or other
proceeding under any international, national, federal or state
bankruptcy or similar law, in connection with any claim relating
to the merger agreement, the transactions contemplated by the
merger agreement and the voting and support agreement,
(ii) in the event of a reorganization under the Bankruptcy
Reform Act of 1978, as amended, of any trustee, it will make the
election under Section 111(b)(2) and (iii) if for any
reason, it recovers from a trustee individual property or assets
of that trustee, it will promptly return the asset or amount
recovered to the trustee.
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Expenses
Except as otherwise expressly provided in the voting and support
agreement and the share exchange agreement, each of the parties
will bear all costs and expenses it incurs in connection with
the transactions contemplated by the voting and support
agreement.
Additional
Shares
Until termination of the voting and support agreement in
accordance with its terms, each Selling Stockholder and TOMS
will promptly notify Man of the number of shares of our common
stock and Series A voting preferred stock, if any, of which
the Selling Stockholder or TOMS acquires record or beneficial
ownership after the date of the voting and support agreement.
Amendment
and Waiver
The parties to the voting and support agreement may modify or
amend the voting and support agreement by a written agreement
executed by each of the parties.
Any party, subject to law, may waive inaccuracies in an other
partys representations and warranties, extend the time for
the other party to perform its obligations or acts, waive
compliance by an other party with any of the agreements in the
voting and support agreement, or waive its own conditions
(except where the voting and support agreement provides that a
condition may not be waived). No failure or delay by Parent or
Merger Sub in exercising any of its rights under the voting and
support agreement will constitute a waiver, and no single or
partial exercise of any of its rights will preclude any other or
further exercise of its rights.
Joinder
By virtue of the Joinder Agreement dated as of June 21,
2010 by and among Man, Merger Sub, GLG, the LPs and the
Remainder Trusts, each of the Remainder Trusts joined as a party
to the voting and support agreement and agreed to perform the
obligations of the LPs thereunder. The Joinder Agreement is
attached as Appendix I to this proxy statement.
Employment
and Service Agreements
The following is a summary of the material terms and
provisions of the employment and service agreements expected to
be entered into by Man entities with each of Noam Gottesman,
Emmanuel Roman and Pierre Lagrange. The complete text of these
agreements will be attached as Appendix G to this proxy
statement and incorporated into this proxy statement by
reference when they are available. We urge you to read the full
text of these agreements for a more complete description of each
of the executives terms and conditions of employment when
they are available.
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Noam Gottesman will enter into an employment agreement with Man
Investments USA Holdings Inc. and Emmanuel Roman and Pierre
Lagrange will both enter into service agreements with Man Group
Services Ltd. effective as of the of the closing of the share
exchange.
Under the terms of the each of the agreements, each Individual
Principal will receive an annual base salary of $1,000,000, and
employee benefits including, but not limited to reimbursement of
reasonable business expenses, 30 paid vacation days per year,
and health, life and disability insurance coverage.
In addition, each of the agreements provide that either the
Individual Principal or the Man employer entity may terminate
such Individual Principals employment by giving the other
party 12 months advance written notice. The relevant
Man employer entity may, in its discretion, provide such
Individual Principal with payment of severance in lieu of
notice, such that it shall make payment in respect of the
Individual Principals base salary for any unexpired part
of the notice period to which he is entitled. No notice or
severance in lieu of notice is required in the event of a
termination of employment or for any reason set forth in the
summary termination section of the agreements and, in the case
of Noam Gottesman, a termination due to death or disability. The
agreements will include restrictive covenants granted by each
Individual Principal in favor of Man.
Restrictive
Covenant Agreements
The following is a summary of the material terms and
provisions of the restrictive covenant agreements with each of
Noam Gottesman, Emmanuel Roman and Pierre Lagrange. The complete
text of such agreements is attached as Appendix H to this
proxy statement and incorporated into this proxy statement by
reference. We urge you to read the full text of the agreements
for a more complete description of the terms and conditions
therein.
On May 17, 2010, Noam Gottesman entered into a
non-competition and non-solicitation agreement and Emmanuel
Roman and Pierre Lagrange entered into deed of vendor covenants
with GLG and Man, in each case contingent on the closing of the
transactions contemplated by the merger agreement and share
exchange agreement. The material terms of these agreements are
substantially similar and are summarized below.
Under the terms of the respective agreements, as a material
inducement to Man to enter into the merger agreement and share
exchange agreement, each of the Individual Principals has agreed
to be bound by certain restrictive covenants beginning on the
date of the closing of the share exchange and ending on the
third anniversary of such date in exchange for a $100,000
payment (payable within 14 days after the date of the
closing of the share exchange). During this period, each
Individual Principal will not alone, or jointly, directly or
indirectly own, be employed or engaged by or in, or otherwise
assist or have any stake or interest in, any business that is
carried on in competition with the Business (as
defined below) anywhere within the United States, England,
Scotland, Wales and Northern Ireland, the Cayman Islands (and
Switzerland in the case of Pierre Lagrange and Emmanuel Roman),
and any other country or territory in which any GLG Entity (as
defined below) had material operations as of the date of the
closing of the share exchange. However, the Individual
Principals are permitted to be shareholders or equity owners of
not more than 3% of the shares of any company whose shares are
quoted on any recognized investment exchange.
The Business is defined as the management,
investment management and investment advisory businesses, and
the business of structuring, establishing, marketing,
distributing and managing investment funds as carried on by any
GLG Entity as of the date of closing of the share exchange.
GLG Entity refers to GLG, any wholly owned
subsidiary and other entity controlled directly or indirectly by
GLG at the date of closing of the share exchange specifically
including a list of entities set forth in the agreement.
Additionally, the Individual Principals will not, either alone
or jointly, directly or indirectly in connection with the
carrying on of any business that is in competition with the
Business:
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have business dealings with, provide services to, or otherwise
accept business from any person who or which, as of the date of
closing of the share exchange, had business dealings with or
received services or products from any GLG Entity as a client,
Investor or Prospective Investor (as such terms are defined
below);
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have business dealings with any Intermediary (as such term is
defined below) for the purpose of securing the opportunity to
provide to his, her or its clients or prospective clients any
services or products that are
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substantially similar to any of those provided by any GLG Entity
or to place the business of any such client or prospective
client with any business that competes with the Business;
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solicit or attempt to solicit any person who or which was, as of
the date of closing of the share exchange, a client, Investor or
Prospective Investor of any GLG Entity for the purpose of
providing or offering to provide services or products that are
substantially similar to any of those offered or provided by any
GLG Entity;
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solicit or approach any Intermediary for the purpose of securing
from such Intermediary the opportunity to provide his, her or
its clients or prospective clients any services or products that
are substantially similar to any of those provided by any GLG
Entity, or to place the business of any such client or
prospective client with any business that competes with the
Business; or
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solicit, induce or encourage any Key Individual (as described
below) to cease his or her employment, consultancy, partnership
or other similar relationship with any GLG Entity.
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The Individual Principals may become interested in any business
that includes a business carried on in competition with the
Business, provided that such Individual Principal is not
concerned or involved with or otherwise assists that aspect of
the business carried on in competition with the Business.
An Intermediary means any person who, at the date of
closing of the share exchange (a) promoted, marketed,
advised or arranged for investors in the services
and/or
products of any GLG Entity, (b) was a partner, member,
employee or agent of, or consultant to such intermediary, or
(c) was a partner, member, employee or agent of a client or
prospective client of any GLG Entity and who was working in the
capacity of an Intermediary and, in all cases, with which
intermediary the executive had direct dealing on behalf of any
GLG Entity in connection with such intermediarys
promotion, marketing, advising or arrangement for investors in
the services
and/or
products of any GLG Entity.
An Investor means any person who, at the date of
closing of the share exchange (a) held investments in any
investment product for which any GLG Entity provided services or
(b) was a partner, member, employee or agent of, or
consultant to, or affiliate of such investor; and, in all cases,
with which investor the Individual Principal had dealings on
behalf of any GLG Entity in connection with such investments.
A Key Individual mean any person who, as of the date
of closing of the share exchange, is employed or engaged by or a
partner in any GLG Entity (a) with whom the Individual
Principal has had material contact and (b) is employed or
engaged in the marketing of any GLG Entitys services and
products or in managing fund assets as an analyst or in a senior
management position.
Prospective Investor means any person (a) with
whom any GLG Entity entered into negotiations or discussions or
(b) on whom any GLG Entity expended a material amount of
money at the date of closing of the share exchange and to the
knowledge of the Individual Principal prior to the date of
closing of the share exchange, in either case, (i) with a
view toward securing investment in any investment product for
which any GLG Entity provides services, (ii) with which
person the Individual Principal had dealings on behalf of any
GLG Entity and (iii) which person does not affirmatively
indicate to any GLG Entity at the date of closing of the share
exchange that he, she or it does not wish to become an investor.
123
IMPORTANT
INFORMATION REGARDING GLG
Our
Directors and Executive Officers
Set forth below for each of the directors and executive officers
of GLG is his respective present principal occupation or
employment, the name and principal business of the corporation
or other organization in which such occupation or employment is
conducted and the five-year employment history of each such
director and executive officer. Except as otherwise noted, each
person identified below is a citizen of the United States of
America. The business address of Messrs. Gottesman, Roman,
White, San Miguel, Rojek, Ashken, Franklin, Hauslein and
Lauder is
c/o GLG
Partners, Inc., 399 Park Avenue, 38th Floor, New York, New
York 10022 and the telephone number at that address is (212)
224-7200. The business address of Mr. Lagrange is
c/o GLG
Partners LP, One Curzon Street, London W1J 5HB, England and the
telephone number at that address is +44 (0) 20-7016-7000.
During the last five years, none of GLG, our directors or our
executive officers has been (a) convicted in a criminal
proceeding (excluding traffic violations or similar
misdemeanors) or (b) a party to any judicial or
administrative proceeding (except for matters that were
dismissed without sanction or settlement) that resulted in a
judgment or decree or final order enjoining the person from
future violations of, or prohibiting activities subject to,
federal or state securities laws, or a finding of any violation
of federal or state securities laws.
Directors
The board of directors currently consists of seven directors.
The term of each of the directors will terminate on the date of
the 2011 annual meeting of our stockholders, unless the merger
is consummated sooner.
Noam Gottesman, 49, has been our Chairman of the Board
and Co-Chief Executive Officer and a director since November
2007. He is a Senior Managing Director of GLG Partners LP and
has been a co-founder and, prior to 2009, a Managing Director of
GLG Partners LP since its formation in September 2000, and was a
co-founder of the GLG Partners division of Lehman Brothers
International (Europe) in 1995. He has also served as Co-Chief
Executive Officer of GLG Partners LP since September 2005 and
served as its Chief Executive Officer from September 2000 until
September 2005. Prior to 1995, Mr. Gottesman was an
Executive Director of Goldman Sachs International, where he
managed global equity portfolios in the private client group.
Mr. Gottesman earned a B.A. from Columbia University.
Pierre Lagrange, 48, has been a member of our board of
directors since February 2009. He is a Senior Managing Director
of GLG Partners LP and has been a co-founder and, prior to 2009,
a Managing Director of GLG Partners LP since its formation in
September 2000, and was a co-founder of the GLG Partners
division of Lehman Brothers International (Europe) in 1995. He
has overall responsibility for a number of our global equity
products, including the GLG European Equity Fund, the GLG
Environment Fund, the GLG EAFE (Institutional) Fund and our
flagship GLG European Long-Short Fund. Prior to 1995,
Mr. Lagrange worked at Goldman Sachs managing global equity
portfolios and at JP Morgan in government bond trading. He has
an M.A. in Engineering from the Solvay Business School in
Brussels. Mr. Lagrange is a citizen of Belgium.
Emmanuel Roman, 47, has been our Co-Chief Executive
Officer and a director since November 2007. He is a Senior
Managing Director of GLG Partners LP and has served as a
Co-Chief Executive Officer and, prior to 2009, a Managing
Director of GLG Partners LP since September 2005. From 2000 to
April 2005, Mr. Roman served as a
co-head of
Worldwide Global Securities Services of Goldman Sachs
International Limited. In 2003, Mr. Roman also became
co-head of the European Equities Division and a member of the
European Management Committee, a position he held until April
2005. In 1998, Mr. Roman was elected a partner of Goldman
Sachs after two years as a Managing Director. Mr. Roman
also served as co-head of Worldwide Equity Derivatives at
Goldman Sachs from 1996 to 2000. Mr. Roman earned an M.B.A.
in Finance and Econometrics from the University of Chicago and a
bachelors degree from the University of Paris.
Mr. Roman is a citizen of France.
Ian G. H. Ashken, 49, has been a member of the board of
directors since November 2007. He has been Vice Chairman and
Chief Financial Officer of Jarden Corporation (consumer
products) and a member of the Board of Directors of Jarden since
2001. Between 2001 and 2007 he was also Secretary of Jarden
Corporation. Mr. Ashken is also a principal and executive
officer of a number of private investment entities. He also
served as Vice Chairman
and/or Chief
Financial Officer of three public companies, Benson Eyecare
Corporation, Lumen Technologies, Inc. and Bollé Inc.
between 1992 and 2000. He also serves as a director of Phoenix
Group Holdings.
124
Martin E. Franklin, 45, was Chairman of the board of
directors of Freedom Acquisition Holdings, Inc. (our predecessor
corporation) from June 2006 to November 2007 and has been a
member of the board of directors since June 2006.
Mr. Franklin has served as Chairman and Chief Executive
Officer of Jarden Corporation (consumer products) since 2001.
Prior to joining Jarden Corporation, Mr. Franklin served as
Chairman and a director of Bollé, Inc. from 1997 to 2000,
Chairman of Lumen Technologies, Inc. from 1996 to 1998, and as
Chairman and Chief Executive Officer of its predecessor, Benson
Eyecare Corporation from 1992 to 1996. Mr. Franklin also
serves on the board of directors of Liberty Acquisition Holdings
Corp., Liberty Acquisition Holdings (International) Company and
Kenneth Cole Productions, Inc. Mr. Franklin also serves as
a director and trustee of a number of private companies and
charitable institutions.
James N. Hauslein, 50, has been a member of the board of
directors since July 2006. Mr. Hauslein has also served as
President of Hauslein & Company, Inc. (private equity)
since May 1991. From July 1991 until April 2001,
Mr. Hauslein served as Chairman of the Board of Sunglass
Hut International, Inc., the worlds largest specialty
retailer of non-prescription sunglasses. Mr. Hauslein also
served as Sunglass Huts Chief Executive Officer from May
1997 to February 1998 and again from January 2001 to May 2001.
Mr. Hauslein is also currently a member of the board of
directors of Liberty Acquisition Holdings Corp., Atlas
Acquisition Holdings Corp., Elephant Capital Plc (formerly
Promethean India, Plc) and of two private companies.
Mr. Hauslein serves on several philanthropic boards and
foundations and is a member of several Alumni Advisory Boards at
Cornell University. Mr. Hauslein earned an M.B.A., with
Distinction, from Cornell Universitys Johnson Graduate
School of Management and a B.S. in chemical engineering from
Cornell University.
William P. Lauder, 49, has been a member of the board of
directors since July 2006. Mr. Lauder has been Executive
Chairman of The Estée Lauder Companies Inc. (cosmetics)
since July 2009. He served as Chief Executive Officer of The
Estée Lauder Companies Inc. from March 2008 through June
2009 and President and Chief Executive Officer from July 2004 to
February 2008. At The Estée Lauder Companies Inc.,
Mr. Lauder served as Chief Operating Officer from January
2003 through June 2004 and Group President from July 2001
through 2002, where he was responsible for the worldwide
business of Clinique and Origins and the companys retail
store and online operations. From 1998 to 2001, Mr. Lauder
was President of Clinique Laboratories. Prior to then, he was
President of Origins Natural Resources Inc., where he had been
the senior officer of the Origins brand since its creation in
1990. He joined The Estée Lauder Companies in 1986 as
Regional Marketing Director of Clinique U.S.A. in the New York
Metro area. Mr. Lauder then spent two years at
Prescriptives as Field Sales Manager. Prior to joining The
Estée Lauder Companies, he completed Macys executive
training program in New York City and became Associate
Merchandising Manager of the New York Division/Dallas store at
the time of its opening in September 1985. Mr. Lauder
earned a B.S. in Economics from the Wharton School of the
University of Pennsylvania. He is a member of the Board of
Trustees of the University of Pennsylvania and the Boards of
Directors of the Fresh Air Fund, the 92nd Street Y and the
Trinity School in New York City.
Executive
Officers
The following sets forth certain information regarding our
executive officers.
|
|
|
Name
|
|
Position
|
|
Noam Gottesman
|
|
Chairman of the Board and Co-Chief Executive Officer
|
Emmanuel Roman
|
|
Co-Chief Executive Officer
|
Pierre Lagrange
|
|
Senior Managing Director of GLG Partners LP
|
Simon White
|
|
Chief Operating Officer
|
Jeffrey Rojek
|
|
Chief Financial Officer
|
Alejandro San Miguel
|
|
General Counsel and Corporate Secretary
|
Additional information concerning Messrs. Gottesman, Roman
and Lagrange is set forth above.
Simon White, 52, has been our Chief Operating Officer
since March 2008 and served as our Chief Financial Officer from
November 2007 to March 2008. He has been GLG Partners LPs
Chief Operating Officer since September 2000. From 1997 to
September 2000, he worked at LBIE as Executive Director and
Branch Manager of the GLG Partners division. From 1995 to 1997,
he was Chief Administrative Officer of Lehman Brothers
European high net worth business. From 1993 to 1995, he was
European Controller at Lehman Brothers. Prior to 1993,
125
Mr. White worked at Credit Suisse First Boston and
PaineWebber in a number of senior business and support roles in
their London and New York offices. Mr. White is a chartered
accountant and a fellow of the Institute of Chartered
Accountants and has worked in the financial services business
since 1986. Mr. White is a citizen of the United Kingdom
Jeffrey Rojek, 41, has been our Chief Financial Officer
since March 2008. Prior to joining GLG, Mr. Rojek was an
Audit and Advisory Partner at KPMG, in the firms New York
financial services practice. He joined KPMG in 1991 and over his
nearly 18 year career there worked with global banking,
investment banking and other related financial services clients.
From 2004 to 2006, he was based in KPMGs national office
advising on audit and accounting issues related to financial
instruments. Prior to that, Mr. Rojek spent three years in
Singapore as KPMGs Regional Lead Partner for Deutsche
Bank, Citigroup and Jones Lang Lasalle. Mr. Rojek has an
M.B.A. from Columbia University and a B.S. from Fordham
University.
Alejandro San Miguel, 42, has been our General
Counsel and Corporate Secretary since November 2007.
Mr. San Miguel was a partner at the law firm of
Chadbourne & Parke LLP, one of GLGs principal
outside law firms, from 2001 until November 2007. He joined the
law firm in 1996 from Thacher Profitt & Wood LLP where
he worked since 1993. Mr. San Miguel received a J.D.
from New York Law School and a B.A. from the University of
Pennsylvania.
Historical
Summary Financial Data
The following summary financial data for the five fiscal years
ended December 31, 2009 were derived from the audited
combined and consolidated financial statements of GLG and its
subsidiaries. The following summary financial data for the six
months ended June 30, 2009 and June 30, 2010 were
derived from the unaudited combined and consolidated financial
statements of GLG and its subsidiaries. In November 2007, we
completed the acquisition of GLG Partners LP and certain of its
affiliated entities (each, an Acquired Company).
Effective upon the consummation of the acquisition,
(1) each Acquired Company became a subsidiary of ours,
(2) the business and assets of the Acquired Companies (the
GLG Business) became our only operations and
(3) we changed our name to GLG Partners, Inc. As the
Acquisition was considered a reverse acquisition
recapitalization for accounting purposes, the combined
historical financial statements of the GLG Business became our
historical financial statements. The summary financial data
should be read in conjunction with the audited consolidated
financial statements and other financial information contained
in our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009 (the 2009
10-K),
including the notes thereto, and the unaudited consolidated
financial statements and other financial information contained
in our Quarterly Reports on
Form 10-Q
for the fiscal quarters ended March 31, 2010 (the
March 31
10-Q)
and June 30, 2010 (the June 30 10-Q), each
incorporated by reference into this proxy statement. More
comprehensive financial information is included in the 2009
10-K, the
March 31
10-Q and the
June 30 10-Q, including managements discussion and
analysis of financial condition and results of operations in the
2009 10-K,
the March 31
10-Q and the
June 30 10-Q, and other documents we file with the SEC, and
the following summary is qualified in its entirety by reference
to the 2009
10-K, the
March 31
10-Q,
126
the June 30, 10-Q and other documents and all of the
financial information and notes contained in those documents.
See Where You Can Find More Information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
|
|
Years Ended December 31,
|
|
|
Ended June 30,
|
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2009
|
|
|
2010
|
|
|
|
(US dollars in thousands)
|
|
|
Combined and Consolidated Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues and other income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees, net
|
|
$
|
137,958
|
|
|
$
|
186,273
|
|
|
$
|
287,152
|
|
|
$
|
317,787
|
|
|
$
|
152,528
|
|
|
$
|
70,458
|
|
|
$
|
89,545
|
|
Performance fees, net
|
|
|
279,405
|
|
|
|
394,740
|
|
|
|
678,662
|
|
|
|
107,517
|
|
|
|
114,605
|
|
|
|
48,759
|
|
|
|
25,088
|
|
Administration fees, net
|
|
|
311
|
|
|
|
34,814
|
|
|
|
64,224
|
|
|
|
69,145
|
|
|
|
25,685
|
|
|
|
11,410
|
|
|
|
15,016
|
|
Transaction charges
|
|
|
184,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
1,476
|
|
|
|
5,039
|
|
|
|
10,080
|
|
|
|
542
|
|
|
|
8,056
|
|
|
|
7,229
|
|
|
|
1,290
|
|
Total net revenues and other income
|
|
|
603,402
|
|
|
|
620,866
|
|
|
|
1,040,118
|
|
|
|
494,991
|
|
|
|
300,874
|
|
|
|
137,856
|
|
|
|
130,939
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation, benefits and profit share
|
|
|
345,918
|
|
|
|
369,836
|
|
|
|
1,211,212
|
|
|
|
952,916
|
|
|
|
637,995
|
|
|
|
(318,586
|
)
|
|
|
(222,952
|
)
|
General, administrative and other
|
|
|
64,032
|
|
|
|
68,404
|
|
|
|
108,926
|
|
|
|
123,049
|
|
|
|
90,907
|
|
|
|
(47,743
|
)
|
|
|
(59,050
|
)
|
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,768
|
|
|
|
(833
|
)
|
|
|
(1,737
|
)
|
Third party distribution, administration and service fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,276
|
|
|
|
(665
|
)
|
|
|
(2,142
|
)
|
Total expenses
|
|
|
409,950
|
|
|
|
438,240
|
|
|
|
1,320,138
|
|
|
|
1,075,965
|
|
|
|
734,946
|
|
|
|
(367,827
|
)
|
|
|
(285,881
|
)
|
Income (loss) from operations
|
|
|
193,452
|
|
|
|
182,626
|
|
|
|
(280,020
|
)
|
|
|
(580,974
|
)
|
|
|
(434,072
|
)
|
|
|
(229,971
|
)
|
|
|
(154,942
|
)
|
Realized gain/(loss) on
available-for-sale
investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(21,855
|
)
|
|
|
(21,217
|
)
|
|
|
(917
|
)
|
Gain on debt extinguishment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84,821
|
|
|
|
84,821
|
|
|
|
|
|
Gain on business combination negative goodwill
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,122
|
|
|
|
21,122
|
|
|
|
|
|
Interest income, net
|
|
|
2,795
|
|
|
|
4,657
|
|
|
|
2,350
|
|
|
|
(16,613
|
)
|
|
|
(11,503
|
)
|
|
|
649
|
|
|
|
417
|
|
Income (loss) before income taxes
|
|
|
196,247
|
|
|
|
187,283
|
|
|
|
(277,670
|
)
|
|
|
(597,587
|
)
|
|
|
(361,487
|
)
|
|
|
(6,567
|
)
|
|
|
(161,418
|
)
|
Income tax benefit/(expense)
|
|
|
(25,345
|
)
|
|
|
(29,225
|
)
|
|
|
(64,000
|
)
|
|
|
(14,231
|
)
|
|
|
2,102
|
|
|
|
(2,552
|
)
|
|
|
7,964
|
|
Net income/(loss)
|
|
|
170,902
|
|
|
|
158,058
|
|
|
|
(341,670
|
)
|
|
|
(611,818
|
)
|
|
|
(359,385
|
)
|
|
|
(153,715
|
)
|
|
|
(153,454
|
)
|
Net income (loss) attributable to common stockholders
|
|
|
170,250
|
|
|
|
157,876
|
|
|
|
(310,508
|
)
|
|
|
(630,997
|
)
|
|
|
(318,951
|
)
|
|
|
(144,635
|
)
|
|
|
(135,444
|
)
|
Distributions to Individual Principals and Trustees
|
|
|
(106,531
|
)
|
|
|
(165,705
|
)
|
|
|
(330,972
|
)
|
|
|
(118,354
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend Paid
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16,210
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) per share, basic
|
|
|
1.25
|
|
|
|
1.16
|
|
|
|
(2.11
|
)
|
|
|
(2.97
|
)
|
|
|
(1.45
|
)
|
|
|
(0.67
|
)
|
|
|
(0.59
|
)
|
Net income/(loss) per share, diluted
|
|
|
0.87
|
|
|
|
0.81
|
|
|
|
(2.11
|
)
|
|
|
(2.97
|
)
|
|
|
(1.45
|
)
|
|
|
(0.67
|
)
|
|
|
(0.59
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|
|
As of June 30,
|
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2009
|
|
|
2010
|
|
|
|
(US dollars in thousands)
|
|
|
Combined and Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
236,261
|
|
|
$
|
273,148
|
|
|
$
|
429,422
|
|
|
$
|
316,195
|
|
|
$
|
263,782
|
|
|
$
|
258,289
|
|
|
$
|
201,338
|
|
Fees receivable
|
|
|
246,179
|
|
|
|
251,963
|
|
|
|
389,777
|
|
|
|
42,106
|
|
|
|
104,541
|
|
|
|
74,896
|
|
|
|
68,073
|
|
Working capital
|
|
|
42,387
|
|
|
|
183,388
|
|
|
|
220,583
|
|
|
|
112,304
|
|
|
|
190,907
|
|
|
|
176,027
|
|
|
|
169,837
|
|
Property and equipment, net
|
|
|
3,290
|
|
|
|
6,121
|
|
|
|
9,079
|
|
|
|
14,076
|
|
|
|
12,856
|
|
|
|
13,232
|
|
|
|
12,901
|
|
Current assets
|
|
|
491,825
|
|
|
|
551,055
|
|
|
|
873,682
|
|
|
|
404,367
|
|
|
|
419,909
|
|
|
|
406,166
|
|
|
|
317,452
|
|
Non-current assets
|
|
|
3,515
|
|
|
|
6,322
|
|
|
|
110,455
|
|
|
|
84,015
|
|
|
|
80,872
|
|
|
|
88,563
|
|
|
|
82,565
|
|
Total assets
|
|
|
495,340
|
|
|
|
557,377
|
|
|
|
984,137
|
|
|
|
488,382
|
|
|
|
500,781
|
|
|
|
494,729
|
|
|
|
400,017
|
|
Accrued compensation and benefits
|
|
|
247,745
|
|
|
|
289,301
|
|
|
|
467,887
|
|
|
|
148,531
|
|
|
|
138,686
|
|
|
|
71,309
|
|
|
|
44,982
|
|
Other liabilities
|
|
|
|
|
|
|
5,100
|
|
|
|
16,092
|
|
|
|
50,765
|
|
|
|
13,886
|
|
|
|
36,920
|
|
|
|
15,862
|
|
Loans payable, convertible notes and revolving credit facility
|
|
|
13,000
|
|
|
|
13,000
|
|
|
|
570,000
|
|
|
|
570,000
|
|
|
|
533,672
|
|
|
|
526,639
|
|
|
|
516,527
|
|
Total stockholders equity (deficit)
|
|
|
181,599
|
|
|
|
176,710
|
|
|
|
(244,230
|
)
|
|
|
(377,549
|
)
|
|
|
(283,569
|
)
|
|
|
(271,515
|
)
|
|
|
(285,633
|
)
|
Current liabilities
|
|
|
300,741
|
|
|
|
180,873
|
|
|
|
698,367
|
|
|
|
335,931
|
|
|
|
252,511
|
|
|
|
239,605
|
|
|
|
160,516
|
|
Non-current liabilities
|
|
|
14,370
|
|
|
|
14,552
|
|
|
|
531,911
|
|
|
|
530,000
|
|
|
|
531,839
|
|
|
|
526,639
|
|
|
|
525,134
|
|
127
Ratio of
Earnings to Fixed Charges
The following table sets forth our consolidated ratio of
earnings to fixed charges for each of the periods indicated. For
purposes of calculating this ratio, earnings consist of income
(loss) from operations before (i) income taxes,
(ii) non-controlling interests and (iii) fixed
charges, excluding capitalized interest. Fixed charges consist
of interest on borrowings (whether expensed or capitalized), the
portion of rental expense applicable to interest, and
amortization of debt issuance costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|
As of June 30,
|
2005
|
|
2006
|
|
2007
|
|
2008
|
|
2009
|
|
2009
|
|
2010
|
|
362
|
|
238
|
|
|
|
|
|
|
|
|
|
|
Earnings were insufficient to cover fixed charges by
approximately $286,541,000, $605,148,000 and $446,801,000 for
the years ended December 31, 2007, 2008 and 2009,
respectively, and by approximately $236,538,000 and $160,943,000
for the six months ended June 30, 2009 and 2010,
respectively.
Book
Value Per Share
Our net book value per share as of June 30, 2010 was
$(1.13).
Transactions
in Common Stock
Repurchases
of Common Stock
The following table shows purchases of common stock during the
past two years effected by GLG.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
|
|
|
|
Total Number of
|
|
|
Range of Prices
|
|
|
Price Paid per
|
|
Quarter
|
|
Shares Purchased
|
|
|
Paid per Share
|
|
|
Share
|
|
|
April 1, 2008 to June 30, 2008
|
|
|
64,900
|
|
|
$
|
8.15
|
|
|
$
|
8.15
|
|
July 1, 2008 to September 30, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
October 1, 2008 to December 31, 2008
|
|
|
1,195,139
|
|
|
|
2.22 - 3.20
|
|
|
|
3.12
|
|
January 1, 2009 to March 31, 2009
|
|
|
28,344,655
|
|
|
|
2.17 - 2.60
|
|
|
|
2.27
|
|
April 1, 2009 to June 30, 2009
|
|
|
41,436
|
|
|
|
2.84 - 3.65
|
|
|
|
3.56
|
|
July 1, 2009 to September 30, 2009
|
|
|
605,167
|
|
|
|
4.08
|
|
|
|
4.08
|
|
October 1, 2009 to December 31, 2009
|
|
|
168,115
|
|
|
|
2.66 - 2.74
|
|
|
|
2.73
|
|
January 1, 2010 to March 31, 2010
|
|
|
525,416
|
|
|
|
2.70 - 3.12
|
|
|
|
3.10
|
|
April 1, 2010 to June 30, 2010
|
|
|
40,237
|
|
|
|
2.91
|
|
|
|
2.91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
30,985,065
|
|
|
|
|
|
|
|
|
|
Purchases
by the Selling Stockholders
The following tables show purchases of our common stock and
other equity-related securities since May 1, 2008 effected
by the Selling Stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
Total Number of
|
|
|
Range of Prices
|
|
|
Price Paid
|
|
Name of Purchaser
|
|
Date of Purchase
|
|
Shares Purchased
|
|
|
Paid per Share
|
|
|
per Share
|
|
|
Noam Gottesman
|
|
April 1 June 30, 2008
|
|
|
1,000,000
|
|
|
$
|
8.15
|
|
|
$
|
8.15
|
|
|
|
January 1 March 31, 2009
|
|
|
309,664
|
|
|
$
|
2.01 2.25
|
|
|
$
|
2.17
|
|
Emmanuel Roman
|
|
January 1 March 31, 2009
|
|
|
348,696
|
|
|
$
|
1.99 2.30
|
|
|
$
|
2.24
|
|
128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Amount of
|
|
|
|
|
|
|
5.00% Dollar-
|
|
Number of Common
|
|
|
|
|
Denominated
|
|
Shares into which
|
|
|
|
|
Convertible
|
|
Convertible Notes are
|
|
|
|
|
Subordinated Notes
|
|
Convertible Prior to the
|
Name of Purchaser
|
|
Date of Purchase
|
|
Purchased
|
|
Merger
|
|
TOMS International Ltd.
|
|
|
May 15, 2009
|
|
|
$
|
10,000,000
|
|
|
|
2,688,172
|
|
Jackson Holding Services Inc.
|
|
|
May 15, 2009
|
|
|
$
|
5,000,000
|
|
|
|
1,344,086
|
|
Point Pleasant Ventures Ltd.
|
|
|
May 15, 2009
|
|
|
$
|
15,000,000
|
|
|
|
4,032,258
|
|
Total
|
|
|
|
|
|
$
|
30,000,000
|
|
|
|
8,064,516
|
|
See Special Factors Interests of Certain
Persons in the Merger A Portion of our 5.00%
Dollar-Denominated Convertible Subordinated Notes are held by
the Principals above regarding the treatment of the
convertible notes in connection with the merger.
Purchases
by Man, Holdco and Merger Sub
Except for the shares to be acquired pursuant to the share
exchange agreement and as set forth in the table below, Man and
its affiliates have not made any purchases of our common stock
during the past two years. As of July 29, 2010, none of
Man, Holdco, Merger Sub or any of their respective associates or
majority-owned subsidiaries beneficially owned any shares of our
common stock.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
Total Number
|
|
|
|
Average
|
|
|
|
|
of Shares
|
|
Range of Prices
|
|
Price Paid
|
Name of Purchaser
|
|
Date of Purchase
|
|
Purchased
|
|
Paid per Share
|
|
per Share
|
|
Man Investments Limited (a wholly
|
|
July 1 September 30, 2008
|
|
|
31,990
|
|
|
$
|
8.25 8.93
|
|
|
$
|
8.71
|
|
owned subsidiary of Man)
|
|
October 1 December 31, 2008
|
|
|
35,230
|
|
|
$
|
2.44 3.79
|
|
|
$
|
3.03
|
|
Purchases
by Merger Sub
Merger Sub has not made any purchases of our common stock during
the past two years.
Transactions
During the Past 60 Days
There have been no transactions in shares of our common stock
during the past 60 days by us, any of our officers or
directors, the Selling Stockholders, Man, Holdco, Merger Sub,
any of Merger Subs or Holdcos officers or directors,
or any associate or majority-owned subsidiary of the foregoing,
with the exception of 15,407, 15,407 and 6,704 shares
withheld by us to pay taxes upon vesting of restricted stock
awards for Messrs. Rojek, San Miguel and Schreyer,
respectively.
Security
Ownership of Certain Beneficial Owners and Management
The table below sets forth the beneficial ownership of our
common stock and Series A voting preferred stock as of
August 4, 2010 by the following individuals or entities:
|
|
|
|
|
each person who beneficially owns more than 5% of the
outstanding shares of our capital stock;
|
|
|
|
the individuals who are our Co-Chief Executive Officers, Chief
Financial Officer and three other most highly compensated
executive officers;
|
|
|
|
the individuals who are our directors; and
|
|
|
|
the individuals who are our directors and executive officers as
a group.
|
Beneficial ownership is determined in accordance with the rules
of the SEC. Except as otherwise indicated, each person or entity
named in the table has sole voting and investment power with
respect to all shares of our capital stock shown as beneficially
owned, subject to applicable community property laws. As of
August 4, 2010, 251,883,013 shares of our common stock
and 58,904,993 shares of our Series A voting preferred
stock were issued and outstanding. In computing the number of
shares of our capital stock beneficially owned by a person and
the percentage ownership of that person, all shares of our
capital stock that will be subject to warrants or convertible
securities held by that person are deemed outstanding. These
shares are not, however, deemed outstanding for the purpose of
computing the percentage ownership of any other person. None of
the shares of our common stock or
129
Series A voting preferred stock owned by any of our
directors or officers have been pledged as security. The
business address of Messrs. Gottesman, Roman, White,
San Miguel, Rojek, Hauslein and Lauder and of Lavender
Heights Capital LP is
c/o GLG
Partners, Inc., 399 Park Avenue, 38th Floor, New York, New
York 10022. The business address of Mr. Lagrange and of
Sage Summit LP is
c/o GLG
Partners LP, One Curzon Street, London W1J 5HB, England.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
|
|
|
|
|
Approximate
|
|
|
Approximate
|
|
|
|
|
|
|
Percentage
|
|
|
Percentage
|
|
|
|
|
|
|
of Outstanding
|
|
|
of Outstanding
|
|
|
|
Number of Shares
|
|
|
Common Stock
|
|
|
Common Stock
|
|
|
|
of Common Stock
|
|
|
Beneficially
|
|
|
Beneficially
|
|
Name of Beneficial Owner and Management
|
|
Beneficially Owned
|
|
|
Owned
|
|
|
Owned
|
|
|
Lehman Brothers Holdings, Inc.(1)
|
|
|
33,762,690
|
|
|
|
13.4
|
%
|
|
|
10.9
|
%
|
Lansdowne Partners Limited Partnership(2)
|
|
|
19,837,389
|
|
|
|
7.9
|
%
|
|
|
6.4
|
%
|
Berggruen Holdings North America Ltd.(3)
|
|
|
20,805,900
|
|
|
|
7.9
|
%
|
|
|
6.5
|
%
|
Sage Summit LP(4)(5)
|
|
|
159,623,802
|
(14)(15)(16)(17)
|
|
|
50.1
|
%
|
|
|
50.1
|
%
|
Lavender Heights Capital LP(4)(5)
|
|
|
159,623,802
|
(14)(15)(16)(17)
|
|
|
50.1
|
%
|
|
|
50.1
|
%
|
Ogier Fiduciary Services (Cayman) Limited, acting solely in its
capacity as trustee of Blue Hill Trust(5)
|
|
|
159,623,802
|
(14)(15)(16)(17)
|
|
|
50.1
|
%
|
|
|
50.1
|
%
|
Ogier Fiduciary Services (Cayman) Limited, acting solely in its
capacity as trustee of Green Hill Trust(5)
|
|
|
159,623,802
|
(14)(15)(16)(17)
|
|
|
50.1
|
%
|
|
|
50.1
|
%
|
Noam Gottesman(4)(6)
|
|
|
159,804,202
|
(14)(15)(16)(17)
|
|
|
50.1
|
%
|
|
|
50.1
|
%
|
Pierre Lagrange(4)(6)
|
|
|
159,804,202
|
(14)(15)(16)(17)
|
|
|
50.1
|
%
|
|
|
50.1
|
%
|
Emmanuel Roman(4)(6)
|
|
|
159,804,202
|
(14)(15)(16)(17)
|
|
|
50.1
|
%
|
|
|
50.1
|
%
|
Martin E. Franklin(7)
|
|
|
14,682,016
|
|
|
|
5.8
|
%
|
|
|
4.7
|
%
|
Ian G.H. Ashken(8)
|
|
|
3,575,842
|
|
|
|
1.4
|
%
|
|
|
1.1
|
%
|
James N. Hauslein(9)
|
|
|
187,133
|
|
|
|
|
*
|
|
|
|
*
|
William P. Lauder(10)
|
|
|
187,133
|
|
|
|
|
*
|
|
|
|
*
|
Simon White(11)
|
|
|
357,133
|
|
|
|
|
*
|
|
|
|
*
|
Jeffrey M. Rojek(12)
|
|
|
324,023
|
|
|
|
|
*
|
|
|
|
*
|
Alejandro San Miguel(13)
|
|
|
342,661
|
|
|
|
|
*
|
|
|
|
*
|
All directors and executive officers as a group (10 individuals)
|
|
|
179,460,143
|
|
|
|
55.8
|
%
|
|
|
55.8
|
%
|
|
|
|
|
|
Does not include as outstanding 58,904,993 shares of our
common stock into which 58,904,993 FA Sub 2 exchangeable shares
and 58,904,993 associated shares of Series A voting
preferred stock beneficially owned by Noam Gottesman and the
Trustee of the Gottesman GLG Trust may be exchanged by the
holder thereof at any time and from time to time, other than
with respect to Sage Summit LP, Lavender Heights Capital LP and
Messrs. Gottesman, Lagrange and Roman. |
|
|
|
|
|
Assumes 310,788,006 shares of our common stock are issued
and outstanding upon the exchange of 58,904,993 FA Sub 2
exchangeable shares and 58,904,993 associated shares of
Series A voting preferred stock beneficially owned by Noam
Gottesman and the Trustee of the Gottesman GLG Trust. |
|
|
|
* |
|
Less than 1% |
|
(1) |
|
Based on a Form 4 filed on September 12, 2008, Lehman
(Cayman Islands) Ltd (LCI) holds
33,659,998 shares of our common stock, Lehman Brothers Inc.
(LBI) holds 95,092 shares and 3,150 shares
included in units and Lehman Brothers Special Financing Inc.
holds 1,300 shares. The warrants included in the units are
exercisable for 3,150 shares of common stock beginning on
December 21, 2007. LCI and LBI are wholly owned
subsidiaries of Lehman Brothers Holdings, Inc. The business
address of Lehman Brothers Holdings, Inc. is 1271 Avenue of the
Americas, 45th Floor, New York, New York 10020. |
130
|
|
|
(2) |
|
Based on a Schedule 13G amendment filed on
February 12, 2010 by Lansdowne Partners Limited Partnership
(Lansdowne Partners) and Lansdowne UK Equity
Fund Limited (Lansdowne UK, and together with
Lansdowne Partners, Lansdowne), Lansdowne Partners
is the investment adviser of Lansdowne UK. Lansdowne holds
19,837,389 shares of our common stock as to which
(i) Lansdowne Partners has sole voting and dispositive
power with respect to 4,542,141 shares and
(ii) Lansdowne Partners and Lansdowne UK have shared voting
control and dispositive power with respect to
15,295,248 shares. Lansdowne Partners disclaims beneficial
ownership of any of these securities, except for its pecuniary
interest therein. The business address of Lansdowne Partners is
15 Davies Street, London W1K 3AG, England and the business
address of Lansdowne UK is
c/o Fortis
Prime Fund Solutions Administration Services (Ireland)
Limited, Fortis House, Park Lane, Spencer Dock, Dublin 1,
Ireland. |
|
(3) |
|
Based on a Schedule 13D filed on November 13, 2007,
Berggruen Acquisition Holdings Ltd (BAH) owns
5,923,200 shares included in founders units and
Berggruen Holdings North America Ltd. (Berggruen
Holdings) owns 4,209,500 shares, of which 2,500,000
are included in co-investment units. The amount shown in the
table above includes an aggregate of 4,750,000 shares of
common stock issuable upon exercise of sponsors warrants
and co-investment warrants, all of which are exercisable
beginning on December 21, 2007, and 5,923,200 shares
of common stock issuable upon exercise of founders
warrants which are not currently exercisable. BAH is a direct
subsidiary of Berggruen Holdings. Berggruen Holdings is a
direct, wholly owned subsidiary of Berggruen Holdings Ltd.
(BHL) and the managing and majority shareholder of
BAH. All of the outstanding capital stock of BHL is owned by the
Tarragona Trust (Tarragona). The trustee of
Tarragona is Maitland Trustees Limited, a BVI corporation acting
as an institutional trustee in the ordinary course of business
without the purpose or effect of changing or influencing control
of us. Nicolas Berggruen is a director of BHL.
Mr. Berggruen may be considered to have beneficial
ownership of BAHs interests in us and disclaims beneficial
ownership of any shares in which he does not have a pecuniary
interest. The principal business address of each of BAH,
Berggruen Holdings and BHL is 1114 Avenue of the Americas, 41st
Floor, New York, New York 10036. The principal business address
of Mr. Berggruen is 9-11 Grosvenor Gardens, London, SW1W
OBD, United Kingdom. The principal business address of Tarragona
is 9 Columbus Centre, Pelican Drive, Road Town, Tortola, British
Virgin Islands. |
|
(4) |
|
Represents shares held by the parties to a Voting Agreement
dated as of June 22, 2007, as amended, among the Individual
Principals, the Trustees, Lavender Heights Capital LP, Sage
Summit LP, Jackson Holding Services Inc., Point Pleasant
Ventures Ltd. and us. Each of the parties to the Voting
Agreement disclaims beneficial ownership of shares held by the
other parties to the Voting Agreement (as described below)
(except each Individual Principal with respect to his respective
Trustee). |
|
(5) |
|
Includes (i) 8,460,854 shares purchased by Ogier
Fiduciary Services (Cayman) Limited, acting solely in its
capacity as trustee of Blue Hill Trust, from Sage Summit LP on
June 21, 2010, and (ii) 5,640,570 shares
purchased by Ogier Fiduciary Services (Cayman) Limited, acting
solely in its capacity as trustee of Green Hill Trust, from
Lavender Heights Capital LP on June 21, 2010. Each of Sage
Summit LP and Lavender Heights Capital LP has the right to
rescind the respective purchase agreement pursuant to which such
share purchases were effectuated, and to reacquire the GLG
shares prior to completion of the merger (or such other date as
agreed). See Special Factors Background of the
Merger above for a description of the respective purchase
agreements. |
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(6) |
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Includes 90,200 shares of common stock included in units
held by certain investment funds managed by us (the GLG
Funds). The warrants included in the units are exercisable
for 90,200 shares of our common stock beginning on
December 21, 2007. Each of the Individual Principals serves
as a Managing Director of GLG Partners Limited, the general
partner of GLG Partners LP. GLG Partners LP serves as the
investment manager of the GLG Funds that have invested in the
90,200 units. GLG Partners LP, as investment manager of the
GLG Funds, may be deemed the beneficial owner of all of our
securities owned by the GLG Funds. GLG Partners Limited, as
general partner of GLG Partners LP, may be deemed the beneficial
owner of all of our securities owned by the GLG Funds. Each of
the Individual Principals, as a Managing Director of GLG
Partners Limited with shared power to exercise investment
discretion, may be deemed the beneficial owner of all of our
securities owned by the GLG Funds. Each of GLG Partners LP, GLG
Partners Limited and the Individual Principals disclaims
beneficial ownership of any of these securities, except for
their pecuniary interest therein. |
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(7) |
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Includes 5,798,668 shares of common stock and
300,000 shares of restricted stock which vest in three
equal installments on May 15, 2010, 2011 and 2012 and
44,788 shares of restricted stock that vest on February 15,
2011. The amount shown in the table includes an aggregate of
3,800,000 shares of common stock issuable |
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upon exercise of sponsors warrants and co-investment
warrants and 4,738,560 shares of common stock issuable upon
exercise of founders warrants which are not currently
exercisable. The business address of Mr. Franklin is 555
Theodore Fremd Avenue,
Suite B-302,
Rye, New York 10580. |
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(8) |
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Includes 850,000 and 100,000 shares of common stock
included in co-investment units owned by Ian Ashken and Tasburgh
LLC, respectively, and an aggregate of 950,000 shares
issuable upon the exercise of the
co-investment
warrants. Also includes 1,184,640 shares issuable upon the
exercise of founders warrants which are not currently
exercisable. Mr. Ashken is the majority owner and managing
member of Tasburgh LLC. The business address for Mr. Ashken
and Tasburgh LLC is 555 Theodore Fremd Avenue,
Suite B-302,
Rye, New York 10580. Also includes 48,860 shares of
restricted stock that vest on February 15, 2011. |
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(9) |
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Includes 44,104 shares of common stock, 51,201 shares
of common stock included in units (consisting of one share of
common stock and one warrant to purchase one share of common
stock) owned by Mr. Hauslein and 51,201 shares
issuable upon the exercise of founders warrants included
in the units which are not currently exercisable. Also includes
40,717 shares of restricted stock that vest on February 15,
2011. |
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(10) |
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Includes 44,104 shares of common stock, 51,201 shares
of common stock included in units owned by Mr. Lauder and
51,201 shares issuable upon the exercise of founders
warrants included in the units which are not currently
exercisable. Also includes 40,717 shares of restricted stock
that vest on February 15, 2011. |
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(11) |
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Excludes 506,035 shares Mr. White is entitled to
receive under the equity participation plan, 110,000 of which
will be distributed to him on November 2, 2010, 296,035 of
which will be distributed to him on the later of
November 2, 2010 or the date of a change of control and
100,000 of which will be distributed to him in three equal
installments on March 31, 2011, 2012 and 2013, and includes
27,133 shares of restricted stock which vest in two equal
installments on March 31, 2011 and 2012. |
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(12) |
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Includes (i) 206,327 shares of restricted stock which
vest on November 2, 2010, subject to our having achieved
certain minimum levels of net assets under management as of
October 31, 2010; (ii) 66,667 shares of
restricted stock which vest in two equal installments on
May 15, 2011 and 2012; and (iii) 48,839 shares of
restricted stock which vest in two equal installments on
March 31, 2011 and 2012. |
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(13) |
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Includes (i) 182,453 shares of restricted stock which
vest on November 2, 2010, subject to our having achieved
certain minimum levels of net assets under management as of
October 31, 2010; (ii) 66,667 shares of
restricted stock which vest in two equal installments on
May 15, 2011 and 2012; and (iii) 27,133 shares of
restricted stock which vest in two equal installments on
March 31, 2011 and 2012. |
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(14) |
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Includes 8,460,857 and 5,640,570 shares beneficially owned
by Sage Summit LP and Lavender Heights Capital LP, respectively.
The Trustees are the directors of the general partner of each of
these limited partnerships. The Individual Principals may be
deemed beneficial owners of the foregoing shares. Each of the
Individual Principals disclaims beneficial ownership of any of
these securities. |
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(15) |
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Includes 58,900,370 FA Sub 2 exchangeable shares and 58,900,370
associated shares of Series A voting preferred stock
beneficially owned by the Gottesman GLG Trust and 4,623
Exchangeable Shares, 4,623 shares of Series A voting
preferred stock and 1,309,664 shares of common stock
beneficially owned by Mr. Gottesman. Each Exchangeable
Share is exchangeable by the holder at any time and from time to
time into one share of our common stock, and each share of
Series A voting preferred stock will be automatically
redeemed upon the exchange of an Exchangeable Share. Also
includes 2,688,172 shares of common stock issuable upon
conversion of $10 million aggregate principal amount of our
5.0% convertible subordinated notes due 2014. |
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(16) |
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Includes 58,900,370 and 4,623 shares beneficially owned by
the Lagrange GLG Trust and Mr. Lagrange, respectively. Also
includes 4,032,258 shares of common stock issuable upon
conversion of $15 million aggregate principal amount of our
5.0% convertible subordinated notes due 2014. |
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(17) |
|
Includes 18,338,212 and 350,162 shares beneficially owned
by the Roman GLG Trust and Mr. Roman, respectively. Also
includes 1,344,086 shares of common stock issuable upon
conversion of $5 million aggregate principal amount of our
5.0% convertible subordinated notes due 2014. |
Please refer to Important Information Regarding the
Principals Voting Agreement for a discussion
of the voting agreement among the Selling Stockholders.
Market
Price of Our Common Stock and Dividend Information
Our common stock, warrants and units (consisting of one share of
common stock and one warrant to purchase a share of common
stock) trade on the New York Stock Exchange under the symbols
GLG, GLGWS and
132
GLGU, respectively. The following sets forth the
high and low sales price of our units, common stock and
warrants, as reported on the New York Stock Exchange for the
periods shown:
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Common Stock
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Warrants
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Units
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High
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Low
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High
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Low
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High
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Low
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2008:
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Second Quarter
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$
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12.25
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$
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7.67
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$
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4.80
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$
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1.82
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$
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17.04
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$
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9.54
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Third Quarter
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$
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9.50
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$
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4.51
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$
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3.18
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$
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0.35
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$
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12.50
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$
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5.18
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Fourth Quarter
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$
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5.95
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$
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1.86
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$
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0.67
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$
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0.00
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$
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6.00
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$
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1.59
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2009:
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First Quarter
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$
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3.44
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$
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1.94
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$
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0.15
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$
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0.03
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$
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3.23
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$
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1.90
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Second Quarter
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$
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4.25
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$
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2.26
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$
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0.37
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$
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0.06
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$
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4.39
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$
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3.02
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Third Quarter
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$
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4.61
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$
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3.51
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$
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0.42
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$
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0.18
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$
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8.06
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$
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3.86
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Fourth Quarter
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$
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4.08
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$
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2.51
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$
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0.33
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$
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0.10
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$
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4.49
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$
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2.75
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2010:
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First Quarter
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$
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3.54
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$
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2.60
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$
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0.21
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$
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0.10
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$
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3.65
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$
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3.00
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Second Quarter
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$
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4.40
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$
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2.53
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$
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0.18
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$
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0.08
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$
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4.39
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$
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2.95
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Third Quarter (through August 26, 2010)
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$
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4.46
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$
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4.32
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$
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0.14
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$
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0.10
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$
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4.40
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$
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4.16
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On May 14, 2010, the last trading day before we announced
the execution of the merger agreement, the high and low sales
prices of our common stock were $2.99 and $2.90, respectively.
The merger consideration of $4.50 per share represents a premium
of approximately 55% over the closing trading price of $2.91 per
share on May 14, 2009, and approximately 41% over the
average closing prices of our common stock for the 30-trading
day period ending on May 14, 2010. On May 14, 2010,
the closing price of our publicly traded warrants was $0.129. On
August , 2010, the most
recent practicable date before the printing of this proxy
statement, the high and low reported sales prices of our common
stock were $ and
$ , respectively. You are urged to
obtain a current market price quotation for our common stock.
GLG paid a regular quarterly dividend of $0.025 per share of
common stock on each of April 21, 2008, July 21, 2008
and October 21, 2008 in respect of the first, second and
third quarters of 2008, respectively, on all outstanding shares
of common stock, including unvested shares of restricted stock
under GLGs equity-based plans. There was no quarterly
dividend declared or paid for the fourth quarter of 2008. On
December 30, 2008, GLG announced that the board had
determined not to continue paying a regular quarterly dividend
on its common stock, including for the fourth quarter of 2008.
During 2009 and 2010, there were no dividends paid on GLG common
stock.
Under the credit agreement dated as of October 30, 2007, as
amended, by and among GLG, FA Sub 1 Limited, FA Sub 2 Limited
and FA Sub 3 Limited, Citigroup Global Markets Inc., as book
manager and arranger, Citicorp USA, Inc., as administrative
agent, and the other lenders party thereto, GLG is prohibited
from declaring or paying a dividend on its capital stock or in
respect of the FA Sub 2 exchangeable shares until the aggregate
outstanding principal amount of loans owing to non-affiliates of
GLG is less than $200 million and so long as no default or
event of default under the credit agreement shall have occurred
and be continuing at the date of declaration or payment thereof
or would result therefrom.
Description
of Business
The information under the Part I, Item 1,
Business of our 2009
10-K is
incorporated herein by reference.
Description
of Property
The information under the Part I, Item 2,
Properties of our 2009
10-K is
incorporated herein by reference.
Legal
Proceedings
The information under the Part I, Item 3, Legal
Proceedings of our 2009
10-K is
incorporated herein by reference. See also the description of
the pending litigation relating to the merger under
Special Factors Background of the Merger
above.
133
IMPORTANT
INFORMATION REGARDING THE PRINCIPALS
During the last five years, none of the persons or entities
described below has been (a) convicted in a criminal
proceeding (excluding traffic violations or similar
misdemeanors) or (b) a party to any judicial or
administrative proceeding (except for matters that were
dismissed without sanction or settlement) that resulted in a
judgment or decree or final order enjoining the person from
future violations of, or prohibiting activities subject to,
federal or state securities laws, or a finding of any violation
of federal or state securities laws.
Individual
Principals
Information regarding each of Messrs. Gottesman, Roman and
Lagrange can be found above under Important Information
Regarding GLG Our Directors and Executive
Officers.
Trusts
and Related Entities
Trusts
Gottesman GLG Trust is a New York trust established by
Mr. Gottesman for the benefit of himself and his family.
Leslie J. Schreyer is the trustee of the Gottesman GLG Trust.
The business address of the Gottesman GLG Trust is
c/o Chadbourne &
Parke, 30 Rockefeller Plaza, New York, NY 10112 and the
telephone number at that address is
(212) 408-5100.
Roman GLG Trust is a Jersey, Channel Islands trust
established by Mr. Roman for the benefit of himself and his
family. Jeffrey A. Robins is the trustee of the Roman GLG Trust.
The business address of the Roman GLG Trust is
c/o Chadbourne &
Parke, 30 Rockefeller Plaza, New York, NY 10112 and the
telephone number at that address is
(212) 408-5100.
Lagrange GLG Trust is a Jersey, Channel Islands trust
established by Mr. Lagrange for the benefit of himself and
his family. G&S Trustees Limited is the trustee of the
Lagrange GLG Trust. The business address of the Lagrange GLG
Trust is
c/o Hawksford
International, 15 Esplanade, St. Helier, Jersey, Channel
Islands, JE1 1RB and the telephone number at that address is +44
(0) 153-474-0000.
Related
Entities
TOMS International Ltd. is a British Virgin
Islands company, wholly owned by Leslie J. Schreyer as Trustee
of the Gottesman GLG Trust, principally engaged in holding
securities as a wholly owned subsidiary of the Gottesman GLG
Trust. The registered address of TOMS International Ltd. is
Wickhams Cay, P.O. Box 662, Road Town, Tortola,
British Virgin Islands and the telephone number at that address
is
(284) 494-2217.
Leslie J. Schreyer is the sole director, Anthony M. Roncalli is
the vice president and assistant secretary, and Jeffrey A.
Robins is the vice president and assistant secretary.
Jackson Holding Services Inc. is a British
Virgin Islands company, wholly owned by Jeffrey A. Robins as
Trustee of the Roman GLG Trust, principally engaged in holding
securities as a wholly owned subsidiary of the Roman GLG Trust.
The registered address of Jackson Holding Services Inc. is
Wickhams Cay, P.O. Box 662, Road Town, Tortola,
British Virgin Islands and the telephone number at that address
is
(284) 494-2217.
Jeffrey A. Robins is the sole director, president and secretary,
and Anthony M. Roncalli is the assistant secretary.
Point Pleasant Ventures Ltd. is a British
Virgin Islands company, wholly owned by G&S Trustees
Limited as Trustee of the Lagrange GLG Trust, principally
engaged in holding securities as a wholly owned subsidiary of
the Lagrange GLG Trust. The business address of Point Pleasant
Ventures Ltd. is
c/o Hawksford
International, 15 Esplanade, St. Helier, Jersey, Channel
Islands, JE1 1RB and the telephone number at that address is +44
(0) 153-474-0000.
The directors are Nigel T. Bentley, Michael E. Powell, Steven D.
Robinson and Timothy G. Cartwright.
Directors
and Officers of Related Entities
Each of Leslie J. Schreyer, Jeffrey A. Robins and
Anthony M. Roncalli is a citizen of the United States and
has been a partner of Chadbourne & Parke LLP during
the past five years. The business address for each of
134
Messrs. Schreyer, Robins and Roncalli is
Chadbourne & Parke LLP, 30 Rockefeller Plaza, New
York, NY 10112 and the telephone number for each at that address
is
(212) 408-5100.
Nigel T. Bentley is a citizen of the United Kingdom and
has been a director of G&S Trustees Limited for the past
five years.
Michael E. Powell is a citizen of the United Kingdom and
has been a director of G&S Trustees Limited for the past
five years.
Steven D. Robinson is a citizen of the United Kingdom and
has been a director of G&S Trustees Limited since January
2006. Prior to January 2006, Mr. Robinson was a trust
manager of G&S Trustees Limited.
Timothy G. Cartwright is a citizen of the United Kingdom
and has been a director of G&S Trustees Limited since July
2005. Prior to July 2005, Mr. Cartwright was a trust
manager of G&S Trustees Limited.
The business address for each of Messrs. Bentley, Powell,
Robinson and Cartwright is
c/o Hawksford
International, 15 Esplanade, St. Helier, Jersey, Channel
Islands, JE1 1RB and the telephone number at that address is +44
(0) 153-474-0000.
Voting
Agreement
The Selling Stockholders, who control approximately 48.8% of the
voting power of the outstanding shares of our capital stock, and
GLG are parties to a voting agreement dated June 22, 2007.
Under the voting agreement as currently in effect, the Selling
Stockholders party thereto, referred to as the controlling
stockholders, agreed to vote all of the shares of common
stock and Series A preferred stock and any other security
of GLG beneficially owned by them that entitles them to vote in
the election of directors of GLG (collectively, the Voting
Stock) in accordance with the agreement and direction of
the parties holding the majority of the Voting Stock
collectively held by all controlling stockholders (the
Voting Block) with respect to each of the following
events:
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the nomination, designation or election of the members of the
board of directors of GLG (or the board of any subsidiary) or
their respective successors (or their replacements);
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the removal, with or without cause, from the board of directors
of GLG (or the board of any subsidiary) of any director; and
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any change in control of GLG.
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The controlling stockholders and GLG have agreed that so long as
the controlling stockholders and their respective permitted
transferees collectively beneficially own (1) more than 25%
of the Voting Stock and at least one Individual Principal is an
employee, partner or member of GLG or any subsidiary of GLG or
(2) more than 40% of the Voting Stock, GLG will not
authorize, approve or ratify any of the following actions or any
plan with respect thereto without the prior approval of the
Individual Principals owning a majority of the Voting Stock held
by all Individual Principals:
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any incurrence of indebtedness, in one transaction or a series
of related transactions, by GLG or any of its subsidiaries in
excess of $570 million or, if a greater amount has been
previously approved by the controlling stockholders and their
respective permitted transferees, such greater amount;
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any issuance by GLG of equity or equity-related securities that
would represent, after such issuance, or upon conversion,
exchange or exercise, as the case may be, at least 20% of the
total voting power of GLG;
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any commitment to invest or investment or series of related
commitments to invest or investments in a person or group of
related persons in an amount greater than $250 million;
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the adoption of a shareholder rights plan;
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any appointment of a Chief Executive Officer or Co-Chief
Executive Officer of GLG; or
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the termination of the employment of an Individual Principal
with GLG or any of its material subsidiaries without cause.
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135
The controlling stockholders and GLG have agreed, subject to the
fiduciary duties of the directors of GLG, that so long as the
controlling stockholders and their respective permitted
transferee(s) beneficially own Voting Stock representing certain
percentages of the total voting power of GLG as provided in the
voting agreement, GLG will nominate individuals designated by
the Voting Block such that the controlling stockholders will
have a certain number of designees on the board of directors in
relation to the percentages of their total voting power of GLG.
No controlling stockholder may transfer Voting Stock except that
transfers may be made to permitted transferees and in public
markets as permitted by the GLG Shareholders Agreement described
below.
The controlling stockholders have agreed that if (1) the
Voting Block proposes to transfer all of the Voting Stock held
by it to any person other than an Individual Principal or a
Trustee, (2) such transfer would result in a change in
control of GLG, and (3) if such a transfer requires any
approval under the voting agreement or under the GLG
shareholders agreement, such transfer has been approved in
accordance with the voting agreement and the GLG shareholders
agreement, then if requested by the Voting Block, each other
controlling stockholder will be required to sell all of his or
its Voting Stock.
Martin Franklin, a director of GLG, became a party of the Voting
Agreement on February 12, 2010, at which time all the
provisions of the Voting Agreement described above became
binding on Mr. Franklin for so long as he remained a party
to the Voting Agreement, except that he (a) could at any
time transfer any or all of his Voting Stock to any person or,
upon no less than 30 days written notice to all other
parties to the Voting Agreement, withdraw from the Voting
Agreement, (b) was not subject to Section 4
(Drag-Along Rights) and Section 9.11 (Endorsement
of Voting Stock Share Certificates) of the Voting Agreement,
and (c) would only indemnify other parties to the Voting
Agreement (other than GLG) for breaches of the Voting Agreement
by Mr. Franklin. On May 16, 2010, prior to the
execution of the share exchange agreement and the merger
agreement, Mr. Franklin gave written notice of his election
to withdraw from the Voting Agreement to the other parties to
the Voting Agreement with immediate effect, and the other
parties to the Voting Agreement waived the application of the
30-day
notice period described above. Mr. Franklin stated that he
was withdrawing from the Voting Agreement because he wanted his
economic interests to be aligned with the unaffiliated
stockholders of GLG. As a result, Mr. Franklin is no longer
subject to the voting requirements of the Voting Agreement and
his shares of GLG common stock will be acquired by Man in the
merger. Mr. Franklins shares of GLG common stock will
not be counted toward the Minority Stockholder Approval.
Agreement
among Principals and Trustees
On June 22, 2007, the Individual Principals and the
trustees of their respective trusts (the Trustees)
entered into an agreement among principals and trustees.
The agreement among principals and trustees provides that in the
event an Individual Principal voluntarily terminates his
employment with us for any reason prior to November 2,
2012, the following percentages of our common stock, our
Series A voting preferred stock or FA Sub 2 exchangeable
shares held by that Individual Principal and his Trustee as of
November 2, 2007, which we refer to as Forfeitable
Interests, will be forfeited, together with the same
percentage of all distributions received with respect to such
Forfeitable Interests after the date the Individual Principal
voluntarily terminates his employment with us, to the Individual
Principals who continue to be employed by us or a subsidiary as
of the applicable forfeiture date and their Trustees, as follows:
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in the event the termination occurs prior to November 2,
2008, 82.5%;
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in the event the termination occurs on or after November 2,
2008 but prior to November 2, 2009, 66%;
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in the event the termination occurs on or after November 2,
2009 but prior to November 2, 2010, 49.5%;
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in the event the termination occurs on or after November 2,
2010 but prior to November 2, 2011, 33%; and
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in the event the termination occurs on or after November 2,
2011 but prior to November 2, 2012, 16.5%.
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For purposes of the agreement, forfeiture date means
the date which is the earlier of (1) the date that is six
months after the applicable date of termination of employment by
the Individual Principal and (2) the date on or after such
termination date that is six months after the date of the latest
publicly-reported disposition of our equity
136
securities by any continuing Individual Principal, which
disposition is not exempt from the application of the provisions
of Section 16(b) of the Exchange Act.
Shares of our capital stock acquired by the Individual
Principals or their Trustees after November 2, 2007 (other
than by operation of the agreement among principals and
trustees), including shares acquired as a result of equity
awards from us, will not be subject to the forfeiture provisions
described above.
None of the forfeited Forfeitable Interests will return to or
benefit us. Forfeited Forfeitable Interests will be allocated
among the continuing Individual Principals and their Trustees
based on their and their permitted transferees collective
pro rata ownership of all Forfeitable Interests held by the
continuing Individual Principals and their Trustees and their
respective permitted transferees as of the Forfeiture Date. For
purposes of this allocation, each Individual Principal and his
Trustee will be deemed to hold all Forfeitable Interests that he
or his permitted transferee transfers to a charitable
institution, even if such charitable institution subsequently
transfers such Forfeitable Interests to any other person or
entity.
To the extent that a continuing Individual Principal or his
Trustee receives Forfeitable Interests of another Individual
Principal or his Trustee or permitted transferee pursuant to the
provisions described above, such Forfeitable Interests will be
deemed to be Forfeitable Interests of the continuing Individual
Principal or his Trustee receiving such Forfeitable Interests
for all purposes of the agreement among principals and trustees.
The transfer by an Individual Principal or his Trustee of any
Forfeitable Interests to a permitted transferee or any other
person will in no way affect any of his obligations under the
agreement. An Individual Principal or his Trustee may, in his or
its sole discretion, satisfy all or a portion of his or its
obligations under the agreement among principals and trustees by
substituting, for any shares of our common stock or shares of
our Series A voting preferred stock and FA Sub 2
exchangeable shares otherwise forfeitable, an amount of cash
equal to the closing trading price, on the business day
immediately preceding the Forfeiture Date, of such shares on the
securities exchange, if any, where such shares then primarily
trade.
The forfeiture requirements contained in the agreement among
principals and trustees will lapse with respect to an Individual
Principal and his Trustee and permitted transferees upon the
death or disability of an Individual Principal, unless he
voluntarily terminated his employment with us prior to such
event.
The agreement among principals and trustees may be amended and
the terms and conditions of the agreement may be changed or
modified upon the approval of a majority of the Individual
Principals who remain employed by us. We and our shareholders
have no ability to enforce any provision thereof or to prevent
the Individual Principals from amending the agreement among
principals and trustees or waiving any forfeiture obligation.
Pursuant to the terms of the share exchange agreement, the
Selling Stockholders have agreed to terminate the agreement
among principals and trustees prior to the share exchange
closing.
GLG
Shareholders Agreement
Under the GLG Shareholders Agreement dated as of June 22,
2007 by and among GLG and certain GLG shareholders, including
the Individual Principals, the Trustees and Lehman (Cayman
Islands) Limited, the parties and their permitted transferees
are restricted from the direct or indirect sale or transfer of
their equity interests in GLG for periods of up to four years
commencing November 2, 2007, in each case, on terms and
conditions described below:
Noam Gottesman, Emmanuel Roman, Pierre Lagrange (collectively,
the Individual Principals) and Leslie J. Schreyer,
in his capacity as trustee of the Gottesman GLG Trust, G&S
Limited, in its capacity as trustee of the Lagrange GLG Trust
and Jeffrey A. Robins, in his capacity as trustee of the Roman
GLG Trust (collectively, the Trustees), Sage Summit
LP and Lavender Heights Capital LP (on behalf of the key
personnel participating in the equity participation plan), and
each of their permitted transferees may each sell or transfer up
to 10% of his or its original allocation of GLG common stock
(plus the unused amounts of the 10% cap from prior years, if
any) each year during the three years beginning on
November 2, 2008. After November 2, 2011, sales or
transfers of GLG common stock by these shareholders will be
unrestricted.
137
Lehman (Cayman Islands) Limited and its permitted transferees
were each permitted to sell or transfer up to 25% of its
original allocation of GLG common stock during the year
beginning on November 2, 2008 and are each permitted to
sell or transfer up to 50% of its original allocation of GLG
common stock (plus the unused amount of the 25% cap from the
prior year, if any) during the year beginning on
November 2, 2009. After November 2, 2010, sales or
transfers of GLG common stock by these shareholders will be
unrestricted.
All of the foregoing transfer restrictions may be waived by the
affirmative vote of two-thirds of the members of the board of
directors of GLG; provided, however, that a waiver with respect
of any of these shareholders owning an amount of registrable
securities representing 5% or more of the total voting power of
GLG shall be conditioned on a pro rata release of all such
shareholders owning such an amount of registrable securities,
unless a waiver is consented to by each shareholder owning such
an amount of registrable securities still subject to the
transfer restrictions described above.
In connection with the share exchange agreement, the Selling
Stockholders obtained a waiver of the transfer restrictions
applicable to their shares. In addition, certain U.K. domiciled
key personnel who are members of Sage Summit LP and Lavender
Heights Capital LP obtained, as permitted transferees of those
partnerships, waivers of the transfer restrictions described
above to permit sales of vested shares of GLG common stock which
have already been distributed from Sage Summit LP and Lavender
Heights Capital LP to such members.
In addition, the agreement provides demand registration rights,
piggyback registration rights and shelf registration rights for
certain GLG shareholders party to the agreement.
Pursuant to the terms of the share exchange agreement, the
Selling Stockholders have agreed to amend the GLG Shareholders
Agreement to cause such agreement to terminate upon the
effective time.
Founders
Agreement
Under the founders agreement dated June 22, 2007 by and
among Noam Gottesman, as sellers representative, the
Individual Principals, the Trustees, Berggruen Acquisition
Holdings Ltd (Berggruen) and Marlin Equities II, LLC
(Marlin), Berggruen and Marlin agreed that in
connection with the redemption of the publicly traded warrants,
at the written demand of Mr. Gottesman, as the GLG
shareowners representative, they and any of their
permitted transferees will exercise such warrants owned by them
or their permitted transferees as requested to be exercised by
Mr. Gottesman, provided that the warrant agreement has been
amended to permit cashless exercise of the founders
warrants. Mr. Franklin is an affiliate of Marlin.
Amended
and Restated Warrant Agreement
Under the warrant agreement dated December 21, 2006, as
amended, by and between Continental Stock Transfer &
Trust Company and GLG, GLG issued public warrants,
founders warrants, sponsors warrants and
co-investment
warrants. Each warrant entitles the holder to purchase one share
of GLG common stock at a price of $7.50 per share, subject to
certain adjustments set forth in the warrant agreement. The
warrants expire on December 28, 2011. Holders of warrants
do not have the rights or privileges of holders of common stock,
including voting rights, until they exercise their warrants and
receive shares of common stock.
GLG, at its option, may redeem not less than all of the
outstanding public warrants at any time after they become
exercisable and prior to their expiration upon giving
30 days notice at the redemption price of $0.01 per warrant
only if the last sale price of GLG common stock equals or
exceeds $14.25 per share for any 20 trading days within a
30-trading day period ending on the third business day prior to
the notice of redemption.
The public warrants may be exercised, for cash or on a
cashless basis, in accordance with the warrant
agreement at any time after notice of redemption has been given
by GLG and prior to the redemption date. Thereafter, the holder
of the public warrants will have no further rights except to
receive the redemption price.
The sponsors warrants and the co-investment warrants have
terms and provisions that are substantially similar to the
public warrants, except that the sponsors warrants are
non-redeemable so long as the sponsors or their permitted
transferees (as defined below) hold such warrants, while the
co-investment warrants are subject to the same redemption
provisions as those to which the public warrants are subject.
138
The founders warrants (which are held by Berggruen, Ian
Ashken, Martin Franklin, James N. Hauslein, William P. Lauder
and Herbert A. Morey) are substantially similar to the public
warrants, except that the founders warrants are not
currently exercisable and will become exercisable if and when
the last sales price of GLG common stock exceeds $14.25 per
share for any 20 trading days within a 30-trading day period
beginning February 1, 2008 and are non-redeemable so long
as they are held by the founders or their permitted transferees.
The holders of these warrants are permitted to transfer such
warrants (including the common stock to be issued upon exercise
of such warrants) in certain limited circumstances, such as to
GLGs officers and directors, and other persons or entities
associated with such holder (permitted transferees),
but the permitted transferees receiving such warrants will be
subject to the same sale restrictions imposed on the holders.
If the number of outstanding shares of common stock is
(1) increased by a stock dividend or by a stock split or
(2) decreased by a consolidation, combination, reverse
stock split or reclassification of shares of common stock, then
on the effective date of such event, the number of shares of
common stock issuable on exercise of each warrant shall be
proportionately increased or decreased.
In case of any reclassification or reorganization of the
outstanding shares of common stock (other than a change
referenced above), or in the case of any merger or consolidation
of GLG with or into another corporation (other than a
consolidation or merger in which GLG is the continuing
corporation and that does not result in any reclassification or
reorganization of the outstanding shares of common stock), or in
the case of any sale or conveyance to another corporation or
entity of the assets or other property of GLG as an entirety or
substantially as an entirety in connection with which GLG is
dissolved, the warrant holders will thereafter have the right to
purchase and receive, upon exercise of the warrants in lieu of
common stock of GLG the kind and amount of shares of stock or
other securities or property (including cash) receivable upon
such reclassification, reorganization, merger, consolidation or
dissolution described above, by a warrant holder of the number
of shares of common stock of GLG obtainable upon exercise of the
warrants immediately prior to such event. These provisions will
similarly apply to successive reclassifications,
reorganizations, mergers or consolidations, sales or other
transfers.
If any other event affecting GLG common stock occurs to which
the above-described adjustments would not apply, or even if
applicable, they would not, in the good faith judgment of the
board of directors of GLG, fairly and adequately protect the
purchase rights of the warrant holders, then the board of
directors of GLG shall make such adjustments, in accordance with
the essential intent and principles of such provisions, as shall
be reasonably necessary, in the good faith opinion of the board
of directors of GLG, to protect such purchase rights.
Convertible
Subordinated Note Indenture
In May and June 2009, GLG issued an aggregate of
$228.5 million principal amount of convertible notes, due
2014, in a private offering to qualified institutional buyers
under Rule 144A. The convertible notes were issued at par
and carry an interest rate of 5.00% per annum. Interest is
payable semi-annually in arrears on May 15 and November 15 of
each year, beginning November 15, 2009.
Subject to limitations on the number of shares of common stock
they may own, holders may convert their notes into shares of
common stock at any time on or prior to the business day
immediately preceding the maturity date of the notes. The
initial conversion rate for the notes is 268.8172 shares of
common stock per $1,000 initial principal amount of notes (which
represents an initial conversion price of approximately $3.72
per share).
Upon conversion of a note, a holder will not receive any cash
payment of interest and the conversion rate will not be adjusted
for accrued or unpaid interest. Delivery of common stock is
deemed to satisfy all obligations with respect to notes tendered
for conversion. Notes can only be converted in denominations of
$1,000 and multiples thereof. Cash will be paid in lieu of any
fractional shares only.
Conversion rate adjustments will be made if there is an event
which dilutes the value of common stock (e.g., share split,
issuing common stock as a dividend or share combination). The
conversion rate will be increased if there is a designated event
which is a change of control or in connection with the
conversion of notes at a time when GLG is in default of its
obligations to file, have declared effective or maintain the
effectiveness of a shelf registration statement for the resale
of the notes.
139
If at any time after the third anniversary of the original
issuance date of the notes the volume-weighted average price of
GLG common stock exceeds 150% of the conversion price on at
least 20 of the 30 consecutive trading days, the conversion
rights may be withdrawn upon notice given between 30 and
60 days prior to the withdrawal.
Holders of the notes have the option to convert their notes into
a fixed amount in cash based on the cash consideration payable
in connection with the occurrence of a change of control of GLG,
and, for a specified period after a change of control, holders
are entitled to a make-whole premium adjustment to
the conversion rate in accordance with the terms of the
convertible notes indenture if the consideration in a change of
control of GLG is between $3.10 and $12.00 per share of GLG
common stock. In addition, shortly after a change of control,
GLG must make a change of control offer to repurchase the
outstanding convertible notes at a purchase price of
100 per cent of the principal amount plus accrued and
unpaid interest to the date of such repurchase.
Support
Agreement
Under the support agreement dated November 2, 2007 by and
between GLG and FA Sub 2 Limited, GLG has agreed to instruct
Continental Stock Transfer & Trust Co., its
transfer agent, to do the following, promptly upon receiving a
notice that the holder of the FA Sub 2 exchangeable shares
desires to exchange such securities in accordance with their
terms and conditions:
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to issue that number of shares of GLG common stock as may be
required to comply with any such exchange notice;
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to deliver those shares upon receipt by GLG of
(1) certificates representing the FA Sub 2 exchangeable
shares tendered for exchange and (2) such other documents
or instruments as may be reasonably requested by GLG; and
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to record successive transfers of any shares of GLG common stock
issued pursuant to any exchange notice first as a transfer by
GLG to FA Sub 1 Limited (which will be treated as between GLG
and FA Sub 1 Limited as a contribution to the capital of FA Sub
1 Limited) and second as a transfer by FA Sub 1 Limited to FA
Sub 2 Limited (which will be treated as between FA Sub 1 Limited
and FA Sub 2 Limited as a contribution to the capital of FA Sub
2 Limited) and third as a transfer by FA Sub 2 Limited to the
person(s) named in the exchange notice.
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If there is a recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or
substantially all of GLGs assets, spin-off, distribution
or other transaction in which holders of GLG common stock are
entitled to receive stock, securities or assets with respect to
or in exchange for GLG common stock, then GLG will deliver to
the holder of FA Sub 2 exchangeable shares, in addition to or in
lieu of GLG common stock, such stock, securities or assets as
would have been issued or payable in exchange for the number of
shares of GLG common stock issuable immediately prior thereto.
Upon any change in the number of outstanding shares of GLG
common stock as a result of exercises of GLG warrants, GLG will
have the right to purchase (directly or through a subsidiary)
from FA Sub 2 Limited a number of FA Sub 2 Limited Class A
ordinary shares equal to the net number of shares of GLG common
stock issued upon exercise of the warrant. The purchase price
per share will equal the cash price per share received by GLG
for the shares of GLG common stock (or $0.0001 per share, the
par value of the FA Sub 2 Limited Class A ordinary shares,
in the event of a cashless exercise of warrants).
140
IMPORTANT
INFORMATION REGARDING MAN, HOLDCO AND MERGER SUB
Important
Information Regarding Man
Man has not, during the past five years, been convicted in a
criminal proceeding, nor has it been a party to any judicial or
administrative proceeding that resulted in a judgment, decree or
final order enjoining it from future violations of, or
prohibiting the activities subject to, federal or state
securities laws, or a finding of any violation of federal or
state securities laws.
Set forth below for each director and executive officer of Man
is his or her respective present principal occupation or
employment, the name and principal business of the corporation
or other organization in which such occupation or employment is
conducted and the five-year employment history of each such
director and executive officer. During the last five years, none
of the persons listed below has been (i) convicted in a
criminal proceeding (excluding traffic violations and similar
misdemeanors) or (ii) a party to any judicial or
administrative proceeding (except for matters that were
dismissed without sanction or settlement) that resulted in a
judgment, decree or final order enjoining such person from
future violations of, or prohibiting activities subject to,
federal or state securities laws, or a finding of any violation
of federal or state securities laws. Unless otherwise stated,
the business address and telephone number of each of the
directors and officers listed below is
c/o Man
Group plc, Sugar Quay, Lower Thames Street, London, EC3R 6DU,
United Kingdom; +44 (0)20-7144-1000.
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Jon Aisbitt Chairman of the Board.
Mr. Aisbitt was appointed a Non-Executive Director of Man
in August 2003 and Non-Executive Chairman of Man in September
2007. He was previously a Partner and Managing Director in the
Investment Banking Division of Goldman Sachs and has
20 years experience in international corporate
finance. Mr. Aisbitt is a citizen of the United Kingdom.
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Robert Aitken Management Committee, Head of
Man Group Compliance. Mr. Aitken joined Man in 2003 from
the Financial Services Authority after serving other operating
roles in financial services. Mr. Aitken is a citizen of the
United Kingdom.
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Alison Carnwath Senior Independent
Non-Executive Director. Ms. Carnwath was appointed a
Non-Executive
Director of Man in January 2001. Prior to joining the Man Board
she spent 20 years working in investment banking. She is
Chairman of Land Securities Group plc, and an Independent
Director of Paccar Inc. She was an Independent Director of MF
Global Holdings Limited until August 2010. Ms. Carnwath is
a citizen of the United Kingdom.
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Peter Clarke Chief Executive. Mr. Clarke
joined Man in 1993 from the investment banking industry, having
worked at Morgan Grenfell and Citicorp. He became Head of
Corporate Finance & Corporate Affairs and was Company
Secretary from April 1996 to November 2007. He was appointed to
the Man Board in 1997 and became Finance Director in May 2000.
Mr. Clarke was Deputy Group Chief Executive from November
2005 until his appointment as Chief Executive in March 2007.
Mr. Clarke is a citizen of the United Kingdom.
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Phillip Colebatch Non-Executive Director.
Mr. Colebatch was appointed a Non-Executive Director of Man
in September 2007. He was previously a member of the Executive
Boards of Swiss Reinsurance Company from 2002 to 2006, Fox Pitt
Kelton from 2002 to 2006 and Credit Suisse Group from 1984 to
2001. He is a Non-Executive Director of Insurance Australia
Group, Lend Lease Corporation, Swann Insurance (Aust) Pty Ltd.
and three private companies. Mr. Colebatch is on the Boards
of Trustees of the LGT Group Foundation and the Prince of
Liechtenstein Foundation. Mr. Colebatch is a citizen of
Australia.
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Dugald Eadie Non-Executive Director.
Mr. Eadie was appointed a Non-Executive Director of Man in
January 2002. He has held a number of senior executive positions
in the fund management industry. He was most recently Group
Managing Director of Henderson plc until his retirement in 1999,
following its acquisition by AMP. He is an Honorary Fellow of
the Faculty of Actuaries, and a Fellow of the UK Society of
Investment Professionals. Mr. Eadie is a citizen of the
United Kingdom.
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Tony Gurney Management Committee, Marketing
and Client Services. Mr. E. A. Gurney is Global Head of
Product & Client Operations at Man Investments and is
a member of its Management Committee. Prior to
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joining Man Investments in 2006, he spent four years with
Financial Risk Management, a fund of hedge funds manager, as
COO. In 2000, he left J.P. Morgan with the senior members
of the convertible arbitrage trading team to set up Ferox
Capital Management, serving as COO. Mr. Gurney is a citizen
of the United Kingdom.
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Kevin Hayes Finance Director. Mr. Hayes
joined Man as Chief Financial Officer in March 2007 from Lehman
Brothers, where he served in a variety of senior finance and
strategy positions, latterly as Global Director of Process and
Productivity based in New York. He was previously a Partner in
the Financial Services practice of Ernst & Young LLP
in New York. He was Company Secretary of Man from November 2007
to July 2009 and was appointed to the Man Board in May 2007.
Mr. Hayes is a citizen of the United Kingdom.
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Ruud Hendriks Non-Executive Director.
Mr. Hendriks was appointed a Non-Executive Director of Man
in August 2009. He was previously with Goldman Sachs Asset
Management from 2001 to 2009 where he had been a Managing
Director and Co-Head of Sales for Europe, Middle East and
Africa. Prior to this, Mr. Hendriks was Global Head of
Institutional Sales for Robeco, a leading international asset
manager. Mr. Hendriks is a member of the Supervisory Board
of Taler Group, Chairman of the Supervisory Board of Financial
Assets and a member of the International Board of Advisors of
Polaris (an Italian based asset manager). Mr. Hendriks is a
citizen of the Netherlands.
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Herbert Item Management Committee, Chief
Investment Officer and Head of hedge fund multi-manager
business. Mr. Item joined Man in 1997 with 10 years of
equity and derivatives trading experience. Mr. Item was
appointed CIO of Mans integrated hedge fund multi-manager
business in 2009, with responsibility for all investment
functions. Mr. Item is a citizen of Switzerland.
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Frédéric Jolly Non-Executive
Director. Mr. Jolly was appointed a Non-Executive Director
of Man in August 2009. Previously, Mr. Jolly spent fourteen
years at Russell Investments where he served as Chief Executive
Officer for Europe, Middle East and Africa and as a member of
the Global Executive Committee from 2000 to 2008, and as
Chairman of the Global Distribution Strategy Committee from 2005
to 2008. Prior to this, Mr. Jolly was Head of Investment
Consulting at The Wyatt Company, Paris (now Watson Wyatt).
Mr. Jolly was a board member of Pantheon Ventures Ltd. from
2004 to 2008. Mr. Jolly is founding partner of Lexam
Partners, an advisory business specializing in financial
services. Mr. Jolly is a citizen of France.
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Christoph Möller Management Committee,
Sales. Mr. Möller joined Man in 1981 and moved to his
current position in 2001 after serving roles in finance and
product structuring. Mr. Möller is a citizen of
Switzerland.
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Patrick OSullivan Non-Executive
Director. Mr. OSullivan was appointed a Non-Executive
Director of Man in September 2007. He was previously Vice
Chairman of the Group Management Board, as well as Group Finance
Director, of Zurich Financial Services Group from 2002 to 2009
and was a Non-Executive Director of Collins Stewart plc from
2006 to 2009. He is Chairman of Old Mutual plc and a
Non-Executive Director of the Bank of Ireland and COFRA Holding
AG. Mr. OSullivan is a citizen of Ireland.
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Michael Robinson Management Committee, Human
Resources. Mr. Robinson joined Man in 2003 after serving in
senior roles at INVESCO and as a main board director of
Henderson Global Investors plc and a career in the Royal Navy.
Mr. Robinson is a citizen of the United Kingdom.
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Stephen Ross Management Committee, Product
Structuring and Financing; Legal. A lawyer by training,
Mr. Ross joined Man in 2003 from Clifford Chance LLP, where
he was a Partner and Co-head of the Private Funds Group. He is
Group General Counsel of Man and Global Head of Product
Structuring & Financing. He has been a member of the
Management Committee since joining the firm. Mr. Ross is a
citizen of the United Kingdom.
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John Rowsell Management Committee, Head of
Mans Principal Strategies Group. Prior to his current
responsibilities, Mr. Rowsell was Chief Investment Officer
of Man Glenwood and was Chairman of the Investment and
Management Committees. Previously, Mr. Rowsell served as
Chief Executive Officer for Glenwood Capital Investments L.L.C.
Mr. Rowsells principal business address and telephone
number is
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123 N. Wacker Drive, 28th Floor, Chicago, IL
60606;
(800) 446-5345.
Mr. Rowsell is a citizen of the United States of America.
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Tim Wong Management Committee, AHL.
Mr. Wong joined Man in 1991 and moved to his current
position as CEO of AHL, Mans largest fund, in 2001.
Mr. Wong is a citizen of the United Kingdom.
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Mike Wright Management Committee, Technology.
Mr. Wright joined Man in 2007 after serving
IT leadership roles at Fidelity International (from 2005 to
2007) and Willis Group (from 1997 to 2004). Prior to this
he was a consultant at McKinsey. Mr. Wright is a citizen of
the United Kingdom.
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Important
Information Regarding Holdco
Set forth below for each member of the board of managers and
executive officer of Holdco is his or her respective present
principal occupation or employment, the name and principal
business of the corporation or other organization in which such
occupation or employment is conducted and the five-year
employment history of such manager and executive officer. During
the last five years, none of the persons listed above has been
(i) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) a party to any
judicial or administrative proceeding (except for matters that
were dismissed without sanction or settlement) that resulted in
a judgment or decree or final order enjoining the person from
future violations of, or prohibiting activities subject to,
federal or state securities laws, or a finding of any violation
of federal or state securities laws.
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Lance Donenberg Vice President.
Mr. Donenberg is the Head of Strategic Investments of Man
Investments. Prior to his current responsibilities,
Mr. Donenberg was Head of Investment Sourcing for Man
Glenwood and an Investment Committee member of Glenwood Capital
Investments L.L.C. Before joining Glenwood in 2006,
Mr. Donenberg was a founding principal with Balyasny Asset
Management. Mr. Donenbergs principal business address
and telephone number is 123 N. Wacker Drive,
28th Floor, Chicago, IL 60606;
(800) 446-5345.
Mr. Donenberg is a citizen of the United States of America.
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Orly Lax Vice President and Secretary.
Ms. Lax is the Head of U.S. Legal and Product Legal of
Man Investments. Ms. Lax originally joined Man Investments
in 2004. Ms. Laxs principal business address and
telephone number is One Rockefeller Plaza, 16th Floor, New
York, NY 10020;
(646) 452-9700.
Ms. Lax is a citizen of the United States of America.
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John Rowsell President. See information
provided for Mr. Rowsell above.
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Important
Information Regarding Merger Sub
Set forth below for each of the directors and executive officers
of Merger Sub is his or her respective present principal
occupation or employment, the name and principal business of the
corporation or other organization in which such occupation or
employment is conducted and the five-year employment history of
such director and executive officer. During the last five years,
none of the persons listed below has been (i) convicted in
a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) a party to any judicial or
administrative proceeding (except for matters that were
dismissed without sanction or settlement) that resulted in a
judgment or decree or final order enjoining the person from
future violations of, or prohibiting activities subject to,
federal or state securities laws, or a finding of any violation
of federal or state securities laws.
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Lance Donenberg Vice President. See
information provided for Mr. Donenberg above.
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Orly Lax Vice President and Secretary. See
information provided for Ms. Lax above.
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John Rowsell President. See information
provided for Mr. Rowsell above.
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143
APPRAISAL
RIGHTS
If you do not vote for the Merger Proposal at the special
meeting and otherwise comply with the applicable statutory
procedures of Section 262 of the General Corporation Law of
the State of Delaware, or the DGCL, summarized herein, you may
be entitled to appraisal rights under Section 262 of the
DGCL. In order to exercise and perfect appraisal rights, a
record holder of our common stock must follow the steps
summarized below properly and in a timely manner.
Section 262 of the DGCL is reprinted in its entirety as
Appendix F to this proxy statement. Set forth below is a
summary description of Section 262 of the DGCL. The
following summary describes the material aspects of
Section 262 of the DGCL, and the law relating to appraisal
rights and is qualified in its entirety by reference to
Appendix F. The following summary does not constitute any
legal or other advice nor does it constitute a recommendation
that stockholders exercise their appraisal rights under Section
262. All references in Section 262 of the DGCL and this
summary to stockholders are to the record holders of
the shares of our common stock immediately prior to the
effective time of the merger as to which appraisal rights are
asserted. Failure to comply strictly with the procedures set
forth in Section 262 of the DGCL will result in the loss of
appraisal rights.
Under the DGCL, holders of our common stock who follow the
procedures set forth in Section 262 will be entitled to
have their shares appraised by the Delaware Court of Chancery,
or the Delaware Court, and to receive payment in cash of the
fair value of those shares, exclusive of any element
of value arising from the accomplishment or expectation of the
merger.
Under Section 262, where a merger agreement relating to a
proposed merger is to be submitted for adoption at a meeting of
stockholders, as in the case of the special meeting, the
corporation, not less than 20 days prior to such meeting,
must notify each of its stockholders who was a stockholder on
the record date with respect to such shares for which appraisal
rights are available, that appraisal rights are so available,
and must include in each such notice a copy of Section 262.
This proxy statement constitutes such notice to the holders of
our common stock and Section 262 is attached to this proxy
statement as Appendix F. Any stockholder who wishes to
exercise such appraisal rights or who wishes to preserve his
right to do so should review the following discussion and
Appendix F carefully, because failure to timely and
properly comply with the procedures specified will result in the
loss of appraisal rights under the DGCL. Moreover, because of
the complexity of the procedures for exercising the right to
seek appraisal of shares of common stock, we believe that if a
stockholder considers exercising such rights, such stockholder
should seek the advice of legal counsel.
If you wish to exercise appraisal rights you must not vote for
the Merger Proposal and must deliver to GLG, before the vote on
the Merger Proposal, a written demand for appraisal of your
shares of our common stock. If you sign and return a proxy card
or vote by submitting a proxy by telephone or through the
Internet, without expressly directing that your shares of our
common stock be abstained or voted against the Merger Proposal,
you will effectively waive your appraisal rights because such
shares represented by the proxy will be voted for the Merger
Proposal. Accordingly, if you desire to exercise and perfect
appraisal rights with respect to any of your shares of common
stock, you must either vote against the Merger Proposal or
abstain from voting when voting in person or submitting a proxy
by telephone, through the Internet or by mail, or refrain from
voting altogether. A vote or proxy against the Merger Proposal,
an abstention or a failure to vote will not, in and of itself,
constitute a demand for appraisal.
A written demand for appraisal will be sufficient if it
reasonably informs GLG of the identity of the stockholder and
that such stockholder intends thereby to demand appraisal of
such stockholders shares of common stock. This written
demand for appraisal must be separate from any proxy or vote
abstaining from or voting against the Merger Proposal. A
stockholders failure to make the written demand prior to
the taking of the vote on the adoption of the merger agreement
at the special meeting of stockholders will constitute a waiver
of appraisal rights. If you wish to exercise your appraisal
rights you must be the record holder of such shares of our
common stock on the date the written demand for appraisal is
made and you must continue to hold such shares through the
effective time of the merger. Accordingly, a stockholder who is
the record holder of shares of common stock on the date the
written demand for appraisal is made, but who thereafter
transfers such shares prior to the effective time of the merger,
will lose any right to appraisal in respect of such shares.
144
Only a holder of record of shares of our common stock is
entitled to assert appraisal rights for such shares of our
common stock registered in that holders name. A demand for
appraisal should be executed by or on behalf of the holder of
record, exactly as the holders name appears on the stock
certificates, should specify the holders mailing address
and the number of shares registered in the holders name
and must state that such person intends thereby to demand
appraisal of his, her or its shares. If the shares are owned of
record in a fiduciary capacity, such as by a trustee, guardian
or custodian, execution of the demand for appraisal should be
made in that capacity, and if the shares are owned of record by
more than one person, as in a joint tenancy or tenancy in
common, the demand should be executed by or on behalf of all
joint owners. An authorized agent, including one for two or more
joint owners, may execute the demand for appraisal on behalf of
a holder of record; however, the agent must identify the record
owner or owners and expressly disclose the fact that, in
executing the demand, he or she is acting as agent for such
owner or owners.
A record holder such as a broker who holds shares as nominee for
several beneficial owners may exercise appraisal rights with
respect to the shares of our common stock held for one or more
beneficial owners while not exercising such rights with respect
to the shares held for other beneficial owners; in such case,
the written demand should set forth the number of shares as to
which appraisal is sought. Where the number of shares of our
common stock is not expressly stated, the demand will be
presumed to cover all shares held in the name of the record
owner. If you hold your shares in brokerage accounts or other
nominee forms and wish to exercise your appraisal rights, you
are urged to consult with your broker to determine the
appropriate procedures for the making of a demand for appraisal.
All written demands for appraisal of shares must be mailed or
delivered to: GLG Partners, Inc., 399 Park Avenue,
38th Floor, New York, New York 10022, Attention: Secretary,
or should be delivered to the Secretary at the special meeting,
prior to the vote on the Merger Proposal.
Within ten days after the effective time of the merger, we, as
the surviving corporation, will notify each stockholder who
properly asserted appraisal rights under Section 262 and
has not voted for the Merger Proposal of the effective time of
the merger. Within 120 days after the effective time of the
merger, but not thereafter, we or any stockholder who has
complied with the statutory requirements summarized above and is
entitled to appraisal rights under Section 262 may commence
an appraisal proceeding by filing a petition in the Delaware
Court demanding a determination of the fair value of the shares
held by all dissenting holders. If no such petition is filed,
appraisal rights will be lost for all stockholders who had
previously demanded appraisal of their shares. We are not under
any obligation, and we have no present intention, to file any
such petition with respect to appraisal of the value of any
shares. Accordingly, if you wish to exercise your appraisal
rights, you should regard it as your obligation to take all
steps necessary to perfect your appraisal rights in the manner
prescribed in Section 262.
Within 120 days after the effective time of the merger, any
stockholder who has complied with the provisions of
Section 262 will be entitled, upon written request, to
receive from us a statement setting forth the aggregate number
of shares of our common stock not voted in favor of the Merger
Proposal and with respect to which demands for appraisal were
received by us, and the number of holders of such shares. Such
statement must be mailed within ten days after the written
request therefore has been received by us or within ten days
after expiration of the period for delivery of appraisal
demands, whichever is later. A person who is the beneficial
owner of shares of such stock held either in a voting trust or
by a nominee on behalf of such person may, in such persons
own name, file an appraisal petition or request from us the
statement described in this paragraph.
If a petition for an appraisal is timely filed and a copy
thereof served upon us, we will then be obligated, within
20 days, to file with the Delaware Register in Chancery a
duly verified list containing the names and addresses of the
stockholders who have demanded appraisal of their shares and
with whom agreements as to the value of their shares have not
been reached. After notice to the stockholders as required by
the Delaware Court, the Delaware Court is empowered to conduct a
hearing on such petition to determine those stockholders who
have complied with Section 262 and who have become entitled
to appraisal rights thereunder. The Delaware Court may require
the stockholders who demanded appraisal rights of our shares of
common stock to submit their stock certificates to the Register
in Chancery for notation thereon of the pendency of the
appraisal proceeding; and if any stockholder fails to comply
with such direction, the Delaware Court may dismiss the
proceedings as to such stockholder.
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After the Delaware Court determines which stockholders are
entitled to appraisal, the appraisal proceeding shall be
conducted in accordance with the rules of the Delaware Court,
including any rules specifically governing appraisal
proceedings. Through such proceeding the Delaware Court shall
determine the fair value of the shares exclusive of any element
of value arising from the accomplishment or expectation of the
merger, together with interest, if any, to be paid upon the
amount determined to be the fair value. In determining such fair
value, the Delaware Court shall take into account all relevant
factors. Unless the Delaware Court in its discretion determines
otherwise for good cause shown, interest from the effective date
of the merger through the date of payment of the judgment shall
be compounded quarterly and shall accrue at 5% over the Federal
Reserve discount rate (including any surcharge) as established
from time to time during the period between the effective date
of the merger and the date of payment of the judgment. If you
are considering seeking appraisal, you should be aware that the
fair value of your shares as determined under Section 262
could be more than, the same as or less than the consideration
you are entitled to receive pursuant to the merger agreement if
you did not seek appraisal of your shares and that investment
banking opinions as to the fairness from a financial point of
view of the consideration payable in a merger are not
necessarily opinions as to fair value under Section 262. In
determining fair value of shares, the Delaware Court
will take into account all relevant factors. In
Weinberger v. UOP, Inc., the Delaware Supreme Court
has stated that such factors include market value, asset
value, dividends, earnings prospects, the nature of the
enterprise and any other facts which were known or which could
be ascertained as of the date of the merger which throw any
light on future prospects of the merged corporation. In
Weinberger, the Delaware Supreme Court stated, among
other things, that proof of value by any techniques or
methods generally considered acceptable in the financial
community and otherwise admissible in court should be
considered in an appraisal proceeding. In addition, the Delaware
Court has decided that the statutory appraisal remedy, depending
on factual circumstances, may or may not be a dissenters
exclusive remedy.
The Delaware Court will direct the payment of the fair value of
the shares of our common stock who have perfected appraisal
rights, together with interest, if any. Upon application of a
stockholder, costs of the action (which do not include
attorneys or expert fees or expenses) may be determined by
the Delaware Court and taxed upon the parties as the Delaware
Court deems equitable under the circumstances. The Delaware
Court may also order that all or a portion of the expenses
incurred by any stockholder in connection with an appraisal,
including without limitation reasonable attorneys fees and
the fees and expenses of experts utilized in the appraisal
proceeding, be charged pro rata against the value of all
of the shares entitled to appraisal. In the absence of such
determination or assessment, each party bears its own expenses.
Any stockholder who has duly demanded and perfected an appraisal
in compliance with Section 262 will not, after the
effective time of the merger, be entitled to vote his or her
shares for any purpose or be entitled to the payment of
dividends or other distributions thereon, except dividends or
other distributions payable to holders of record of shares of
our common stock as of a date prior to the effective time of the
merger.
At any time within 60 days after the effective time of the
merger, any stockholder who has not commenced an appraisal
proceeding or joined that proceeding as a named party may
withdraw his or her demand for appraisal and to accept the cash
payment for his or her shares pursuant to the merger agreement
by delivering to us, as the surviving corporation, a written
withdrawal of the demand for appraisal. After this period, a
stockholder may withdraw his or her demand for appraisal only
with our written consent. If no petition for appraisal is filed
with the Delaware Court within 120 days after the effective
time of the merger, a stockholders right to appraisal will
cease and he or she will be entitled to receive the cash payment
for his or her shares pursuant to the merger agreement, as if he
or she had not demanded appraisal of his or her shares. No
petition timely filed in the Delaware Court demanding appraisal
will be dismissed as to any stockholder without the approval of
the Delaware Court, and such approval may be conditioned on such
terms as the Delaware Court deems just; provided, however, that
any stockholder who has not commenced an appraisal proceeding or
joined that proceeding as a named party may withdraw his, her or
its demand for appraisal and accept the merger consideration
offered pursuant to the merger agreement within 60 days
after the effective date of the merger. If we do not approve a
request to withdraw a demand for appraisal when that approval is
required, or, except with respect to any stockholder who
withdraws such stockholders right to appraisal in
accordance with the proviso in the immediately preceding
sentence, if the Delaware Court does not approve the dismissal
of an appraisal proceeding, the stockholder will be entitled to
receive only the appraised value determined
146
in any such appraisal proceeding, which value could be less
than, equal to or more than the consideration being offered
pursuant to the merger agreement.
If you properly demand appraisal of your shares of our common
stock under Section 262 and you fail to perfect, or
effectively withdraw or lose, your right to appraisal, as
provided in the DGCL, your shares will be converted into the
right to receive the consideration receivable with respect to
such shares in accordance with the merger agreement. You will
fail to perfect, or effectively lose or withdraw, your right to
appraisal if, among other things, no petition for appraisal is
filed within 120 days after the effective time of the
merger, or if you deliver to us a written withdrawal of your
demand for appraisal. Any such attempt to withdraw an appraisal
demand more than 60 days after the effective time of the
merger will require our written approval.
If you desire to exercise your appraisal rights, you must not
vote for the Merger Proposal and must strictly comply with the
procedures set forth in Section 262 of the DGCL.
Failure to take any required step in connection with the
exercise of appraisal rights will result in the termination or
waiver of such rights.
147
APPROVAL
OF ADJOURNMENT OF SPECIAL MEETING
Proposal
You are being asked to approve the adjournment of the special
meeting, if necessary, to permit further solicitation and vote
of proxies if there are insufficient votes at the time of the
special meeting to approve the Merger Proposal. Any adjournment
may be made without notice, except when expressly required by
law.
Vote
Required
Approval of the Adjournment Proposal requires the affirmative
vote of the holders of a majority of our shares of common stock
and Series A voting preferred stock in person or by proxy
and entitled to vote on the matter, voting as a single class.
Any signed proxies received by us in which no voting
instructions are provided on this matter will be voted
FOR the Adjournment Proposal. Any adjournment or
postponement of the meeting for the purpose of soliciting
additional proxies will allow our stockholders who have already
sent in their proxies to revoke them at any time prior to their
use at the meeting as adjourned or postponed.
Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
STOCKHOLDERS VOTE FOR THE ADJOURNMENT PROPOSAL.
148
FUTURE
STOCKHOLDER PROPOSALS
If the merger is completed, we will have no public stockholders
and there will be no public participation in any of our future
stockholder meetings. We intend to hold the 2011 annual meeting
of our stockholders (the 2011 Annual Meeting) only
if the merger is not completed.
To be eligible for inclusion in our proxy statement and the
proxy card, stockholder proposals for the 2011 Annual Meeting
must be received on or before November 26, 2010 by the
Office of the Secretary at our headquarters, 399 Park Avenue,
38th Floor, New York, New York 10022. Our Bylaws require a
stockholder desiring to propose any matter for consideration of
the stockholders at the 2011 Annual Meeting to notify GLGs
Secretary in writing at the address listed in the preceding
sentence on or after January 12, 2011 and on or before
February 11, 2011. If the number of directors to be elected
to the board at the 2011 Annual Meeting is increased and we do
not make a public announcement naming all of the nominees for
director or specifying the increased size of the board on or
before January 30, 2011, a stockholder proposal with
respect to nominees for any new position created by such
increase will be considered timely if received by our Secretary
not later than the close of business on the tenth day following
our public announcement of the increase. If the stockholder does
not also comply with the requirements of
Rule 14a-4
under the Exchange Act, GLG may exercise discretionary voting
authority under proxies it solicits to vote in accordance with
its best judgment on any such proposal or nomination submitted
by a stockholder.
DELIVERY
OF DOCUMENTS TO STOCKHOLDERS SHARING AN ADDRESS
GLG is delivering only one proxy statement to multiple
stockholders that share the same address unless we have received
contrary instructions from one or more of such stockholders.
Upon oral or written request, GLG will deliver promptly a
separate copy of this proxy statement to a stockholder at a
shared address to which a single copy of this document was
delivered. If you are a stockholder at a shared address to which
GLG delivered a single copy of this proxy statement and you
desire to receive a separate copy of this proxy statement, or if
you desire to notify us that you wish to receive a separate copy
our proxy statements or annual reports in the future, or if you
are a stockholder at a shared address to which GLG delivered
multiple copies of this document and you desire to receive one
copy in the future, please submit your request by mail or
telephone to GLG at 399 Park Avenue, 38th Floor, New York,
NY 10022, Attention: Investor Relations,
(212) 224-7257.
If a broker, bank or other nominee holds your shares in GLG,
please contact the broker, bank or other nominee directly if you
have questions, require additional copies of this proxy
statement, or wish to receive separate copies of our proxy
statements or annual reports in the future by revoking your
consent to householding.
TRANSACTION
OF OTHER BUSINESS
The board of directors does not know of any other matters that
may be presented at the meeting. In the event of a vote on any
matters other than those referred to in the accompanying Notice
of Special Meeting of Stockholders, proxies in the accompanying
form will be voted in accordance with the judgment of the
persons voting such proxies.
WHERE YOU
CAN FIND MORE INFORMATION
GLG files annual, quarterly and current reports, proxy
statements and other information with the SEC. You may read and
copy any document GLG files at the SECs public reference
room located at 100 F Street, N.E., Room 1580,
Washington, D.C. 20549. 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 at the SECs
website at www.sec.gov. You also may obtain free copies of the
documents GLG files with the SEC by going to the SEC
Filings section of our Investor Relations website at:
www.glgpartners.com/investor_relations/overview.
The information provided on our website is not part of this
proxy statement, and therefore is not incorporated by reference
herein, except to the extent expressly set forth below under
Incorporation by Reference.
149
Any person, including any beneficial owner, to whom this proxy
statement is delivered may request additional copies of this
proxy statement and copies of any of the documents incorporated
by reference in this proxy statement, without charge, by written
or telephonic request directed to GLG Partners, Inc., 399 Park
Avenue, 38th Floor, New York, NY 10022, Attention: Investor
Relations,
(212) 224-7257.
Documents incorporated by reference are available without
charge, excluding any exhibits to those documents unless the
exhibit is specifically incorporated by reference into those
documents.
Because the merger and share exchange constitute a going
private transaction, GLG, Man, Holdco, Merger Sub and each
Individual Principal (each, a filing person) have
filed with the SEC a Transaction Statement on
Schedule 13E-3
with respect to the proposed merger and share exchange. The
Schedule 13E-3,
including any amendments and exhibits filed or incorporated by
reference as a part of it, is available for inspection as set
forth above.
INCORPORATION
BY REFERENCE
The SEC allows us to incorporate by reference into
this proxy statement the information we file with it, which
means that we can disclose important information to you by
referring you to those documents. The information incorporated
by reference is an important part of this proxy statement. Some
documents or information, such as that called for by
Item 7.01 of
Form 8-K,
are deemed furnished and not filed in accordance with SEC rules.
None of those documents and none of that information is
incorporated by reference into this proxy statement. We
incorporate by reference the documents listed below (except that
the safe harbor under Section 21E of the Exchange Act
referenced in the
Form 10-K
and
Forms 10-Q
listed below does not apply to any forward-looking statements we
make in connection with the merger and share exchange):
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GLGs annual report on
Form 10-K
for the year ended December 31, 2009;
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GLGs quarterly reports on
Form 10-Q
for the quarters ended March 31, 2010 and June 30,
2010;
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GLGs current reports on
Form 8-K,
filed with the SEC on January 5, 2010, February 19,
2010, March 23, 2010, May 11, 2010, May 19, 2010,
May 26, 2010, June 25, 2010, July 20, 2010,
August 9, 2010 and August 20, 2010; and
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GLGs registration statement on
Form 8-A/A,
filed with the SEC on November 2, 2007, containing a
description of GLG common stock.
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GLG will incorporate into this proxy statement any future
filings it makes with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the filing date of this
proxy statement and before the special meeting.
GLG has supplied all information in this proxy statement
pertaining to itself. Man has supplied all information in this
proxy statement pertaining to itself, Holdco and Merger Sub.
Each of the Selling Stockholders and TOMS has supplied all
information in this proxy statement pertaining to itself.
THIS PROXY STATEMENT DOES NOT CONSTITUTE THE SOLICITATION OF
A PROXY IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR
FROM WHOM IT IS UNLAWFUL TO MAKE SUCH PROXY SOLICITATION IN THAT
JURISDICTION. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED
OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT TO VOTE
YOUR SHARES AT THE SPECIAL MEETING. WE HAVE NOT AUTHORIZED
ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM
WHAT IS CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY
STATEMENT.
THIS PROXY STATEMENT IS DATED
AUGUST , 2010. YOU SHOULD NOT
ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT IS
ACCURATE AS OF ANY DATE OTHER THAN THAT DATE, OR THAT THE
INFORMATION CONTAINED IN ANY DOCUMENT INCORPORATED BY REFERENCE
TO THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN
THE DATE THEREOF, AND THE MAILING OF THIS PROXY STATEMENT TO
STOCKHOLDERS DOES NOT CREATE ANY IMPLICATION TO THE CONTRARY.
150
TABLE OF
CONTENTS
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Page
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ARTICLE I THE MERGER
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A-1
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Section 1.1
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The Merger
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A-1
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Section 1.2
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Closing
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A-1
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Section 1.3
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Effective Time
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A-2
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Section 1.4
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Effects of the Merger
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A-2
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Section 1.5
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Certificate of Incorporation and By-laws of the Surviving
Corporation
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A-2
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Section 1.6
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Directors and Officers of the Surviving Corporation
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A-2
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ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES;
COMPANY STOCK OPTIONS
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A-2
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Section 2.1
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Effect on Capital Stock
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A-2
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Section 2.2
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Exchange of Certificates
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A-3
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Section 2.3
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Company Equity Awards
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A-5
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Section 2.4
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Exchangeable Shares and Preferred Stock
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A-5
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Section 2.5
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Withholding Taxes
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A-6
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Section 2.6
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Adjustments
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A-6
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
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A-6
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Section 3.1
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Organization, Standing and Corporate Power
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A-6
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Section 3.2
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Capitalization
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A-7
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Section 3.3
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Authority; Voting Requirements
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A-7
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Section 3.4
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Non-contravention
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A-8
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Section 3.5
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Governmental Approvals
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A-9
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Section 3.6
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Information Supplied
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A-9
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Section 3.7
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Brokers
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A-9
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Section 3.8
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Opinion of Financial Advisor
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A-9
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Section 3.9
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Subsidiaries
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A-10
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Section 3.10
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Company SEC Documents; Undisclosed Liabilities
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A-10
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Section 3.11
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Absence of Certain Changes
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A-12
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Section 3.12
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Legal Proceedings
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A-12
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Section 3.13
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Compliance With Laws; Licenses
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A-12
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Section 3.14
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Contracts
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A-14
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Section 3.15
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Tax Matters
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A-16
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Section 3.16
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Employee Benefits and Labor Matters
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A-17
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Section 3.17
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Intellectual Property
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A-19
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Section 3.18
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Title to Property
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A-21
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Section 3.19
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Insurance
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A-21
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Section 3.20
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Funds
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A-21
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Section 3.21
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Environmental Matters
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A-23
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Section 3.22
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No Other Company Representations or Warranties
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A-23
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT
AND MERGER SUB
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A-23
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Section 4.1
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Organization
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A-23
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Section 4.2
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Ownership and Operations of Merger Sub
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A-23
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Section 4.3
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Authority
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A-23
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A-i
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Section 4.4
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Non-contravention
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A-24
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Section 4.5
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Governmental Approvals
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A-24
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Section 4.6
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Information Supplied
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A-25
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Section 4.7
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Brokers
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A-25
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Section 4.8
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Sufficient Funds
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A-25
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Section 4.9
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Share Ownership
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A-25
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Section 4.10
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Legal Proceedings
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A-25
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Section 4.11
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Agreements and Understandings
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A-25
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Section 4.12
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No Other Parent Representations or Warranties
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A-25
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ARTICLE V ADDITIONAL COVENANTS AND AGREEMENTS
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A-26
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Section 5.1
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Company Stockholders Meeting; Preparation of the Proxy Statement
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A-26
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Section 5.2
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Parent Shareholders Meeting; Preparation of the Shareholder
Circular and Prospectus
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A-27
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Section 5.3
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Takeover Proposals; Board Recommendation; Etc
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A-28
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Section 5.4
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Reasonable Best Efforts
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A-30
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Section 5.5
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Conduct of Business
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A-32
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Section 5.6
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Public Announcements
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A-34
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Section 5.7
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Access to Information; Confidentiality
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A-35
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Section 5.8
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Indemnification and Insurance
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A-35
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Section 5.9
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Section 16 Matters
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A-36
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Section 5.10
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Delisting; Deregistration
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A-36
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Section 5.11
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Notification of Certain Matters; Reports
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A-36
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Section 5.12
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Securityholder Litigation
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A-37
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Section 5.13
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Consolidation
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A-37
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Section 5.14
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Warrant Tender Offers
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A-37
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ARTICLE VI CONDITIONS PRECEDENT
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A-37
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Section 6.1
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Conditions to Each Partys Obligations to Effect the Merger
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A-37
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Section 6.2
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Additional Conditions to Obligations of Parent and Merger Sub to
Effect the Merger
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A-38
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Section 6.3
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Additional Conditions to Obligations of the Company to Effect
the Merger
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A-38
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ARTICLE VII TERMINATION
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A-39
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Section 7.1
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Termination
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A-39
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Section 7.2
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Effect of Termination
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A-40
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Section 7.3
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Fees and Expenses
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A-40
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ARTICLE VIII MISCELLANEOUS
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A-42
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Section 8.1
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Survival
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A-42
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Section 8.2
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Amendments; Waivers; Etc
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A-42
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Section 8.3
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Assignment
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A-43
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Section 8.4
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Entire Agreement
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A-43
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Section 8.5
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No Third-Party Beneficiaries
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A-43
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Section 8.6
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Governing Law
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A-43
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Section 8.7
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Jurisdiction
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A-43
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Section 8.8
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Specific Enforcement
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A-43
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A-ii
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Page
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Section 8.9
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WAIVER OF JURY TRIAL
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A-44
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Section 8.10
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Severability
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A-44
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Section 8.11
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Notices
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A-44
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Section 8.12
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Definitions
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A-45
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Section 8.13
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Interpretation
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A-51
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Section 8.14
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Counterparts
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A-52
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A-iii
AGREEMENT
AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of May 17, 2010
(this Agreement), is among Man Group plc, a
public limited company existing under the laws of England and
Wales (Parent), Escalator Sub 1 Inc., a
Delaware corporation and a wholly owned Subsidiary of Parent
(Merger Sub), and GLG Partners, Inc., a
Delaware corporation (the Company).
Certain terms used in this Agreement are used as defined in
Section 8.12.
WHEREAS, the respective Boards of Directors of the Company,
Parent and Merger Sub have approved this Agreement, and the
merger of Merger Sub with and into the Company (the
Merger) on the terms and subject to the
conditions provided for in this Agreement;
WHEREAS, simultaneously with the execution and delivery of this
Agreement and as a condition and inducement to the willingness
of Parent and Merger Sub to enter into this Agreement, Parent
and certain stockholders of the Company (the
Controlling Holders) are entering into
(a) a voting and support agreement (the Voting
Agreement) pursuant to which, among other things, such
stockholders have agreed to vote to adopt this Agreement and to
take certain other actions in furtherance of the Merger, in each
case on the terms set forth therein and (b) a share
exchange agreement (the Share Exchange
Agreement) pursuant to which, among other things, such
stockholders have agreed to exchange their shares of Company
Common Stock and Company Preferred Stock (in each case, as
defined below) for Parent Ordinary Shares (as defined below);
WHEREAS, simultaneously with the execution and delivery of this
Agreement and as a condition and inducement to the willingness
of Parent and Merger Sub to enter into this Agreement, Parent
and certain Controlling Holders are entering into (a) a
non-competition and non-solicitation agreement among Parent, the
Company and Noam Gottesman, (b) a deed of vendor covenant
among Parent, the Company and Pierre Lagrange and (c) a
deed of vendor covenant among Parent, the Company and Emmanuel
Roman, each dated the date hereof and effective on and from the
Closing Date (as defined below);
WHEREAS, the Board of Directors of the Company has determined
that the consideration to be paid for each share of Company
Common Stock in the Merger is fair to the holders of such shares
and has resolved to recommend that such stockholders adopt and
approve this Agreement and the Merger upon the terms and subject
to the conditions set forth herein;
WHEREAS, the Special Committee of the Board of Directors of the
Company (the Special Committee) has
determined that the consideration to be paid for each share of
Company Common Stock in the Merger is fair to the holders of
such shares (other than the Controlling Holders) and has
resolved to recommend that such stockholders adopt and approve
this Agreement and the Merger upon the terms and subject to the
conditions set forth herein; and
WHEREAS, concurrently with the execution of this Agreement, the
Company and the Controlling Holders are executing and delivering
a written waiver (a Shareholders Agreement
Waiver) which, upon its effectiveness, among other
things, waives the transfer restrictions set forth in
Article II of the Shareholders Agreement.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this
Agreement, and intending to be legally bound hereby, Parent,
Merger Sub and the Company hereby agree as follows:
ARTICLE I
THE
MERGER
Section 1.1 The
Merger. On the terms and subject to the
conditions set forth in this Agreement, and in accordance with
the General Corporation Law of the State of Delaware (the
DGCL), at the Effective Time Merger Sub shall
be merged with and into the Company, and the separate corporate
existence of Merger Sub shall thereupon cease, and the Company
shall be the surviving corporation in the Merger (the
Surviving Corporation).
Section 1.2 Closing. The
closing of the Merger (the Closing)
shall take place at the offices of
Weil, Gotshal & Manges LLP, 767 Fifth
Avenue, New York, New York 10153 on a date and at a time to be
specified by the Company and Parent, which date shall be no
later than the third (3rd) Business Day after satisfaction or
(to the extent permitted by Law and other than the condition set
forth in Section 6.1(a), which may
A-1
not be waived) waiver of the conditions set forth in
Article VI (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the
satisfaction or waiver of those conditions at such time, and
other than the condition set forth in Section 6.2(c)), and
which time shall be immediately after the satisfaction of the
condition set forth in Section 6.2(c), or at such other
place, date
and/or time
as may be agreed to in writing by the Company and Parent. The
date on which the Closing actually occurs is referred to in this
Agreement as the Closing Date.
Section 1.3 Effective
Time. Subject to the provisions of this
Agreement, as promptly as practicable on the Closing Date the
parties shall file with the Secretary of State of the State of
Delaware a certificate of merger, executed in accordance with,
and in such form as complies with, the relevant provisions of
the DGCL (the Certificate of Merger). The
Merger shall become effective upon the filing of the Certificate
of Merger or at such later time as is agreed to by the parties
and specified in the Certificate of Merger (the time at which
the Merger becomes effective is referred to in this Agreement as
the Effective Time).
Section 1.4 Effects
of the Merger. From and after the Effective
Time, the Merger shall have the effects set forth in the
applicable provisions of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the
Effective Time, all the properties, rights, privileges, powers
and franchises of the Company and Merger Sub shall vest in the
Surviving Corporation, and all debts, liabilities and duties of
the Company and Merger Sub shall become the debts, liabilities
and duties of the Surviving Corporation.
Section 1.5 Certificate
of Incorporation and By-laws of the Surviving
Corporation. The certificate of incorporation
and by-laws of the Company, as in effect immediately prior to
the Effective Time, shall be amended at and as of the Effective
Time to be in the form of Exhibit A and Exhibit B,
respectively, and as so amended shall be the certificate of
incorporation and by-laws of Surviving Corporation until
thereafter amended (subject to Section 5.8) as provided
therein or by Law.
Section 1.6 Directors
and Officers of the Surviving
Corporation. Each of the parties shall take
all action necessary to cause the directors of Merger Sub
immediately prior to the Effective Time to be the directors of
the Surviving Corporation immediately following the Effective
Time, to hold office until their respective successors are duly
elected or appointed and qualified or their earlier death or
resignation or removal in accordance with the certificate of
incorporation and by-laws of the Surviving Corporation. Prior to
the Closing Date, the Company shall take all action necessary to
cause the directors of the Company to resign as directors of the
Company effective no later than the Effective Time. The officers
of the Company immediately prior to the Effective Time shall be
the officers of the Surviving Corporation until their respective
successors are duly appointed and qualified or their earlier
death or resignation or removal in accordance with the
certificate of incorporation and by-laws of the Surviving
Corporation.
ARTICLE II
EFFECT OF
THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS;
EXCHANGE OF CERTIFICATES; COMPANY STOCK OPTIONS
Section 2.1 Effect
on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the
holder of any shares of common stock, par value $0.0001 per
share, of the Company (Company Common Stock)
or the holder of any shares of capital stock of Merger Sub:
(a) Capital Stock of Merger
Sub. Each issued and outstanding share of
capital stock of Merger Sub shall be converted into and become
one validly issued, fully paid and non-assessable share of
common stock, par value $0.01 per share, of the Surviving
Corporation and shall constitute the only outstanding shares of
capital stock of the Surviving Corporation. From and after the
Effective Time, all certificates representing common stock of
Merger Sub shall be deemed for all purposes to represent the
number of shares of common stock of the Surviving Corporation
into which they were converted in accordance with the
immediately preceding sentence.
(b) Cancellation of Treasury Stock, Parent-Owned
Stock and Preferred Stock. Any shares of
Company Common Stock that are owned by the Company as treasury
stock, any shares of Company Common Stock owned by Parent,
Merger Sub or any Subsidiary of the Company other than those
Subsidiaries listed on
A-2
Schedule 2.1(b), and any shares of Company Preferred Stock
shall be automatically canceled and shall cease to exist and no
consideration shall be delivered in exchange therefor.
(c) Conversion of Company Common
Stock. Each issued and outstanding share of
Company Common Stock (other than (i) shares to be canceled
in accordance with Section 2.1(b), (ii) Dissenting
Shares, (iii) the Company Restricted Shares and
(iv) the Company Stock Rights) shall be converted into the
right to receive $4.50 in cash, without interest (the
Merger Consideration). As of the Effective
Time, all such shares of Company Common Stock shall no longer be
outstanding and shall automatically be canceled and shall cease
to exist, and each holder of a certificate (a
Certificate), or un-certificated
book-entry shares (Book-Entry Shares), which
immediately prior to the Effective Time represented any such
shares of Company Common Stock shall thereafter cease to have
any rights with respect thereto, except the right to receive the
Merger Consideration to be paid in consideration therefor upon
surrender of such Certificate or Book-Entry Shares in accordance
with Section 2.2(b), without interest.
(d) Appraisal
Rights. Notwithstanding anything in this
Agreement to the contrary, shares of Company Common Stock that
are issued and outstanding immediately prior to the Effective
Time and which are held by a stockholder that did not vote in
favor of the Merger (or consent thereto in writing) and is
entitled to demand and properly demands appraisal of such shares
pursuant to, and complies in all respects with, the provisions
of Section 262 of the DGCL (each, a Dissenting
Stockholder), shall not be converted into or be
exchangeable for the right to receive the Merger Consideration
(the Dissenting Shares), but instead
such holder shall be entitled to receive such consideration as
may be determined to be due to such Dissenting Stockholder
pursuant to Section 262 of the DGCL (and at the Effective
Time, such Dissenting Shares shall no longer be outstanding and
shall automatically be canceled and shall cease to exist, and
such holder shall cease to have any rights with respect thereto,
except the rights set forth in Section 262 of the DGCL),
unless such holder shall have failed to perfect or shall have
effectively withdrawn or lost rights to appraisal under the
DGCL. If any Dissenting Stockholder shall have failed to perfect
or shall have effectively withdrawn or lost such right, such
holders shares of Company Common Stock shall thereupon be
treated as if they had been converted into and become
exchangeable for the right to receive, as of the Effective Time,
the Merger Consideration for each such share of Company Common
Stock, in accordance with Section 2.1(c), without any
interest thereon. The Company shall give Parent (i) prompt
notice of any written demands for appraisal of any shares of
Company Common Stock, attempted withdrawals of such demands and
any other instruments served pursuant to the DGCL and received
by the Company relating to stockholders rights of
appraisal, and (ii) the opportunity to participate in and
direct all negotiations and proceedings with respect to demands
for appraisal under the DGCL. The Company shall not, except with
the prior written consent of Parent, voluntarily make any
payment with respect to, or settle, or offer or agree to settle,
any such demand for payment, or waive any failure to timely
deliver a written demand for appraisal or timely take any other
action to perfect appraisal rights in accordance with the DGCL.
Any portion of the Merger Consideration made available to the
Agent pursuant to Section 2.2 to pay for shares of Company
Common Stock for which appraisal rights have been perfected
shall be returned to Parent upon demand.
Section 2.2 Exchange
of Certificates.
(a) Agent. Upon the Effective
Time, Parent shall deposit with such bank or trust company as
may be designated by Parent and reasonably acceptable to the
Company (the Agent), for the benefit of the
holders of shares of Company Common Stock converted at the
Effective Time into the right to receive the Merger
Consideration pursuant to Section 2.1(c), the aggregate
Merger Consideration to which such holders shall become entitled
pursuant to Section 2.1(c). All cash so deposited with the
Agent shall, pending its disbursement to such holders, be
invested by the Agent as directed by Parent; provided,
however, that any investment of such cash shall in all
events be limited to (i) direct short-term obligations of
the U.S. government, (ii) short-term obligations for
which the full faith and credit of the United States of America
is pledged to provide for the payment of principal and interest,
(iii) short-term commercial paper rated
A-1 or
P-1 or
better by Moodys Investors Service, Inc. or Standard and
Poors Ratings Services, respectively, (iv) in
certificates of deposit, bank repurchase agreements or
bankers acceptances of commercial banks with capital
exceeding $1 billion, or (v) money market funds having
a rating in the highest investment category granted by a
recognized credit rating agency at the time of such investment;
provided, further, that no such investment or loss
thereon shall affect
A-3
the amounts payable to holders of Certificates or Book-Entry
Shares pursuant to this Article II. Any net profit
resulting from, or interest or income produced by, such amounts
on deposit with the Agent will be payable to Parent or as Parent
otherwise directs.
(b) Procedures. As promptly as
practicable after the Effective Time, Parent and the Surviving
Corporation shall cause the Agent to mail to each holder of
record of Company Common Stock converted pursuant to
Section 2.1(c) into the right to receive the Merger
Consideration a letter of transmittal and related instructions,
which shall specify that the delivery shall be effected, and
risk of loss and title shall pass, only upon proper delivery of
the Certificates (or book-entry transfer of the Book-Entry
Shares) to the Agent and which shall otherwise be in customary
form and shall include customary provisions (including with
respect to delivery of an agents message
regarding the book-entry transfer of Book-Entry Shares) for use
in effecting the surrender of the Certificates and Book-Entry
Shares in exchange for the Merger Consideration. Upon surrender
of a Certificate for cancellation to the Agent, together with
such letter of transmittal, duly completed and validly executed
in accordance with the instructions (or, in the case of
Book-Entry Shares, receipt of an agents
message by the Agent or such other evidence, if any, of
transfer as the Agent may reasonably request), the holder of
such Certificate (or Book-Entry Shares, as applicable) shall be
entitled to receive promptly in exchange therefor the Merger
Consideration, without interest, for each share of Company
Common Stock formerly represented by such Certificate (or
Book-Entry Shares, as applicable), and the Certificate (or
Book-Entry Shares, as applicable) so surrendered shall forthwith
be canceled. If any portion of such consideration is to be
issued and paid to a Person other than the Person in whose name
the surrendered Certificate or Book-Entry Shares were
registered, it shall be a condition to such issuance and payment
that (1) the Certificate so surrendered shall be properly
endorsed or shall otherwise be in proper form for transfer or
such Book-Entry Share shall be properly transferred and
(2) the Person requesting such issuance and payment shall
have paid any transfer and other Taxes required by reason of the
issuance and payment of such consideration to a Person other
than the registered holder of such Certificate or Book-Entry
Shares surrendered or shall have established to the reasonable
satisfaction of the Agent and the Surviving Corporation that
such Tax either has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.2, each
Certificate shall be deemed at any time after the Effective Time
to represent only the right to receive the Merger Consideration
as contemplated by this Article II, without interest.
Notwithstanding anything to the contrary in this Agreement, a
holder of Book-Entry Shares shall not be required to deliver a
Certificate to the Agent to receive the consideration to which
such holder is entitled pursuant to this Article II in
respect of such Book-Entry Shares.
(c) Transfer Books; No Further Ownership Rights in
Company Stock. The Merger Consideration
issued and paid in respect of shares of Company Common Stock
represented by Book-Entry Shares, or upon the surrender for
exchange of Certificates, in accordance with the terms of this
Article II shall be deemed to have been issued and paid in
full satisfaction of all rights pertaining to the shares of
Company Common Stock previously represented by such Book-Entry
Shares and Certificates (as applicable), and at the close of
business on the day on which the Effective Time occurs, the
stock transfer books of the Company shall be closed and
thereafter there shall be no further registration of transfers
on the stock transfer books of the Surviving Corporation of the
shares of Company Common Stock that were outstanding immediately
prior to the Effective Time. From and after the Effective Time,
the holders of Book-Entry Shares or Certificates that evidenced
ownership of shares of Company Common Stock outstanding
immediately prior to the Effective Time shall cease to have any
rights with respect to such shares of Company Common Stock,
except as otherwise provided for in this Agreement or by Law.
Subject to the last sentence of Section 2.2(e), if, at any
time after the Effective Time, Certificates are presented to the
Surviving Corporation for any reason, they shall be canceled and
exchanged as provided in this Article II.
(d) Lost, Stolen or Destroyed
Certificates. If any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by Parent, the posting by
such Person of a bond, in such reasonable amount as Parent may
direct, as indemnity against any claim that may be made against
it with respect to such Certificate, the Agent will issue and
pay, in exchange for such lost, stolen or destroyed Certificate,
the applicable Merger Consideration to be issued and paid in
respect of the shares of Company Common Stock formerly
represented by such Certificate, as contemplated by this
Article II.
(e) Termination of Fund. At any
time following the one (1) year anniversary of the Closing
Date, Parent or the Surviving Corporation shall be entitled to
require the Agent to deliver to it any instruments and funds
(including
A-4
any interest received with respect thereto) that had been made
available to the Agent and which have not been disbursed to
holders of Certificates, and thereafter such holders shall be
entitled to look only to the Surviving Corporation (subject to
abandoned property, escheat or other similar Laws) as general
creditors thereof with respect to the payment of any Merger
Consideration that may be payable upon surrender of any
Certificates held by such holders, as determined pursuant to
this Agreement, without any interest thereon. Any amounts
remaining unclaimed by such holders at such time at which such
amounts would otherwise escheat to or become property of any
Governmental Authority shall become, to the extent permitted by
Law, the property of Parent, free and clear of all claims or
interest of any Person previously entitled thereto.
(f) No Liability. Notwithstanding
any provision of this Agreement to the contrary, none of the
parties hereto, the Surviving Corporation or the Agent shall be
liable to any Person for Merger Consideration delivered to a
public official pursuant to any applicable abandoned property,
escheat or similar Law.
Section 2.3 Company
Equity Awards.
(a) Immediately prior to the Effective Time, each Company
Restricted Share which is then outstanding shall be converted
into the right to receive from the Surviving Corporation an
amount in cash equal to the Merger Consideration, the receipt of
which shall be subject to the same vesting conditions and other
restrictions that were applicable to such Company Restricted
Share at the time it was cancelled. For the avoidance of doubt,
no interest shall accrue on any cash amount pending the
satisfaction of any vesting or other restrictions. As of the
Effective Time, all such Company Restricted Shares shall no
longer be outstanding and shall automatically be canceled and
shall cease to exist, and each holder of a Certificate or
Book-Entry Shares, which immediately prior to the Effective Time
represented any such Company Restricted Share shall thereafter
cease to have any rights with respect thereto, except the right
to receive the Merger Consideration, subject to the applicable
vesting conditions and other restrictions, to be paid in
consideration therefor.
(b) As of the Effective Time, each outstanding award under
the Company Stock Plans which represents a right to receive a
share of Company Common Stock upon satisfaction of vesting
conditions, which for the avoidance of doubt shall exclude the
Company Restricted Shares (the Company Stock
Rights), shall be assumed by the Surviving
Corporation, subject to the same vesting and other terms and
conditions that were applicable to such Company Stock Rights
prior to the Effective Time. Following the Effective Time,
subject to the terms and conditions thereof, the Company Stock
Rights shall be settleable in Parent Ordinary Shares equal to
the product (which shall be rounded down to the nearest whole
share) of (i) the number of shares underlying such Company
Stock Rights multiplied by (ii) the Exchange Ratio.
Notwithstanding the foregoing, if and to the extent the
representations and warranty contained in the last sentence of
Section 3.2(c) is not true and complete as of the Effective
Time, or the rollover contemplated in the first sentence of this
Section 2.3(b) would be prohibited by applicable securities
Laws, the affected Company Stock Rights shall be converted as of
the Effective Time into a right to receive an amount in cash
equal to the Merger Consideration multiplied by the number of
shares of Company Common Stock covered by such Company Stock
Rights, the receipt of which shall be subject to the same
vesting and other conditions that were applicable to such
Company Stock Rights immediately prior to the Effective Time.
(c) Prior to the Effective Time, the Company shall, or
shall cause the appropriate administrative body to, take all
actions and make such determinations with respect to the Company
Restricted Shares and the Company Stock Rights, in each case, as
necessary to implement the foregoing provisions of this
Section 2.3 (including, any such actions as may be
reasonably requested by Parent). Without limiting the foregoing,
the Company shall take all actions necessary to ensure that the
Company will not, at the Effective Time, be bound by any
options, stock appreciation rights, restricted stock rights,
restricted stock units, phantom equity awards, warrants or other
rights or agreements which would entitle any Person, other than
Parent and its subsidiaries, to own any equity interest in the
Surviving Corporation or to receive any payment in respect
thereof (other than as provided in Section 2.3(a) or
2.3(b)).
Section 2.4 Exchangeable
Shares and Preferred Stock. Prior to the
Closing Date, the Board of Directors of the Company (or, if
appropriate, any committee of the Board of Directors of the
Company), shall take all action or make such determinations, in
each case, necessary to give effect to (a) the exchange or
conversion of Exchangeable
A-5
Shares (as defined below) as contemplated by the Share Exchange
Agreement and (b) the redemption of all outstanding shares
of Series A Voting Preferred Stock, par value
$0.0001 per share, of the Company.
Section 2.5 Withholding
Taxes. Parent, the Surviving Corporation and
the Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Article II
such amounts as may be required to be deducted and withheld with
respect to the making of such payment under the Code, or under
any provision of state, local or foreign Tax Law (including, as
applicable, by acceleration to the Effective Time of the vesting
of cash awards (under Section 2.3(b)) in an amount
sufficient to pay the income tax
and/or
employee national insurance contributions liability that arises
as a result of the transactions contemplated in
Section 2.3(b) in respect of U.K. employees). To the extent
amounts are so withheld and paid over to the appropriate Taxing
Authority, the withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the Person in
respect of which such deduction and withholding was made. In
addition, to the extent such amounts are insufficient to cover
the income tax
and/or
employee national insurance contributions liability imposed on
the service provider, vesting of the awards shall be accelerated
in an amount sufficient to cover such income tax
and/or
employee national insurance contributions liability.
Section 2.6 Adjustments. Notwithstanding
any provision of this Article II to the contrary (but
without in any way limiting the covenants in Section 5.5),
if between the date of this Agreement and the Effective Time the
outstanding shares of Company Common Stock shall have been
changed into a different number of shares or a different class
by reason of the occurrence or record date of any stock
dividend, stock split, reclassification, combination, exchange
of shares or similar transaction, the Merger Consideration shall
be appropriately adjusted to reflect such stock dividend, stock
split, reclassification, combination, exchange of shares or
similar transaction.
ARTICLE III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except as disclosed (I) in the Company SEC Documents filed
with the SEC from and after March 2, 2009 but prior to date
of this Agreement (but excluding any risk factor disclosures
contained under the heading Risk Factors, any
disclosure of risks included in any forward-looking
statements disclaimer or any other statements that are
similarly non-specific, predictive or forward-looking in nature,
in each case, other than any specific factual information
contained therein) or (II) the definitive disclosure
schedule letter delivered by the Company to Parent prior to the
execution of this Agreement (the Company Disclosure
Schedule), the Company hereby represents and warrants
to Parent and Merger Sub as follows:
Section 3.1 Organization,
Standing and Corporate Power.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the Laws of the State of
Delaware and has all corporate power and authority necessary to
own or lease all of its properties and assets and to carry on
its business as presently conducted.
(b) The Company is duly licensed or qualified to do
business and is in good standing (with respect to jurisdictions
that have the concept of good standing) in each jurisdiction
where the ownership, leasing or operation of its properties or
other assets or the nature its business requires such licensing
or qualification, except for failures to be so licensed,
qualified or in good standing that, individually and in the
aggregate, would not reasonably be expected to have a Company
Material Adverse Effect.
(c) The Company has made available to Parent correct and
complete copies of the Organizational Documents of the Company,
as in effect as of the date of this Agreement.
(d) The Company has made available to Parent correct and
complete copies of the minutes (or, in the case of minutes that
have not yet been finalized, drafts thereof) of all meetings of
stockholders, the Board of Directors of the Company and each
committee of the Board of Directors of the Company, other than
the Special Committee, held since November 2, 2007, except
in each case for records that may discuss the Merger, strategic
alternatives or other potential business development or
strategic initiatives.
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Section 3.2 Capitalization.
(a) The authorized capital stock of the Company consists of
1,000,000,000 shares of Company Common Stock and
150,000,000 shares of preferred stock, par value
$0.0001 per share (Company Preferred
Stock). At the close of business on May 4, 2010:
(a) 251,242,969 shares of Company Common Stock were
issued and outstanding (of which 20,664,059 shares of
Company Common Stock were Company Restricted Shares),
(b) 14,101,424 shares of Company Common Stock were
held by the Company in its treasury,
(c) 40,842,854 shares of Company Common Stock were
reserved for issuance under the Company Stock Plans,
(d) 58,904,993 shares of Company Preferred Stock were
issued or outstanding, (e) 54,484,677 shares of
Company Common Stock were reserved for issuance upon exercise of
the warrants described in Section 3.2(a) of the Company
Disclosure Schedule (Warrants),
(f) 61,424,730 shares of Company Common Stock were
reserved for issuance upon conversion of the convertible notes
described in Section 3.2(a) of the Company Disclosure
Schedule (Convertible Notes) and
(g) 58,904,993 shares of Company Common Stock were
reserved for issuance upon conversion of the exchangeable shares
described in Section 3.2(a) of the Company Disclosure
Schedule (Exchangeable Shares). Except as set
forth in Section 3.2(a) of the Company Disclosure Schedule,
no Company Common Stock is owned by any Subsidiary of the
Company.
(b) Except for the Warrants, the Convertible Notes and the
Exchangeable Shares, as of May 4, 2010 there were
(i) no outstanding shares of capital stock of the Company,
(ii) no outstanding securities of the Company or its
Subsidiaries convertible into or exchangeable or exercisable for
shares of capital stock of the Company, and (iii) except as
set forth in Section 3.2(b) of the Company Disclosure
Schedule, no outstanding options, warrants or rights, or
commitments or agreements, to acquire from the Company, or that
obligate the Company to issue shares of capital stock of the
Company or any securities of the Company or its Subsidiaries
convertible into or exchangeable or exercisable for shares of
capital stock of the Company. Except as set forth in
Section 3.2(b) of the Company Disclosure Schedule, there
are no outstanding agreements of any kind which obligate the
Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of the Company or
any securities, options, warrants or rights convertible into or
exchangeable or exercisable for shares of capital stock of the
Company. Except as set forth in Section 3.2(b) of the
Company Disclosure Schedule, since December 31, 2009, the
Company has not issued any shares of its capital stock or any
securities convertible into or exchangeable or exercisable for
any shares of its capital stock, other than pursuant to
Warrants, Convertible Notes and Exchangeable Shares referred to
in Section 3.2(a) that are outstanding as of the date of
this Agreement or are issued after the date of this Agreement
without violation of Section 5.5. All outstanding shares of
Company Common Stock have been duly authorized and validly
issued and are fully paid, non-assessable and free of preemptive
rights.
(c) The Company has made available to Parent with respect
to each holder of Company Restricted Shares, as of May 16,
2010, the name of the holder of such awards, the number of
shares of Company Restricted Shares held by such holder, the
date on which such Company Restricted Shares was granted, and
the applicable vesting schedule. The Company has made available
to Parent with respect to each holder of Company Stock Rights,
as of May 16, 2010, the name of the holder of such awards,
the number of shares of Company Common Stock underlying such
award, the date on which such Company Stock Right was granted,
and the applicable vesting schedule and settlement dates. Except
as set forth in Section 3.2(c) of the Company Disclosure
Schedule, each holder of Company Stock Rights is a
non-U.S. resident.
(d) The Company has delivered to Parent a true, complete
and accurate list, as of May 16, 2010, of the name and
address of each holder of Company Preferred Stock and
Exchangeable Shares, in each case, as reflected on the stock
transfer or other corporate records of the Company.
Section 3.3 Authority;
Voting Requirements.
(a) The Company has all necessary corporate power and
authority to execute and deliver this Agreement and, subject to
obtaining the Company Stockholder Approval, to perform its
obligations hereunder and for it to consummate the Transactions.
The execution, delivery and performance by the Company of this
Agreement, and the consummation by it of the Transactions, have
been duly authorized and approved by its Board of Directors
(upon recommendation of the Special Committee), and except for
obtaining the Company Stockholder Approval, no other corporate
action on the part of the Company is necessary to authorize the
execution, delivery and performance by the Company of this
Agreement and the consummation by it of the Transactions. This
Agreement has been duly
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executed and delivered by the Company and, assuming due
authorization, execution and delivery hereof by the other
parties hereto, constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except that such enforceability
(i) may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws of
general application affecting or relating to the enforcement of
creditors rights generally and (ii) is subject to
general principles of equity, whether considered in a proceeding
at law or in equity (the Bankruptcy and Equity
Exception).
(b) The Special Committee, at a meeting duly called and
held, has, by unanimous vote, (i) determined that it is in
the best interests of the Company and its stockholders, and
declared it advisable, for the Company to enter into this
Agreement, (ii) recommended to the Board of Directors of
the Company the approval of the execution, delivery and
performance by the Company of this Agreement and the
consummation by the Company of the Transactions (subject to
obtaining the Company Stockholder Approval), and
(iii) recommended to the Board of Directors of the Company
the approval of the execution and delivery of the Share Exchange
Agreement by the stockholders of the Company party thereto, and
the consummation of the Share Exchange Transactions.
(c) The Board of Directors of the Company, at a meeting
duly called and held, has, by unanimous vote,
(i) determined that it is in the best interests of the
Company and its stockholders, and declared it advisable, for the
Company to enter into this Agreement, (ii) approved the
execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the
Transactions, (iii) directed that the Company submit the
adoption of this Agreement to a vote at a meeting of the
stockholders of the Company to obtain the Company Stockholder
Approval in accordance with the terms of this Agreement,
(iv) resolved, subject to Section 5.3, to recommend
that the stockholders of the Company adopt this Agreement at the
Company Stockholders Meeting and (v) approved the execution
and delivery of the Share Exchange Agreement by the stockholders
of the Company party thereto and the consummation of the Share
Exchange Transactions.
(d) The Company Stockholder Approval is the only vote or
approval of the holders of any class or series of capital stock
of the Company or any of its Subsidiaries which is necessary to
adopt this Agreement and approve the Transactions.
(e) The Board of Directors of the Company has adopted
resolutions sufficient to render inapplicable the limitations on
business combinations contained in Section 203
of the DGCL to Parent and Merger Sub, this Agreement, the Share
Exchange Agreement, the Voting Agreement and the Merger. No
other state anti-takeover statute or regulation, nor any
takeover-related provision in the Organizational Documents of
the Company, is applicable to Parent or Merger Sub, this
Agreement, the Share Exchange Agreement, the Voting Agreement
and the Merger that would (i) prohibit or restrict the
ability of the Company to perform its obligations under this
Agreement or the Certificate of Merger or its ability to
consummate the Merger or the other Transactions, (ii) have
the effect of invalidating or voiding any provision of this
Agreement, the Share Exchange Agreement, the Voting Agreement or
the Certificate of Merger or (iii) subject Parent or Merger
Sub to any impediment or condition in connection with the
exercise of any of its rights under this Agreement, the Share
Exchange Agreement, the Voting Agreement or the Certificate of
Merger.
Section 3.4 Non-contravention. None
of the execution and delivery of this Agreement by the Company,
the consummation by the Company of the Transactions, compliance
by the Company with any of the terms or provisions hereof or the
consummation of the Share Exchange Transactions, will
(a) violate or conflict with any provision of the
Organizational Documents of the Company or any of its
Subsidiaries or (b) assuming that the authorizations,
consents and approvals referred to in Section 3.5 and the
Company Stockholder Approval are obtained and the filings
referred to in Section 3.5 are made, (i) violate in
any material respect any Law, injunction, order, judgment,
ruling or decree of any Governmental Authority applicable to the
Company or any of its Subsidiaries or (ii) violate,
conflict with, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default),
or give rise to a right of termination, cancellation or
redemption, an acceleration of performance required, a loss of
benefits, or the creation of any Lien upon any of the properties
or assets of the Company or any of its Subsidiaries under, any
of the terms, conditions or provisions of any Contract or Permit
to which the Company or any of its Subsidiaries is a party,
except, in the case of clause (ii), for such violations,
conflicts, defaults, terminations, cancellations, redemptions,
accelerations, losses and Liens as, individually and in the
aggregate, would not reasonably be expected to have a Company
Material Adverse Effect or prevent or materially delay the
consummation of the Transactions or the Share Exchange
Transactions.
A-8
Section 3.5 Governmental
Approvals. Except for (a) the filing
with the SEC of a proxy statement relating to the Company
Stockholders Meeting (as such proxy statement may be amended or
supplemented from time to time, the Proxy
Statement), and other filings required under, and
compliance with other applicable requirements of, the Exchange
Act and the rules of the New York Stock Exchange, (b) the
filing of the Certificate of Merger with the Secretary of State
of the State of Delaware pursuant to the DGCL, (c) filings
that may be required under, and compliance with other applicable
requirements of, the HSR Act and (d) filings with
Governmental Authorities required under, and compliance with
other applicable requirements of, the Laws listed on
Section 3.5 of the Company Disclosure Schedule, no consents
or approvals of, or filings, declarations or registrations with,
any Governmental Authority are necessary for the execution and
delivery of this Agreement by the Company, the consummation by
the Company of the Transactions or the consummation by the
stockholders of the Company party thereto of the Share Exchange
Transactions, except for such other consents, approvals,
filings, declarations or registrations that, if not obtained,
made or given, would not reasonably be expected, individually
and in the aggregate, to have a Company Material Adverse Effect
or prevent or materially delay the consummation of the
Transactions or the Share Exchange Transactions.
Section 3.6 Information
Supplied.
(a) None of the information supplied or to be supplied by
or on behalf of the Company specifically for inclusion or
incorporation by reference (i) in the Proxy Statement and
contained in the Proxy Statement, at the date the Proxy
Statement (and any amendment or supplement thereto) is first
mailed to the stockholders of the Company or at the time of the
Company Stockholders Meeting, or (ii) in any proxy
solicitation materials of the Company and contained in any such
proxy solicitation materials, as of the date of its first use,
will contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light
of the circumstances under which they are made, not misleading;
provided, that no representation or warranty is made by
the Company with respect to information supplied by or on behalf
of any Controlling Holder (in their capacity as a stockholder),
Parent or Merger Sub for inclusion or incorporation by reference
in any of the foregoing.
(b) None of the information supplied or to be supplied by
or on behalf of the Company specifically for inclusion or
incorporation by reference in the Shareholder Circular or the
Prospectus and contained in the Shareholder Circular or the
Prospectus will, (a) in the case of the Shareholder
Circular, at the date it (and any amendment or supplement
thereto) is first mailed to shareholders of Parent or at the
time of the Parent Shareholders Meeting and (b) in the case
of the Prospectus, at the date it (and any amendment or
supplement thereto) is published, contain any untrue statement
of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under
which they are made, not misleading; provided, that no
representation or warranty is made by the Company with respect
to information supplied by or on behalf of any Controlling
Holder (in their capacity as a stockholder), Parent or Merger
Sub for inclusion or incorporation by reference in any of the
foregoing.
Section 3.7 Brokers. Except
for Goldman Sachs International (Goldman) and
Moelis & Company LLC (Moelis), the
fees and expenses of which will be paid by the Company, no
broker, investment banker, financial advisor or other Person is
entitled to any brokers, finders, financial
advisors or other similar fee or commission, or the
reimbursement of expenses, in connection with the Transactions
based upon arrangements made by or on behalf of the Company or
any of its Subsidiaries. A correct and complete copy of the
engagement letter with each of Goldman and Moelis has been
provided to Parent.
Section 3.8 Opinion
of Financial Advisor.
(a) The Special Committee has received the opinion of
Moelis, dated May 16, 2010, to the effect that, as of such
date, and subject to the various assumptions and qualifications
set forth therein, the Merger Consideration to be received in
the Merger by holders of shares of Company Common Stock (other
than the Controlling Holders) is fair from a financial point of
view to such stockholders (the Moelis Fairness
Opinion). A correct and complete copy of the Moelis
Fairness Opinion will be delivered to Parent for informational
purposes only upon receipt thereof by the Company. The Company
has been authorized by Moelis to permit the inclusion of the
Moelis Fairness Opinion and references thereto in the Proxy
Statement, subject to prior review and consent by Moelis.
A-9
(b) The Board has received the opinion of Goldman, dated
May 17, 2010, to the effect that, as of such date, and
subject to the various assumptions and qualifications set forth
therein, the aggregate consideration to be received by holders
(other than Parent and its Affiliates) of shares of Company
Common Stock, Exchangeable Shares and Convertible Notes under
this Agreement and the Share Exchange Agreement is fair from a
financial point of view to such holders (the Goldman
Fairness Opinion). A correct and complete copy of the
Goldman Fairness Opinion will be delivered to Parent for
informational purposes only upon receipt thereof by the Company.
The Company has been authorized by Goldman to permit the
inclusion of the Goldman Fairness Opinion and references thereto
in the Proxy Statement, subject to prior review and consent by
Goldman.
Section 3.9 Subsidiaries.
(a) Section 3.9(a) of the Company Disclosure Schedule
sets forth as of the date of this Agreement, the name and
jurisdiction of organization of each Subsidiary of the Company.
Each Subsidiary of the Company is duly organized, validly
existing and in good standing (with respect to jurisdictions
that have the concept of good standing) under the Laws of the
jurisdiction of its organization set forth on
Section 3.9(a) of the Company Disclosure Schedule and has
all corporate, limited liability or partnership, as the case may
be, power and authority necessary to own or lease all of its
properties and assets and to carry on its business as presently
conducted, except for failure to be in good standing or so
qualified or have such power or authority that individually and
in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect. Except as otherwise specified
on Section 3.9(a) of the Company Disclosure Schedule, all
of the outstanding shares of capital stock of (or other equity
interests in) each Subsidiary of the Company have been duly
authorized, validly issued and are fully paid and non-assessable
and, except for qualifying shares or the like, are owned,
directly or indirectly, by the Company free and clear of any and
all (x) Liens, (y) transfer restrictions (except for
such transfer restrictions of general applicability as may be
provided under applicable Laws) and (z) voting agreements
or voting restrictions. Except as set forth on
Section 3.9(a) of the Company Disclosure Schedule, no
outstanding options, warrants or rights to acquire from the
Company or any of its Subsidiaries, or that obligate the Company
or any of its Subsidiaries to issue, shares of capital stock of
(or other equity interests in) a Subsidiary of the Company, and
no outstanding securities of a Subsidiary of the Company
convertible into or exchangeable or exercisable for shares of
capital stock of (or other equity interests in) a Subsidiary of
the Company, in each case, are owned by a Person other than the
Company or a wholly-owned Subsidiary of the Company.
(b) Except as set forth on Section 3.9(a) of the
Company Disclosure Schedule, the Company does not own, directly
or indirectly, as of the date of this Agreement, any shares of
capital stock of, or other equity interests in, any Person.
(c) Each Subsidiary of the Company is duly licensed or
qualified to do business and is in good standing (with respect
to jurisdictions that have the concept of good standing) in each
jurisdiction where the ownership, leasing or operation of its
properties or other assets or the nature its business requires
licensing or qualification, except for failures to be so
licensed, qualified or in good standing that, individually and
in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect. The Company has made available
to Parent correct and complete copies of the Organizational
Documents of each Subsidiary of the Company as in effect of the
date of this Agreement.
Section 3.10 Company
SEC Documents; Undisclosed Liabilities.
(a) The Company has filed with or furnished to the SEC, on
a timely basis, all required registration statements,
prospectuses, certifications, proxy statements and reports with
the SEC since November 2, 2007 (the IPO
Date) (such documents collectively, and together with
all documents filed during such period on a voluntary basis on
Form 8-K,
and in each case including all exhibits and schedules thereto
and documents incorporated by reference therein, the
Company SEC Documents). As of their
respective effective dates (in the case of Company SEC Documents
that are registration statements filed pursuant to the
requirements of the Securities Act) and as of their respective
SEC filing dates (in the case of all other Company SEC
Documents), the Company SEC Documents complied in all material
respects with the requirements of the Securities Act, the
Exchange Act and the Sarbanes-Oxley Act, as the case may be,
applicable to such Company SEC Documents, and none of the
Company SEC Documents as of such respective dates (or, if
amended prior to the date of this Agreement, the date of the
filing of such amendment) contained any untrue statement of a
material fact or omitted to state a material fact required to be
A-10
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. As of the date of this Agreement, there
are no outstanding or unresolved comments in comment letters
received from the SEC staff with respect to the Company SEC
Documents. None of the Companys Subsidiaries is (or has
been at any time since the IPO Date) subject to the reporting
requirements of Section 13(a) or 15(d) of the Exchange Act.
(b) Each of the consolidated financial statements of the
Company included (or incorporated by reference) in the Company
SEC Documents complied as to form, as of their respective dates
of filing with the SEC, in all material respects with all
applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP (except, in the case of
un-audited statements, as permitted by the rules and regulations
of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto or as
permitted by
Regulation S-X)
and fairly present in all material respects the consolidated
financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods shown
(subject, in the case of un-audited statements, to normal,
recurring year-end audit adjustments).
(c) Neither the Company nor any of its Subsidiaries has any
liabilities or obligations of any nature (whether absolute,
accrued, contingent or otherwise), except liabilities or
obligations (i) reflected or reserved against on the
consolidated balance sheet of the Company and its Subsidiaries
as of March 31, 2010 (the Balance Sheet
Date), or disclosed in the notes thereto, included in
the Company SEC Documents, (ii) incurred after the Balance
Sheet Date in the ordinary course of business,
(iii) incurred pursuant to this Agreement or otherwise in
connection with the Transactions, or (iv) that individually
and in the aggregate would not reasonably be expected to have a
material negative impact on the Company and its Subsidiaries,
taken as a whole, or (v) liabilities and obligations under
Contracts and the Company Plans.
(d) The Company has established and maintains disclosure
controls and procedures (as defined in
Rules 13a-15(e)
and
15d-15(e) of
the Exchange Act), as required under as required by
Rules 13a-15(a)
and
15d-15(a) of
the Exchange Act, and such disclosure controls and procedures
are designed to ensure that material information relating to the
Company, including its consolidated Subsidiaries, required to be
disclosed by the Company in the reports that it files or submits
under the Exchange Act is made known to the chief executive
officer and the chief financial officer of the Company by others
within the Company, and to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with GAAP. The Company has disclosed, based on its
most recent evaluation of the Companys internal control
over financial reporting, to the Companys auditors, to the
audit committee of the Board of Directors of the Company and to
Parent, (i) all significant deficiencies and material
weaknesses in the design or operation of internal control over
financial reporting (as defined in
Rule 13a-15(f)
of the Exchange Act) which are reasonably likely to adversely
affect the Companys ability to record, process, summarize
and report financial information and (ii) any fraud,
whether or not material, that involves management or other
employees who have a significant role in the Companys
internal control over financial reporting.
(e) Since the IPO Date, subject to any applicable grace
periods, the Company has been and is in compliance in all
material respects with (i) the applicable provisions of the
Sarbanes-Oxley Act and (ii) the applicable listing and
corporate governance rules and regulations of the New York Stock
Exchange.
(f) Since the IPO Date, (i) neither the Company nor
any of its Subsidiaries nor, to the Knowledge of the Company,
any director, officer or auditor of the Company or any of its
Subsidiaries, has received or been informed of any credible
complaint, allegation, assertion or claim, whether written or
oral, regarding a deficiency with the accounting or auditing
practices, procedures, methodologies or methods of the Company
or any of its Subsidiaries or their respective internal
accounting controls reasonably likely to lead to material
non-compliance by the Company with GAAP or the Exchange Act
(including any material complaint, allegation, assertion or
claim that the Company or any of its Subsidiaries has engaged in
questionable accounting or auditing practices), which complaint,
allegation, assertion or claim was not publicly disclosed in the
Company SEC Documents or appropriately addressed or otherwise
cured, and (ii) no attorney representing the Company or any
of its Subsidiaries, whether or not employed by the Company or
any of its Subsidiaries, has reported evidence of a material
violation of securities
A-11
laws, breach of fiduciary duty or similar violation by the
Company or any of its Subsidiaries or their respective officers,
directors, employees or agents to the Board of Directors of the
Company or any committee thereof.
(g) Neither the Company nor any of its Subsidiaries is a
party to, or has any commitment to become a party to, any joint
venture, off-balance sheet partnership or any similar Contract
or arrangement (including any Contract or arrangement relating
to any transaction or relationship between or among the Company
and any of its Subsidiaries, on the one hand, and any
unconsolidated affiliate, including any structured finance,
special purpose or limited purpose entity or Person, on the
other hand, or any off-balance sheet arrangement (as
defined in Item 303(a) of
Regulation S-K)),
where the result, purpose or intended effect of such Contract or
arrangement is to avoid disclosure of any material transaction
involving, or material liabilities of, the Company or any of its
Subsidiaries in the Companys consolidated financial
statements or Company SEC Documents.
Section 3.11 Absence
of Certain Changes. Since the Balance Sheet
Date:
(a) the business of the Company and its Subsidiaries has
been carried on and conducted in all material respects in the
ordinary course of business consistent with past practice except
for the execution and performance of this Agreement and the
discussions and negotiations related thereto; and
(b) there has not been any change, development, occurrence,
event or state of facts that, individually or in the aggregate,
has had or would reasonably be expected to have a Company
Material Adverse Effect.
Section 3.12 Legal
Proceedings. Except as would not,
individually or in the aggregate, reasonably be expected to have
a material negative impact on the Company and its Subsidiaries,
taken as a whole, there is no legal, administrative or arbitral
proceeding, claim, suit, action, injunction, order, judgment,
ruling, decree, regulatory enforcement action or disciplinary
proceeding, or, to the Knowledge of the Company, investigation
(i) pending or, to the Knowledge of the Company, threatened
against the Company, any of its Subsidiaries, any of the Funds
or any of their respective properties or assets before any
Governmental Authority or (ii) pending or, to the Knowledge
of the Company, threatened before any Governmental Authority
against any officer, director or employee of the Company or any
Subsidiary of the Company or any Fund with respect to the
Companys, the Subsidiaries and the Funds
business activities.
Section 3.13 Compliance
With Laws; Licenses.
(a) The Company, each of its Subsidiaries and the Funds are
(and since the IPO Date have been) in compliance with all Laws
applicable to the Company, any of its Subsidiaries or any of the
Funds and their respective properties and assets, except for
such non-compliance as would not, individually or in the
aggregate, reasonably be expected to have a material negative
impact on the Company and its Subsidiaries, taken as a whole.
Since the IPO Date, none of the Company, any of its Subsidiaries
or any of the Funds has received written notice to the effect
that a Governmental Authority (i) claimed or charged that
the Company, any of its Subsidiaries, any of their respective
officers, directors or employees, acting in such capacities, or
any of the Funds was not in compliance with all Laws applicable
to the Company, any of its Subsidiaries, any of their respective
officers, directors or employees or any of the Funds, as the
case may be, any of their properties or other assets or any of
their businesses or operations, except for claims and charges
that have been favorably resolved or (ii) was considering
the amendment, termination, revocation or cancellation of any
License (as defined below), except, in the case of
clause (i) or (ii), as would not, individually or in the
aggregate, reasonably be expected to have a material negative
impact on the Company and its Subsidiaries, taken as a whole.
(b) Since the IPO Date, none of the Company, any of its
Subsidiaries or any of the Funds has received written notice of
a claim or charge that has not been favorably resolved by a
Governmental Authority of a violation of the securities Laws
(which include, without limitation, Laws relating to investment
management) of the United States, the United Kingdom or the
Cayman Islands by the Company, any of its Subsidiaries, any of
their respective officers, directors or employees, or any of the
Funds that could, individually or in the aggregate, reasonably
be expected to negatively affect (other than in a transitory
manner) the reputation of the Company and its Subsidiaries,
their business franchise, their ability to raise and retain
assets under management and their ability to preserve and
attract Clients or key employees and partners in a significant
or fundamental way.
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(c) Except as set forth on Section 3.13(c) of the
Company Disclosure Schedule, none of the Company or any of its
Subsidiaries, or to the Knowledge of the Company, any person
(i) associated (as defined under the Investment
Advisers Act of 1940, as amended (the Advisers
Act)) with, or (ii) who is an affiliated
person (as defined under the Investment Company Act of
1940, as amended (the Investment Company
Act)) of any of the foregoing, has been convicted of
any crime or is or has engaged in any conduct that would be a
basis for (A) denial, suspension or revocation of
registration of an investment adviser under Section 203(e)
of the Advisers Act or the creation of a disclosure obligation
under
Rule 206(4)-4(b)
thereunder, or ineligibility to serve as an associated person of
an investment adviser, (B) being ineligible to serve as an
investment adviser (or in any other capacity contemplated by the
Investment Company Act) to a registered investment company
pursuant to Section 9(a) or 9(b) of the Investment Company
Act or (C) being ineligible to serve as a broker-dealer or
an associated person of a broker-dealer pursuant to
Section 15(b) of the Exchange Act, and to the Knowledge of
the Company, there is no proceeding or investigation that is
reasonably likely to become the basis for any such
ineligibility, disqualification, denial, suspension or
revocation.
(d) Each Subsidiary identified on Section 3.13(d) of
the Company Disclosure Schedule (the Registered
Advisers) has at all times required by applicable Law
been duly registered as an investment adviser under the Advisers
Act except as would not, individually or in the aggregate,
reasonably be expected to have a material negative impact on the
Company and its Subsidiaries, taken as a whole. Each of the
Company and its Subsidiaries has at all times required by
applicable Law been duly registered, licensed and qualified as
an investment adviser in all jurisdictions where such
registration, licensing, qualification or notification is
required in order to conduct its business, except as would not,
individually or in the aggregate, reasonably be expected to have
a material negative impact on the Company and its Subsidiaries,
taken as a whole. The Company has delivered to the Parent true
and complete copies of the most recent Form ADV (including
Part II) of each Registered Adviser, as amended to
date, and any other applicable foreign and domestic registration
forms, likewise as amended to date. The information contained in
such forms was in material compliance with applicable Law and
true and complete in all material respects at the time of filing
and the Company has made all amendments to such forms as is
required to make under applicable Laws. Each Registered Adviser
has adopted a written policy regarding insider trading and a
code of ethics, which complies in all material respects with all
applicable provisions of the Advisers Act (including with
respect to insider trading and personal trading under
Section 204A thereof and
Rule 204A-1
thereunder), copies of which have been made available to Parent.
All employees of the Registered Advisers have executed
acknowledgments that they are bound by the provisions of the
applicable insider trading policies and code of ethics, except
as would not, individually or in the aggregate, reasonably be
expected to have a material impact on the Company and its
Subsidiaries, taken as a whole. Except as would not,
individually or in the aggregate, reasonably be expected to have
a material negative impact on the Company and its Subsidiaries,
taken as a whole, during the past three (3) years, there
have been no violations or allegations of violations of such
codes of ethics or insider trading policies. Except as would
not, individually or in the aggregate, reasonably be expected to
have a material negative impact on the Company and its
Subsidiaries, taken as a whole, each Registered Adviser has
adopted a written compliance program regarding such Registered
Advisers satisfaction of the requirements of
Rule 206(4)-7
under the Advisers Act. The Company and its Subsidiaries
(i) have all Permits, registrations, certifications and
other approvals (collectively, Licenses)
required from Governmental Authorities required in order for
them to lawfully conduct their business in the manner presently
conducted, except where the failure to have the same would not,
individually or in the aggregate, reasonably be expected to have
a material negative impact on the Company and its Subsidiaries,
taken as a whole and (ii) are in compliance with the terms
of all such Licenses, except for such non-compliance as would
not, individually or in the aggregate, reasonably be expected to
have a material negative impact on the Company and its
Subsidiaries, taken as a whole. No person other than any
full-time employee of the Company or its Subsidiaries renders
investment education or investment management services on behalf
of the Company or its Subsidiaries to Clients of the Company or
its Subsidiaries, or solicits Clients with respect to the
provision of investment advice or investment management services
by the Company or its Subsidiaries, except as would not,
individually or in the aggregate, reasonably be expected to have
a material negative impact on the Company and its Subsidiaries,
taken as a whole.
(e) Except as would not, individually or in the aggregate,
reasonably be expected to have a material negative impact on the
Company and its Subsidiaries, taken as a whole, and except as
set forth on Section 3.13(e) of the Company Disclosure
Schedule, none of the Subsidiaries of the Company is a
broker or dealer within the
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meaning of the Exchange Act, a commodity pool
operator or commodity trading adviser within
the meaning of the Commodity Exchange Act, or a trust company.
Except as would not, individually or in the aggregate,
reasonably be expected to have a material negative impact on the
Company and its Subsidiaries, taken as a whole, none of the
Company or any of its Subsidiaries or any of their respective
officers or employees is, nor during the past five
(5) years has any such Person been, registered or required
to be registered as a broker or dealer, a commodity trading
adviser, a commodity pool operator, a futures commission
merchant, an introducing broker, a registered representative or
associated person, a counseling officer, a sales person or in
any similar capacity with the SEC, the CFTC, the NFA, the FINRA
or the securities commission of any state or any self-regulatory
body and no such Person is subject to any material liability or
disability by reason of any failure to be so registered.
(f) Except as would not, individually or in the aggregate,
reasonably be expected to have a material negative impact on the
Company and its Subsidiaries, taken as a whole, each of the
Company and its Subsidiaries has complied with (i) the
International Money Laundering Abatement and Anti-Terrorist
Financing Act of 2001, which comprises Title III of the
Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, as
amended, and the regulations promulgated thereunder,
(ii) the rules and regulations administered by the
U.S. Treasury Departments Office of Foreign Assets
Control and (iii) other national or international
anti-money laundering Laws, in the case of clauses (ii) and
(iii), to the extent such Laws are applicable to them.
Section 3.14 Contracts.
(a) Section 3.14(a) of the Company Disclosure Schedule
sets forth a list of each Company Material Contract as of the
date of this Agreement, except for any contract that has been
filed as an exhibit to the Annual Report on
Form 10-K
filed by the Company for the year ended December 31, 2009
or the Quarterly Report on
Form 10-Q
filed by the Company for the quarter ended March 31, 2010.
For purposes of this Agreement, Company Material
Contract shall mean each Contract to which the Company
or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries or any of their respective properties or
assets is bound that:
(i) is or would be required to be (A) filed by the
Company as a material contract pursuant to
Item 601(b)(10) of
Regulation S-K
or (B) disclosed by the Company on a Current Report on
Form 8-K;
(ii) (A) is an exclusivity agreement or arrangement,
or (B) purports to (1) restrict the ability of the
Company or any of its Subsidiaries or Affiliates to compete in
any geographic area or line of business or (2) limit the
Persons to whom the Company or any of its Subsidiaries or
Affiliates may sell products or deliver services, in each case,
in a manner that is material to the Company and its Subsidiaries
taken as a whole;
(iii) is a joint venture, partnership or similar or related
agreement;
(iv) involves the acquisition from another Person or
disposition to another Person, directly or indirectly (by merger
or otherwise), of a business, division or Subsidiary that
(A) was for aggregate consideration under such Contract (or
series of related Contracts) in excess of $1,500,000 or
(B) contain obligations (including indemnification,
earn-out or other contingent obligations) that are
still in effect and could result in material payments by the
Company or any of its Subsidiaries;
(v) is a loan or credit agreement, indenture, note or other
Contract or instrument evidencing indebtedness for borrowed
money by the Company or any of its Subsidiaries or Contract or
instrument pursuant to which indebtedness for borrowed money may
be incurred or is guaranteed by the Company or any of its
Subsidiaries, in each case, in excess of $5,000,000.
(vi) is a financial derivatives master agreement or
confirmation, futures account agreement, or similar Contract or
instrument, evidencing financial hedging or similar trading
activities;
(vii) is a mortgage, pledge, security agreement or other
Contract granting a Lien (other than a Permitted Lien) on any
material property or asset of the Company or any of its
Subsidiaries;
(viii) prohibits or requires the payment of dividends or
distributions in respect of the capital stock or equity
interests of the Company or any of its wholly owned Subsidiaries
prohibits the pledging of the capital
A-14
stock or equity interests of the Company or any of its wholly
owned Subsidiaries, or prohibits the issuance of guarantees by
any wholly owned Subsidiary of the Company;
(ix) is reasonably likely to involve the payment, in one
transaction or a series of related transactions, to or by the
Company or any of its Subsidiaries of more than $5,000,000 in
any twelve (12)-month period, other than (1) payments to
Moelis and Goldman pursuant to their engagement letters,
(2) interest payments under the Companys outstanding
indebtedness pursuant to Contracts and instruments set forth on
Section 3.14(a)(v) of the Company Disclosure Schedule,
(3) intercompany payments between or among the Company or
its Subsidiaries, (4) payments under all management and
investment management agreements between Funds and Clients, on
the one hand, and the Company and its Subsidiaries, on the other
hand, (5) payments and distributions under all limited
partner interest letters and employment agreements and
(6) payments under all Contracts that cannot be terminated
without less than 60 days notice;
(x) is a license agreement pursuant to which the Company or
any of its Subsidiaries is a named party and licenses in
material Intellectual Property, or licenses out material
Intellectual Property owned by the Company or its Subsidiaries,
other than (A) non-exclusive licenses entered into in the
ordinary course of business and (B) license agreements for
commercially available software or information technology
services on customary or standard terms;
(xi) is with any Governmental Authority, other than
investment management agreements entered into in the ordinary
course of business;
(xii) purports to subject the Company or any of its
Subsidiaries to a standstill or similar restriction;
(xiii) is a voting agreement or registration rights
agreement;
(xiv) is an Advisory Agreement with respect to Clients in
managed accounts with $50,000,000 or more of assets under
management;
(xv) is a side letter or similar agreement (a Side
Letter) entered into between the Company or any of its
Subsidiaries, on the one hand, and any Client, on the other
hand, including those that grant any right of first
refusal or most favored nations rights or
provide for indemnification or claw-back or similar
undertakings requiring the rebate, reimbursement or refund of
any fees in any such case, that is material to the Company and
its Subsidiaries taken as a whole;
(xvi) is a Contract for the distribution or sale of shares
or units of a Fund, other than those entered into in the
ordinary course of business;
(xvii) is a Contract for custody, transfer agent,
administration, prime broker, accounting services or other
similar services, other than those entered into in the ordinary
course of business;
(xviii) is a Lease of real property that is material to the
Company and its Subsidiaries taken as a whole;
(xix) is a Contract with any Controlling Holder or
Affiliate thereof or any current or former member, officer,
director or Affiliate of the Company, which was otherwise not
made available to Parent on the Companys electronic
datasite prior to the date hereof that is material to the
Company and its Subsidiaries, taken as a whole; or
(xx) is a Contract for the employment of any individual on
a full-time, part-time or consulting or other basis providing
annual compensation in excess of $1,000,000.
(b) The Company has made available to Parent or filed with
the SEC correct and complete copies of each Company Material
Contract, together with any and all amendments and supplements
thereto. Each Company Material Contract is valid and binding on,
and in full force and effect and enforceable in accordance with
its terms, by the Company or its Subsidiary party thereto, and,
to the Knowledge of the Company, each other party thereto, in
each case, subject to the Bankruptcy and Equity Exception and
except for failures to be valid, binding, in full force and
effect and enforceable as would not reasonably be expected to
have, individually or in the aggregate, a Company Material
Adverse Effect. None of the Company or any of its Subsidiaries
or, to the Knowledge of the Company, any other party to a
Company Material Contract, is in default under any Company
Material Contract (nor
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does any condition exist that, with notice or lapse of time or
both, would constitute a default thereunder by the Company or
any of its Subsidiaries or, to the Knowledge of the Company, any
other party thereto), except for defaults as would not
reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect. No party to any
Company Material Contract has given the Company or any of its
Subsidiaries notice of its intention to cancel, terminate,
change the scope of rights under, or not renew, any Company
Material Contract which event would, individually or in the
aggregate, reasonably be expected to have a material impact on
the Company and its Subsidiaries, taken as a whole.
Section 3.15 Tax
Matters. Except as would not, individually or
in the aggregate, reasonably be expected to have a material
negative impact on the Company and its Subsidiaries, taken as a
whole:
(a) (i) All income, franchise and corporation Tax
Returns and all other material Tax Returns required to be filed
by or on behalf of each of the Company and the Subsidiaries have
been duly and timely filed with the appropriate Taxing Authority
in all jurisdictions in which such Tax Returns are required to
be filed (after giving effect to any valid extensions of time in
which to make such filings), and all such Tax Returns are true,
complete and correct in all material respects; and (ii) all
Taxes payable by or on behalf of each of the Company and the
Subsidiaries have been fully and timely paid. The Company and
each Subsidiary complied in all material respects with all
applicable Laws relating to the payment and withholding of Taxes
and has duly and timely withheld and paid over to the
appropriate Taxing Authority all amounts required to be withheld
and paid under all applicable Laws. There are no liens as a
result of any unpaid Taxes upon any of the assets of the Company
or any Subsidiary, other than Permitted Liens.
(b) The most recent financial statements contained in the
Company SEC Documents reflect an adequate reserve for all Taxes
payable by the Company and its Subsidiaries for all taxable
periods and portion thereof through the date of such financial
statements.
(c) All deficiencies asserted or assessments made, in
writing, as a result of any examinations by any Taxing Authority
of the Tax Returns of the Company or any Subsidiary have been
fully paid. No issue has been raised by a Taxing Authority in
any prior examination of the Company or any Subsidiary that, by
application of the same or similar principles, could reasonably
be expected to result in a material proposed deficiency for any
subsequent taxable period.
(d) Neither the Company nor any of its Subsidiaries has
constituted either a distributing corporation or a
controlled corporation (within the meaning of
Section 355(a)(1)(A) of the Code) in a distribution of
stock qualifying for tax-free treatment under Section 355
of the Code since the effective date of Section 355(e) of
the Code.
(e) No audit or other administrative or court proceedings
are pending with any Governmental Authority with respect to
income, franchise or corporation Taxes or other material Taxes
of the Company or any of its Subsidiaries and no written notice
thereof has been received. No written (or, to the Knowledge of
the Company, other) claim has been made by a Taxing Authority in
any jurisdiction where the Company or any Subsidiary does not
file Tax Returns that it is or may be subject to taxation by
that jurisdiction. Neither the Company nor any Subsidiary is
(i) subject to any private letter ruling of the IRS or
comparable rulings of any Taxing Authority or (ii) has
entered into any agreement with a Taxing Authority the
provisions of which remain in force.
(f) The Company has made available to Parent correct and
complete copies of (i) all income, franchise and
corporation and all other material Tax Returns of the Company
and its Subsidiaries for the preceding three taxable years and
(ii) any material audit report issued within the last three
(3) years (or otherwise with respect to any audit or
proceeding in progress) relating to income, franchise or
corporation Taxes of the Company or any of its Subsidiaries.
(g) The Company will not be during the five (5)-year period
ending on the Closing Date, a United States real property
holding corporation within the meaning of Section 897
of the Code.
(h) None of the Company, any Subsidiary or any other Person
on their behalf has (i) agreed to or is required to make
any adjustments pursuant to Section 481(a) of the Code or
any similar provision of Law or has
A-16
any knowledge that any Taxing Authority has proposed any such
adjustment, or has any application pending with any Taxing
Authority requesting permission for any changes in accounting
methods that relate to the Company or any Subsidiary or
(ii) executed or entered into a closing agreement pursuant
to Section 7121 of the Code or any similar provision of Law
with respect to the Company or any Subsidiary.
(i) Neither the Company nor any Subsidiary is a party to
any Tax sharing, allocation, indemnity or similar agreement or
arrangement (whether or not written) pursuant to which it will
have any obligation to make any payments after the Closing.
Neither the Company nor any Subsidiary has ever been a member of
any consolidated, combined, affiliated or unitary Tax group
(other than a group the common parent of which is the Company).
(j) The Company and the Subsidiaries have disclosed on
their federal income Tax Returns all positions taken therein
that could give rise to substantial understatement of federal
income Tax within the meaning of Section 6662 of the Code.
None of the Company or any Subsidiary has participated in any
listed transaction or reportable
transaction within the meaning of Section 6707A of
the Code, Treasury Regulations
Section 1.6011-4
(and any predecessor provision) or any applicable comparable
provisions of state, local or
non-United
States law or regulations.
(k) No goodwill or going concern value of the Company or
any Subsidiary was held or used by any of the Company, any
Subsidiary or a related person (as defined in
Section 197(f)(9)(C) of the Code) prior to August 11,
1993.
(l) No Subsidiary has ever been a passive foreign
investment company within the meaning of Section 1297 of
the Code or a foreign investment company within the meaning of
Section 1246 of the Code.
(m) Neither the Company nor any of the Subsidiaries has, or
has ever had, a permanent establishment, branch or agency in any
country other than the country in which it is organized and
resident, or has engaged in a trade or business in any country
other than the country in which it is organized and resident
that subjected it to Tax in such country, and neither the
Company nor any Subsidiary is a permanent establishment, branch
or agency of any Fund.
(n) Each Company and Subsidiary is and has at all times
been tax resident only in its jurisdiction of organization or
incorporation.
(o) Neither the execution nor the performance of, nor any
action taken in pursuance of, this Agreement, nor the
satisfaction of any condition to which this Agreement is
subject, will result in any asset of the Company or any
Subsidiary being deemed to have been disposed of and reacquired
for Tax purposes or will otherwise give rise to a Tax liability
for the Company or any Subsidiary.
(p) No event, transaction, act or omission has occurred
which could result in the Company or any Subsidiary becoming
liable for Tax which is primarily or directly chargeable against
or attributable to a person other than the Company or Subsidiary
or which is charged by reference to the income or gains of or
any supplies, acquisitions or importations made by another
person.
(q) Each of the Company and its Subsidiaries (i) if
required by Law, is registered for the purposes of the VATA,
(ii) has made, given, obtained and kept
up-to-date,
full and accurate records, invoices and documents appropriate or
required for the purposes of the VATA, (iii) has complied
in all respects with all other applicable VAT legislation and in
particular has filed all returns and made all payments of VAT on
a timely basis, (iv) has not been required by a Taxing
Authority to give security under the VATA, and (v) is not a
member of a VAT group.
Section 3.16 Employee
Benefits and Labor Matters.
(a) Section 3.16(a) of the Company Disclosure Schedule
sets forth a correct and complete list of: (i) all material
employee benefit plans (as defined in
Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended (ERISA)) and
(ii) all other material benefit plans, programs, policies,
agreements or arrangements (whether contractually binding or
not) relating to or otherwise governing the holding of or
acquisition of any stock or any rights to or options over any
stock, any bonus or other incentive compensation,
A-17
equity or equity-based compensation, deferred compensation,
change in control, severance, termination of employment,
retirement benefits, pension benefits, lump sum benefits
(whether payable on leaving service, death, disablement or
otherwise), jubilee payments, retention, loans, salary
continuation, health, life insurance or educational assistance
plan, with respect to which either (1) the Company or any
of its Subsidiaries has any obligation or liability, contingent
or otherwise, to or in respect of current or former employees,
staff engaged on a non employment basis (including without
limitation any individuals who perform or who have in the past
performed services and are or were members of any limited
partnership, any individual consultants, or directors or other
officers of the Company or any of its Subsidiaries) (such
persons being collectively the Covered
Staff), or any persons dependent upon any Covered
Staff or (2) under which any Covered Staff or persons
dependent on any Covered Staff have rights, entitlements or
legitimate expectations which have arisen as a result of their
employment by or engagement with the Company or any of its
Subsidiaries or its predecessor entities (collectively, the
Company Plans). No Company Plan is or has
been subject to Title IV of ERISA, or is a
multiemployer plan, as defined in Section 3(37)
of and subject to ERISA (a Multiemployer
Plan), or is subject to Sections 4063 or 4064 of
ERISA. Neither the Company nor any ERISA Affiliate has ever
sponsored, maintained, contributed or been obligated to
contribute (on a contingent basis or otherwise) to any employee
benefit plan subject to Section 412 of the Code or
Section 302 or Title IV of ERISA.
(b) Correct and complete copies of the following documents
with respect to each of the Company Plans have been delivered or
made available to Parent by the Company to the extent
applicable: (i) any plans, rules, governing documentation,
trust documents, insurance contracts, investment agreements,
funding agreements or other funding arrangements, guarantees and
all amendments thereto; (ii) the most recent annual returns
submitted to any relevant regulator or Taxing Authority
including in respect of any relevant U.S. plans,
Forms 5500 and all schedules thereto; (iii) the most
recent actuarial report or other funding summary and any updates
thereto; (iv) where the Company Plan benefits from any
tax-favored status, the relevant confirmation from the Taxing
Authorities including for any relevant U.S. plans the most
recent IRS determination letter; (v) all booklets,
summaries and other material communications to any Covered Staff
regarding the Company Plans (excluding for the avoidance of
doubt any correspondence that relates solely to an individual
member of a Company Plan that provide benefits for more than one
member of Covered Staff), the most recent summary plan
descriptions, summaries of material modifications; and
(vi) written summaries of all non-written Company Plans.
(c) A correct and complete copy of each of the employment
agreements for each officer, director or member of the Senior
Management Advisory Group of the Company, as set forth on
Section 3.16(c) of the Company Disclosure Schedule, have
previously been delivered by the Company to Parent.
(d) Except as would not reasonably be expected to have a
Company Material Adverse Effect, the Company Plans and the
Employment Agreements have been established, operated,
administered and maintained, in all respects, in accordance with
their terms and with all applicable provisions of all applicable
Laws including where applicable ERISA and the Code.
(e) Except as would not reasonably be expected to have a
Company Material Adverse Effect, (i) the Company Plans
intended to qualify under Section 401 or other tax-favored
treatment under of Subchapter B of Chapter 1 of Subtitle A
of the Code are so qualified, and any trusts intended to be
exempt from federal income taxation under the Code are so
exempt, (ii) nothing has occurred with respect to the
operation of the Company Plans that is reasonably expected to
cause the loss of such qualification or exemption, or the
imposition of any liability, penalty or Tax under ERISA or the
Code, and (iii) the Company Plans intended to qualify for
any tax-favored treatment or other similar exemption under any
other non U.S. Tax regime comply with the relevant
requirements and nothing has occurred with respect to the
operation of any such Company Plan that could reasonably be
expected to cause the loss of such qualification or exemption,
or the imposition of any liability, penalty or Tax.
(f) Except as would not reasonably be expected to have a
Company Material Adverse Effect, there are no pending material
actions, audits or investigations by any Governmental Authority,
claims or lawsuits arising from or relating to the Company
Plans, (other than routine benefit claims), nor does the Company
have any Knowledge of facts that is reasonably likely to form
the basis for any such claim or lawsuit.
A-18
(g) None of the Company Plans provide for post-employment
life or health coverage for any participant or any beneficiary
of a participant, except as may be required by a relevant
statute and at the expense of the participant or the
participants beneficiary (excluding any governmental
subsidy).
(h) Except as set forth on Section 3.16(h) of the
Company Disclosure Schedule, neither the execution and delivery
of this Agreement nor the consummation of the Transactions
(alone or in combination with another event) or the Share
Exchange Transactions (either alone or in combination with
another event) will (i) result in any payment becoming due
to any member of Covered Staff; (ii) increase any benefits
otherwise payable under any Company Plan; (iii) result in
any member of Covered Staff being in a better position than he
or she would have been in otherwise; (iv) result in the
acceleration of the time of payment, funding or vesting of any
benefits under any Company Plan; or (v) require any
contributions or payments to fund any obligations under any
Company Plan. Except as set forth on Schedule 3.16(h) of
the Company Disclosure Schedule, the consummation of the
Transactions will not be a factor causing payments to be made by
the Company or any Subsidiary to be non-deductible (in whole or
in part) under Section 280G or Section 162(m) of the
Code, or would be subject to withholding under Section 4999
of the Code.
(i) Except as would not, individually or in the aggregate,
reasonably be expected to have a material negative impact on the
Company and its Subsidiaries, taken as a whole, neither the
Company nor any of its Subsidiaries has any current or
contingent liability for (i) the misclassification of any
individual who performs services for and who is not treated as
an employee of the Company or any of its Subsidiaries;
(ii) any outstanding payments due to or in respect of any
Covered Staff; or (iii) any claim arising out of any breach
of contract, any claim arising out of employment protection law
in any jurisdiction (whether in relation to discrimination or
otherwise) or termination of employment or engagement of any
member of Covered Staff.
(j) None of the Covered Staff of the Company or its
Subsidiaries is represented in his or her relationship with the
Company or any of its Subsidiaries by any trade union, works
council, staff association or other labor organization
(collectively a Labor Organization). Neither
the Company nor any of its Subsidiaries has recognized any Labor
Organization, nor has any Labor Organization been elected as the
collective bargaining agent of any employees, nor has the
Company or any of its Subsidiaries entered into any collective
bargaining agreement or union contract recognizing any Labor
Organization as the bargaining agent of any employees. There is
no union organization activity involving any of the employees of
the Company or any of its Subsidiaries pending or, to the
Knowledge of the Company, threatened, nor to the Knowledge of
the Company has there ever been union representation involving
any of the employees of the Company or any of its Subsidiaries.
There are no strikes, slowdowns, or work stoppages or lockouts
involving any of the employees of the Company or any of its
Subsidiaries pending or, to the Knowledge of the Company,
threatened, nor has there ever been union representation
involving any of the employees of the Company or any of its
Subsidiaries. There is no picketing involving any of the
employees of the Company or any of its Subsidiaries pending or,
to the Knowledge of the Company, threatened. Except as set forth
on Section 3.16(j) of the Company Disclosure Schedule, in
the last 12 months prior to the date of this Agreement
there have been no redundancy or severance programs involving
the termination of employment of 20 or more employees within a
30 day period and no transfer of staff to or from the
Company or any Subsidiary by operation of the Transfer of
Undertakings (Protection of Employment) Regulations 2006.
Section 3.17 Intellectual
Property.
(a) For purposes of this Agreement:
(i) Company Intellectual Property
means all Intellectual Property Rights used in or necessary for
the conduct of the business of the Company or any of its
Subsidiaries, or owned or held for use by the Company or any of
its Subsidiaries.
(ii) Company Technology means all
Technology used in or necessary for the conduct of the business
of the Company or any of its Subsidiaries, or owned or held for
use by the Company or any of its Subsidiaries.
(iii) Intellectual Property
Rights shall mean all of the rights arising from
or in respect of the following in any jurisdiction:
(A) patents, any reissues, reexaminations, divisionals,
continuations,
continuations-in-part
and extensions thereof (collectively,
Patents); (B) trademarks, service marks,
trade names (whether registered or unregistered), service names,
industrial designs, brand names, brand marks, trade dress
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rights, Internet domain names, identifying symbols, logos,
emblems, signs or insignia, and including all goodwill
associated with the foregoing (collectively,
Marks); (C) copyrights, whether
registered or unregistered (including copyrights in computer
software programs), mask work rights (collectively,
Copyrights); (D) rights in
databases whether arising under Directive
96/9/EC or
otherwise (collectively Database Rights);
(E) rights in designs not being Patents or Marks, whether
registered or unregistered (collectively,
Designs); (F) confidential and
proprietary information, or non-public processes, designs,
specifications, Technology, know-how, techniques, formulas,
inventions, concepts, trade secrets, discoveries, ideas and
technical data and information, (collectively, Trade
Secrets); and (G) all applications, registrations
and permits related to any of the foregoing clauses (A)
through (F).
(iv) Software means computer
programs, including any and all software implementations of
algorithms, models and methodologies whether in source code,
object code or other form, databases and compilations, including
any and all data and collections of data, descriptions,
flow-charts and other work product used to design, plan,
organize and develop any of the foregoing and all documentation,
including user manuals and training materials related to any of
the foregoing.
(v) Technology means,
collectively, all designs, formulas, algorithms, procedures,
techniques, ideas, know-how, Software, Internet websites and web
content, tools, inventions (whether patentable or unpatentable
and whether or not reduced to practice), invention disclosures,
developments, creations, improvements, works of authorship,
other similar materials and all recordings, graphs, drawings,
reports, analyses, other writings and any other embodiment of
the above, in any form or media, whether or not specifically
listed herein, and all related technology, documentation and
other materials used in, incorporated in, embodied in or
displayed by any of the foregoing, or used or useful in the
design, development, reproduction, maintenance or modification
of any of the foregoing.
(b) Section 3.17(b) of the Company Disclosure Schedule
sets forth an accurate and complete list of all material
Patents, pending Patent applications, registered Marks, pending
applications for registrations of any Marks, registered
Copyrights, pending applications for registration of any
Copyrights, and Internet domain names, in each case, owned or
filed by the Company or any of its Subsidiaries (the
Registered Intellectual Property) on the date
hereof. Section 3.17(b) of the Company Disclosure Schedule
lists the jurisdictions in which each such Registered
Intellectual Property right has been issued or registered or in
which any application for such issuance and registration has
been filed.
(c) The Company
and/or one
of its Subsidiaries is the sole and exclusive owner of, or has
valid and continuing rights to use and license all of the
Company Intellectual Property and Company Technology as used or
licensed in the operation of the business, in each case, except
as would not, individually or in the aggregate, reasonably be
expected to have a material negative impact on the Company and
its Subsidiaries, taken as a whole. Except as would not,
individually or in the aggregate, reasonably be expected to have
a material negative impact on the Company and its Subsidiaries,
taken as a whole, the use, practice or other exploitation of the
Company Intellectual Property
and/or the
Company Technology by the Company or any of its Subsidiaries,
and the operation of the Companys and its
Subsidiaries businesses do not infringe, constitute an
unauthorized use of, misappropriate or otherwise violate any
Intellectual Property Rights of any third Person. Except as set
forth in Section 3.17(c) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries is a
party to or the subject of any pending or, to the Knowledge of
the Company, threatened suit, action, investigation or
proceeding which involves a claim (i) against the Company
or any of its Subsidiaries, of infringement, unauthorized use,
misappropriation or violation of any Intellectual Property
Rights of any Person, or challenging the ownership, use,
validity or enforceability of any Company Intellectual Property
or (ii) contesting the right of the Company or any of its
Subsidiaries to use, sell, license, practice, exploit, transfer
or dispose of any Company Intellectual Property or Company
Technology, or any products or services covered thereby in any
manner nor has the Company nor any of its Subsidiaries received
written notice of any such threatened claim.
(d) To the Knowledge of the Company, no Person (including
employees and former employees of the Company or any of its
Subsidiaries) is infringing, violating, misappropriating or
otherwise misusing any Company Intellectual Property except as
would not, individually or in the aggregate, reasonably be
expected to have a material negative impact on the Company and
its Subsidiaries, taken as a whole, and neither the Company nor
any of
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its Subsidiaries has made any such claims against any Person
(including employees and former employees of the Company or any
of its Subsidiaries).
(e) Except as would not, individually or in the aggregate,
reasonably be expected to have a material negative impact on the
Company and its Subsidiaries, taken as a whole, the Company and
its Subsidiaries have taken reasonable measures to protect and
preserve the confidentiality of all Trade Secrets and any other
confidential information of the Company or its Subsidiaries. To
the Knowledge of the Company, no employee, consultant or
independent contractor of the Company or any of its Subsidiaries
is, as a result of or in the course of such employees,
consultants or independent contractors engagement by
the Company or its Subsidiaries, in default or breach of any
material term of any non-disclosure agreement or assignment of
invention agreement, except as would not, individually or in the
aggregate, reasonably be expected to have a material negative
impact on the Company and its Subsidiaries, taken as a whole.
(f) The Company and its Subsidiaries own, lease or license
all Software, hardware, databases, computer equipment and other
information technology (collectively, Computer
Systems) that are necessary and adequate in all
material respects for the operation of the Companys and
its Subsidiaries businesses, as currently conducted. The
Computer Systems have not failed to any material extent and the
data which they process has not been materially corrupted. The
Company and its Subsidiaries have taken reasonable steps in
accordance with industry standards to preserve the availability,
security and integrity of the Computer Systems and the data and
information stored on the Computer Systems.
Section 3.18 Title
to Property. The Company and its Subsidiaries
have good and valid title to, or valid leasehold or sublease
interests or other comparable contract rights in and to, all
properties and other assets which were reflected on the most
recent financial statements included in the Company SEC
Documents and which are, individually or in the aggregate,
material to the business or financial condition of the Company
and its Subsidiaries, taken as a whole on a consolidated basis
(except for properties sold or otherwise disposed of since the
date thereof in the ordinary course of business consistent with
past practice and not in violation of this Agreement),
Section 3.19 Insurance. The
Company and each of its Subsidiaries maintain insurance policies
that, to the Knowledge of the Company, are reasonable and
customary in the industry in which the Company and its
Subsidiaries operate. All material insurance policies maintained
by the Company and its Subsidiaries as of the date hereof (or
summaries thereof) have been provided or made available to
Parent or Merger Sub. Except as would not reasonably be expected
to have a Company Material Adverse Effect, (a) all such
policies are in full force and effect and (b) neither the
Company nor any of its Subsidiaries is in breach or default
under any policy.
Section 3.20 Funds.
(a) Section 3.20(a) of the Company Disclosure Schedule
sets forth a true, complete and correct list of each Fund
(specifying the legal name of the entity acting as manager),
together with its jurisdiction of organization and the
jurisdictions in which it is licensed or qualified or registered
to do business. Section 3.20(a) of the Company Disclosure
Schedule further sets forth, for each Fund, the Adjusted Assets
Under Management as of the most recent month-end.
(b) Except (x) as disclosed in Section 3.20(b) of
the Company Disclosure Schedule or (y) as would not
reasonably be expected to have a Company Material Adverse Effect:
(i) Each of the Company and its Subsidiaries, as
applicable, complies, and has complied with all Advisory
Agreements relating to the Funds (collectively,
IMA) and all Fund documentation to
which it is or has been a party or which relates or has related
to it and has no outstanding liability in respect of any failure
to comply with any such IMA or Fund documentation.
(ii) Each Fund that is operated, managed, marketed or
distributed by the Company or any of its Subsidiaries is and has
been operated, managed, marketed or distributed in all material
respects in accordance with the terms of appointment of the
Company or a Subsidiary, the relevant Fund documentation and
with all applicable Laws, including (without limitation) the
Laws of the jurisdiction in which the Fund is marketed and all
applicable anti-money laundering Laws.
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(iii) Each Fund has marketing literature that was when
issued and (if still current) remains correct and not misleading
and compliant with all applicable Laws.
(iv) Each Fund has, at all relevant times during which the
Company or its Subsidiaries have managed the Fund, been duly
established in the jurisdiction in which it purports to be
established and all necessary notifications to, and
registrations with, local regulatory and other bodies have been
made to permit such activities as are carried out by or in
relation to such Fund and all necessary licenses and approvals
have been obtained in relation to it.
(v) Each Fund is, and has been at all relevant times during
which the Company or its Subsidiaries have managed the Fund,
duly authorized under the applicable Law in the country in which
it is established and, to the Companys knowledge, there is
no investigation, inquiry, proceeding or other circumstance
(including, without limitation, the entering into or
consummation of this Agreement) which is likely to result in the
suspension, cancellation, refusal, modification or revocation of
any such authorization.
(vi) The ownership interests in each Fund have been duly
and validly issued and are fully paid and nonassessable and the
ownership interests in each Fund were issued and sold pursuant
to applicable exemptions from any registration under,
and/or in
compliance with, any securities Laws.
(vii) Since their inception, each of the Funds operated or
managed by the Company or any of its Subsidiaries has been
operated and managed and is currently being operated and managed
in compliance in all material respects with all applicable Laws
and its respective investment objectives, guidelines, policies,
constituent documents and any applicable restrictions. Except as
set forth in Section 3.20(b) of the Disclosure Schedule,
none of the Funds is registered as, or is required to be
registered as, an investment company under the Investment
Company Act.
(viii) True, correct and complete copies of all offering
documents, forms of subscription agreements, administrative
services agreements, distribution, solicitation or placement
agency agreements, solicitation agreements and custody
agreements, as applicable, or any similar written agreements,
including all Side Letters, in any case pertaining to the Funds
have been made available to Parent.
(c) Each Fund is duly organized, validly existing and in
good standing under the Laws of the jurisdiction of its
organization and has the requisite corporate, limited company,
trust or partnership power and authority to own its properties
and to carry on its business as it is now conducted, and is
qualified to do business in each jurisdiction where it is
required to do so under applicable Law, except where the failure
to have such power, authority or qualification is not reasonably
expected to have a Company Material Adverse Effect
(d) Except as set forth on Section 3.20(d) of the
Company Disclosure Schedule, as of the date hereof, none of the
Funds have suspended investor redemptions or imposed any
gates or currently contemplate taking any such
actions.
(e) Except as set forth in Section 3.20(e) of the
Company Disclosure Schedule, none of the assets of any of the
Funds are held in a side pocket within the Fund or have been
transferred to a separate Fund which has been established for
the sole purpose of holding such assets.
(f) Except as set forth in Section 3.20(f) of the
Company Disclosure Schedule, none of the IMA for the Funds are
subject to key person provisions.
(g) Except as set forth in Section 3.20(g) of the
Company Disclosure Schedule, the consummation of the
Transactions or the Share Exchange Transactions are not a basis
for termination of any Advisory Agreements to which the Company,
its Subsidiaries or the Funds are party and relate to assets
under management in excess of $50 million.
(h) Section 3.20(h) of the Company Disclosure Schedule
sets forth each side letter or similar arrangement that has been
entered into by the Company, any Subsidiary or any Fund with any
Client in respect of such Clients investment in any Fund
which provide such Client with preferential redemption or
withdrawal rights.
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(i) Since April 1, 2010 and through the date of this
Agreement, the net redemptions and withdrawals of funds by
Clients (or notices from Clients indicating a clear and
unequivocal intention to redeem or withdraw funds (whether
present or future)) are not material to the Company and its
Subsidiaries, taken as a whole.
Section 3.21 Environmental
Matters. Except for those matters that,
individually or in the aggregate do not have and would not
reasonably be expected to have a Company Material Adverse
Effect, (A) neither the Company nor any of its Subsidiaries
has received any written notice of or entered into or assumed by
Contract or operation of Law or otherwise, any obligation,
liability, order, settlement, judgment, injunction or decree
relating to or arising under Environmental Laws, and (B) to
the Knowledge of the Company, no conditions exist with respect
to any property currently or formerly owned, operated or leased
by the Company or any of its Subsidiaries or any property to or
at which the Company or any of its Subsidiaries transported or
arranged for the disposal or treatment of Hazardous Materials
that could reasonably be expected to result in the Company and
its Subsidiaries incurring Environmental Liabilities.
Section 3.22 No
Other Company Representations or
Warranties. Except for the representations
and warranties made by the Company in this Article III,
none of the Company or any of its Subsidiaries, or any of their
respective stockholders, directors, officers, members, managers,
employees, Affiliates, advisors, agents or representatives or
any other Person has made or is making any express or implied
representation or warranty with respect to the Company or any of
its Subsidiaries or their respective businesses, operations,
assets, liabilities or condition (financial or otherwise) and
any such other representations or warranties are hereby
disclaimed. In particular, without limiting the foregoing
disclaimer, none of the Company or any of its Subsidiaries, or
any of their respective stockholders, directors, officers,
members, managers, employees, Affiliates, advisors, agents or
representatives or any other Person makes or has made any
representation or warranty to Parent, Merger Sub, or any of
their Affiliates or Representatives or shall have or be
subjected to any liability with respect to (i) any
financial projection, forecast, estimate, budget or prospect
information relating to the Company, any of its Subsidiaries or
their respective businesses or operations, or (ii) any oral
or written information presented to Parent, Merger Sub, or any
of their Affiliates or Representatives in the course of their
due diligence investigation of the Company, the negotiation of
this Agreement or in the course of the transactions contemplated
hereby.
ARTICLE IV
REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB
Except as disclosed in the definitive disclosure schedule letter
delivered by Parent and Merger Sub to the Company prior to the
execution of this Agreement (the Parent Disclosure
Schedule), Parent and Merger Sub hereby represent and
warrant to the Company as follows:
Section 4.1 Organization. Parent
is a public limited company duly organized, validly existing and
in good standing under the Laws of England and Wales. Merger Sub
is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware. Each of Parent
and Merger Sub is duly licensed or qualified to do business and
is in good standing (with respect to jurisdictions that have the
concept of good standing) in each jurisdiction where the
ownership, leasing or operation of its properties or other
assets or the nature its business requires licensing or
qualification, except for failures to be so licensed, qualified
or in good standing that, individually and in the aggregate, has
not had and could not reasonably be expected to prevent or
materially impair the ability of Parent and Merger Sub to
consummate the Transactions (a Parent Material Adverse
Effect).
Section 4.2 Ownership
and Operations of Merger Sub. Parent owns of
record all of the outstanding capital stock of Merger Sub.
Merger Sub was formed solely for the purpose of engaging in the
Transactions and the Share Exchange Transactions, has engaged in
no other business activities and has conducted its operations
only as contemplated by this Agreement and the Share Exchange
Agreement.
Section 4.3 Authority.
(a) Parent and Merger Sub have all necessary corporate
power and authority to execute and deliver this Agreement and,
subject to obtaining Parent Shareholder Approval, to perform
their respective obligations hereunder and to consummate the
Transactions. The execution, delivery and performance by Parent
and
A-23
Merger Sub of this Agreement, and the consummation by Parent and
Merger Sub of the Transactions, have been duly authorized and
approved by their respective Board of Directors and by Parent as
the sole stockholder of Merger Sub, and except for obtaining the
Parent Shareholder Approval and obtaining the approval of the
Board of Directors of Parent to the publication of the
Shareholder Circular and the Prospectus (provided that obtaining
such approval shall not be a condition precedent to
Parents and Merger Subs obligations to effect the
Merger), no other corporate action on the part of Parent or
Merger Sub is necessary to authorize the execution, delivery and
performance by Parent or Merger Sub of this Agreement and the
consummation by Parent and Merger Sub of the Transactions. This
Agreement has been duly executed and delivered by Parent and
Merger Sub and, assuming due authorization, execution and
delivery hereof by the Company, constitutes a legal, valid and
binding obligation of Parent and Merger Sub, enforceable against
Parent and Merger Sub in accordance with its terms, subject to
the Bankruptcy and Equity Exception.
(b) The affirmative vote (in person or by proxy) of the
holders of a majority of the outstanding Parent Ordinary Shares
present and voting at the Parent Shareholders Meeting (or any
adjournment or postponement thereof) in favor of approving the
Transactions and the Share Exchange Transactions (the
Parent Shareholder Approval) is the
only vote or approval of the holders of any class or series of
shares of Parent which is necessary to approve the Transactions
and the Share Exchange Transactions. Parent confirms that the
Parent Shareholder Approval is required in accordance with
Chapter 10 of the Listing Rules by reference to the
relevant facts and circumstances at the date of this Agreement.
Section 4.4 Non-contravention. None
of the execution and delivery of this Agreement by Parent and
Merger Sub, the consummation by Parent and Merger Sub of the
Transactions, compliance by Parent and Merger Sub with any of
the terms or provisions hereof or the consummation of the Share
Exchange Transactions, will (a) violate or conflict with
any provision of the Organizational Documents of Parent or
Merger Sub or (b) assuming that the authorizations,
consents and approvals referred to in Section 4.5 and the
Parent Shareholder Approval are obtained and the filings
referred to in Section 4.5 are made, (i) violate any
Law, injunction, order, judgment, ruling or decree of any
Governmental Authority applicable to Parent or Merger Sub or
(ii) violate, conflict with, constitute a default (or an
event which, with notice or lapse of time, or both, would
constitute a default), or give rise to a right of termination or
cancellation, an acceleration of performance required, a loss of
benefits, or the creation of any Lien upon any of the respective
properties or assets of Parent or Merger Sub, under, any of the
terms, conditions or provisions of any Contract or Permit to
which Parent or Merger Sub is a party, except, in the case of
clause (ii), for such violations, conflicts, defaults,
terminations, cancellations, accelerations, losses and Liens as,
individually and in the aggregate, would not reasonably be
expected to have a Parent Material Adverse Effect or prevent or
materially delay the consummation of the Transactions or the
Share Exchange Transactions.
Section 4.5 Governmental
Approvals. Except for (a) the filing
with, and approval of, the UKLA of (i) a circular relating
to the Parent Shareholders Meeting (as such shareholder circular
may be amended or supplemented from time to time, the
Shareholder Circular) and (ii) a
prospectus in respect of Parent Ordinary Shares to be issued in
connection with the Share Exchange Transactions (as such
prospectus may be amended or supplemented from time to time, the
Prospectus) and other filings required under,
and in compliance with other applicable requirements of, the
Exchange Act, FSMA and the Listing Rules of the UKLA made under
Part VI of FSMA (the Listing Rules) or
the Admission and Disclosure Standards of the London Stock
Exchange, (b) the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware pursuant to the
DGCL, (c) filings required under, and compliance with other
applicable requirements of, the HSR Act and (d) filings
with Governmental Authorities required under, and compliance
with other applicable requirements of, the Laws listed on
Section 4.5 of the Parent Disclosure Schedule, no consents
or approvals of, or filings, declarations or registrations with,
any Governmental Authority are necessary for the execution and
delivery of this Agreement by Parent or Merger Sub, the
consummation by Parent and Merger Sub of the Transactions or the
consummation of the Share Exchange Transactions, except for such
other consents, approvals, filings, declarations or
registrations that, if not obtained, made or given, would not
reasonably be expected to have a Parent Material Adverse Effect
or prevent or materially delay the consummation of the
Transactions or the Share Exchange Transactions.
A-24
Section 4.6 Information
Supplied.
(a) None of the information supplied or to be supplied by
or on behalf of Parent or Merger Sub specifically for inclusion
or incorporation by reference (i) in the Proxy Statement
and contained in the Proxy Statement, at the date it (and any
amendment or supplement thereto) is first mailed to the
stockholders of the Company or at the time of the Company
Stockholders Meeting, or (ii) in any proxy solicitation
materials of the Company and contained in any such proxy
solicitation materials, as of the date of its first use, will
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they are made, not misleading;
provided, that no representation or warranty is made by
Parent or Merger Sub with respect to information supplied by or
on behalf of any Controlling Holder (in their capacity as a
stockholder) or the Company for inclusion or incorporation by
reference in any of the foregoing.
(b) None of the information supplied or to be supplied by
or on behalf of Parent or Merger Sub specifically for inclusion
or incorporation by reference in the Shareholder Circular or
Prospectus and contained in the Shareholder Circular or
Prospectus will, (a) in the case of the Shareholder
Circular, at the date it (and any amendment or supplement
thereto) is first mailed to shareholders of Parent or at the
time of the Parent Shareholders Meeting and (b) in the case
of the Prospectus, at the date it (and any amendment or
supplement thereto) is published, contain any untrue statement
of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under
which they are made, not misleading; provided, that no
representation is made by Parent or Merger Sub with respect to
information supplied by or on behalf of any Controlling Holder
(in their capacity as a stockholder) or the Company for
inclusion or incorporation by reference in any of the foregoing.
Section 4.7 Brokers. Except
for the fees and expenses of brokers that will be paid by
Parent, no broker, investment banker, financial advisor or other
Person is entitled to any brokers, finders,
financial advisors or other similar fee or commission, or
the reimbursement of expenses, in connection with the
Transactions or the Share Exchange Transactions based upon
arrangements made by or on behalf of Parent or any of its
Subsidiaries in connection with Parents and Merger
Subs entering in to this Agreement.
Section 4.8 Sufficient
Funds. Parent and Merger Sub, at the
Effective Time, will have sufficient funds to pay the aggregate
Merger Consideration and to pay all fees and expenses payable by
them in connection with the Transactions and the Share Exchange
Transactions.
Section 4.9 Share
Ownership. Neither Parent nor Merger Sub has
been, at any time during the three years preceding the date
hereof, an interested stockholder of the Company, as
defined in Section 203 of the DGCL. Each of Parent and
Merger Sub does not own (directly or indirectly, beneficially or
of record) and is not a party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of, in each case, any shares of capital stock of the
Company (other than as contemplated by this Agreement, the Share
Exchange Agreement or the Voting Agreement).
Section 4.10 Legal
Proceedings. There is no pending or, to the
knowledge of Parent, threatened, Legal Proceeding imposed upon,
Parent or any of its Subsidiaries, or any of their respective
properties or assets, or any of the officers, directors or
employees of Parent or its Subsidiaries, or to which Parent or
one of its Subsidiaries is otherwise a party, in each case that
could reasonably be expected to have a Parent Material Adverse
Effect or prevent or materially delay the consummation of the
Transactions or the Share Exchange Transactions.
Section 4.11 Agreements
and Understandings. Parent has disclosed to
the Company and the Special Committee all contracts,
arrangements or understandings (and, with respect to those that
are written, Parent has furnished to the Company correct and
complete copies thereof) between or among Parent, Merger Sub, or
any other Subsidiary or affiliate of Parent, on the one hand,
and (a) any Controlling Holder, (b) any other member
of the Board of Directors or management of the Company or
(c) any person that owns 5% or more of the shares of the
outstanding capital stock of the Company (based on information
filed with the SEC), on the other hand, in each case that relate
in any way to the Company, the Surviving Corporation, the
Transactions or the Share Exchange Transactions.
Section 4.12 No
Other Parent Representations or
Warranties. Except for the representations
and warranties made by Parent in this Article IV, none of
Parent or any of its Subsidiaries, or any of their respective
stockholders, directors, officers, members, managers, employees,
Affiliates, advisors, agents or
A-25
representatives or any other Person has made or is making any
express or implied representation or warranty with respect to
Parent or any of its Subsidiaries or their respective
businesses, operations, assets, liabilities or condition
(financial or otherwise) and any such other representations or
warranties are hereby disclaimed. In particular, without
limiting the foregoing disclaimer, none of Parent or any of its
Subsidiaries, or any of their respective stockholders,
directors, officers, members, managers, employees, Affiliates,
advisors, agents or representatives or any other Person makes or
has made any representation or warranty to the Company, any of
its Subsidiaries, or any of their Affiliates or Representatives
or shall have or be subjected to any liability with respect to
(i) any financial projection, forecast, estimate, budget or
prospect information relating to Parent, any of its Subsidiaries
or their respective businesses or operations, or (ii) any
oral or written information presented to the Company, any of its
Subsidiaries or any of their Affiliates or Representatives in
the course of their due diligence investigation of Parent, the
negotiation of this Agreement or in the course of the
transactions contemplated hereby.
ARTICLE V
ADDITIONAL
COVENANTS AND AGREEMENTS
Section 5.1 Company
Stockholders Meeting; Preparation of the Proxy Statement.
(a) The Company shall establish a record date for, duly
call, give notice of, convene and hold a special meeting of
stockholders of the Company (including any adjournment or
postponement thereof, the Company Stockholders
Meeting) as promptly as practicable after the date of
this Agreement for the purpose of obtaining the Company
Stockholder Approval. Notwithstanding anything to the contrary
contained in this Agreement, the Company, after consultation
with Parent, may adjourn or postpone the Company Stockholders
Meeting to the extent necessary to ensure that any required
supplement or amendment to the Proxy Statement is provided to
the Companys stockholders. The Companys obligations
pursuant to this Section 5.1(a) shall not be diminished or
otherwise affected by (i) the receipt, disclosure or
commencement of any Takeover Proposal (whether or not a Superior
Proposal) or (ii) any proposed or actual change,
qualification, withdrawal or modification of the Company Board
Recommendation.
(b) The Company shall, through the Board of Directors of
the Company or any authorized committee thereof, but subject to
the right to make a Company Adverse Recommendation Change in
accordance with Section 5.3, (i) recommend to the
stockholders of the Company that such stockholders adopt this
Agreement and give the Company Stockholder Approval (the
Company Board Recommendation) and
(ii) include the Company Board Recommendation in the Proxy
Statement. The Company shall use reasonable best efforts to
obtain the Company Stockholder Approval. The Company shall
provide Parent with such information with respect to the
solicitation of the Company Stockholder Approval as Parent may
reasonably request.
(c) As promptly as practicable following the date of this
Agreement, the Company shall (using its reasonable best efforts)
prepare, and file with the SEC, a preliminary Proxy Statement,
which shall comply as to form in all material respects with
applicable requirements of the Exchange Act. The Company shall
use its reasonable best efforts to respond to any comments of
the SEC or its staff and cause the Proxy Statement to be mailed
to the stockholders of the Company as promptly as practicable
after the Proxy Statement has been cleared by the SEC for
mailing to the stockholders of the Company. The Company shall
notify Parent promptly of the receipt of any comments from the
SEC or its staff and of any request by the SEC or its staff for
amendments or supplements to the Proxy Statement or for
additional information and will supply Parent with copies of all
correspondence between the Company or any of the Companys
Representatives (as defined in Section 5.3), on the one
hand, and the SEC or its staff, on the other hand, with respect
to the Proxy Statement or the Transactions (and, to the extent
practicable, the Company and its counsel shall permit Parent and
its counsel to participate in all communications with the SEC
and its staff (including all meetings and telephone conferences)
with respect to the Proxy Statement or the Transactions). If at
any time prior to the Company Stockholders Meeting any event
shall occur, or fact or information shall be discovered, that
should be set forth in an amendment or supplement to the Proxy
Statement so that such document would not include any
misstatement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading, the
party that discovers such information shall promptly notify the
other parties hereto and the Company shall prepare and file with
the SEC such amendment or supplement as promptly as practicable
and, to the
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extent required by Law, cause such amendment or supplement to be
disseminated to the stockholders of the Company. Parent shall
cooperate with the Company in the preparation of the Proxy
Statement or any amendment or supplement thereto. Without
limiting the generality of the foregoing, each of Parent and
Merger Sub will furnish to the Company all information relating
to it required by the Exchange Act to be set forth in the Proxy
Statement. Notwithstanding anything to the contrary stated
above, prior to filing or mailing the Proxy Statement (or any
amendment or supplement thereto) or responding to any comments
of the SEC or its staff with respect thereto, the Company shall
provide Parent and its counsel with a reasonable opportunity to
review and comment on such document or response and shall
consider in good faith all comments reasonably proposed by
Parent and its counsel.
Section 5.2 Parent
Shareholders Meeting; Preparation of the Shareholder Circular
and Prospectus
(a) Parent shall establish a record date for, duly call,
given notice of, convene and hold a general meeting of
shareholders of Parent (including any adjournment or
postponement thereof, the Parent Shareholders
Meeting) as soon as practicable after the date of this
Agreement for the purpose of obtaining the Parent Shareholder
Approval.
(b) Provided that to do so is not inconsistent with the
fiduciary duties of the Board of Directors of Parent to Parent
under applicable Law (as reasonably determined by such Board of
Directors in good faith after consultation with outside legal
counsel), Parent shall, through the Board of Directors of
Parent, include a recommendation in the Shareholder Circular
that shareholders of Parent vote so as to provide the Parent
Shareholder Approval (the Parent
Recommendation). Provided that to do so is not
inconsistent with the fiduciary duties of the Board of Directors
of Parent to Parent under applicable Law (as reasonably
determined by such Board of Directors in good faith after
consultation with outside legal counsel), Parent shall use
reasonable best efforts to obtain the Parent Shareholder
Approval as promptly as practicable after the date hereof and
shall not adjourn or postpone the Parent Shareholders Meeting in
order to frustrate or delay obtaining such Parent Shareholder
Approval. Parent shall provide the Company with such information
with respect to the solicitation of the Parent Shareholder
Approval as the Company may reasonably request.
(c) As soon as practicable following the date of this
Agreement, Parent shall (using its reasonable best efforts)
prepare, and file with the UKLA, drafts of the Shareholder
Circular and the Prospectus, which shall comply as to form in
all material respects with applicable requirements of the
Listing Rules and FSMA. Parent shall use its reasonable best
efforts to respond to any comments of the UKLA or its staff on
the Shareholder Circular and the Prospectus. Parent shall cause
(a) the Shareholder Circular to be mailed to the
shareholders of Parent; and (b) the Prospectus to be
published, in each case as soon as practicable after the
Shareholder Circular and the Prospectus have both been approved
by the UKLA. Parent shall notify the Company promptly of the
receipt of any comments from the UKLA or its staff for
amendments or supplements to the Shareholder Circular and
Prospectus and will supply the Company with copies of all
correspondence between Parent or any of Parents
Representatives, on the one hand, and the UKLA or its staff, on
the other hand, with respect to the Shareholder Circular and the
Prospectus (and, to the extent practicable, Parent and its
counsel shall permit the Company and its counsel to participate
in all communications with the UKLA and its staff (including all
meetings and telephone conferences) with respect to the
Shareholder Circular and the Prospectus).
(d) If at any time prior to the Parent Shareholders Meeting
any event shall occur, or fact or information shall be
discovered, that should be set forth in an amendment or
supplement to the Shareholder Circular, the party that discovers
such information shall promptly notify the other parties hereto
and Parent shall prepare and file with the UKLA such amendment
or supplement as promptly as practicable and, to the extent
required by Law, cause such amendment or supplement to be
disseminated to the shareholders of Parent.
(e) If at any time prior to the commencement of the trading
of the Parent Ordinary Shares on the London Stock Exchange in
connection with the Share Exchange Transactions, there arises or
is noted a significant new factor, material mistake or
inaccuracy relating to the information included in the
Prospectus, that should be set forth in a supplement to the
Prospectus, the party that discovers such information shall
promptly notify the other parties hereto and Parent shall
prepare and file with the UKLA such supplement as promptly as
practicable and shall cause such supplement to be published once
it has been approved by the UKLA.
(f) The Company shall, and shall cause its Subsidiaries and
Representatives to, cooperate with Parent (i) in the
preparation of the Shareholder Circular and Prospectus or any
amendment or supplement thereto and (ii) in
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connection with maintaining or obtaining working capital
financing for the Surviving Corporation. Without limiting the
generality of the foregoing, the Company will furnish to Parent
all information relating to it required by the Listing Rules and
FSMA to be set forth in the Shareholder Circular and the
Prospectus and all other information reasonably requested by the
working capital financing sources. Notwithstanding anything to
the contrary stated above, prior to filing, mailing or
publishing the Shareholder Circular and the Prospectus (or any
amendment or supplement thereto) or responding to any comments
of the UKLA or its staff with respect thereto, Parent shall
provide the Company and its counsel with a reasonable
opportunity to review and comment on such document or response
and shall consider in good faith all comments reasonably
proposed by the Company and its counsel.
Section 5.3 Takeover
Proposals; Board Recommendation; Etc.
(a) Except as otherwise permitted by this Section 5.3,
the Company shall not, and shall cause its Subsidiaries not to,
and shall not authorize or permit its and its Subsidiaries
respective officers, directors, employees, financial advisors
and investment bankers, agents and representatives
(collectively, Representatives) to,
directly or indirectly, (A) solicit (or facilitate or
encourage, including by way of furnishing non-public
information) the making of, or any inquiries regarding, or the
making of any proposal or offer that is reasonably likely to
lead to, a Takeover Proposal or (B) engage in, continue or
otherwise participate in any discussions or negotiations with
any third party regarding a Takeover Proposal; provided,
however, that if the Company or any of its Subsidiaries
or Representatives receives following the date of this Agreement
and prior to receipt of the Company Stockholder Approval, a
written Takeover Proposal which was unsolicited and not
involving a breach of this Agreement or any
standstill agreement and that the Board of Directors
of the Company (or any authorized committee thereof) reasonably
determines in good faith, after consultation with outside legal
counsel and an outside financial advisor, constitutes or is
reasonably likely to lead to a Superior Proposal, and such Board
reasonably determines in good faith, after consultation with
outside legal counsel, that the failure to take such action
would be inconsistent with the Company directors fiduciary
duties to the stockholders of the Company under applicable Law,
then the Company and its Representatives may, prior to receipt
of the Company Stockholder Approval and after providing Parent
prior written notice of its intention to take such action, and
subject to compliance with the Companys obligations under
this Section 5.3, (1) furnish, pursuant to an
Acceptable Confidentiality Agreement (as defined below), any
information with respect to the Company and its Subsidiaries to
the Person (or group of Persons) making such Takeover Proposal
(provided, that the Company shall concurrently provide to
Parent all non-public information concerning the Company or its
Subsidiaries that is provided to any Person given such access
which was not previously provided to Parent or its
Representatives) and (2) engage and participate in
discussions and negotiations with such Person (or group of
Persons) regarding such Takeover Proposal. Nothing contained in
this Section 5.3 shall restrict the ability of the Company
and its Representatives to request and obtain clarification of
the terms of any Takeover Proposal. The Company shall provide
Parent with a correct and complete copy of each confidentiality
agreement entered into pursuant to this Section 5.3 within
48 hours of the execution thereof. The Company shall not
enter into any confidentiality agreement with any Person which
prohibits the Company from complying with its obligations to
Parent under this Section 5.3. Without limiting any of the
foregoing, it is understood that any violation of this
Section 5.3 by the Companys Subsidiaries or
Representatives under the Companys control shall be deemed
to be a breach of this Section 5.3 by the Company.
(b) Except as permitted by this Section 5.3(b),
neither the Board of Directors of the Company nor any committee
thereof shall (i)(A) withdraw, qualify or change, or publicly
propose to withdraw, qualify or change, in a manner adverse to
Parent, the Company Board Recommendation or (B) approve or
recommend a Takeover Proposal or an indication of interest (any
action described in this clause (i) being referred to as a
Company Adverse Recommendation Change) or
(ii) authorize or permit the Company or any of its
Subsidiaries to enter into any merger, acquisition, share
exchange or other agreement with respect to any Takeover
Proposal (other than an Acceptable Confidentiality Agreement in
accordance with this Section 5.3) (each, a
Company Acquisition Agreement) or
(iii)(A) authorize or take any action to make the provisions of
Section 203 of the DGCL (or any other business
combination, control share acquisition,
fair price or other similar anti-takeover Law),
inapplicable to any transaction contemplated by a Takeover
Proposal, or (B) release any Person from, or waive,
terminate or fail to enforce, any standstill or
similar obligation of any Person (other than Parent) with
respect to the Company or any of its Subsidiaries.
Notwithstanding the foregoing, prior to receipt of the Company
Stockholder Approval, if the Board of Directors of the Company
or an authorized committee thereof receives a
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Takeover Proposal that the Board of Directors of the Company or
an authorized committee thereof reasonably determines in good
faith, after consultation with outside legal counsel and an
outside financial advisor, constitutes a Superior Proposal, the
Company may make a Company Adverse Recommendation Change with
respect to such Superior Proposal
and/or the
Company or its Subsidiaries may enter into one or more Company
Acquisition Agreements with respect to such Superior Proposal
if, in the case of a Company Acquisition Agreement, the Company
shall have, concurrently with such entry into such Company
Acquisition Agreement, terminated this Agreement pursuant to
Section 7.1(d)(ii) and paid to Parent the Company
Termination Fee due under Section 7.3(b); provided,
however, that no Company Adverse Recommendation Change
and/or entry
into any Company Acquisition Agreement and termination of this
Agreement by the Company pursuant to Section 7.1(d)(ii),
shall be made until after the third (3rd) Business Day following
Parents receipt of written notice (unless at the time such
notice is otherwise required to be given there are less than
three (3) Business Days until the Company Stockholders
Meeting, in which case the Company shall provide as much notice
as is reasonably practicable) from the Company (a 5.3
Notice) advising Parent that the Board of Directors of
the Company intends to make such Company Adverse Recommendation
Change
and/or enter
into such Company Acquisition Agreement and terminate this
Agreement pursuant to Section 7.1(d)(ii) and specifying the
terms and conditions of (and the identity of the Person or group
of Persons making) the Superior Proposal and including copies of
all materials described in Section 5.3 (d)(ii) (it being
understood and agreed that any amendment to the financial terms
or other material terms or conditions of such Superior Proposal
shall require a new 5.3 Notice and a new three (3) Business
Day period (unless at the time such notice is otherwise required
to be given there are less than three (3) Business Days
until the Company Stockholders Meeting, in which case the
Company shall provide as much notice as is reasonably
practicable)); and during such period, if requested by Parent,
the Company shall engage in good faith negotiations with Parent
to amend this Agreement in a manner such that the failure by the
Board of Directors of the Company to make a Company Adverse
Recommendation Change or to so terminate this Agreement (taking
into account the share exchange agreement and any similar
arrangements or agreements contemplated by the relevant Takeover
Proposal) would not be inconsistent with its fiduciary duties
under applicable Law; and in determining whether to make any
such Company Adverse Recommendation Change or termination (and
whether the relevant Takeover Proposal still constitutes a
Superior Proposal), the Board of Directors of the Company shall
take into account any changes to the terms of this Agreement and
the Share Exchange Agreement proposed by Parent. Any Company
Adverse Recommendation Change shall be deemed not to change the
approval of the Board of Directors of the Company for the
purposes of causing Section 203 of the DGCL or any other
state takeover statute or similar state Law to be inapplicable
to the Transactions and the Share Exchange Transactions.
(c) The Board of Directors of the Company may take and
disclose to the stockholders of the Company a position
contemplated by
Rule 14e-2(a),
Rule 14d-9
or Item 1012(a) of
Regulation M-A
promulgated under the Exchange Act if such Board determines in
good faith, after consultation with outside legal counsel, that
failure to so disclose such position would constitute a
violation of applicable Law.
(d) In addition to the other obligations of the Company set
forth in this Section 5.3:
(i) within 24 hours of the execution of this
Agreement, the Company shall, and shall cause its Subsidiaries
and Representatives to, cease immediately and cause to be
terminated any and all existing discussion or negotiation of, or
cooperation with, or assistance or participation in, or
facilitation of, any such inquiries, proposal, discussions or
negotiations with any third party or its representatives or
financing sources conducted prior to the date of this Agreement
with respect to any Takeover Proposal, and the Company shall
promptly require that each Person (other than Parent) that has
executed a confidentiality agreement within the twelve
(12)-month period prior to the date of this Agreement in
connection with consideration of any potential Takeover Proposal
to return to the Company or destroy all confidential information
heretofore furnished to such Person by or on behalf of the
Company or any of its Subsidiaries and all analyses and other
materials prepared by or on behalf of such Person that contains,
reflects or analyzes that information; and
(ii) the Company shall promptly advise Parent in writing,
and in no event later than 24 hours after receipt, if any
proposal, offer or inquiry is received by, any information is
requested from, or any discussions or negotiations are sought to
be initiated or continued with, the Company or its Subsidiaries
or Representatives in respect of a Takeover Proposal, and shall,
in such notice to Parent, indicate the identity of the Person or
group of Persons making such proposal, offer, inquiry or request
and the terms and conditions of such proposal or
A-29
offer and the nature of such inquiry or request (and shall
include with such notice copies of any draft agreements,
financing commitment letters and other written materials and
correspondence received from or on behalf of such Person or
group of Persons relating to such proposal, offer, inquiry or
request), and thereafter shall promptly keep Parent informed of
all material developments affecting the status and terms and
conditions of such proposal, offer, inquiry or request (and the
Company shall provide Parent with copies of any additional
drafts of agreements, financing commitment letters and other
written materials and correspondence received that relate
thereto) and the status of discussions or negotiations.
(e) As used in this Agreement:
(i) Acceptable Confidentiality
Agreement shall mean any confidentiality agreement
entered into after the date of this Agreement that contains
provisions that are no less favorable in the aggregate to the
Company (and no less restrictive in any material respect with
respect to the conduct of the Person to whom information is
disclosed, including with respect to standstill
provisions) than those contained in the Confidentiality
Agreement.
(ii) Superior Proposal shall mean
any bona fide written offer made by a third-party to the
Company entered into after the date of this Agreement not
involving a breach of this Agreement or any
standstill agreement, to acquire, directly or
indirectly, more than 50% of the equity securities of the
Company or all or substantially all of the assets of the Company
and its Subsidiaries on a consolidated basis, which offer is on
terms and conditions which the Board of Directors of the Company
or any authorized committee thereof reasonably determines in
good faith, after consultation with outside legal counsel and an
outside financial advisor, to be more favorable from a financial
point of view to the holders of Company Common Stock (in their
capacity as such) than the Merger, taking into account all the
terms and conditions of such proposal (including the likelihood
and timing of consummation thereof based upon, among other
things, the availability of financing and the expectation of
obtaining required approvals) and this Agreement (including any
changes to the terms of this Agreement committed to by Parent to
the Company in writing).
(iii) Takeover Proposal shall
mean any inquiry, proposal or offer from any Person (other than
Parent and its Subsidiaries) or group of Persons relating to, in
a single transaction or series of related transactions, any
(A) acquisition of assets of the Company and its
Subsidiaries (including securities of Subsidiaries, but
excluding sales of assets in the ordinary course of business)
equal to 15% or more of the Companys consolidated assets
or to which 15% or more of the Companys revenues or
earnings on a consolidated basis are attributable,
(B) acquisition of beneficial ownership (within the meaning
of Section 13 under the Exchange Act) of 15% or more of the
outstanding Company Common Stock or any other class of equity
securities of the Company, (C) tender offer or exchange
offer that if consummated would result in any Person (or
group, as defined under Section 13
of the Exchange Act) beneficially owning 15% or more of the
outstanding Company Common Stock or (D) merger,
consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar
transaction involving the Company; in each case, other than the
Transactions and the Share Exchange Transactions.
Section 5.4 Reasonable
Best Efforts.
(a) Subject to the terms and conditions of this Agreement
(including Section 5.3(b) and 5.4(d)), each of the parties
hereto shall cooperate with the other parties hereto and use
(and shall cause their respective Subsidiaries to use) their
respective reasonable best efforts to promptly (i) take, or
cause to be taken, all actions, and do, or cause to be done, all
things, necessary to cause the conditions to Closing to be
satisfied as promptly as practicable and to consummate and make
effective, in the most expeditious manner practicable, the
Transactions, including preparing and filing promptly and fully
all documentation to effect all necessary filings, notices,
petitions, statements, registrations, submissions of
information, applications and other documents (including any
required filings under applicable Antitrust Laws), and
(ii) obtain all approvals, consents, registrations,
permits, authorizations and other confirmations
(A) required from third parties in connection with the
Transactions (provided, however, that no party
hereto shall be obligated to pay any consideration (or grant any
financial accommodation) to any third party from whom any such
approval, consent or other confirmation is requested) and
(B) from Governmental Authorities necessary, proper or
advisable to consummate the Transactions. For purposes hereof,
Antitrust Laws means the Sherman Act, as
amended, the Clayton Act, as amended, the HSR Act, and the
Federal Trade Commission Act, as
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amended, and all other applicable Laws issued by a Governmental
Authority that are designed or intended to (1) prohibit,
restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade or harm to competition or
(2) regulate foreign investment through mergers or similar
transactions.
(b) In furtherance and not in limitation of the foregoing,
(i) each of the parties hereto shall make any required
filing of a Notification and Report Form pursuant to the HSR Act
with respect to the Transactions as promptly as practicable and
supply as promptly as practicable any additional information and
documentary material that may be requested pursuant to the HSR
Act and use its reasonable best efforts to take, or cause to be
taken, all other actions consistent with this Section 5.4
necessary to cause the expiration or termination of the
applicable waiting periods under the HSR Act (including any
extensions thereof) as promptly as practicable, and
(ii) each of the parties hereto shall each use its
reasonable best efforts to (A) take all action necessary to
ensure that no state takeover statute or similar Law becomes
applicable to any of the Transactions or Share Exchange
Transactions, and (B) if any state takeover statute or
similar Law becomes applicable to any of the Transactions and
Share Exchange Transactions, take all action necessary to ensure
that the Transactions and Share Exchange Transactions may be
consummated as promptly as practicable on the terms contemplated
by this Agreement and the Share Exchange Agreement and otherwise
minimize the effect of such Law on the Transactions and the
Share Exchange Transactions.
(c) Each of the parties hereto shall use its reasonable
best efforts to (i) cooperate in all respects with each
other in connection with any filing or submission with a
Governmental Authority in connection with the Transactions and
in connection with any investigation or other inquiry by or
before a Governmental Authority relating to the Transactions,
including any proceeding initiated by a private party, and
(ii) keep the other parties informed in all material
respects and on a reasonably timely basis of any material
communication received by such party from, or given by such
party to, the Federal Trade Commission, the Antitrust Division
of the Department of Justice, the European Commission or any
other Governmental Authority and of any material communication
received or given in connection with any proceeding by a private
party, in each case regarding any of the Transactions. Subject
to applicable Laws relating to the exchange of information, each
of the parties hereto shall (1) have the right to review in
advance, and to the extent practicable each shall consult the
other on, all the information relating to Transactions or the
other parties that appears in any filing made with, or written
materials submitted to, any third party
and/or any
Governmental Authority in connection with the Transactions, and
(2) to the extent allowed by the applicable Governmental
Authority, consult with the other parties hereto in advance of
any meeting or conference with, the Federal Trade Commission,
the Antitrust Division of the Department of Justice, the
European Commission or other Governmental Authority relating to
the Transactions and give the other parties hereto the
opportunity to attend and participate in such meetings.
(d) In furtherance and not in limitation of the covenants
of the parties contained in this Section 5.4, each of the
parties hereto shall use its reasonable best efforts to resolve
such objections, if any, as may be asserted by a Governmental
Authority or other Person with respect to the Transactions.
Notwithstanding the foregoing or any other provision of this
Agreement, the Company shall not, without Parents prior
written consent, commit to any divestiture transaction or agree
to any restriction on its business, and nothing in this
Section 5.4 shall (i) limit any applicable rights a
party may have to terminate this Agreement pursuant to
Section 7.1 so long as such party has up to then complied
in all material respects with its obligations under this
Section 5.4, or (ii) require Parent to offer, accept
or agree to (A) dispose or hold separate any part of its or
the Surviving Corporations (or their respective
Subsidiaries) businesses, operations, assets or product
lines, (B) not compete in any geographic area or line of
business,
and/or
(C) restrict the manner in which, or whether, Parent, the
Surviving Corporation or any of their Affiliates may carry on
business in any part of the world or (iii) require any
party to litigate or otherwise resist any administrative or
judicial action or proceeding (including any proceeding by a
private party) challenging any of the Transactions as violative
of any Antitrust Law.
(e) The Company shall, and shall cause its Subsidiaries to,
use its commercially reasonable efforts to obtain, as promptly
as practicable following the date of this Agreement, the
approval of the Irish Financial Services Regulatory Authority to
the continued management of each Irish Fund by GLG Partners
Asset Management Limited and discretionary investment management
by GLG Partners LP following the Closing. The parties hereto
agree that each such Irish Fund shall be deemed to have
consented for all purposes under this Agreement to the
transactions contemplated hereby and the continued management of
such Irish Fund by GLG Partners Asset Management Limited and
discretionary investment management by GLG Partners LP following
the Closing if such
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continued management following the Closing has been approved in
accordance with the immediately preceding sentence, unless at
any time prior to the Closing such Irish Fund notifies the GLG
Partners Asset Management Limited in writing that such Irish
Fund has terminated its Advisory Agreement prior to or following
the Closing (and such notice is not withdrawn).
(f) If consent is required or notice is required to be
given (i) by applicable Law, (ii) by the Advisory
Agreement of, or relating to, any Client (other than an Irish
Fund) for the deemed assignment or continuation of the Advisory
Agreement relating to such Client, or (iii) by the offering
documents or constituent documents of any Fund, in each case as
a result of the consummation of the transactions contemplated by
this Agreement, as promptly as practicable following the date of
this Agreement, the Company shall, and shall cause its
Subsidiaries to, send a notice (Transaction
Notice) informing any relevant Client of the
transactions contemplated by this Agreement and (if required)
requesting the consent of such Client to the transactions or the
deemed assignment or continuation of such Advisory Agreement.
(g) In connection with obtaining the Client consents under
this Section 5.4, at all times prior to the Closing, the
Company shall take reasonable steps to keep Parent informed of
the status of obtaining such Client consents and, upon
Parents request, make available to Parent copies of all
such executed Client consents.
(h) The Company shall deliver (or cause to be delivered)
drafts of all Transaction Notices and other consent materials
prepared by Company or its Affiliates to Parent a reasonable
time prior to the mailing or distribution of such documents to
any Client in order to afford Parent an opportunity to fully
review and comment on such documents, and Parent shall have the
right to so review and comment on such documents. Any reasonable
comments provided by Parent on such documents shall be
considered in good faith by the Company. The Company shall
reasonably cooperate with Parent and its Affiliates in
connection with the obtaining of Client consents under this
Section 5.4.
Section 5.5 Conduct
of Business.
(a) Except as expressly contemplated, permitted or required
by this Agreement or as required by applicable Law or as set
forth in Section 5.5 of the Company Disclosure Schedule,
during the period from the date of this Agreement until the
Effective Time (or such earlier date on which this Agreement is
terminated), unless Parent otherwise consents in writing (which
consent shall not be unreasonably withheld, delayed or
conditioned), (1) the Company shall, and shall cause each
of its Subsidiaries to, conduct its business in all material
respects in the ordinary course consistent with past practice
and, to the extent consistent with the foregoing, to use
reasonable best efforts to maintain existing relationships with
Clients, intermediaries, employees, consultants and other
Persons with whom the Company or its Subsidiaries have material
business relationships, and (2) without limiting the
generality of the foregoing, the Company shall not, and shall
not permit any of its Subsidiaries to:
(i) issue, sell or grant any shares of its capital stock,
equity or equity-based interests, or any securities or rights
convertible into, exchangeable or exercisable for, or evidencing
the right to subscribe for, any shares of its capital stock or
equity interests, or any warrants, options or right to purchase
or acquire any shares of its capital stock or equity interests
or any securities or rights convertible into, exchangeable or
exercisable for, or evidencing the right to subscribe for, any
shares of its capital stock or equity interests, or amend the
terms of any warrants, options, rights to purchase or acquire
shares of its capital stock or equity interests or any
securities or rights into, exchangeable or exercisable for, or
evidencing the right to subscribe for, any shares of its capital
stock or equity interests; provided, that the Company may
issue shares of Company Common Stock upon (A) the exercise
of Warrants, (B) the conversion of Convertible Notes and
(C) the exchange of the Exchangeable Shares, in each case,
that are outstanding on the date of this Agreement and in
accordance with the terms thereof;
(ii) redeem, purchase or otherwise acquire any of its
outstanding shares of capital stock or equity interests, or any
rights, warrants or options to acquire any shares of its capital
stock or equity interests, except (A) pursuant to Contracts
in effect as of the date of this Agreement and set forth in
Section 5.5(a)(ii) of the Company Disclosure Schedule, or
(B) in connection with withholding to satisfy tax
obligations with respect to Restricted Stock or the forfeiture
of equity awards that were granted under the Company Stock Plans
and are outstanding on the date of this Agreement;
A-32
(iii) declare, set aside for payment or pay any dividend
on, or make any other distribution (whether in cash, stock or
property) in respect of, any shares of its capital stock or
equity interests or otherwise make any payments to its
stockholders or other equity-holders in their capacity as such
(other than dividends by a wholly owned Subsidiary of the
Company to its parent or cumulative dividends in respect of the
Exchangeable Shares in the ordinary course of business
consistent with practice and in accordance with the terms of the
FA Sub 2 Limited Organizational Documents);
(iv) split, combine, subdivide or reclassify any shares of
its capital stock;
(v) incur or assume any indebtedness for borrowed money,
issue or sell any debt securities, or guarantee any indebtedness
or enter into any keep well or other Contract to
maintain any financial statement condition of another Person,
except (A) borrowings by the Company or any of its
Subsidiaries in the ordinary course of business and consistent
with past practices under the Companys existing credit
facility set forth in Section 5.5(a)(v) of the Company
Disclosure Schedule and guarantees of such borrowings issued by
the Companys Subsidiaries to the extent required under the
terms of such credit facility, (B) inter-company borrowings
solely among the Company and its wholly owned Subsidiaries in
the ordinary course consistent with past practice and
(C) in connection with letters of credit issued in the
ordinary course of business in amounts not in excess of
$1,000,000 in the aggregate;
(vi) make any loans or advances to any Person (other than
the Company or any wholly owned Subsidiary of the Company),
except travel and similar advances to its employees, and
advances to customers, in each case, made in the ordinary course
of business consistent with past practice;
(vii) make any capital expenditure or expenditures which
(A) involves the purchase of real property or (B) is
in excess of $2,000,000 individually or $5,000,000 in the
aggregate, except for any such capital expenditures as budgeted
in the Companys 2010 capital expenditure plan set forth in
Section 5.5(a)(vii) of the Company Disclosure Schedule;
(viii) sell, dispose of or otherwise transfer (by merger or
otherwise), lease out or license out, or pledge, mortgage or
otherwise encumber, any of its material properties or assets
(including securities of Subsidiaries), except (A) sales,
leases and licenses, in each case, in the ordinary course of
business consistent with past practice or up to $10,000,000 in
the aggregate, (B) pursuant to Contracts in force on the
date of this Agreement and listed in Section 5.5(a)(viii)
of the Company Disclosure Schedule, (C) dispositions of
obsolete or worthless assets, (D) Permitted Liens and
(E) pledges, mortgages or other encumbrances to secure
indebtedness permitted hereunder;
(ix) directly or indirectly acquire (A) by merging or
consolidating with, or by purchasing all or any substantial
amount of the capital stock or equity interest in, any Person
(or a division or business of any Person), or (B) except in
the ordinary course of business consistent with past practice,
any assets for consideration in excess of $5,000,000 in the
aggregate (excluding assets acquired from wholly owned
Subsidiaries), in each case, other than acquisitions between or
among the Company or its wholly owned Subsidiaries;
(x) (A) increase in the severance, compensation,
distributions or benefits payable to any of its current or
former directors, officers, employees or consultants (including
any limited partners, Affiliates or trustees) or establish,
adopt, enter into, amend or terminate any Company Plan or
Employment Agreements or any plan, program, policy, trust, fund
or Contract (or other arrangement that would be a Company Plan
or Employment Agreement if it were in existence as of the date
of this Agreement) with, for or in respect of, any current or
former director, officer, employee or consultant (including any
limited partner, Affiliate or trustee), other than (1) as
required pursuant to (x) the terms of the Company Plan or
Employment Agreement in effect as of the date of this Agreement
or (y) applicable Law, (2) increases in salaries,
wages and benefits of employees (other than officers or
directors) made as a result of promotions in the ordinary course
of business and in amounts and in a manner consistent with past
practice and (3) increases in salaries and wages of
employees (other than officers or directors) that are otherwise
in the ordinary course of business and in amounts and in a
manner consistent with past practice or (B) pay or accrue
any compensation, distributions or bonuses in advance or
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prior to the time such amounts would otherwise be due, paid or
accrued in the ordinary course of business and in a manner
consistent with the past practices of the Company and its
Subsidiaries;
(xi) (A) enter into, terminate or amend any Material
Contract, or any other Contract that is material to the Company
and its Subsidiaries taken as a whole, other than in the
ordinary course of business consistent with past practice,
(B) enter into or extend the term or scope of any Contract
that purports to restrict the Company, or any existing or future
Subsidiary or Affiliate of the Company, from engaging in any
line of business or in any geographic area, (C) amend or
modify the engagement letters referred to in Section 3.7,
(D) enter into any Contract that would be breached by, or
require the consent of any third party in order to continue in
full force following, consummation of the Transactions or the
Share Exchange Transactions or (E) release any Person from,
or modify or waive any provision of, any confidentiality,
standstill or similar agreement;
(xii) make any material changes in financial or tax
accounting methods, principles or practices (or change an annual
accounting period), except insofar as may be required by a
change in GAAP or applicable Law;
(xiii) (A) make, change or revoke any material Tax
election, (B) settle or compromise any material Tax claim
or assessment, (C) surrender any Tax refund, (D) amend
any Tax Return or (E) file any Tax Return not prepared in
accordance with the Companys or the relevant
Subsidiarys or Funds past practices, in each case
except insofar as may be required by applicable Law;
(xiv) amend its Organizational Documents;
(xv) adopt a plan or agreement of complete or partial
liquidation or dissolution other than with respect to wholly
owned Subsidiaries;
(xvi) commence, settle or compromise any legal, regulatory,
arbitral or administrative proceeding, claim, suit or action
material to the Company and its Subsidiaries taken as a whole;
(xvii) (A) redeem, repurchase, prepay, defease or
cancel any indebtedness for borrowed money, other than as
required in accordance with its terms, or (B) except as
required by Law, any judgment by a court of competent
jurisdiction or the terms of any Contract in effect on the date
hereof, pay, discharge, settle or satisfy any claims,
liabilities or obligations (whether absolute, accrued,
contingent or otherwise) that are otherwise material to the
Company and its Subsidiaries taken as a whole, other than the
payment, discharge, settlement or satisfaction (1) in the
ordinary course of business or in accordance with their terms of
claims, liabilities or obligations (i) disclosed, reflected
or reserved against in the most recent audited financial
statements (or the notes thereto) of the Company included in the
Company SEC Documents (for amounts not in excess of such
reserves) or (ii) incurred since the date of such financial
statements in the ordinary course of business or (2) of
costs and expenses related to this Agreement, the Share Exchange
Agreement or the Voting Agreement and the Transactions or the
Share Exchange Transactions; or
(xviii) agree to take any of the foregoing actions or any
action which would reasonably be expected to prevent, or
materially delay or impede, the satisfaction of any of the
conditions set forth in Article VI.
Section 5.6 Public
Announcements. The initial press release with
respect to the execution of this Agreement shall be a joint
press release to be reasonably agreed upon by Parent and the
Company. Thereafter, no party hereto shall issue or cause the
publication of any press release or other public announcement
(to the extent not previously issued or made in accordance with
this Agreement) with respect to this Agreement, the Merger, the
other Transactions or the Share Exchange Transactions without
the prior consent of the other parties hereto (which consent
shall not be unreasonably withheld or delayed), except as may be
required by Law or by any applicable listing agreement with, or
rules and regulations of, any national securities exchange
(including the Listing Rules and the Disclosure and Transparency
Rules), as determined in the good faith judgment of the party
proposing to make such release (in which case such party shall
not issue or cause the publication of such press release or
other public announcement without prior consultation with the
other party where practicable). The Company shall, and shall
cause its Subsidiaries to, cooperate and consult with Parent
with respect to any broadly disseminated communications of a
general nature to employees (including general communications
relating to benefits and
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compensation) or Clients relating to the Transactions or the
Share Exchange Transactions prior to making any such
communications and shall consider in good faith all comments
reasonably proposed by Parent and its counsel.
Section 5.7 Access
to Information; Confidentiality.
(a) Except as prohibited by Law or any obligation of
confidentiality of the Company or its Subsidiaries, the Company
shall, and shall cause its Subsidiaries to, afford to Parent and
Parents representatives reasonable access during normal
business hours to the Companys and its Subsidiaries
properties, Contracts, books and records, correspondence,
personnel, representatives, accountants and advisors, and
furnish promptly to Parent such other information concerning the
Companys and its Subsidiaries businesses and
properties as Parent may reasonably request (provided,
further, that the Company shall use its commercially
reasonable efforts to (i) obtain the required consent of
such third party to provide such access or disclosure,
(ii) develop an alternative to providing such information
so as to address such matters that is reasonably acceptable to
Parent and the Company
and/or
(iii) enter into a joint defense agreement or implement
such other commercially reasonable techniques if doing so would
reasonably permit the disclosure of such information without
violating applicable Law or jeopardizing such attorney-client
privilege, as applicable).
(b) Until the Effective Time, the information provided will
be subject to the terms of the Confidentiality Agreement, dated
March 1, 2010, between Parent and the Company (as it may be
amended from time to time, the Confidentiality
Agreement).
(c) No investigation, or information received, pursuant to
this Section 5.7 will modify any of the representations and
warranties of the parties hereto.
Section 5.8 Indemnification
and Insurance.
(a) From and after the Effective Time, Parent and the
Surviving Corporation, jointly and severally, shall
(i) indemnify, defend and hold harmless the past and
present directors and officers (including for the avoidance of
doubt persons holding similar positions, such as managers of a
limited liability company) of the Company and its Subsidiaries
(each, an Indemnitee and, collectively,
the Indemnitees) with respect to all claims,
liabilities, losses, damages, judgments, fines, penalties, costs
(including amounts paid in settlement or compromise) and
expenses (including fees and expenses of legal counsel, experts
and litigation consultants, and the cost of any appeal bonds) in
connection with any claim, suit, action, proceeding or
investigation (whether civil, criminal, administrative or
investigative, each a Proceeding), whenever
asserted, based on or arising out of, in whole or in part,
(1) the fact that an Indemnitee is or was a director,
officer or employee of the Company or of a Subsidiary of the
Company or (2) acts or omissions by an Indemnitee in the
Indemnitees capacity as a director or officer of the
Company or of a Subsidiary of the Company or taken at the
request of the Company or of a Subsidiary of the Company
(including in connection with serving at the request of the
Company or of a Subsidiary of the Company as a director or
officer of another Person (including any employee benefit
plan)), in each case under clause (1) or (2), at, or at any
time prior to, the Effective Time (including any claim, suit,
action, proceeding or investigation relating in whole or in part
to the Transactions or the Share Exchange Transactions), to the
fullest extent permitted under applicable Law and as provided
under the certificate of incorporation and by-laws of the
Company and under any indemnification agreements (the
Indemnification Agreements) as in
effect on the date of this Agreement. The Surviving Corporation
shall advance all fees and expenses (including without
limitation fees and expenses of legal counsel, experts,
litigation consultants, and the cost of any appeal bonds)
incurred by Indemnitee in connection with any Proceeding within
ten (10) Business Days after the receipt by the Surviving
Corporation of a statement or statements requesting such
advances from time to time, whether prior to or after final
disposition of any Proceeding. The Indemnitee shall qualify for
advances, to the fullest extent permitted under applicable Law,
solely upon the execution and delivery to the Surviving
Corporation of an undertaking providing that the Indemnitee
undertakes to repay the advance to the extent that it is
ultimately determined that Indemnitee is not entitled to be
indemnified by the Company under the provisions of this
Agreement, the Organizational Documents of the Surviving
Corporation, applicable Law or otherwise. Without limiting the
foregoing, from and after the Effective Time, Parent shall cause
the Organizational Documents of the Surviving Corporation to
contain provisions no less favorable to the Indemnitees with
respect to limitation of liabilities of directors and officers,
indemnification and advancement of expenses than are set forth
as of the date of this Agreement in the Organizational Documents
of the Company,
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which provisions shall not be amended, repealed or otherwise
modified in a manner that would adversely affect the rights
thereunder of the Indemnitees.
(b) Parent and the Surviving Corporation shall maintain and
extend all directors and officers liability
insurance policies (both primary and any and all excess
policies) maintained by the Company on the date of this
Agreement (collectively, the Current D&O
Policies) for a period of not less than six
(6) years after the Effective Time with respect to claims
arising in whole or in part from facts or events that actually
or allegedly occurred on or before the Effective Time, including
in connection with the approval of this Agreement and the
Transactions or the Share Exchange Transactions;
provided, however, that Parent may substitute
therefor policies of substantially equivalent coverage and
amounts containing terms no less favorable to the covered
persons; provided, further, that if the Current
D&O Policies expire or are terminated or cancelled during
such period through no fault of Parent or the Surviving
Corporation, then Parent or the Surviving Corporation shall
obtain substantially similar D&O insurance; provided
further, however, that in no event shall Parent be
required to pay aggregate premiums for such similar insurance in
excess of 300% of the last annual premiums paid in the aggregate
by the Company for the Current D&O Policies, as set forth
on Section 5.8 of the Company Disclosure Schedule (the
Maximum Premium). In lieu of the foregoing,
the Company may obtain one or more prepaid and non-cancelable
directors and officers insurance tail policies
applicable for the period of six (6) years commencing at
the Effective Time (including with respect to acts or omissions
in connection with the Transactions or the Share Exchange
Transactions) and ending on the six (6)-year anniversary of the
Effective Time (the D&O Tail Period);
such insurance policies shall provide at least the same coverage
with respect to amounts, scope, terms and conditions as the
Current D&O Policies; provided, that the aggregate
premium for such prepaid policies shall not exceed the Maximum
Premium, and provided, further, that if the
Company is unable to obtain, prior to the Effective Time,
insurance tail policies meeting the above requirements, the
Company may instead obtain prior to the Effective Time as much
comparable insurance for the D&O Tail Period as reasonably
practicable for an aggregate policy premium not in excess of the
Maximum Premium.
(c) The provisions of this Section 5.8 are intended to
be for the benefit of, and shall be enforceable by, each
Indemnitee, his or her heirs and his or her representatives and
(ii) in addition to, and not in substitution for, any other
rights to indemnification or contribution that any such Person
may have by contract or otherwise.
(d) In the event that Parent, the Surviving Corporation or
any of their respective successors or assigns
(i) consolidates with or merges into any other Person and
is not the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or
substantially all of its properties and assets to any Person,
then, and in each such case, proper provision shall be made so
that the successors and assigns of Parent and the Surviving
Corporation shall assume all of the obligations thereof set
forth in this Section 5.8.
Section 5.9 Section 16
Matters. Prior to the Effective Time, the
parties hereto shall cooperate to cause any dispositions of
Company Common Stock (including derivative securities with
respect to Company Common Stock) in the Transactions or the
Share Exchange Transactions by each individual who is subject to
the reporting requirements of Section 16(a) of the Exchange
Act with respect to the Company to be exempt under
Rule 16b-3
promulgated under the Exchange Act in accordance with the
interpretative guidance set forth by the SEC with respect to
such matters.
Section 5.10 Delisting;
Deregistration. Parent shall use its
reasonable best efforts to cause the Companys securities
to be de-listed from the New York Stock Exchange, and
de-registered under the Exchange Act, as promptly as practicable
following the Effective Time.
Section 5.11 Notification
of Certain Matters; Reports.
(a) The Company shall give prompt notice to Parent, and
Parent shall give prompt notice to the Company, of (i) any
notice or other communication received by such party from any
Governmental Authority in connection with the Transactions or
the Share Exchange Transactions, (ii) any notice or other
communication received by such party from any Person alleging
that the consent of such Person is or may be required in
connection with the Transactions or the Share Exchange
Transactions, if the subject matter of such communication or the
failure of such party to obtain such consent would reasonably be
expected to be material to the Company, the Surviving
Corporation or Parent, (iii) any material actions, suits,
claims, investigations or legal or regulatory proceedings
commenced or, to
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the Knowledge of such party, threatened against, relating to or
involving or otherwise affecting such party or any of its
Subsidiaries, (iv) any actions, suits, claims,
investigations or legal or regulatory proceedings which relate
to the Transactions or the Share Exchange Transactions, and
(v) the discovery of any fact, circumstance or failure to
perform, or the occurrence or non-occurrence of any event,
which, individually or in the aggregate, if the same were
occurring or continuing as of the Closing Date, would give rise
to the failure of a condition set forth in Section 6.2(a),
6.2(b), 6.3(a) or 6.3(b), as applicable; provided,
however, that the delivery of any notice pursuant to this
Section 5.11 shall not (A) cure any breach of, or
non-compliance with, any other provision of this Agreement or
(B) affect the remedies available to, or the conditions in
Article VI to the obligations of, the party receiving such
notice.
(b) The Company shall deliver to Parent the information and
reports listed on Exhibit 5.11(b).
Section 5.12 Securityholder
Litigation. Company and the Parent shall
reasonably cooperate in connection with the defense or
settlement of any securityholder litigation against the Company
and/or its
directors relating to the Transactions or the Share Exchange
Transactions, and shall not settle or offer to settle any such
litigation without Parents prior consent.
Section 5.13 Consolidation. The
Company shall, and shall cause its Subsidiaries and GLG Partners
Services LP and GLG Partners LP to, use reasonable best efforts
to amend their respective Contracts, effective on or before
Closing, with the effect that funds under management by any of
them would not be required to be included in the consolidated
accounts of Parent immediately following Closing under
International Financial Reporting Standards as applied by Parent
(which efforts shall include, without limitation, accepting the
reasonable directions of Parents external auditor).
Section 5.14 Warrant
Tender Offers. The Company shall, and may
cause its Subsidiaries to, use their respective reasonable best
efforts to commence, at such time as mutually agreed between
Parent and the Company after the date hereof and prior to the
Closing Date, offers to purchase with respect to all of the
Warrants at a price of $0.129 per Warrant (collectively,
the Warrant Offers), and Parent shall
assist the Company in connection therewith. Notwithstanding
anything to the contrary, the closing of the Warrant Offers
shall be conditioned on the completion of the Merger and the
Warrant Offers shall otherwise be consummated in compliance with
applicable Laws and SEC rules and regulations. Parent shall
ensure that, at the Effective Time, the Surviving Corporation
has all funds necessary in connection with any such Warrant
Offer. Parent shall (i) upon request by the Company,
reimburse the Company for all reasonable out of pocket costs
(including reasonable attorneys fees) incurred by the
Company or any of its Subsidiaries in connection with the
actions of the Company and its Subsidiaries contemplated by this
Section 5.14 and (ii) indemnify and hold harmless the
Company and its Subsidiaries from and against any and all
claims, losses and damages suffered or incurred by any of them
in connection with the Warrant Offers.
ARTICLE VI
CONDITIONS
PRECEDENT
Section 6.1 Conditions
to Each Partys Obligations to Effect the
Merger. The respective obligations of each
party hereto to effect the Merger shall be subject to the
satisfaction (or, to the extent permitted under Law, waiver by
Parent and the Company other than the condition set forth in
clause (a) below, which may not be waived) on or prior to
the Closing Date of the following conditions:
(a) Company Stockholder
Approval. The Company Stockholder Approval
shall have been received.
(b) Parent Shareholder
Approval. The Parent Shareholder Approval
shall have been received.
(c) Antitrust and Other Regulatory
Approvals. The waiting period (and any
extension thereof) applicable to the Merger under the HSR Act
shall have expired or been terminated. In addition, (i) any
waiting period (and any extension thereof) applicable to the
Merger under other Antitrust Laws listed on
Exhibit D shall have expired or been terminated, and
all consents, approvals and authorizations of any Governmental
Authority required of Parent, the Company or any of their
respective Subsidiaries under such Antitrust Laws to consummate
the Merger shall have been obtained; (ii) the Governmental
Authorities listed on Exhibit E shall have Approved
the Transactions and (iii) each other Governmental
Authority shall have
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Approved the Transactions where, in the absence of such
approval, the consummation of the Merger would be unlawful in
any jurisdiction.
(d) No Restraints. No Law,
injunction, order, judgment, ruling or decree enacted,
promulgated, issued, entered, amended or enforced by any
Governmental Authority (collectively,
Restraints) of competent jurisdiction located
in the United States, or in a jurisdiction outside of the United
States in which the Company, Parent or any of their respective
Subsidiaries engages in material business activities, shall be
in effect enjoining, restraining, preventing or prohibiting
consummation of the Merger or the Share Exchange or making the
consummation of the Merger or the Share Exchange illegal.
Section 6.2 Additional
Conditions to Obligations of Parent and Merger Sub to Effect the
Merger. The obligations of Parent and Merger
Sub to effect the Merger are further subject to the satisfaction
(or, to the extent permitted under Law, waiver by Parent) on or
prior to the Closing Date of the following conditions:
(a) Representations and
Warranties. (i) The representation and
warranty of the Company contained in Sections 3.11(b) and
3.13(b) shall have been true and correct as of the date of this
Agreement and shall be true and correct on and as of the Closing
Date as if made on and as of the Closing Date; (ii) the
representations and warranties of the Company contained in
Sections 3.1(a), 3.2, 3.3, 3.4(a), 3.7 and 3.8 shall have
been true and correct as of the date of this Agreement and shall
be true and correct on and as of the Closing Date as if made on
and as of the Closing Date (or, to the extent given as of a
specific date, as of such date), except for de minimis
inaccuracies; (iii) the representations and warranties
of the Company contained in Section 3.9(a), disregarding
all qualifications and exceptions contained therein relating to
materiality or Material Adverse Effect, shall have been true and
correct in all material respects as of the date of this
Agreement and shall be true and correct in all material respects
on and as of the Closing Date as if made on and as of the
Closing Date (or, to the extent given as of a specific date, as
of such date); and (iv) all other representations and
warranties of the Company contained in this Agreement,
disregarding all qualifications and exceptions contained therein
relating to materiality or Material Adverse Effect, shall have
been true and correct as of the date of this Agreement and shall
be true and correct on and as of the Closing Date as if made on
and as of the Closing Date (or, to the extent given as of a
specific date, as of such date), except (in the case of this
clause (iv)) for such failures to be true and correct that,
individually and in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect.
(b) Performance of Obligations of the
Company. The Company shall have performed in
all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date.
(c) Share Exchange. The
transactions contemplated by the Share Exchange Agreement shall
have been consummated.
(d) Certificates.
(i) Parent shall have received a certificate of an
executive officer of the Company, dated the Closing Date,
certifying on behalf of the Company that the conditions
specified in Sections 6.2(a), 6.2(b) and 6.2(d) have been
satisfied.
(ii) Parent shall have received from the Company a
certificate, dated as of the Share Exchange Closing Date, in the
form attached hereto as Exhibit F. In connection
with the delivery of the certificate, the Company shall comply
with the notification requirements set forth in Treasury
Regulations
Section 1.897-2(h)(2).
Section 6.3 Additional
Conditions to Obligations of the Company to Effect the
Merger. The obligation of the Company to
effect the Merger is further subject to the satisfaction (or, to
the extent permitted under Law, waiver by the Company) on or
prior to the Closing Date of the following conditions:
(a) Representations and
Warranties. The representations and
warranties of Parent and Merger Sub contained in this Agreement,
disregarding all qualifications and exceptions contained therein
relating to materiality, shall have been true and correct as of
the date of this Agreement and shall be true and correct on and
as of the Closing Date as if made on and as of the Closing Date
(or, to the extent given as of a specific date,
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as of such date), except for such failures to be true and
correct that, individually and in the aggregate, do not prevent
Parent or Merger Sub from consummating the Merger.
(b) Performance of Obligations of Parent and Merger
Sub. Parent and Merger Sub shall have
performed in all material respects all obligations required to
be performed by them under this Agreement at or prior to the
Closing Date.
(c) Certificate. The Company shall
have received a certificate of an executive officer of Parent,
dated the Closing Date, certifying on behalf of Parent that the
conditions specified in Sections 6.3(a) and 6.3(b) have
been satisfied.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This
Agreement may be terminated and the Transactions abandoned at
any time prior to the Effective Time, whether before or after
receipt of the Company Stockholder Approval:
(a) by the mutual written consent of the Company and
Parent; or
(b) by either of the Company or Parent, if:
(i) the Merger shall not have been consummated on or before
December 31, 2010 (the Outside Date);
provided, however, that the right to terminate
this Agreement pursuant to this Section 7.1(b)(i) shall not
be available to any party whose material breach of this
Agreement has been the principal cause of the failure of the
Merger to be consummated on or before the Outside Date;
(ii) (A) any Restraint having the effect set forth in
Section 6.1(c) shall be in effect and shall have become
final and non-appealable or (B) there shall be a final
non-appealable denial of any regulatory approval required by
Section 6.1(b); provided, however, that the
right to terminate this Agreement pursuant to this
Section 7.1(b)(ii) shall not be available to any party
whose material breach of this Agreement has been the principal
cause of the issuance of such final, non-appealable Restraint or
denial of regulatory approval;
(iii) the Company Stockholder Approval shall not have been
obtained at the Company Stockholders Meeting duly convened
therefor or at any adjournment or postponement thereof, as
permitted by this Agreement, other than in the circumstances
contemplated by Section 7.1(c)(ii);
(iv) the Parent Shareholder Approval shall not have been
obtained at the Parent Shareholders Meeting duly convened
therefor or at any adjournment or postponement thereof, as
permitted by this Agreement, other than in the circumstances
contemplated by Section 7.1(d)(iii); or
(c) by Parent, if:
(i) (A) a failure to perform or breach of any of the
Companys covenants or agreements set forth in
Section 5.1 or 5.3 of this Agreement shall have occurred or
(B) a failure to perform or breach of any of the
Companys representations, warranties, covenants or
agreements set forth in this Agreement (other than as set forth
in clause (A) of this Section 7.1(c)(i)) shall have
occurred, which failure to perform or breach (1) would (if
it occurred or was continuing as of the Closing Date) give rise
to the failure of a condition set forth in Section 6.2(a)
or 6.2(b) and (2) cannot be cured by the Company by the
Outside Date or, if capable of being cured by the Company by the
Outside Date, shall not have been cured within twenty
(20) calendar days following receipt of written notice from
Parent stating Parents intention to terminate this
Agreement pursuant to this Section 7.1(c)(i) and the basis
for such termination; provided, however, that the
right to terminate this Agreement pursuant to this
Section 7.1(c)(i) shall not be available to the Parent if
it is then in material breach under this Agreement;
(ii) other than in the circumstances contemplated by
Section 7.1(d)(i) or 7.1(d)(iii), (A) a Company
Adverse Recommendation Change shall have occurred, (B) the
Company shall have failed to include the Company Board
Recommendation in the Proxy Statement or (C) the Board of
Directors of the Company
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or an authorized committee thereof shall not have
(1) rejected any publicly disclosed Takeover Proposal
within ten (10) days of the public disclosure thereof
(including, for these purposes, by taking no position with
respect to the acceptance by the Companys stockholders of
a tender offer or exchange offer, which shall constitute a
failure to reject such Takeover Proposal) and (2) publicly
reconfirmed the Company Board Recommendation within five
(5) days after receipt of a written request from Parent
that it do so following the making by any Person of a publicly
disclosed Takeover Proposal; or
(iii) after the date hereof, a Company Material Adverse
Event shall have occurred; or
(d) by the Company:
(i) if a failure to perform or breach of any of
Parents or Mergers Subs representations, warranties,
covenants or agreements set forth in this Agreement shall have
occurred, which failure to perform or breach (A) would (if
it occurred or was continuing as of the Closing Date) give rise
to the failure of a condition set forth in Section 6.3(a)
or 6.3(b) and (B) cannot be cured by Parent and Merger Sub
by the Outside Date or, if capable of being cured by Parent and
Merger Sub by the Outside Date, shall not have been cured within
twenty (20) calendar days following receipt of written
notice from the Company stating the Companys intention to
terminate this Agreement pursuant to this Section 7.1(d)(i)
and the basis for such termination; provided,
however, that the right to terminate this Agreement
pursuant to this Section 7.1(d)(i) shall not be available
to the Company if it is then in material breach under this
Agreement;
(ii) prior to the receipt of the Company Stockholder
Approval, in order to enter into a transaction that is a
Superior Proposal in accordance with Section 5.3, if
concurrently with such termination the Company enters into one
or more definitive Company Acquisition Agreements providing for
such Superior Proposal and prior to or concurrently with such
termination the Company shall have paid to Parent the Company
Termination Fee due under Section 7.3(b); provided,
however, that the Company shall not terminate this
Agreement pursuant to this Section 7.1(d)(ii) unless the
Company, its Subsidiaries and Representatives shall have
complied in all respects with the conditions of Section 5.3
that the Company is required to satisfy before taking action
pursuant to this Section 7.1(d)(ii); or
(iii) the Board of Directors of Parent shall have either
(a) not made the Parent Recommendation in the Shareholder
Circular or (b) withdrawn, qualified or adversely modified
the Parent Recommendation once contained in the Shareholder
Circular, other than in the circumstances contemplated by
Section 7.1(c).
Section 7.2 Effect
of Termination.
(a) In the event of the termination of this Agreement as
provided in Section 7.1, written notice thereof shall be
given to the other party or parties hereto, specifying the
provision hereof pursuant to which such termination is made, and
this Agreement shall forthwith become null and void (other than
the Confidentiality Agreement in accordance with its terms,
Section 5.7(b), this Section 7.2, Section 7.3 and
Article VIII, all of which shall survive termination of
this Agreement), and there shall be no liability on the part of
Parent, Merger Sub or the Company or their respective directors,
officers and Affiliates, except (i) as provided in
Section 7.3, and (ii) nothing shall relieve any party
from liability for fraud or any willful breach of this Agreement.
(b) The party desiring to terminate this Agreement pursuant
to Section 7.1 (other than under clause (a)) shall
give written notice of such termination, including a description
in reasonable detail of the reasons for such termination, to the
other party in accordance with Section 8.11, specifying the
provision or provisions hereof pursuant to which such
termination is effected.
Section 7.3 Fees
and Expenses.
(a) Except as otherwise provided below in this
Section 7.3, whether or not the Merger is consummated, all
fees and expenses incurred in connection with this Agreement,
the Merger and the other Transactions shall be paid by the party
incurring such fees or expenses, except that expenses incurred
in connection with the printing and mailing of the Proxy
Statement and notices or other filings with Governmental
Authorities under any Antitrust Laws shall be shared equally by
Parent and the Company.
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(b) If after the date of this Agreement:
(i) (A) a Takeover Proposal shall have been made to
the Company (or to the Companys stockholders generally),
or any Person shall have announced (or otherwise made known to
the Board of Directors of the Company) an intention (whether or
not conditional) to make a Takeover Proposal, and
(B) following the occurrence of an event described in the
preceding clause (A) (provided that, in the case of a
termination pursuant to Section 7.1(b)(iii), such event
shall have occurred prior to the Company Stockholder Meeting),
this Agreement shall have been terminated (1) by the
Company or Parent pursuant to Section 7.1(b)(i) or
Section 7.1(b)(iii), or (2) by Parent pursuant to
Section 7.1(c)(i), and
(C) within twelve (12) months of the date this
Agreement is terminated as described in the preceding
clause (B), the Company enters into one or more definitive
Company Acquisition Agreements with respect to, or consummates a
transaction contemplated by, any Takeover Proposal (provided
that for purposes of this clause (C), the references to
15% in the definition of Takeover Proposal shall be
deemed to be references to 40%); or
(ii) this Agreement shall have been terminated by Parent
pursuant to Section 7.1(c)(ii); or
(iii) this Agreement shall have been terminated by the
Company pursuant to Section 7.1(d)(ii),
then, in any such event under clause (i), (ii) or
(iii) of this Section 7.3(b), the Company shall pay
the Company Termination Fee to Parent by wire transfer of
immediately available funds to an account to be designated by
Parent. Company Termination Fee shall
mean an amount equal to $48,000,000 (inclusive of any applicable
VAT or its equivalent).
(c) If this Agreement shall have been terminated by
(i) the Company or Parent pursuant to
Section 7.1(b)(iii) or (ii) Parent pursuant to
Section 7.1(c)(i) prior to the Company Stockholders Meeting
and the Companys breach or failure triggering such
termination shall have been a breach of (or failure to comply
with) the Companys obligations under Section 5.1 or
Section 5.3, and, in each case, no Company Termination Fee
is payable in respect thereof pursuant to Section 7.3(b),
then the Company shall pay to Parent (by wire transfer of
immediately available funds to an account to be designated by
Parent) an amount equal to the Parent Expenses (as defined
below), and the Company shall remain obligated to pay to Parent
the Company Termination Fee (less the amount of Parent Expenses
previously actually paid to Parent pursuant to this sentence) if
the Company Termination Fee becomes payable pursuant to
Section 7.3(b). Parent Expenses shall
mean the lesser of (i) all
out-of-pocket
fees and expenses (including fees and expenses of counsel,
accountants, financial advisors and investment bankers) incurred
by or on behalf of Parent or its Affiliates in connection with
or related to the authorization, preparation, negotiation,
execution and performance of this Agreement and the filing of
any required notices under applicable Antitrust Laws or other
regulations and (ii) $15,000,000 (the Cap
Amount).
(d) If this Agreement shall have been terminated by the
Company or Parent pursuant to Section 7.1(b)(iv) then
Parent shall pay to the Company (by wire transfer of immediately
available funds to an account to be designated by the Company)
an amount equal to the Company Expenses. Company
Expenses shall mean the lesser of (i) all
out-of-pocket
fees and expenses (including fees and expenses of counsel,
accountants, financial advisers and investment bankers) incurred
by or on behalf of the Company or its Affiliates (other than the
Controlling Holders) in connection with or related to the
authorization, preparation, negotiation, execution and
performance of this Agreement (and the filing of any required
notices under applicable Antitrust laws or other regulations)
and (ii) the Cap Amount.
(e) If this Agreement shall have been terminated by the
Company pursuant to Section 7.1(d)(iii), then Parent shall
pay the Parent Termination Fee to the Company by wire transfer
of immediately available funds to an account to be designated by
the Company. Parent Termination Fee shall mean an
amount equal to $48,000,000 (inclusive of any applicable VAT or
its equivalent).
(f) Any payment required to be made pursuant to
Section 7.3(b)(i) shall be made to Parent promptly
following the earlier execution of a definitive agreement with
respect to, or the consummation of, any transaction contemplated
by a Takeover Proposal as described in Section 7.3(b)(i)
(and in any event not later than three (3) Business Days
after delivery to the Company of notice of demand for payment
thereunder); any payment required to be made pursuant to
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Section 7.3(b)(ii) shall be made to Parent promptly
following termination of this Agreement by Parent pursuant to
Section 7.1(c)(ii) (and in any event not later than three
(3) Business Days after delivery to the Company of notice
of demand for payment thereunder); any payment required to be
made pursuant to Section 7.3(e) shall be made by Parent
promptly following termination of this Agreement by the Company
pursuant to Section 7.1(d)(iii) (and in any event not later
than three (3) Business Days after delivery to Parent of
notice of demand for payment thereunder); and, in circumstances
in which Parent Expenses or Company Expenses are payable, such
payment shall be made to Parent or the Company, as applicable,
not later than three (3) Business Days after delivery to
the Company or to Parent, as applicable, of an itemization
setting forth in reasonable detail such Parent Expenses or
Company Expenses.
(g) In the event that (i) the Company shall fail to
pay the Company Termination Fee
and/or
Parent Expenses or (ii) Parent shall fail to pay the Parent
Termination Fee or the Company Expenses, in each case, as
required pursuant to this Section 7.3 when due, such unpaid
Company Termination Fee or Parent Expenses or Parent Termination
Fee or Company Expenses, as the case may be, shall accrue
interest for the period commencing on the date the Company
Termination Fee or Parent Expenses or Parent Termination Fee or
Company Expenses, as the case may be, became past due, at a rate
equal to the prime lending rate as published in The Wall
Street Journal in effect on the date such payment was
required to be made. In addition, if (x) the Company shall
fail to pay the Company Termination Fee or Parent Expenses or
(y) Parent shall fail to pay the Parent Termination Fee or
Company Expenses, as the case may be, when due, the Company or
Parent, as applicable, shall also pay to the other party all of
such other partys reasonable and documented
out-of-pocket
attorneys fees and other costs and expenses in connection
with efforts to collect the Termination Fee or Parent Expenses
or the Parent Termination Fee or Company Expenses, as the case
may be.
(h) Each of the parties hereto acknowledges that the
covenants and agreements contained in this Section 7.3 are
an integral part of the Transactions.
(i) Notwithstanding anything in this Agreement to the
contrary (including anything in Section 7.2 or 8.8), in the
event that the Company Termination Fee is paid in accordance
with this Section 7.3, the payment of such Company
Termination Fee shall be the sole and exclusive remedy of
Parent, Merger Sub and their respective Affiliates against the
Company or any of its Affiliates with respect to any breach by
the Company, or termination, of this Agreement or the failure of
the Merger to be consummated. Notwithstanding anything in this
Agreement to the contrary (including anything in
Section 7.2 or 8.8), in the event that the Parent
Termination Fee is paid in accordance with this
Section 7.3, the payment of such Parent Termination Fee
shall be the sole and exclusive remedy of the Company and its
Affiliates against Parent or any of its Affiliates with respect
to any breach by Parent or Merger Sub, or termination, of this
Agreement or the failure of the Merger to be consummated.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Survival. The
representations, warranties, covenants and agreements in this
Agreement (or pursuant to any certificate delivered pursuant to
Section 6.2 or Section 6.3) shall terminate at the
Effective Time or, except as otherwise provided in
Section 7.2, upon the termination of this Agreement
pursuant to Section 7.1, as the case may be, except that
(a) the covenants and agreements set forth in
Article II and Section 5.8, and any other covenant or
agreement set forth in this Agreement which contemplates
performance after the Effective Time, shall survive the
Effective Time, and (b) the covenants and agreements set
forth in Sections 5.7(b), 7.2, 7.3 and this
Article VIII shall survive termination. The Confidentiality
Agreement shall (i) survive termination of this Agreement
in accordance with its terms and (ii) terminate as of the
Effective Time.
Section 8.2 Amendments;
Waivers; Etc.
(a) At any time prior to the Effective Time, this Agreement
may be amended or supplemented in any and all respects, whether
before or after receipt of the Company Stockholder Approval, by
written agreement of the parties hereto; provided,
however, that following approval of the Transactions by
the stockholders of the Company, there shall be no amendment or
change to the provisions hereof which by Law would require
further approval by the stockholders of the Company without such
approval.
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(b) At any time prior to the Effective Time, any party may,
subject to Law, (i) waive any inaccuracies in the
representations and warranties of any other party hereto,
(ii) extend the time for the performance of any of the
obligations or acts of any other party hereto, (iii) waive
compliance by the other party with any of the agreements
contained herein or (iv) except as otherwise provided
herein, waive any of such partys conditions. No failure or
delay by the Company, Parent or Merger Sub in exercising any
right hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right hereunder.
Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
(c) Parent shall ensure that neither the Share Exchange
Agreement nor the Voting Agreement shall be amended, modified or
waived in any manner prior to the Effective Time without the
prior written consent of the Company and the approval of the
Special Committee.
Section 8.3 Assignment. Neither
this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned, in whole or in part, by operation
of Law or otherwise, by any of the parties without the prior
written consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by, the parties hereto and their
respective successors and permitted assigns. Any purported
assignment not permitted under this Section shall be null and
void.
Section 8.4 Entire
Agreement. This Agreement, the Company
Disclosure Schedule, the Parent Disclosure Schedule, the
Exhibits hereto, the Voting Agreement, the Share Exchange
Agreement, the
Lock-Up
Agreements (as defined in the Share Exchange Agreement) and the
Confidentiality Agreement constitute the entire agreement, and
supersede all other prior agreements and understandings, both
written and oral, among the parties, or any of them, with
respect to the subject matter hereof and thereof.
Section 8.5 No
Third-Party Beneficiaries. Nothing in this
Agreement, express or implied, is intended to or shall confer
upon any Person other than the parties hereto (and their
respective successors and permitted assigns) any right or remedy
of any nature whatsoever under or by reason of this Agreement,
other than as provided in Section 5.8.
Section 8.6 Governing
Law. This Agreement, all claims or causes of
action (whether at Law, in contract, in tort or otherwise) that
may be based upon, arise out of or relate to this Agreement or
the negotiation, execution, termination, performance or
nonperformance of this Agreement, shall be governed by and
construed in accordance with the Laws of the State of Delaware,
without regard to any choice or conflicts of Law principles
(whether of the State of Delaware or any other jurisdiction)
that would cause the application of the Laws of any jurisdiction
other than the State of Delaware.
Section 8.7 Jurisdiction. All
actions and proceedings arising out of or relating to this
Agreement shall be heard and determined in the Chancery Court of
the State of Delaware and any state appellate court therefrom
within the State of Delaware (or, if the Chancery Court of the
State of Delaware declines to accept jurisdiction over a
particular matter, any state or federal court within the State
of Delaware), and the parties hereto hereby irrevocably submit
to the exclusive jurisdiction of such courts (the
Agreed Courts) in any such action or
proceeding and irrevocably waive the defense of an inconvenient
forum to the maintenance of any such action or proceeding.
Without limiting other means of service of process permissible
under applicable Law, each of the parties hereto agrees that
service of any process, summons, notice or document by
U.S. registered mail to the respective addresses set forth
in Section 8.11 shall be effective service of process for
any suit or proceeding in connection with this Agreement. The
consents to jurisdiction set forth in this paragraph shall not
constitute general consents to service of process in the State
of Delaware and shall have no effect for any purpose except as
provided in this paragraph and shall not be deemed to confer
rights on any Person other than the parties hereto. The parties
hereto agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by Law.
Section 8.8 Specific
Enforcement. The parties agree that
irreparable damage would occur and that the parties would not
have any adequate remedy at law in the event that any of the
provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the
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terms and provisions of this Agreement in any Agreed Court,
without proof of actual damages (and each party hereby waives
any requirement for the securing or posting of any bond or other
security in connection therewith); specific performance being in
addition to any other remedy to which the parties are entitled
at law or in equity.
Section 8.9 WAIVER
OF JURY TRIAL. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING BETWEEN THE PARTIES HERETO ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 8.10 Severability. If
any term or other provision of this Agreement is determined by a
court of competent jurisdiction to be invalid, illegal or
incapable of being enforced by any rule of law or public policy,
all other terms, provisions and conditions of this Agreement
shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible to the
fullest extent permitted by Law in an acceptable manner to the
end that the Transactions are fulfilled to the extent possible.
Section 8.11 Notices. All
notices, requests and other communications to any party
hereunder shall be in writing and shall be deemed given if
delivered personally, telecopy faxed (which is confirmed) or
sent by overnight courier (providing proof of delivery) to the
parties at the following addresses:
If to Parent or Merger Sub, to:
Man Group plc
Sugar Quay
Lower Thames Street
London
EC3R 6DU
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Attention:
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Stephen Ross
Jasveer Singh
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Fax: +44 20 7144 2001
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Fax: (212) 310 8007
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Attention:
|
Jane McDonald
Danielle D. Do
|
If to the Company, to:
GLG Partners, Inc.
399 Park Avenue, 38th Floor
New York, New York 10022
Attention: Alejandro San Miguel
Fax:
(212) 224-7244
with a copies (which shall not constitute notice) to:
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, New York 10112
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Attention:
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Allen Miller
Marc Alpert
Sey-Hyo Lee
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Fax:
(212) 541-5369
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and to:
Winston & Strawn LLP
200 Park Avenue
New York, New York
10166-4193
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Attention:
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William J. Grant
Terrence R. Brady
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Fax:
(212) 294-4700
or such other address or telecopy fax number as such party may
hereafter specify by like notice to the other parties hereto.
All such notices, requests and other communications shall be
deemed received on the date of receipt by the recipient thereof
if received prior to 5 p.m. in the place of receipt and
such day is a business day in the place of receipt. Otherwise,
any such notice, request or communication shall be deemed not to
have been received until the next succeeding business day in the
place of receipt.
Section 8.12 Definitions. As
used in this Agreement, the following terms have the meanings
ascribed thereto below:
5.3 Notice has the meaning set forth
in Section 5.3(b).
Acceptable Confidentiality Agreement
has the meaning set forth in Section 5.3(e)(i).
Adjusted Assets Under Management shall
mean, with respect to each account of each Client and each Fund,
as of a specified date, the amount of assets under management by
the Company or any of its Subsidiaries in such account as of the
Base Date, as adjusted, in the case of any determination of
Adjusted Assets Under Management after the Base Date, to reflect
additions and withdrawals of funds, new accounts and terminated
accounts during the period after the Base Date through and
including such specified date. For the avoidance of doubt,
(i) the calculation of Adjusted Assets Under Management
shall not take into account any distributions of interest,
dividends, income or capital gains from any account (or
reinvestments of such distributions) or any increase or decrease
in assets under management due to market appreciation or
depreciation and any currency fluctuations after the Base Date,
(ii) additions and contributions shall be taken into
account only when actually funded and withdrawals shall be taken
into account when they are actually funded only out of such
account or, if earlier, the date on which the Company, any of
its Subsidiaries or any Fund receives notice communicating an
intention to withdraw any assets from an existing account
and/or Fund
(unless such notice has been revoked prior to the applicable
date), (iii) any assets under management for any account
(including any Fund) for which the Company or any of its
Subsidiaries act as investment adviser and subadviser shall be
counted only once, and (iv) any assets under management for
any set of accounts (including any Fund) one of which invests in
the other shall be counted only once if the Company or any of
its Subsidiaries act as an investment adviser to both, except to
the extent that an investment management fee is payable to one
or more of the Company and any of its Subsidiaries in respect of
both accounts.
Advisers Act has the meaning set forth
in Section 3.13(c).
Advisory Agreement shall mean any
Contract, including, without limitation, any investment
advisory, management and investment management agreement,
entered into by the Company or any of its Subsidiaries for the
purpose of providing management, investment advisory or
investment management services, including any
sub-advisory
services, to a Person.
Affiliate shall mean, as to any
Person, any other Person that, directly or indirectly, controls,
or is controlled by, or is under common control with, such
Person. For this purpose, control (including,
with its correlative meanings, controlled
by and under common control with)
shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of management or policies of a
Person, whether through the ownership of securities or
partnership or other ownership interests, by contract or
otherwise.
Agent has the meaning set forth in
Section 2.2(a).
Agreed Courts has the meaning set
forth in Section 8.7.
Agreement has the meaning set forth in
the Preamble.
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Antitrust Laws has the meaning set
forth in Section 5.4(a).
Approved shall mean approved, cleared
or decided neither to initiate proceedings nor otherwise to
intervene in respect of the Transactions and not to refer the
Transactions to any other competent Governmental Authority, and
as of the Closing Date such approvals, clearances and decisions
shall be in full force and effect and shall not have been
reversed, stayed, enjoined, set aside or suspended and shall
also mean the expiration of any waiting period absent any
legally prohibitive objection from the competent Governmental
Authority following the notification of the Transactions to that
Governmental Authority.
Balance Sheet Date has the meaning set
forth in Section 3.10(c).
Bankruptcy and Equity Exception has
the meaning set forth in Section 3.3(a).
Base Date shall mean March 31,
2010.
Book-Entry Shares has the meaning set
forth in Section 2.1(c).
Business Day shall mean a day except a
Saturday, a Sunday or other day on which the SEC or banks in the
City of New York are authorized or required by Law to be closed.
Cap Amount has the meaning set forth
in Section 7.3(c).
Certificate has the meaning set forth
in Section 2.1(c).
Certificate of Merger has the meaning
set forth in Section 1.3.
Client shall mean any Person who is
(i) party to an Advisory Agreement pursuant to which the
Company or any of its Subsidiaries provides management,
investment management or investment advisory services, including
any
sub-advisory
services, to such Person, or (ii) an investor in a Fund.
Closing has the meaning set forth in
Section 1.2.
Closing Date has the meaning set forth
in Section 1.2.
Code shall mean the Internal Revenue
Code of 1986, as amended, and, as applicable, the rules and
Treasury Regulations promulgated thereunder.
Company has the meaning set forth in
the Preamble.
Company Acquisition Agreement has the
meaning set forth in Section 5.3(b).
Company Adverse Recommendation Change
has the meaning set forth in Section 5.3(b).
Company Board Recommendation has the
meaning set forth in Section 5.1(b).
Company Common Stock has the meaning
set forth in Section 2.1.
Company Disclosure Schedule is defined
in the Preamble to Article III.
Company Expenses has the meaning set
forth in Section 7.3(d).
Company Intellectual Property has the
meaning set forth in Section 3.17(a).
Company Material Adverse Effect shall
mean, with respect to the Company, any change, development,
occurrence, event or state of facts that is, or would reasonably
be expected to be, materially adverse to the financial
condition, assets, liabilities, business or results of
operations of the Company and its Subsidiaries taken as a whole;
provided, however, that none of the following
shall constitute a Company Material Adverse Effect:
(i) changes in the United States or European economy,
financial markets, political or regulatory conditions generally;
(ii) changes, developments, occurrences or events generally
affecting the alternative investment management industry in
Europe (the Companys Industry);
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(iii) the negotiation, execution or announcement of the
Transactions and the Share Exchange Transactions or any changes,
developments, occurrences, events or states of fact arising
therefrom;
(iv) (A) changes in Law or in generally accepted
accounting principles or accounting standards, or changes in
general legal, regulatory or political conditions, (B) acts
of war, sabotage or terrorism, or any escalation or worsening of
any such acts of war, sabotage or terrorism threatened or
underway as of the date of this Agreement, (C) any action
taken by the Company or its Subsidiaries as required by this
Agreement or with the written consent of Parent, or (D) any
decline in the market price, or change in trading volume, of the
capital stock of the Company, or any failure to meet internal or
publicly announced revenue or earnings projections;
provided, further, however, that changes,
developments, occurrences, events or effects referred to in:
(x) clauses (i), (ii), (iv)(A) and (iv)(B) of this
definition may constitute (and may be taken into account in
determining the occurrence or expected occurrence of) a Company
Material Adverse Effect to the extent they adversely affect the
Company and its Subsidiaries taken as a whole in a
disproportionate manner relative to other participants in the
Companys Industry,
(y) clause (iii) shall not apply with respect to
Sections 3.4, 3.5, 3.14 and 4.4; and
(z) clause (iv)(D) of this definition shall not
prevent a determination that the underlying cause of any
decline, change or failure referred to therein is a Company
Material Adverse Effect.
Company Material Contract has the
meaning set forth in Section 3.14.
Company Plans has the meaning set
forth in Section 3.16(a).
Company Preferred Stock has the
meaning set forth in Section 3.2(a).
Company Restricted Shares shall mean
an issued and outstanding share of Company Common Stock granted
by the Company pursuant to any of the Company Stock Plans.
Company SEC Documents has the meaning
set forth in Section 3.10(a).
Company Stock Plans shall mean the
2007 Restricted Stock Plan, the 2007 Long Term Incentive Plan
and the 2009 Long Term Incentive Plan.
Company Stock Rights has the meaning
set forth in Section 2.3(b).
Company Stockholder Approval shall
mean each of (i) the affirmative vote (in person or by
proxy) at the Company Stockholders Meeting (or any adjournment
or postponement thereof) of the holders of a majority of the
outstanding shares of Company Common Stock and Company Preferred
Stock, voting as a single class, in favor of the adoption of
this Agreement and (ii) the affirmative vote (in person or
by proxy) at the Company Stockholders Meeting (or any
adjournment or postponement thereof) of the holders of a
majority of the outstanding shares of Company Common Stock
(excluding the Controlling Holders and their Affiliates, Parent
and its Affiliates, the Company and its Affiliates (other than
the directors who are members of the Special Committee) and
employees of the Company) in favor of the adoption of this
Agreement.
Company Stockholders Meeting has the
meaning set forth in Section 5.1(a).
Company Technology has the meaning set
forth in Section 3.17(a).
Company Termination Fee has the
meaning set forth in Section 7.3(b).
Computer Systems has the meaning set
forth in Section 3.17(f).
Confidentiality Agreement has the
meaning set forth in Section 5.7(b).
Contract shall mean any loan or credit
agreement, indenture, debenture, note, bond, mortgage, lease,
license or other contract, agreement or instrument, in each
case, whether oral or written.
Controlling Holders has the meaning
set forth in the Preamble.
Convertible Notes has the meaning set
forth in Section 3.2(a).
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Copyrights has the meaning set forth
in Section 3.17(a).
Covered Staff has the meaning set
forth in Section 3.16(a).
Current D&O Policies has the
meaning set forth in Section 5.8(b).
D&O Tail Period has the meaning
set forth in Section 5.8(b).
Database Rights has the meaning set
forth in Section 3.17(a).
Designs has the meaning set forth in
Section 3.17(a).
DGCL has the meaning set forth in
Section 1.1.
Disclosure and Transparency Rules
shall mean the UK Disclosure and Transparency Rules of the
UK Listing Authority made under Part VI of FSMA.
Dissenting Stockholder has the meaning
set forth in Section 2.1(d).
Dissenting Shares has the meaning set
forth in Section 2.1(d).
Effective Time has the meaning set
forth in Section 1.3.
ERISA has the meaning set forth in
Section 3.16(a).
Exchange Act shall mean the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
Exchange Ratio has the meaning set
forth in the Share Exchange Agreement.
Exchangeable Shares has the meaning
set forth in Section 3.2(a).
FSMA shall mean the United Kingdom
Financial Services and Markets Act 2000, including any
regulations made pursuant thereto.
Fund shall mean any partnership,
limited liability company or other collective or pooled
investment vehicle or account (whether open ended or close
ended) to which the Company or any of its Subsidiaries, directly
or indirectly, provides management, investment management,
sub-management
or
sub-investment
management or investment advisory services (including, for the
avoidance of doubt, any managed account) or acts as
sub-manager
or
sub-investment
manager, including each of the entities set forth on
Section 3.20(a) of the Company Disclosure Schedule. For the
avoidance of doubt, with respect to any collective or pooled
investment vehicle or account (whether open ended or close
ended) for which the Company or any of its Subsidiaries,
directly or indirectly, provides management, advisory or
investment management services with respect to a
sub-set of
or one or more specific portfolios of the assets invested in
such vehicle or account, only such
sub-set or
portfolios shall be deemed to be a Fund for purposes of this
Agreement.
GAAP shall mean generally accepted
accounting principles in the United States.
Goldman has the meaning set forth in
Section 3.7.
Goldman Fairness Opinion has the
meaning set forth in Section 3.8(b).
Governmental Authority shall mean any
government, court, municipality, regulatory or administrative
agency, commission, body or authority or other governmental
instrumentality, federal, state or local, domestic, foreign or
multinational.
HSR Act shall mean the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.
IMA has the meaning set forth in
Section 3.20(b)(i).
Indemnification Agreement has the
meaning set forth in Section 5.8(a).
Indemnitee has the meaning set forth
in Section 5.8(a).
Intellectual Property Rights has the
meaning set forth in Section 3.17(a).
A-48
Investment Company Act has the meaning
set forth in Section 3.13(c).
IPO Date has the meaning set forth in
Section 3.10(a).
Irish Fund shall mean any collective
investment scheme authorized by the Irish Financial Services
Regulatory Authority as a UCITS pursuant to the European Union
(Undertakings for Collective Investment in Transferable
Securities) Regulations 2003, as amended or as a Non-UCITS
pursuant to Part XII of the Companies Act 1990.
IRS shall mean the U.S. Internal
Revenue Service.
Knowledge shall mean, the actual
knowledge (i.e., not encompassing imputed or similar concepts of
knowledge) after due and careful inquiry of, in the case of the
Company, the individuals listed on Exhibit H, and in the
case of Parent, the individuals listed on Exhibit I.
Labor Organization has the meaning set
forth in Section 3.16(j).
Law shall mean any law, statute, code,
rule, regulation or ordinance of a Governmental Authority.
Licenses has the meaning set forth in
Section 3.13(d).
Liens shall mean any pledge, lien,
charge, right of first refusal or other option to purchase or
otherwise acquire any interest, easement, security interest or
other encumbrance.
Listing Rules has the meaning set
forth in Section 4.5.
Marks has the meaning set forth in
Section 3.17(a).
Maximum Premium has the meaning set
forth in Section 5.8(b).
Merger has the meaning set forth in
the Preamble.
Merger Consideration has the meaning
set forth in Section 2.1(c).
Merger Sub has the meaning set forth
in the Preamble.
Moelis has the meaning set forth in
Section 3.7.
Moelis Fairness Opinion has the
meaning set forth in Section 3.8(a).
Multiemployer Plan has the meaning set
forth in Section 3.16(a).
Organizational Documents shall mean,
with respect to an entity, its certificate of incorporation,
articles of incorporation, by-laws, articles of association,
memorandum of association, certificate of trust, trust
agreement, partnership agreement, limited partnership agreement,
certificate of formation, limited liability company agreement or
operating agreement, as applicable.
Outside Date has the meaning set forth
in Section 7.1(b)(i).
Parent has the meaning set forth in
the Preamble.
Parent Disclosure Schedule has the
meaning set forth in the Preamble of Article IV.
Parent Expenses has the meaning set
forth in Section 7.3(c).
Parent Material Adverse Effect has the
meaning set forth in Section 4.1.
Parent Ordinary Shares shall mean the
ordinary shares of Parent.
Parent Recommendation has the meaning
set forth in Section 5.2(b).
Parent Shareholder Approval has the
meaning set forth in Section 4.3(b).
Parent Shareholders Meeting has the
meaning set forth in Section 5.2(a).
Patents has the meaning set forth in
Section 3.17(a).
A-49
Permit shall mean a permit, license,
franchise or authorization from a Governmental Authority.
Permitted Liens shall mean
(i) Liens for Taxes, assessments or other similar charges
by Governmental Authorities securing payments not yet due or the
amount or validity of which is being contested in good faith and
by appropriate proceedings, (ii) mechanics,
materialmens, carriers, workmens,
warehousemans, repairmens, landlords and
similar Liens which arise in the ordinary course of business,
(iii) such other Liens or imperfections of title that,
individually and in the aggregate, do not, and would not
reasonably be expected to, materially detract from the value of,
or materially impair the existing use of, the property or asset
affected by the applicable Lien and (iv) other immaterial
Liens.
Person shall mean an individual, a
corporation, a limited liability company, a partnership, an
association, a trust or any other entity, including a
Governmental Authority.
Proceeding has the meaning set forth
in Section 5.8(a).
Prospectus has the meaning set forth
in Section 4.5.
Proxy Statement has the meaning set
forth in Section 3.5.
Registered Advisers has the meaning
set forth in Section 3.13(d).
Registered Intellectual Property has
the meaning set forth in Section 3.17(b).
Representatives has the meaning set
forth in Section 5.3(a).
Restraint has the meaning set forth in
Section 6.1(d).
SEC shall mean the
U.S. Securities and Exchange Commission.
Securities Act shall mean the
Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
Share Exchange Agreement has the
meaning set forth in the Preamble.
Share Exchange Transactions refers
collectively to the Share Exchange Agreement and the
transactions contemplated thereby.
Shareholders Agreement shall mean the
Company Shareholders Agreement dated as of June 22, 2007
among the Company and the Persons set forth on the signature
page thereto.
Shareholder Circular has the meaning
set forth in Section 4.5.
Shareholders Agreement Waiver has the
meaning set forth in the Recitals.
Side Letter has the meaning set forth
in Section 3.14(a)(xv).
Software has the meaning set forth in
Section 3.17(a).
Special Committee has the meaning set
forth in the Recitals.
Subsidiary when used with respect to
the Company, the Surviving Corporation, Parent or any other
party, shall mean any corporation, limited liability company,
partnership, trust or other entity of which the Company, the
Surviving Corporation, Parent or such other party, as the case
may be, owns (either alone, directly, or indirectly through, or
together with, one or more of its Subsidiaries) 50% or more of
the equity interests the holder of which is generally entitled
to vote for the election of the board of directors or governing
body of such corporation, limited liability company,
partnership, trust or other entity. For the avoidance of doubt,
each of Sage Summit LP and Lavender Heights Capital LP are
Subsidiaries of the Company, and after the Effective Time, of
the Surviving Corporation. For purposes of determining whether a
Subsidiary is wholly owned, the Exchangeable Shares shall be
disregarded. For the avoidance of doubt, the Funds shall not
constitute Subsidiaries of the Company or any of its
Subsidiaries.
Superior Proposal has the meaning set
forth in Section 5.3(e)(ii).
Surviving Corporation has the meaning
set forth in Section 1.1.
A-50
Takeover Proposal has the meaning set
forth in Section 5.3(e)(iii).
Tax Returns shall mean any return,
report, claim for refund, estimate, computation, information
return or statement or other similar document relating to or
required to be filed with any Governmental Authority with
respect to Taxes, including any schedule or attachment thereto,
and including any amendment thereof.
Taxes shall mean (i) any and all
federal, state, local or foreign taxes, charges, fees, imposts,
levies duties or other assessments, including without limitation
all net income, gross receipts, capital, sales, use, ad valorem,
value added, transfer, franchise, profits, inventory, capital
stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation,
property and estimated taxes, customs duties, fees, assessments
and charges of any kind whatsoever, (ii) all interest,
penalties, fines, additions to Tax or additional amounts imposed
by any Taxing Authority in connection with any item described in
clause (i), and (iii) any liability in respect of any
items described in clauses (i)
and/or
(ii) payable by reason of contract, deed, assumption,
transferee liability, operation of Law, Treasury Regulation
Section 1.1502-6(a)
(or any predecessor or successor thereof of any analogous or
similar provision under Law) or otherwise.
Taxing Authority shall mean the IRS,
HM Revenue and Customs and any other Governmental Authority
responsible for the administration of any Tax or exercising a
fiscal, revenue, customs or excise function.
Technology has the meaning set forth
in Section 3.17(a).
Trade Secrets has the meaning set
forth in Section 3.17(a).
Transaction Notice has the meaning set
forth in Section 5.4(f).
Transactions refers collectively to
this Agreement and the transactions contemplated hereby and by
the Voting Agreement, including the Merger.
Treasury Regulations means the
U.S. Department of Treasury regulations promulgated under
the Code.
UCITS shall mean a collective
investment scheme governed by the Irish regulations on
Undertakings for the Collective Investment of Transferable
Securities.
UKLA shall mean the United Kingdom
Financial Services Authority acting in its capacity as the
competent authority in the United Kingdom under Part VI of
FSMA.
VAT means value added tax as provided
for in the VATA and any other tax of a similar nature.
VATA means, in the United Kingdom, the
Value Added Tax Act 1994 and, in any other jurisdiction, any
equivalent registration.
Voting Agreement has the meaning set
forth in the Recitals.
Warrants has the meaning set forth in
Section 3.2(a).
Section 8.13 Interpretation.
(a) When a reference is made in this Agreement to an
Article, a Section, Schedule or Exhibit, such reference shall be
to an Article of, a Section of, or a Schedule or Exhibit to,
this Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the word
including is used in this Agreement, it shall be
deemed to be followed by the words without
limitation. The words hereof,
herein and hereunder and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement. The word extent in the phrase to
the extent shall mean the degree to which a subject or
other thing extends, and such phrase shall not mean simply
if. A willful breach of this Agreement
shall mean a deliberate act or a deliberate failure to act,
which act or failure to act constitutes in and of itself a
material breach of this Agreement, where breaching was the
conscious objective of the act or failure to act. All terms
defined in this Agreement shall have the defined meanings when
used in any Schedule or other document
A-51
made or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such
terms and to the masculine as well as to the feminine and neuter
genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument
that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver
or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments
thereto and instruments incorporated therein. References to a
Person are also to its permitted assigns and successors.
(b) The Company Disclosure Schedule and Parent Disclosure
Schedule shall identify items of disclosure by reference to a
particular section or subsection of this Agreement;
provided, that any matter disclosed with respect to one
section or subsection of this Agreement shall be deemed
disclosed for purposes of all other sections or subsections of
this Agreement to the extent its relevance to such other
sections or subsections is reasonably apparent.
(c) The parties hereto have participated jointly in the
negotiation and drafting of this Agreement and, in the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as jointly drafted by the parties
hereto and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of
any provision of this Agreement.
Section 8.14 Counterparts. This
Agreement may be executed in counterparts (each of which shall
be deemed to be an original but all of which taken together
shall constitute one and the same agreement) and shall become
effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties.
[signature
page follows]
A-52
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date first
above written.
MAN GROUP PLC
Name: Stephen Ross
ESCALATOR SUB 1 INC.
Name: John B. Rowsell
GLG PARTNERS, INC.
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By:
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/s/ Alejandro
San Miguel
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Name: Alejandro San Miguel
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Title:
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General Counsel and Corporate Secretary
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A-53
Appendix A-1
AMENDMENT
NO. 1 TO
AGREEMENT AND PLAN OF MERGER
This AMENDMENT NO. 1 dated as of August 19, 2010 (this
Amendment) to the Agreement and Plan of
Merger (the Merger Agreement) dated as of
May 17, 2010 among Man Group plc, a public limited company
existing under the laws of England and Wales
(Parent), Escalator Sub 1 Inc., a Delaware
corporation and a wholly owned Subsidiary of Parent
(Merger Sub), and GLG Partners, Inc., a
Delaware corporation (the Company), is among
Parent, Merger Sub and the Company. Capitalized terms used but
not defined herein have the meanings ascribed to such terms in
the Merger Agreement.
WHEREAS, Parent, the Company and the Companys directors
(collectively, the Defendants) are parties to
a shareholder action concerning the Merger Agreement in the
Court of Chancery of the State of Delaware styled
Duva v. GLG Partners, Inc., et al., C.A.
No. 5512-VCS
(the Delaware Action) and the Defendants
other than Parent are parties to shareholder actions concerning
the Merger Agreement in New York Supreme Court styled Akoleo
S.A. v. GLG Partners, Inc., et al. and Zia v.
GLG Partners, Inc., et al. (the New York
Actions);
WHEREAS, Parent, the Company and the plaintiffs in the Delaware
Action and the New York Actions (the
Plaintiffs) have reached an
agreement-in-principle
providing for the settlement of the Delaware Action on the terms
and subject to the conditions set forth in a memorandum of
understanding (the MOU) dated August 19,
2010, which terms include an obligation by Parent, Merger Sub
and the Company to make certain amendments to the Merger
Agreement; and
WHEREAS, Parent, Merger Sub and the Company desire to amend the
Merger Agreement in accordance with the provisions of the MOU;
NOW, THEREFORE, in consideration of the premises set forth
herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Parent,
Merger Sub and the Company hereby agree as follows:
Section 1. Section 5.3(b)
of the Merger Agreement is amended to replace the reference to
third (3rd) Business Day with second (2nd)
Business Day, the reference to three
(3) Business Day period with two
(2) Business Day period and each reference to
three (3) Business Days with two
(2) Business Days.
Section 2. Sections 7.3(b)
and 7.3(e) of the Merger Agreement are amended to replace the
reference to $48,000,000 in each of the definitions
of Company Termination Fee and Parent
Termination Fee with $26,000,000.
Section 3. Section 7.3(b)(i)(C)
of the Merger Agreement is amended to replace the reference to
twelve (12) months with nine
(9) months.
Section 4. The
definition of Business Day in Section 8.12 of
the Merger Agreement is amended to read in its entirety as
follows:
Business Day shall mean any day except
a Saturday, a Sunday or other day on which the SEC or banks in
the City of New York are authorized or required by Law to be
closed; provided, however, that for purposes of
Section 5.3(b) only, Business Day shall also
exclude any other day on which banks in London, England are
authorized or required by Law to be closed.
Section 5. This
Amendment may be executed in counterparts (each of which shall
be deemed to be an original but all of which taken together
shall constitute one and the same agreement) and shall become
effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties.
Section 6. This
Amendment, all claims or causes of action (whether at Law, in
contract, in tort or otherwise) that may be based upon, arise
out of or relate to this Amendment or the negotiation,
execution, termination, performance or nonperformance of this
Amendment, shall be governed by and construed in accordance with
the Laws of the State of Delaware, without regard to any choice
or conflicts of Law principles (whether of the State of
A-1-1
Delaware or any other jurisdiction) that would cause the
application of the Laws of any jurisdiction other than the State
of Delaware.
Section 7. Except
as otherwise specifically amended herein, the Merger Agreement,
as modified by this Amendment, remains in full force and effect.
On and after the date of this Amendment, each reference in the
Merger Agreement to this Agreement,
hereunder, hereof, herein or
words of like import, and each reference to the Merger Agreement
in any other agreements, documents or instruments executed and
delivered pursuant to, in connection with or in relation to the
Merger Agreement, shall mean and be a reference to the Merger
Agreement, as amended by this Amendment.
Section 8. If
any term or other provision of this Amendment is determined by a
court of competent jurisdiction to be invalid, illegal or
incapable of being enforced by any rule of law or public policy,
all other terms, provisions and conditions of this Amendment
shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Amendment so as to effect
the original intent of the parties as closely as possible to the
fullest extent permitted by Law in an acceptable manner to the
end that the Transactions are fulfilled to the extent possible.
[Signatures
on following page]
A-1-2
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered as of the date first
above written.
MAN GROUP PLC
Name: Jasveer Singh
ESCALATOR SUB 1 INC.
Name: Orly Lax
GLG PARTNERS, INC.
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By:
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/s/ Alejandro
San Miguel
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Name: Alejandro San Miguel
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Title:
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Corporate Counsel & Secretary
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A-1-3
SHARE
EXCHANGE AGREEMENT
Dated as of May 17, 2010
among
MAN GROUP PLC
and
THE STOCKHOLDERS LISTED ON SCHEDULE I HERETO
TABLE OF
CONTENTS
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Page
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ARTICLE 1 DEFINED TERMS
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B-2
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Section 1.1.
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Defined Terms
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B-2
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ARTICLE 2 SHARE EXCHANGE
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B-4
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Section 2.1.
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Share Exchange
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B-4
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Section 2.2.
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Share Exchange Closing
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B-4
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ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
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B-4
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Section 3.1.
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Authority
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B-4
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Section 3.2.
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Non-Contravention
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B-5
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Section 3.3.
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Governmental Approvals
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B-5
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Section 3.4.
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Ownership of Shares
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B-5
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Section 3.5.
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Brokers
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B-5
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Section 3.6.
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Purchase for Own Account
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B-6
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Section 3.7.
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Ability to Protect Its Own Interests and Bear Economic Risk
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B-6
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Section 3.8.
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Receipt of Information
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B-6
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Section 3.9.
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Private Placement
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B-6
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Section 3.10.
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Parent Shares
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B-6
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Section 3.11.
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Information Supplied
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B-6
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ARTICLE 4 [RESERVED]
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B-7
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ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PARENT
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B-7
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Section 5.1.
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Organization
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B-7
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Section 5.2.
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Capitalization
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B-7
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Section 5.3.
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Authority
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B-7
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Section 5.4.
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Non-Contravention
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B-8
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Section 5.5.
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Governmental Approvals
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B-8
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Section 5.6.
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Brokers
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B-8
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Section 5.7.
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Regulatory Reports; Undisclosed Liabilities
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B-8
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Section 5.8.
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Absence of Certain Changes
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B-9
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Section 5.9.
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Legal Proceedings
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B-9
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Section 5.10.
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Valid Issuance
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B-9
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Section 5.11.
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Purchase for Own Account
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B-9
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Section 5.12.
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Ability to Protect its Own Interests and Bear Economic Risk
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B-9
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Section 5.13.
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Receipt of Information
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B-10
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Section 5.14.
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Private Placement
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B-10
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Section 5.15.
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Legend
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B-10
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Section 5.16.
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Exclusivity of Representations and Warranties
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B-10
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Section 5.17.
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No Other Parent Representations or Warranties
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B-10
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ARTICLE 6 ADDITIONAL AGREEMENTS
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B-11
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Section 6.1.
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Exchange of Exchangeable Shares
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B-11
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Section 6.2.
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Share Exchange Commitment
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B-11
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Section 6.3.
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Transfer and Other Restrictions
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B-11
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B-i
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Page
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Section 6.4.
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No Solicitation
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B-11
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Section 6.5.
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Further Assurances
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B-12
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Section 6.6.
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Exchange Shares
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B-12
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Section 6.7.
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Public Statements
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B-12
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Section 6.8.
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Fiduciary Duties
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B-13
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Section 6.9.
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Amendment of Agreements
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B-13
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Section 6.10.
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Resignation from the Companys Board of Directors
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B-13
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Section 6.11.
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No Dealing
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B-13
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Section 6.12.
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Parent Shareholders Meeting; Preparation of the Shareholder
Circular and Prospectus
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B-13
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Section 6.13.
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Employment Agreements
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B-14
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Section 6.14.
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Continued Reinvestment
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B-14
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ARTICLE 7 CONDITIONS
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B-14
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Section 7.1.
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Conditions to Each Partys Obligation to Effect the Share
Exchange
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B-14
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Section 7.2.
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Conditions to Obligations of Parent
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B-15
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Section 7.3.
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Conditions to Obligation of the Stockholders
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B-15
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ARTICLE 8 SURVIVAL; TRUSTEE LIABILITY
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B-16
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Section 8.1.
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Survival
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B-16
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Section 8.2.
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Trustee Liability
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B-16
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ARTICLE 9 TERMINATION, AMENDMENT AND WAIVER
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B-17
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Section 9.1.
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Termination
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B-17
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Section 9.2.
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Amendment
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B-17
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Section 9.3.
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Waiver
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B-17
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ARTICLE 10 GENERAL PROVISIONS
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B-18
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Section 10.1.
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Assignment
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B-18
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Section 10.2.
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Entire Agreement
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B-18
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Section 10.3.
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No Third-Party Beneficiaries
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B-18
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Section 10.4.
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Governing Law
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B-18
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Section 10.5.
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Jurisdiction
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B-18
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Section 10.6.
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Specific Performance
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B-18
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Section 10.7.
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WAIVER OF JURY TRIAL
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B-18
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Section 10.8.
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Severability
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B-19
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Section 10.9.
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Notices
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B-19
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Section 10.10.
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Fees and Expenses
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B-19
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Section 10.11.
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Interpretation
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B-19
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Section 10.12.
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Counterparts
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B-20
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B-ii
SHARE
EXCHANGE AGREEMENT
This SHARE EXCHANGE AGREEMENT, dated as of May 17, 2010
(this Agreement), is among MAN GROUP PLC, a
public limited company existing under the laws of England and
Wales (Parent), and each of the stockholders
listed on Schedule I (each, a
Stockholder and, collectively with any
permitted transferee under Section 6.3(b), including any
Permitted Trust Transferee, the
Stockholders).
Introduction
WHEREAS, Parent, Escalator Sub 1 Inc., a Delaware corporation
and wholly owned subsidiary of Parent (Merger
Sub), and GLG Partners, Inc., a Delaware corporation
(the Company), propose to enter into an
Agreement and Plan of Merger, dated as of the date hereof (as it
may be amended or supplemented from time to time, the
Merger Agreement), pursuant to which, upon
the terms and subject to the conditions thereof, Merger Sub will
be merged with and into the Company, and the Company will be the
surviving entity (the Merger); and
WHEREAS, as of the date hereof, each Stockholder is the record
and beneficial owner of, or is trustee of a trust that is the
record holder of and whose beneficiaries are the beneficial
owners of, (i) the number of unrestricted shares (the
Common Shares) of common stock, par value
$0.0001 per share, of the Company (the Company Common
Stock), (ii) the number of shares (the
Preferred Shares) of Series A Voting
Preferred Stock, par value $0.0001 per share, of the Company and
(iii) the number of shares (the Exchangeable
Shares and together with the Common Shares and
Preferred Shares, the Shares) of Ordinary
Class B Shares, par value $0.0001 per share, of FA Sub 2
Limited (the Exchangeable Stock), in each
case, set forth opposite such Stockholders name on
Schedule I (such Shares, together with any other shares of
capital stock of the Company or Exchangeable Stock acquired by
such Stockholder after the date hereof and during the term of
this Agreement (including through the exercise of any warrants
or any other convertible or exchangeable securities or similar
instruments), being collectively referred to herein as such
Stockholders Subject Shares);
provided, that, notwithstanding the foregoing, Subject
Shares shall not include (i) any shares (the
Conversion Shares) of Company Common Stock
such Stockholder acquired upon conversion of the Companys
5.00% Convertible Dollar-Denominated Subordinated Notes due
May 15, 2014 (the Convertible Notes) and
(ii) the number of shares (the Open Market
Shares) of Company Common Stock acquired by such
Stockholder in the open market prior to the date hereof set
forth opposite such Stockholders name on Schedule I;
WHEREAS, as a condition to its willingness to enter into the
Merger Agreement, Parent has required that (i) each
Stockholder agree, and each Stockholder is willing to agree, to
exchange immediately prior to the Effective Time of the Merger
such Stockholders Subject Shares for ordinary shares of
US$0.034286 cents each of Parent (the Parent Ordinary
Shares) pursuant to the terms and subject to the
conditions of this Agreement (the Share
Exchange), and (ii) each Stockholder that is
party to the Voting and Support Agreement, dated as of the date
hereof (the Voting Agreement), among Parent
and certain of the Stockholders, agree, and each such
Stockholder is willing to agree, to vote such Stockholders
Subject Shares in favor of the Merger Agreement, the Merger and
the other transactions contemplated by the Merger
Agreement; and
WHEREAS, as a condition to its willingness to enter into the
Merger Agreement and this Agreement, Parent has required that
(i) Noam Gottesman enter into a non-competition and
non-solicitation agreement with Parent and the Company,
(ii) Emmanuel Roman enter into a deed of vendor covenant
with Parent and the Company and (iii) Pierre Lagrange enter
into a deed of vendor covenant with Parent and the Company, each
dated the date hereof and effective on and from the Share
Exchange Closing Date (as defined below).
B-1
In consideration of the foregoing and of the representations,
warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE 1
DEFINED TERMS
Section 1.1.
Defined Terms.
(a) For purposes of this Agreement, the following terms
shall have the meanings specified in this Section 1.1(a):
Admission and Disclosure Standards
means the requirements contained in the Admission and Disclosure
Standards published by the London Stock Exchange containing,
among other things, the admission requirements to be met by
companies seeking admission to trading on the London Stock
Exchanges main market for listed securities, as amended or
updated from time to time.
Average Dollar Closing Price means the
average of the daily volume weighted average price of a Parent
Ordinary Share in pounds sterling on the London Stock Exchange
for the ten consecutive trading days prior to, but not
including, the Share Exchange Closing Date, converted daily into
U.S. dollars using the closing U.S. dollar/sterling
rate quoted by WM/Reuters on each such trading day.
Dealing has the meaning set forth in
the definitions section of the UK Takeover Code issued by The
Panel on Takeovers and Mergers.
Disclosure and Transparency Rules
means the UK Disclosure and Transparency Rules of the UK Listing
Authority made under Part VI of FSMA.
Exchange Ratio means the Signing Date
Exchange Ratio; provided, that if, on close of trading on
the last trading day immediately prior to the Share Exchange
Closing Date, the product of the Average Dollar Closing Price
times the Signing Date Exchange Ratio is greater than the
Maximum Price, then the Exchange Ratio shall
equal the quotient obtained by dividing the Maximum Price by the
Average Dollar Closing Price.
FSA means the Financial Services
Authority of the United Kingdom or its successor organization or
organizations.
FSMA mean the United Kingdom Financial
Services and Markets Act 2000, including any regulations made
pursuant thereto.
London Stock Exchange means London
Stock Exchange plc.
Listing Rules means the Listing Rules
of the UK Listing Authority made under Part VI of FSMA.
Lock-up
Agreement has the meaning set forth in
Section 2.1.
Maximum Price means $4.25.
Official List means the Official List
maintained by the UK Listing Authority pursuant to Part VI
of FSMA.
Parent Material Adverse Effect means
any change, development, occurrence, event or state of facts
that is, or would reasonably be expected to be, materially
adverse to the financial condition, assets, liabilities,
business or results of operations of Parent and its Subsidiaries
taken as a whole; provided, however, that none of
the following shall constitute a Parent Material Adverse Effect:
(i) changes in the United States or European economy,
financial markets, political or regulatory conditions generally,
(ii) changes, developments, occurrences or events generally
affecting the alternative investment management industry
(Parents Industry),
B-2
(iii) the negotiation, execution, announcement and
consummation of the Transactions and the Share Exchange
Transactions or any changes, developments, occurrences, events
or states of fact arising therefrom, and
(iv) (A) changes in Law or in generally accepted
accounting principles or accounting standards, or changes in
general legal, regulatory or political conditions, (B) acts
of war, sabotage or terrorism, or any escalation or worsening of
any such acts of war, sabotage or terrorism threatened or
underway as of the date of this Agreement, (C) any action
taken by Parent or its Subsidiaries as required by this
Agreement or with the written consent of the other parties
hereto, or (D) any decline in the market price, or change
in trading volume, of the capital stock of Parent, or any
failure to meet internal or publicly announced revenue or
earnings projections; provided, further,
however, that changes, developments, occurrences, events
or effects referred to in:
(x) clauses (i), (ii), (iv)(A) and (iv)(B) of this
definition may constitute (and may be taken into account in
determining the occurrence or expected occurrence of) a Parent
Material Adverse Effect to the extent they adversely affect
Parent and its Subsidiaries, taken as a whole, in a
disproportionate manner relative to other participants in
Parents Industry,
(y) clause (iii) shall not apply with respect to
Sections 3.2, 3.3, 5.4 and 5.5; and
(z) clause (iv)(D) of this definition shall not prevent a
determination that the underlying cause of any decline, change
or failure referred to therein is a Parent Material Adverse
Effect.
Parent Shares means the Parent
Ordinary Shares and the deferred sterling shares, par value
£1 per share of Parent and any other shares issued by
Parent from time to time.
Principal Stockholders mean Emmanuel
Roman, Pierre Lagrange, Noam Gottesman and their respective
Related Trusts.
Prospectus Rules means the rule and
regulations made by the FSA in its capacity as the UKLA under
Part VI of FSMA and contained in the UKLA publication of
the same name.
Related Trust means, in the case of
Noam Gottesman, the Gottesman GLG Trust, in the case of Emmanuel
Roman, the Roman GLG Trust, and in the case of Pierre Lagrange,
the Lagrange GLG Trust.
Reinvestment Holder means a
Stockholder listed on Schedule II attached hereto.
Restricted Reinvested Assets means
with respect to a Reinvestment Holder, those funds that are
designated by such Reinvestment Holders as
restricted pursuant to Section 6.14 (including
any earnings and profits thereon from and after the Effective
Time).
Service Partnerships means Lavender
Heights Capital LP and Sage Summit LP.
Signing Date Exchange Ratio means
1.0856.
Trustee Party has the meaning set
forth in Section 8.2.
UK Listing Authority means the FSA
acting in its capacity as the competent authority in the
United Kingdom under Part VI of FSMA.
Unrestricted Reinvested Assets means
with respect to a Reinvestment Holder, any funds of such
Reinvestment Holder (together with the assets of such
Reinvestment Holders Related Trust) that are invested in
any of the Funds and that are not Restricted Reinvestment Assets.
(b) Capitalized terms used but not defined herein have the
meanings set forth in the Merger Agreement.
B-3
ARTICLE 2
SHARE
EXCHANGE
Section 2.1. Share
Exchange. Upon the terms and subject to the
conditions of this Agreement, each Stockholder shall exchange,
assign, transfer and deliver all of such Stockholders
Subject Shares to Parent at the Share Exchange Closing (as
hereinafter defined); and, in exchange therefor, Parent shall
allot and issue to each Stockholder such number of shares
(rounded to the nearest whole share) of Parent Ordinary Shares
(the Exchange Shares) as is equal to the
product of (i) the number of such Stockholders
Subject Shares that are Company Common Stock multiplied
by (ii) the Exchange Ratio. All of the Exchange Shares
(other than those allotted and issued to the Service
Partnerships) shall be subject to a Share
Lock-Up Deed
of Trust in substantially the form attached hereto as
Exhibit A (a
Lock-Up
Agreement) with respect to each Stockholder. The
Exchange Shares allotted and issued to the Service Partnerships
shall continue to be subject to the same vesting and other terms
and conditions that were applicable to the Service
Partnerships Subject Shares immediately prior to the Share
Exchange Closing, except to the extent acceleration is necessary
to permit payment of applicable Taxes.
Section 2.2. Share
Exchange Closing.
(a) The closing of the Share Exchange (the Share
Exchange Closing) shall take place after satisfaction
or (to the extent permitted by Law) waiver of the conditions set
forth in Article 7 (other than those conditions that by
their nature are to be satisfied at the closing, but subject to
the satisfaction or waiver of those conditions at such time) and
immediately prior to the Closing at the offices of Weil,
Gotshal & Manges LLP, 767 Fifth Avenue, New York,
New York 10153, unless another time, date or place is
agreed to in writing by the parties hereto (such date upon which
the Share Exchange Closing occurs, the Share Exchange
Closing Date).
(b) At the Share Exchange Closing, each Stockholder shall
cause the book entry transfer of such Stockholders Subject
Shares to an account designated by Parent and (ii) Parent
shall allot and issue to the Stockholders their respective
number of Exchange Shares, which shall be subject to the
Lock-Up
Agreements.
ARTICLE 3
REPRESENTATIONS
AND WARRANTIES OF THE STOCKHOLDERS
Except as disclosed in the definitive disclosure schedule letter
delivered by the Stockholders to Parent prior to the execution
of this Agreement (the Stockholder Disclosure
Schedule), each Stockholder, severally and not
jointly, represents and warrants to Parent as follows:
Section 3.1. Authority.
(a) If such Stockholder is incorporated as a corporation,
then such Stockholder has the requisite corporate power and
authority and full legal capacity to enter into, execute and
deliver this Agreement, to perform fully its obligations
hereunder and to consummate the transactions contemplated
hereby. If such Stockholder is organized as a partnership, then
such Stockholder has the requisite partnership power and
authority and full legal capacity to enter into, execute and
deliver this Agreement, to perform fully its obligations
hereunder and to consummate the transactions contemplated
hereby. If such Stockholder is organized as a limited liability
company, then such Stockholder has the requisite limited
liability company power and authority and full legal capacity to
enter into, execute and deliver this Agreement, to perform fully
its obligations hereunder and to consummate the transactions
contemplated hereby. If such Stockholder is organized as a
trust, then such Stockholder has the requisite power and
authority and full legal capacity to enter into, execute and
deliver this Agreement, to perform fully its obligations
hereunder and to consummate the transactions contemplated
hereby. If such Stockholder is an individual, then such
Stockholder has the power and authority and full legal capacity
to, and is competent to, enter into, execute and deliver this
Agreement, to perform fully his or her obligations hereunder and
to consummate the transactions contemplated hereby.
(b) The execution and delivery of this Agreement by such
Stockholder, the performance by such Stockholder of its
obligations hereunder and the consummation by such Stockholder
of the transactions contemplated hereby have been duly and
validly authorized and approved by such Stockholder. No other
proceedings on the part of such
B-4
Stockholder are necessary to authorize the execution and
delivery of this Agreement and the performance by such
Stockholder of its obligations hereunder. This Agreement has
been duly executed and delivered by such Stockholder and,
assuming due authorization, execution and delivery hereof by
Parent, constitutes a legal, valid and binding obligation of
such Stockholder, enforceable against such Stockholder in
accordance with its terms, except that such enforceability
(i) may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws of
general application affecting or relating to the enforcement of
creditors rights generally and (ii) is subject to
general principles of equity, whether considered in a proceeding
at law or in equity (the Bankruptcy and Equity
Exception).
Section 3.2. Non-Contravention. Neither
the execution and delivery of this Agreement and each other
agreement contemplated to be executed and delivered herein by
such Stockholder nor the consummation by such Stockholder of the
Share Exchange, nor compliance by such Stockholder with any of
the terms or provisions hereof or thereof, will (a) violate
or conflict with any provision of the Organizational Documents
of such Stockholder (if such Stockholder is not a natural
person) or (b) assuming that the authorizations, consents
and approvals referred to in Sections 3.3 are obtained and
the filings referred to in Section 3.3 are made,
(i) violate in any material respect any Law, injunction,
order, judgment, ruling or decree of any Governmental Authority
applicable to such Stockholder or (ii) violate, conflict
with, constitute a default (or an event which, with notice or
lapse of time, or both, would constitute a default), or give
rise to a right of termination, cancellation or redemption, an
acceleration of performance required, a loss of benefits, or the
creation of any Lien upon such Stockholders Subject
Shares, under, any of the terms, conditions or provisions of any
Contract or Permit to which such Stockholder is a party, except,
in the case of clause (ii), as set forth on
Section 3.2(b)(ii) of the Stockholder Disclosure Schedule
and for such violations, conflicts, defaults, terminations,
cancellations, redemptions, accelerations, losses and Liens as,
individually and in the aggregate, would not reasonably be
expected to materially delay or impair such Stockholders
ability to perform its obligations hereunder or thereunder or
the consummation of the Share Exchange (a Stockholder
Material Adverse Effect). If such Stockholder is a
married individual and such Stockholders Subject Shares
constitute community property or otherwise need spousal approval
in order for this Agreement to be a legal, valid and binding
obligation of such Stockholder, this Agreement has been duly
authorized, executed and delivered by, and constitutes a legal,
valid and binding obligation of, such Stockholders spouse,
enforceable against such spouse in accordance with its terms,
except that such enforceability may be limited by the Bankruptcy
and Equity Exception.
Section 3.3. Governmental
Approvals. Except for filings with
Governmental Authorities required under, and compliance with
other applicable requirements of, the Laws listed on
Section 3.3 of the Stockholder Disclosure Schedule, no
consents or approvals of, or filings, declarations or
registrations with, any Governmental Authority are necessary for
the execution and delivery of this Agreement by such Stockholder
and the consummation by such Stockholder of the Share Exchange,
except for such other consents, approvals, filings, declarations
or registrations that, if not obtained, made or given, would not
reasonably be expected to have a Stockholder Material Adverse
Effect.
Section 3.4. Ownership
of Shares. Such Stockholder is the record and
beneficial owner of, or is trustee of a trust that is the record
holder of and whose beneficiaries are the beneficial owners of,
the Shares set forth opposite such Stockholders name on
Schedule I attached hereto free and clear of any security
interests, liens, charges, encumbrances, equities, claims,
options or limitations of whatever nature and free of any other
limitation or restriction (including any restriction on the
right to vote, sell or otherwise dispose of such Shares), except
for any such encumbrances arising under the Stockholder
Agreement (which, in the case of each such encumbrance, shall be
released and cease to be of effect upon the Share Exchange
Closing), any such encumbrances arising under applicable
securities law or any such encumbrances arising hereunder. Such
Shares represent all of the shares of capital stock of the
Company beneficially owned by such Stockholder, or in the case
such Stockholder is a trustee of a trust, all the shares of
capital stock of the Company for which such Stockholder is the
record holder. There are no outstanding options, shares of
Company Common Stock subject to vesting or other rights to
acquire from such Stockholder, or obligations of such
Stockholder to sell or to dispose of, any shares of capital
stock of the Company.
Section 3.5. Brokers. Except
for those fees and expenses to be paid by the Company and which
are disclosed in the Merger Agreement, no broker, investment
banker, financial advisor or other Person is entitled to any
brokers, finders, financial advisors or other
similar fee or commission, or the reimbursement of expenses, in
B-5
connection with the Share Exchange based upon arrangements made
by or, with the knowledge of such Stockholder, on behalf of such
Stockholder in connection with its entering into this Agreement.
Section 3.6. Purchase
for Own Account. Such Stockholder is
acquiring the Exchange Shares for its own account and not with a
view to, or for offer or sale in connection with, any
distribution or sale thereof in violation of the Securities Act
of 1933, as amended, and the rules and regulations of the
Securities and Exchange Commission (the SEC)
promulgated thereunder (the Securities Act),
and such Stockholder has no present or contemplated agreement,
understanding, arrangement, obligation or commitment providing
for the disposition of the Exchange Shares, other than in
compliance with the Securities Act.
Section 3.7. Ability
to Protect Its Own Interests and Bear Economic
Risk. Such Stockholder, by reason of its
business and financial experience, has the capacity to protect
such Stockholders own interests in connection with the
transactions contemplated by this Agreement. Such Stockholder is
able to bear the economic risk of an investment in the Exchange
Shares and is able to sustain a loss of all of such
Stockholders investment in the Exchange Shares without
economic hardship if such a loss should occur.
Section 3.8. Receipt
of Information. Such Stockholder has received
all the information he, she or it considers necessary or
appropriate for deciding whether to acquire the Exchange Shares.
Such Stockholder further represents that he, she or it has had
an opportunity to ask questions and receive answers from Parent
regarding the terms and conditions of the Exchange Shares and
the business and financial condition of Parent and to obtain
additional information necessary to verify the accuracy of any
information furnished to such Stockholder or to which such
Stockholder had access. The foregoing, however, does not limit
or modify the representations and warranties of Parent in this
Agreement or the right of such Stockholder to rely upon such
representations and warranties. Such Stockholder has not
received, nor is such Stockholder relying on, any
representations from Parent other than as provided in this
Agreement.
Section 3.9. Private
Placement. Such Stockholder understands that
(a) the Exchange Shares have not been registered under the
Securities Act or any other applicable U.S. federal or
state securities Laws by reason of their issuance by Parent in a
transaction exempt from the registration requirements thereof
(and that Parents reliance on such exemption is predicated
on such Stockholders representations and warranties set
forth in this Article 3) and (b) the Exchange
Shares may not be sold unless such disposition is registered
under the Securities Act and applicable state securities Laws or
is exempt from registration thereunder. Such Stockholder
represents that he, she or it is an accredited
investor (as defined in Rule 501(a) of
Regulation D under the Securities Act).
Section 3.10. Parent
Shares. Other than pursuant to this
Agreement, such Stockholder does not own any of the Parent
Shares, has any interest therein or has any rights under a
derivative referenced to the Parent Shares or has entered into
any contract, option or other arrangement or understanding to
subscribe for or acquire any of the Parent Shares, any interest
therein or any rights under a derivative referenced to the
Parent Shares.
Section 3.11.
Information Supplied. None of the
information supplied or to be supplied by or on behalf of such
Stockholder for inclusion or incorporation by reference in the
Shareholder Circular or the Prospectus and contained in the
Shareholder Circular or the Prospectus will, (a) in the
case of the Shareholder Circular, at the date it (and any
amendment or supplement thereto) is first mailed to shareholders
of Parent or at the time of the Parent Shareholders Meeting and
(b) in the case of the Prospectus, at the date it (and any
amendment or supplement thereto) is published, contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they are made, not misleading;
provided, that no representation or warranty is made by
such Stockholder with respect to information supplied by or on
behalf of either Parent or the Company for inclusion or
incorporation by reference in any of the foregoing.
B-6
ARTICLE 4
[RESERVED]
ARTICLE 5
REPRESENTATIONS
AND WARRANTIES OF PARENT
Except as disclosed in (I) the Regulatory Reports (as
defined below) filed from and after May 28, 2009 and prior
to the date of this Agreement or (II) the definitive
disclosure schedule letter delivered by Parent to the Company
prior to the execution of this Agreement (the Parent
Share Exchange Disclosure Schedule), Parent hereby
represents and warrants to the Stockholders as follows:
Section 5.1. Organization.
(a) Parent is a public limited company duly organized and
validly existing under the Laws of England and Wales and has all
power and authority necessary to own or lease all of its
properties and assets and to carry on its business as presently
conducted.
(b) Parent is duly authorized or qualified to do business
and is in good standing (with respect to jurisdictions that have
the concept of good standing) in each jurisdiction where the
ownership, leasing or operation of its properties or other
assets or the nature its business requires such authorization or
qualification, except for failures to be so licensed, qualified
or in good standing that, individually and in the aggregate,
would not reasonably be expected to have a Parent Material
Adverse Effect.
(c) Parent has made available to the Stockholders correct
and complete copies of the Organizational Documents of Parent,
in effect as of the date of this Agreement, and which has
annexed or incorporated copies of all resolutions or agreements
required by applicable Law to be so annexed or incorporated.
Section 5.2. Capitalization.
(a) At the close of business on May 14, 2010, the
authorized capital stock of Parent consists of 2,858,329,201
Parent Ordinary Shares of US$0.034286 each, 1,043,449,209
deferred shares of 0.001 US cent each, 600,000 preference shares
of US$1,000 each and 50,000 deferred shares of £1 each (the
Deferred Sterling Shares). At the close of
business on April 30, 2010, 1,712,341,544 Parent Ordinary
Shares and 50,000 Deferred Sterling Shares were allotted and
fully paid. As of March 31, 2010, up to 36,017,161 Parent
Ordinary Shares were reserved for issuance in connection with
share awards under Parent incentive schemes and Parent employee
share options (collectively, Parent Options).
(b) Except as set forth in Section 5.2(a), as of
April 30, 2010, there were (i) no outstanding shares
of capital stock of Parent, (ii) no outstanding securities
of Parent or its Subsidiaries convertible into or exchangeable
or exercisable for shares of capital stock of Parent, and
(iii) no outstanding options, warrants or rights, or
commitments or agreements, to acquire from Parent, or that
obligate Parent to issue, shares of capital stock of Parent or
any securities of Parent or its Subsidiaries convertible into or
exchangeable or exercisable for shares of capital stock of
Parent. As of the date of this Agreement, there are no
outstanding agreements of any kind which obligate Parent any of
its Subsidiaries to repurchase, redeem or otherwise acquire any
shares of capital stock of Parent or any securities, options,
warrants or rights convertible into or exchangeable or
exercisable for shares of capital stock of Parent. Since
April 30, 2010 to the date of this Agreement, Parent has
not issued any shares of its capital stock or any securities
convertible into or exchangeable or exercisable for any shares
of its capital stock, other than or pursuant to Parent Options,
referred to in Section 5.2(a) that are outstanding as of
the date of this Agreement. All outstanding shares of Parent
Ordinary Shares have been duly authorized and duly and validly
issued and are fully paid, not subject to calls for further
payments or otherwise assessable and free of preemptive rights,
other than statutory rights under the laws of England and Wales.
Section 5.3. Authority.
(a) Parent has all necessary power and authority to execute
and deliver this Agreement and, subject to obtaining the Parent
Shareholder Approval, to perform its obligations hereunder and
to consummate the Share Exchange. The execution, delivery and
performance by Parent of this Agreement, and the consummation by
it of the
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Share Exchange, have been duly authorized and approved by its
Board of Directors, and except for obtaining the Parent
Shareholder Approval and obtaining the approval of the Board of
Directors of Parent to publishing, and the publication of, the
Shareholder Circular and the Prospectus, no other action on the
part of Parent is necessary to authorize the execution, delivery
and performance by Parent of this Agreement and the consummation
of the Share Exchange. This Agreement has been duly executed and
delivered by Parent and, assuming due authorization, execution
and delivery hereof by the other parties hereto, constitutes a
legal, valid and binding obligation of Parent, enforceable
against Parent in accordance with its terms, subject to the
Bankruptcy and Equity Exception.
(b) The Parent Shareholder Approval is the only vote or
approval of the holders of any class or series of shares of
Parent which is necessary to approve the Share Exchange.
Section 5.4. Non-Contravention. Neither
the execution and delivery of this Agreement by Parent nor the
consummation by Parent of the Share Exchange, nor compliance by
Parent with any of the terms or provisions hereof, will
(a) violate or conflict with any provision of the
Organizational Documents of Parent or (b) assuming that the
authorizations, consents and approvals referred to in
Section 5.5 are obtained and the filings referred to in
Section 5.5 are made, (i) violate in any material
respect any Law, injunction, order, judgment, ruling or decree
of any Governmental Authority applicable to Parent or
(ii) violate, conflict with, constitute a default (or an
event which, with notice or lapse of time, or both, would
constitute a default), or give rise to a right of termination,
cancellation or redemption, an acceleration of performance
required, a loss of benefits, or the creation of any Lien upon
any of the properties or assets of Parent, under, any of the
terms, conditions or provisions of any Contract or Permit to
which Parent is a party, except, in the case of clause (ii), for
such violations, conflicts, defaults, terminations,
cancellations, redemptions, accelerations, losses and Liens as,
individually and in the aggregate, would not reasonably be
expected to have a Parent Material Adverse Effect or prevent or
materially delay the consummation of the Share Exchange.
Section 5.5. Governmental
Approvals. Except for (a) the admission
of the Exchange Shares to listing on the Official List becoming
effective in accordance with the Listing Rules and to trading on
the London Stock Exchange becoming effective in accordance with
the Admission and Disclosure Standards, (b) filings
required under, and compliance with other applicable
requirements of the HSR Act and (c) the filing with, and
approval of, the UKLA of the Shareholder Circular and Prospectus
and any other filings with Governmental Authorities required
under, and compliance with other applicable requirements of, the
Laws listed on Section 5.5 of the Parent Share Exchange
Disclosure Schedule, no consents or approvals of, or filings,
declarations or registrations with, any Governmental Authority
are necessary for the execution and delivery of this Agreement
by Parent and the consummation by Parent of the Share Exchange,
except for such other consents, approvals, filings, declarations
or registrations that, if not obtained, made or given, would not
reasonably be expected, individually and in the aggregate, to
have a Parent Material Adverse Effect or prevent or materially
delay the consummation of the Share Exchange.
Section 5.6. Brokers. Except
for the fees and expenses of brokers and financial advisors,
that will be paid by Parent, no broker, investment banker,
financial advisor or other Person is entitled to any
brokers, finders, financial advisors or other
similar fee or commission, or the reimbursement of expenses, in
connection with the Share Exchange Transactions based upon
arrangements made by or on behalf of Parent or any of its
Subsidiaries in connection with Parents entering in to
this Agreement.
Section 5.7. Regulatory
Reports; Undisclosed Liabilities.
(a) Parent has filed all matters required to be registered
with the Registrar of Companies for England and Wales and has
published all material information, reports, shareholder
circulars, prospectuses or regulatory announcements required to
be published by it under the Listing Rules, the Prospectus Rules
and/or the
Disclosure and Transparency Rules
and/or the
rules of the London Stock Exchange for the two years preceding
the date hereof (the foregoing materials, including the exhibits
and amendments thereto, being collectively referred to herein as
the Regulatory Reports) on a timely basis or
has received a valid extension of such time of filing
and/or
publication and has filed
and/or
published any such Regulatory Reports prior to the expiration of
any such extension. As of their respective dates, the Regulatory
Reports complied in all material respects with the requirements
of the relevant Listing Rules, Prospectus Rules
and/or
Disclosure and Transparency Rules and all other applicable Laws.
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(b) Each of the consolidated financial statements of Parent
included in the Regulatory Reports complied as to form, as of
their respective dates of filing or publication, in all material
respects with all applicable accounting requirements and with
the published rules and regulations of the applicable
Governmental Authority with respect thereto, have been prepared
in accordance with International Financial Reporting Standards
as adopted by the European Union on the basis set out therein
(except, in the case of un-audited statements, as permitted by
the rules and regulations of the applicable Governmental
Authority) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and,
in the case of audited consolidated financial statements, give a
true and fair view of the state of affairs of Parent and its
consolidated Subsidiaries as at the dates stated and of the
profit and loss of Parent and its consolidated Subsidiaries for
the periods specified (subject, in the case of un-audited
statements, to normal, recurring year-end audit adjustments).
(c) Neither Parent nor any of its Subsidiaries has any
liabilities or obligations of any nature (whether absolute,
accrued, contingent or otherwise), except liabilities or
obligations (i) reflected or reserved against on the
consolidated balance sheet of Parent and its Subsidiaries as of
September 30, 2009 (the Parent Balance Sheet
Date), including the notes thereto, included in the
Regulatory Reports, (ii) incurred after the Parent Balance
Sheet Date in the ordinary course of business,
(iii) incurred pursuant to this Agreement or the Merger
Agreement or otherwise in connection with the Share Exchange
Transactions or the Transactions, (iv) that individually
and in the aggregate would not reasonably be expected to have a
material negative impact on Parent and its Subsidiaries, taken
as a whole, or (v) liabilities and obligations under
Contracts and employee benefit plans.
(d) Since January 1, 2007, Parent has complied in all
material respects with FSMA, the Listing Rules, the Prospectus
Rules, the Disclosure and Transparency Rules, the Admission and
Disclosure Standards and the UK Companies Act 1985 or 2006 (as
the case may be).
Section 5.8. Absence
of Certain Changes. Since the Parent Balance
Sheet Date:
(a) the business of Parent and its Subsidiaries has been
carried on and conducted in all material respects in the
ordinary course of business consistent with past practice,
except for the execution and performance of this Agreement, the
Merger Agreement and other agreements contemplated by the Merger
Agreement and the discussions and negotiations related
thereto, and
(b) there has not been any change, development, occurrence,
event or state of facts that, individually or in the aggregate,
has had or would reasonably be expected to have a Parent
Material Adverse Effect.
Section 5.9. Legal
Proceedings. Except as set forth on
Section 5.9 of the Parent Share Exchange Disclosure
Schedule, there is no legal, administrative or arbitral
proceeding, claim, suit, action, injunction, order, judgment,
ruling, decree, regulatory enforcement action or disciplinary
proceeding, or, to the Knowledge of Parent, investigation
(i) pending or, to the Knowledge of Parent, threatened
against Parent, any of its Subsidiaries or any of their
respective properties or assets before any Governmental
Authority or (ii) pending or, to the Knowledge of Parent,
threatened before any Governmental Authority against any
officer, director or employee of Parent or any Subsidiary of
Parent with respect to Parents and its Subsidiaries
business activities that, in the cases of clause (i) or
(ii) would, individually or in the aggregate, reasonably be
expected to have a material negative impact on Parent and its
Subsidiaries taken as a whole.
Section 5.10. Valid
Issuance. The Exchange Shares will, at the
time of issue, have been duly authorized by all necessary action
on behalf of Parent. When registered in the Parents share
register and issued against receipt of the consideration
therefor, the Exchange Shares will be duly authorized and duly
and validly issued, fully paid, not subject to calls for further
payments or otherwise assessable, and free of encumbrances and
preemptive rights, other than statutory rights under the laws of
England and Wales or as contemplated by this Agreement.
Section 5.11. Purchase
for Own Account. Parent is acquiring the
Subject Shares for its own account and not with a view to, or
for offer or sale in connection with, any distribution or sale
thereof in violation of the Securities Act, and Parent has no
present or contemplated agreement, understanding, arrangement,
obligation or commitment providing for the disposition of the
Subject Shares.
Section 5.12. Ability
to Protect its Own Interests and Bear Economic
Risk. Parent, by reason of its business and
financial experience, has the capacity to protect its own
interests in connection with the transactions
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contemplated by this Agreement. Parent is able to bear the
economic risk of an investment in the Subject Shares and is able
to sustain a loss of all of its investment in the Subject Shares
without economic hardship if such a loss should occur.
Section 5.13. Receipt
of Information. Parent has received all the
information it considers necessary or appropriate for deciding
whether to acquire the Subject Shares. Parent further represents
that it has had the opportunity to ask questions and receive
answers from the Stockholders regarding the terms and conditions
of the Subject Shares and the business and financial condition
of the Company and to obtain additional information necessary to
verify the accuracy of any information furnished to Parent or to
which Parent had access. The foregoing, however, does not limit
or modify the representations and warranties of the Stockholders
in this Agreement or the right of Parent to rely upon such
representations and warranties. Parent has not received, nor is
Parent relying on, any representations from the Stockholders
other than as provided in this Agreement.
Section 5.14. Private
Placement. Parent understands that
(a) certain of the Subject Shares have not been registered
under the Securities Act or any other applicable securities laws
by reason of their issuance by the Company in a transaction
exempt from the registration requirements thereof and
(b) that such unregistered Subject Shares may not be sold
unless such disposition is registered under the Securities Act
and applicable state securities laws or is exempt from
registration thereunder.
Section 5.15. Legend. Parent
hereby acknowledges and agrees that any certificate representing
an unregistered Subject Share will bear a legend to the
following effect unless the Company determines otherwise in
compliance with applicable Law:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE SECURITIES ACT), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER U.S. JURISDICTION. THE
SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NEITHER THIS
SHARE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.
Section 5.16. Exclusivity
of Representations and Warranties. Parent
acknowledges and agrees that no Stockholder makes or has made
any representations or warranties with respect to the
transactions contemplated hereby other than those set forth in
this Agreement and the Voting Agreement.
Section 5.17. No
Other Parent Representations or
Warranties. Except for the representations
and warranties made by Parent in this Article 5, none of
Parent or any of its Subsidiaries, or any of their respective
stockholders, directors, officers, members, managers, employees,
Affiliates, advisors, agents or representatives or any other
Person has made or is making any express or implied
representation or warranty with respect to Parent or any of its
Subsidiaries or their respective businesses, operations, assets,
liabilities or condition (financial or otherwise) and any such
other representations or warranties are hereby disclaimed. In
particular, without limiting the foregoing disclaimer, none of
Parent or any of its Subsidiaries, or any of their respective
stockholders, directors, officers, members, managers, employees,
Affiliates, advisors, agents or representatives or any other
Person makes or has made any representation or warranty to any
Stockholder or any of their Affiliates or Representatives or
shall have or be subjected to any liability with respect to
(i) any financial projection, forecast, estimate, budget or
prospect information relating to Parent, any of its Subsidiaries
or their respective businesses or operations, or (ii) any
oral or written information presented to any Stockholder or any
of their Affiliates or Representatives in the course of their
due diligence investigation of the Stockholders, the negotiation
of this Agreement or in the course of the transactions
contemplated hereby.
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ARTICLE 6
ADDITIONAL
AGREEMENTS
Section 6.1. Exchange
of Exchangeable Shares. Following receipt of
approval by the Cayman Islands Monetary Authority as set forth
on Section 3.3 of the Stockholder Disclosure Schedule and
prior to the Share Exchange Closing, each Stockholder agrees to
exchange all of such Stockholders Exchangeable Shares, if
any, for shares of Company Common Stock.
Section 6.2. Share
Exchange Commitment. Each Stockholder, to the
extent permitted by Law, hereby waives any right of withdrawal
of his acceptance to receive Exchange Shares pursuant to
Section 2.1 which arises pursuant to section 87Q(4) of
FSMA in the event that Parent publishes any supplementary
prospectus pursuant to section 87G of FSMA. Each
Stockholder will exchange, assign, transfer and deliver all of
such Stockholders Subject Shares to Parent in exchange for
the Exchange Shares to which it is entitled pursuant to
Section 2.1 even if it has subsequently exercised any right
of withdrawal pursuant to section 87Q(4) of FSMA in respect
of such Exchange Shares.
Section 6.3. Transfer
and Other Restrictions.
(a) Until this Agreement is terminated in accordance with
its terms, except pursuant to the Share Exchange contemplated
hereby or as otherwise permitted by Section 6.1 or 6.3(b),
each Stockholder agrees (severally with respect to itself and
not jointly) not to sell, transfer, pledge, encumber, assign or
otherwise dispose of (collectively,
Transfer), or enter into any contract, option
or other arrangement or understanding with respect to the
Transfer of, such Stockholders Subject Shares or any
interest contained therein.
(b) At any time prior to the Share Exchange Closing Date,
the Stockholders may by written notice to Parent, Transfer such
Stockholders Subject Shares to an Affiliate or other
Person (i) for purpose of facilitating the Share Exchange
and the other transactions contemplated by this Agreement or
(ii) in accordance with Section 8.2(d);
provided, however, that any Transfer contemplated
by Section 6.3(b)(i) shall not impede or delay the
consummation of the Share Exchange or the other transactions
contemplated by this Agreement or otherwise impede any rights of
Parent under this Agreement. Any transferee pursuant to such a
Transfer shall agree to be bound by all of the provisions and
obligations of this Agreement applicable to the transferring
Stockholder, including, without limitation, the Share Exchange,
shall become a party to this Agreement and shall become a
Stockholder for all purposes under this Agreement.
No such Transfer shall limit or affect such transferring
Stockholders obligations hereunder.
Section 6.4. No
Solicitation.
(a) Subject in all respects to Section 6.8, each
Stockholder shall, and shall cause its Affiliates (excluding for
this purpose the Company) and its and its Affiliates
respective Representatives to, immediately cease and cause to be
terminated any discussions or negotiations with any Person
conducted heretofore with respect to a Takeover Proposal, and
use best efforts to obtain the return from all such Persons or
cause the destruction of all copies of confidential information
previously provided to such parties by such Stockholder or its
Representatives. Subject in all respects to Section 6.8,
from the date hereof until any termination of this Agreement in
accordance with its terms, each Stockholder shall not, and shall
cause its Representatives not to, and shall not authorize or
permit its Representatives to, directly or indirectly,
(i) solicit (or facilitate or encourage, including by way
of furnishing non-public information) the making of, or any
inquiries regarding, or the making of any proposal or offer that
is reasonably likely to lead to, a Takeover Proposal or
(ii) engage in, continue or otherwise participate in any
discussions or negotiations with any third party regarding a
Takeover Proposal.
(b) Subject in all respects to Section 6.8, in
addition, from the date hereof until any termination of this
Agreement in accordance with its terms, each Stockholder shall
promptly advise Parent in writing, and in no event later than
24 hours after receipt, if any proposal, offer or inquiry
is received by, any information is requested from, or any
discussions or negotiations are sought to be initiated or
continued with, such Stockholder, its Affiliates (excluding for
this purpose the Company) or their respective Representatives in
respect of a Takeover Proposal, and shall, in such notice to
Parent, indicate the identity of the Person or group of Persons
making such proposal, offer, inquiry or request and the terms
and conditions of such proposal or offer and the nature of such
inquiry or request
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(and shall include with such notice copies of any draft
agreements, financing commitment letters and other written
materials and correspondence received from or on behalf of such
Person or group of Persons relating to such proposal, offer,
inquiry or request), and thereafter shall promptly keep Parent
informed of all material developments affecting the status and
terms and conditions of such proposal, offer, inquiry or request
(and such Stockholder shall provide Parent with copies of any
additional drafts of agreements, financing commitment letters
and other written materials and correspondence received that
relate thereto) and the status of discussions or negotiations.
(c) Notwithstanding anything to the contrary in this
Section 6.4, a Stockholder may participate in discussions
or negotiations with a third party regarding a Takeover Proposal
if (i) the Board of Directors is permitted to participate
in discussions or negotiations with such third party regarding
such Takeover Proposal pursuant to Section 5.3 of the
Merger Agreement and (ii) the Board of Directors requests
the participation of such Stockholder in discussions or
negotiations with respect to such Takeover Proposal without any,
direct or indirect, solicitation, initiation, causation,
facilitation or encouragement by such Stockholder.
Section 6.5. Further
Assurances. Subject in the case of the
Stockholders in all respects to Section 6.8 and subject in
the case of each party to the other terms and conditions
provided herein, each party hereto agrees to use, in both cases
of clause (a) and (b) below, its reasonable best
efforts (a) to take, or cause to be taken, all action, and
(b) to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective in the most
expeditious manner practicable, the Share Exchange, including
(i) the obtaining of all permits, consents, approvals,
authorizations and actions or nonactions required for or in
connection with the consummation by the parties hereto of the
Share Exchange, (ii) the taking of all steps as may be
necessary to obtain an approval or waiver from, or to avoid an
action or proceeding by, a Governmental Authority,
(iii) the obtaining of all necessary consents from third
parties, and (iv) the execution and delivery of any
additional instruments necessary to consummate the Share
Exchange to fully carry out the purposes of this Agreement.
Section 6.6. Exchange
Shares. Following the admission of the
Exchange Shares to the Official List becoming effective in
accordance with the Listing Rules and to trading on the London
Stock Exchanges main market for listed Securities becoming
effective in accordance with the Admission and Disclosure
Standards, Parent shall issue a certificate for the number of
Exchange Shares to which each Stockholder is entitled as
determined in accordance with Section 2.1. Parent shall
retain all Exchange Shares of each Stockholder (other than the
Service Partnerships) in accordance with the terms of such
Stockholders
Lock-Up
Agreement. Subject to the immediately following sentence, each
Service Partnership acknowledges and agrees that each
certificate representing Exchange Shares allotted and issued to
it will bear a legend to the following effect unless Parent
determines otherwise in compliance with applicable Law:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE SECURITIES ACT), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER U.S. JURISDICTION. THE
SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NEITHER THIS
SHARE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF, OTHER THAN ON THE LONDON STOCK EXCHANGE, IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT.
In connection with a distribution of Exchange Shares required to
be made pursuant to the Organizational Documents of an Service
Partnership to a limited partner of such Service Partnership,
Parent shall deliver to such Service Partnership a share
certificate evidencing title to that number of Exchange Shares
required to be distributed to such limited partner free from the
foregoing legend or any similar wording; provided, that
such limited partner shall have agreed in writing for the
benefit of Parent only to resell the Exchange Shares represented
by such share certificate in ordinary transactions on the London
Stock Exchange.
Section 6.7. Public
Statements. Subject in all respects to
Section 6.8, each Stockholder agrees (severally with
respect to itself and not jointly) that no public release or
announcement concerning the Share Exchange Transactions or the
Transactions shall be issued by such Stockholder without the
prior written consent of Parent
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(which consent shall not be unreasonably withheld or delayed),
except as such release or announcement may be required by Law,
including, without limitation, the HSR Act and Sections 13
and 16 of the Exchange Act, or the rules or regulations of any
applicable Governmental Authority to which such Stockholder is
subject or submits, wherever situated, in which case the
Stockholder required to make the release or announcement shall
not issue or cause the publication or making of such press
release or other public announcement without prior consultation
with Parent.
Section 6.8. Fiduciary
Duties. Notwithstanding anything in this
Agreement to the contrary: (a) each Stockholder makes no
agreement or understanding herein in any capacity other than in
such Stockholders capacity as a record holder and
beneficial owner of its Subject Shares (or in the case of a
Stockholder who is the trustee of a trust, makes no agreement or
understanding herein in any capacity other than the trustee of a
trust that is the record holder of and whose beneficiaries are
the beneficial owners of its Subject Shares) and
(b) nothing herein will be construed to limit or affect any
action or inaction by such Stockholder (or a designee of such
Stockholder) in such persons capacity as an officer or
director of the Company in connection with this Agreement, the
Merger Agreement or otherwise, and such actions shall not be
deemed to be a breach of this Agreement.
Section 6.9. Amendment
of Agreements.
(a) Prior to the Share Exchange Closing, the Stockholders
agree to amend the GLG Shareholders Agreement, dated as of
June 22, 2007, among Freedom Acquisition Holdings, Inc. and
the Persons set forth therein to cause such agreement to
terminate upon the Effective Time.
(b) Prior to the Share Exchange Closing, Noam Gottesman,
Pierre Lagrange, Emmanuel Roman, Leslie J. Schreyer, G&S
Trustees Limited and Jeffrey A. Robins shall terminate the
Agreement among Principals and Trustees, dated as of
June 22, 2007, among Noam Gottesman, Pierre Lagrange,
Emmanuel Roman, Leslie J. Schreyer, as Trustee, G&S
Trustees Limited, as Trustee, and Jeffrey A. Robins, as Trustee,
and all rights and obligations thereunder shall be of no further
force and effect.
Section 6.10. Resignation
from the Companys Board of
Directors. Each Stockholder acknowledges the
provisions contained in Section 1.6 of the Merger
Agreement, and each Stockholder who is a director of the Company
agrees to resign as a director of the Company, as provided for
in Section 1.6 of the Merger Agreement. Each Stockholder
further agrees and acknowledges that such resignation shall not
constitute a breach of the terms of any Stockholders
employment contract and to the extent that resignation shall
constitute a breach of such contract each Stockholder agrees to
waive such breach.
Section 6.11. No
Dealing.
(a) Other than pursuant to this Agreement, each Stockholder
agrees not to engage in any Dealing in relation to the Parent
Shares until after the Share Exchange Closing Date.
(b) Except as required by Section 6.1, from the date
hereof, each Stockholder agrees not to acquire any shares of
capital stock of the Company or any Exchangeable Stock
(including through the exercise of any warrants or any other
convertible or exchangeable securities or similar instruments);
provided, that the Stockholders may acquire Conversion
Shares upon conversion of Convertible Notes.
Section 6.12. Parent
Shareholders Meeting; Preparation of the Shareholder Circular
and Prospectus.
(a) If at any time prior to the Parent Shareholders Meeting
any event shall occur, or fact or information shall be
discovered by a Stockholder, that should be set forth in an
amendment or supplement to the Shareholder Circular, that
Stockholder shall promptly notify the other parties hereto and
Parent shall prepare and file with the UKLA such amendment or
supplement as promptly as practicable and, to the extent
required by Law, cause such amendment or supplement to be
disseminated to the shareholders of Parent.
(b) If at any time prior to the commencement of the trading
of the Parent Ordinary Shares on the London Stock Exchange to be
issued in connection with the Share Exchange, any Stockholder
becomes aware of a significant new factor, material mistake or
inaccuracy relating to the information included in the
Prospectus relating to the Company or the Stockholders, that
should be set forth in a supplement to the Prospectus, that
Stockholder shall
B-13
promptly notify the other parties hereto and Parent shall
prepare and file with the UKLA such supplement as promptly as
practicable and shall cause such supplement to be published once
it has been approved by the UKLA.
(c) Each Stockholder shall cooperate with Parent in the
preparation of the Shareholder Circular and Prospectus or any
amendment or supplement thereto. Without limiting the generality
of the foregoing, each Stockholder will furnish to Parent all
information relating to it required by the Listing Rules and
FSMA to be set forth in the Shareholder Circular and the
Prospectus.
Section 6.13. Employment
Agreements. Each of Parent, Noam Gottesman,
Pierre Lagrange and Emmanuel Roman agree to negotiate in good
faith and use his or its reasonable best efforts to enter into,
prior to the Share Exchange Closing, definitive employment
agreements substantially in the form attached as Exhibit B.
Section 6.14. Continued
Reinvestment.
(a) Immediately prior to the Effective Time, each
Reinvestment Holder shall designate as restricted a
portion of the funds that are then-invested by such Reinvestment
Holder (and/or such Reinvestment Holders Related Trust) in
one or more of the Funds that have a net asset value at such
time equal to the amount set forth opposite such Reinvestment
Holders name on Schedule II (such Reinvestment
Holders Effective Time Reinvestment
Amount). To the extent the net asset value of the
amounts invested by such Reinvestment Holder (and/or such
Reinvestment Holders Related Trust) in one or more of the
Funds at the Effective Time are less than such Reinvestment
Holders Effective Time Reinvestment Amount, then at the
Effective Time such Reinvestment Holder shall invest additional
funds in one or more of the Funds and designate them as
restricted so that the aggregate amount of funds
invested by it (and such Reinvestment Holders Related
Trust) at the Effective Time are equal to such Reinvestment
Holders Effective Time Reinvestment Amount. Each
Reinvestment Holders Restricted Reinvested Assets shall
remain invested in one or more of in the Funds until the third
anniversary of the Closing on the same terms and conditions that
are generally applicable at such time to other investors in the
applicable Fund, including with respect to the payment of fees
and taking into account any rebates customarily paid in respect
of management, incentive or distribution fees. At all times
Restricted Reinvested Assets and any Unrestricted Reinvested
Assets shall be held in segregated accounts. For the avoidance
of doubt, nothing in this Section 6.14 shall
(i) prevent any Reinvestment Holder from moving Restricted
Reinvested Assets between and among the Funds, (ii) prevent
any Reinvestment Holder from redeeming or withdrawing that
portion (if any) of the Restricted Reinvested Assets equal to
the amount by which the net asset value of such
Stockholders Restricted Reinvested Assets at the time of
such redemption or withdrawal exceeds the Maximum Restricted
Assets Amount set forth opposite such Reinvestment Holders
name on Schedule II or (iii) require any Reinvestment
Holder to make any additional investment in any of the Funds
after the Effective Time. For the further avoidance of doubt,
nothing in this Section 6.14 shall restrict or prevent any
Reinvestment Holder from withdrawing or redeeming Unrestricted
Reinvestment Assets (as such Unrestricted Reinvestment Assets
may have increased or decreased over time as a result of
investment results) at any time, including, during such time as
such Reinvestment Holder would be precluded by this
Section 6.14 from redeeming or withdrawing Restricted
Reinvested Assets.
(b) Each of the parties agrees to use commercially
reasonable efforts to execute and deliver, or cause to be
executed and delivered, all documents and to take, or cause to
be taken, all actions that may be reasonably necessary or
appropriate to effectuate the provisions of this
Section 6.14.
ARTICLE 7
CONDITIONS
Section 7.1. Conditions
to Each Partys Obligation to Effect the Share
Exchange.
(a) The respective obligations of each party hereto to
effect the Share Exchange shall be subject to the satisfaction,
by the party responsible for fulfilling the obligation, or, to
the extent permitted under applicable Law, waiver, by the party
entitled to the benefit thereof, on or prior to the Share
Exchange Closing Date of each of the conditions set forth in
Article VI of the Merger Agreement; provided,
however, that for purposes of this Section 7.1, the
condition in Section 6.2(c) of the Merger Agreement
relating to the transactions contemplated by this
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Agreement shall be disregarded; provided, further,
for purposes of this Section 7.1(a) that no waiver shall be
given effect hereunder unless the corresponding waiver shall
have been given under the Merger Agreement.
(b) Antitrust and Other Regulatory
Approvals. The waiting period (and any
extension thereof) applicable to the Share Exchange under the
HSR Act shall have expired or been terminated. In addition,
(i) any waiting period (and any extension thereof)
applicable to the Share Exchange under other Antitrust Laws
listed on Exhibit C shall have expired or been terminated,
and all consents, approvals and authorizations of any
Governmental Authority required of Parent, the Company, any of
their respective Subsidiaries or any Stockholder under such
Antitrust Laws to consummate the Share Exchange shall have been
obtained, assuming consummation of the Share Exchange; and
(ii) the Governmental Authorities listed on Exhibit D
shall have Approved the Share Exchange Transactions and the
Transactions and (iii) each other Governmental Authority
shall have Approved the Transactions where, in the absence of
such approval, the consummation of the Merger would be unlawful
in any jurisdiction.
(c) No Restraints. No Law,
injunction, order, judgment, ruling or decree enacted,
promulgated, issued, entered, amended or enforced by any
Governmental Authority of competent jurisdiction located in the
United States, or in a jurisdiction outside of the United
States in which the Company, Parent or any of their respective
Subsidiaries or any Stockholder engages in material business
activities, shall be in effect enjoining, restraining,
preventing or prohibiting consummation of the Share Exchange or
making the consummation of the Share Exchange illegal.
(d) Admission of Exchange
Shares. Admission of the Exchange Shares to
listing on the Official List shall have become effective in
accordance with the Listing Rules and admission of the Exchange
Shares to trading on the London Stock Exchange shall have become
effective in accordance with the Admission and Disclosure
Standards.
Section 7.2. Conditions
to Obligations of Parent. The obligations of
Parent to effect the Share Exchange are further subject to the
satisfaction, or to the extent permitted under applicable Law,
the waiver on or prior to the Share Exchange Closing Date of
each of the following conditions:
(a) Representations and
Warranties. (i) The representations and
warranties of each Stockholder contained in Sections 3.3
and 3.11, disregarding all qualifications and exceptions
contained therein relating to materiality and Stockholder
Material Adverse Effect, shall have been true and correct as of
the date of this Agreement and shall be true and correct on and
as of the Share Exchange Closing Date as if made on and as of
the Share Exchange Closing Date, except (in the case of this
clause (i)) for such failures to be true and correct that,
individually and in the aggregate, would not reasonably be
expected to have a Stockholder Material Adverse Effect and
(ii) all other representations and warranties of each
Stockholder contained in Article 3 of this Agreement shall
have been true and correct as of the date of this Agreement and
shall be true and correct on and as of the Share Exchange
Closing Date as if made on and as of the Share Exchange Closing
Date (or, to the extent given as of a specific date, as of such
date), except for de minimis inaccuracies.
(b) Performance of Obligations of the
Stockholders. Each Stockholder shall have
performed in all material respects all obligations required to
be performed by it under this Agreement at or prior to the Share
Exchange Closing Date.
(c) Certificate. Parent shall have
received certificates from each Stockholder certifying that the
conditions set forth in Sections 7.2(a) and 7.2(b) have
been satisfied.
(d) Required Consents. The
Stockholders shall have obtained the consents set forth on
Section 3.2 of the Stockholder Disclosure Schedule.
(e) Lock-Up
Agreements. Each Stockholder, other than the
Service Partnerships, shall have executed and delivered a
Lock-Up
Agreement.
Section 7.3. Conditions
to Obligation of the Stockholders. The
obligation of each Stockholder to effect the Share Exchange is
further subject to the satisfaction, or to the extent permitted
under applicable Law, the waiver on or prior to the Share
Exchange Closing Date of each of the following conditions:
(a) Representations and
Warranties. (i) The representation and
warranty of Parent contained in Section 5.8(b) shall have
been true and correct as of the date of this Agreement and shall
be true and
B-15
correct on and as of the Share Exchange Closing Date as if made
on and as of the Share Exchange Closing Date; (ii) the
representations and warranties of Parent contained in
Sections 5.1(a), 5.2, 5.3, 5.4(a), and 5.6 shall have been
true and correct as of the date of this Agreement and shall be
true and correct on and as of the Share Exchange Closing Date as
if made on and as of the Share Exchange Closing Date (or, to the
extent given as of a specific date, as of such date), except for
de minimis inaccuracies (and in the case of
Section 5.2, disregarding any inaccuracies arising from the
issue of the Exchange Shares at the Share Exchange Closing); and
(iii) all other representations and warranties of Parent
contained in this Agreement, disregarding all qualifications and
exceptions contained therein relating to materiality or Parent
Material Adverse Effect, shall have been true and correct as of
the date of this Agreement and shall be true and correct on and
as of the Share Exchange Closing Date as if made on and as of
the Share Exchange Closing Date (or, to the extent given as of a
specific date, as of such date), except (in the case of this
clause (iii)) for such failures to be true and correct that,
individually and in the aggregate, would not reasonably be
expected to have a Parent Material Adverse Effect.
(b) Performance of Obligations of
Parent. Parent shall have performed in all
material respects all obligations required to be performed by it
under this Agreement at or prior to the Share Exchange Closing
Date.
(c) Certificates. Each Stockholder
shall have received certificates executed on behalf of Parent by
an authorized officer of Parent, certifying that the conditions
set forth in Sections 7.3(a) and 7.3(b) have been satisfied.
(d) Audited 2010 Financial
Statements. Audited financial statements of
the Parent for the year ended March 31, 2010 (the
Audited 2010 Financial Statements) shall have
been released and subject to an unqualified opinion of the
independent public accountants of Parent, and such Audited 2010
Financial Statements (including the notes thereto) shall not
have any discrepancies compared to the draft financial
statements of Parent for the fiscal year ended March 31,
2010 previously delivered to the Stockholders, except for such
discrepancies, individually or in the aggregate, which would not
be reasonably expected to have a Parent Material Adverse Effect.
ARTICLE 8
SURVIVAL;
TRUSTEE LIABILITY
Section 8.1. Survival. The
representations, warranties, covenants and agreements in this
Agreement (or pursuant to any certificate delivered pursuant to
Section 7.2 or Section 7.3) shall terminate at the
Share Exchange Closing; provided, however, that
(a) the representations and warranties set forth in
Sections 3.1 (Authority), 3.3 (Ownership of Shares), 5.3
(Authority) and 5.10 (Valid Issuance) shall survive the Closing
indefinitely and (b) the covenants and agreements set forth
in Section 6.14 and any other covenant or agreement set
forth in this Agreement which contemplates performance after the
Share Exchange Closing, shall survive the Share Exchange Closing.
Section 8.2. Trustee
Liability. The following provisions shall
apply to each of the parties to this Agreement that are acting
as trustees of a trust (a Trustee Party):
(a) No Trustee Party shall have any personal liability or
obligations of any kind under this Agreement or any other
document contemplated by the Merger Agreement to which such
Trustee Party is a party. Any and all personal liability of any
Trustee Party for breaches by any Stockholder of any
obligations, covenants or agreements, either at common law or at
equity, under any law or otherwise, is hereby expressly waived
by Parent as a condition of and consideration for the execution
of this Agreement.
(b) By executing and delivering this Agreement or any other
document contemplated by the Merger Agreement, such Trustee
Party is acting solely on behalf of, and each of this Agreement
and any other document contemplated by the Merger Agreement to
which such Trustee Party is a party, is solely an obligation of,
and solely a claim against, the trust estate and assets of the
trust administered by such Trustee Party.
(c) Any claim or right to proceed against any Trustee Party
individually, or the individual property or assets of any
Trustee Party, is hereby irrevocably waived and released. No
recourse under this Agreement or
B-16
any other document contemplated by the Merger Agreement to which
such Trustee Party is a party shall be had against any Trustee
Party or any of its assets, except to the extent of the trust
estate and assets of the trust administered by such Trustee
Party from time to time, by the enforcement of any assessment or
by any legal or equitable proceedings seeking to assert such
recourse against the Trustee Party by virtue of any law or
otherwise.
(d) Nothing in this Agreement or any other document
contemplated by the Merger Agreement to which such Trustee Party
is a party shall prevent any Trustee Party from making any
distribution from, investment, reinvestment, purchase, sale or
other disposition of, other transactions of any kind involving,
the trust estate and assets of the trust administered by such
Trustee Party other than the Subject Shares; provided,
that Subject Shares may be distributed or otherwise transferred
(a Permitted Transfer) to a Person (each, a
Permitted Trust Transferee) who or which
is (i) a trust beneficiary or a spouse, former spouse,
grandparent, parent, brother, sister or lineal descendent of a
trust beneficiary or a Permitted Trust Transferee, (ii),
upon the death of a trust beneficiary or a Permitted
Trust Transferee, executors, testamentary trustees,
devisees or legatees of or heirs to the estate of such deceased
person, (iii) any trust principally for the benefit of one
or more of the trust beneficiaries
and/or any
Permitted Trust Transferee, (iv) upon disability of
any trust beneficiary or any Permitted Trust Transferee,
any guardian or conservator for such disabled person or
(v) any corporation, partnership or other entity if all the
beneficial ownership of such entity is held by the Trustee
Party, the trust beneficiary
and/or any
Permitted Trust Transferee; provided,
further, that prior to the effectiveness of any Permitted
Transfer, the applicable Permitted Trust Transferee assumes
and agrees to perform, becomes a party to and becomes a
Stockholder for all purposes under, this Agreement.
(e) Parent hereby irrevocably agrees that, in furtherance
of the provisions of this Section, (i) it shall not
institute against, or join any other Person in instituting
against, any Trustee Party individually, or the individual
property or assets of any Trustee Party, any bankruptcy,
reorganization, insolvency or liquidation proceeding, or other
proceeding under any international, national, federal or state
bankruptcy or similar law, in connection with any claim relating
to the Transaction; (ii) in the event of any reorganization
under the Bankruptcy Reform Act of 1978, as amended, of any
Trustee Party, it will make the election under
Section 111(b)(2) of such Act; and (iii) if for any
reason, whether or not related to the Bankruptcy Reform Act of
1978, as amended, it shall recover from any Trustee Party
individual property or assets of such Trustee Party, it promptly
shall return such asset or amount recovered to such Trustee
Party.
ARTICLE 9
TERMINATION,
AMENDMENT AND WAIVER
Section 9.1. Termination. This
Agreement shall terminate and cease to have any force or effect
on the earlier of (a) the termination of the Merger
Agreement in accordance with its terms and (b) the written
agreement of the parties hereto to terminate this Agreement. In
addition, the holders of a majority of the Subject Shares held
by the Principal Stockholders may elect to terminate this
Agreement upon the effectiveness of any amendment or other
modification to the Merger Agreement, or of any waiver by the
Company of any material covenant or condition thereof, that is
effected without the prior written consent of the holders of a
majority of the Subject Shares held by the Principal
Stockholders; provided, that this right shall not apply
to any amendment, modification or waiver that is not adverse to
the Company or any of the Stockholders.
Section 9.2. Amendment. This
Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement
executed by each of the parties hereto; provided,
however, that with respect to the obligations of any
single Stockholder under this Agreement, this Agreement may be
amended with the approval of such Stockholder and Parent subject
to the prior written consent of the other Stockholders, which
consent shall not be unreasonably withheld or delayed.
Section 9.3. Waiver. No
failure or delay by a Stockholder or Parent in exercising any
right hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right hereunder.
Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
B-17
ARTICLE 10
GENERAL
PROVISIONS
Section 10.1. Assignment. Neither
this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned, in whole or in part, by operation
of Law or otherwise, by any of the parties without the prior
written consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by, the parties hereto and their
respective successors and permitted assigns. Any purported
assignment not permitted under this Section 10.1 shall be
null and void.
Section 10.2. Entire
Agreement. This Agreement (including all
exhibits hereto), the Stockholder Disclosure Schedule, the
Parent Share Exchange Disclosure Schedule, the
Lock-Up
Agreements, the Merger Agreement, the Company Disclosure
Schedule, the Parent Disclosure Schedule, the Voting Agreement
and the Confidentiality Agreement constitute the entire
agreement, and supersede all other prior agreements and
understandings, both written and oral, among the parties, or any
of them, with respect to the subject matter hereof and thereof.
Section 10.3. No
Third-Party Beneficiaries. Nothing in this
Agreement, express or implied, is intended to or shall confer
upon any Person other than the parties hereto (and their
respective successors and permitted assigns) any right or remedy
of any nature whatsoever under or by reason of this Agreement,
other than as provided in Article 8.
Section 10.4. Governing
Law. All claims or causes of action (whether
at Law, in contract, in tort or otherwise) that may be based
upon, arise out of or relate to this Agreement (including,
without limitation, the negotiation, termination, performance or
non-performance of such other Sections) or the execution of this
Agreement, shall be governed by and construed in accordance with
the Laws of the State of Delaware (without regard to any choice
or conflicts of Law principles (whether of the State of Delaware
or any other jurisdiction) that would cause the application of
the Laws of any jurisdiction other than the State of Delaware).
Section 10.5. Jurisdiction.
(a) All actions and proceedings arising out of or relating
to this Agreement shall be heard and determined in the Chancery
Court of the State of Delaware and any state appellate court
therefrom within the State of Delaware (or, if the Chancery
Court of the State of Delaware declines to accept jurisdiction
over a particular matter, any state or federal court within the
State of Delaware), and the parties hereto hereby irrevocably
submit to the exclusive jurisdiction of such courts (the
Agreed Courts) in any such action or
proceeding and irrevocably waive the defense of an inconvenient
forum to the maintenance of any such action or proceeding.
(b) Without limiting other means of service of process
permissible under applicable Law, each of the parties hereto
agrees that service of any process, summons, notice or document
by U.S. registered mail to the respective addresses set
forth in Section 10.9 shall be effective service of process
for any suit or proceeding in connection with this Agreement.
The consents to jurisdiction set forth in this paragraph shall
not constitute general consents to service of process in the
State of Delaware and shall have no effect for any purpose
except as provided in this paragraph and shall not be deemed to
confer rights on any Person other than the parties hereto. The
parties hereto agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by Law.
Section 10.6. Specific
Performance. The parties agree that
irreparable damage would occur and that the parties would not
have any adequate remedy at law in the event that any of the
provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this
Agreement in any Agreed Court, without proof of actual damages
(and each party hereby waives any requirement for the securing
or posting of any bond or other security in connection
therewith); specific performance being in addition to any other
remedy to which the parties are entitled at law or in equity.
Section 10.7. WAIVER
OF JURY TRIAL. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING BETWEEN THE PARTIES
B-18
HERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 10.8. Severability. If
any term or other provision of this Agreement is determined by a
court of competent jurisdiction to be invalid, illegal or
incapable of being enforced by any rule of law or public policy,
all other terms, provisions and conditions of this Agreement
shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible to the
fullest extent permitted by Law in an acceptable manner to the
end that the Share Exchange Transactions or the Transactions are
fulfilled to the extent possible.
Section 10.9. Notices. All
notices, requests and other communications to any party
hereunder shall be in writing and shall be deemed given if
delivered personally, telecopy faxed (which is confirmed) or
sent by overnight courier (providing proof of delivery) to the
parties at the following addresses:
if to Parent:
Man Group plc
Sugar Quay
Lower Thames Street
London
EC3R 6DU
Jasveer Singh
Fax: +44 207144 2001
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Fax: (212) 310 8007
Danielle D. Do
if to a Stockholder, to the appropriate address set forth on
Schedule I hereto,
with a copy (which shall not constitute notice) to:
Allen & Overy LLP
1221 Avenue of the Americas
New York, New York 10020
Fax:
(212) 610-6399
Attention: Eric Shube
or such other address or telecopy fax number as such party may
hereafter specify by like notice to the other parties hereto.
All such notices, requests and other communications shall be
deemed received on the date of receipt by the recipient thereof
if received prior to 5 P.M. in the place of receipt and
such day is a business day in the place of receipt. Otherwise,
any such notice, request or communication shall be deemed not to
have been received until the next succeeding business day in the
place of receipt.
Section 10.10. Fees
and Expenses. All fees and expenses incurred
in connection with this Agreement and the Share Exchange
Transactions or the Transactions shall be paid by the party
incurring such fees or expenses, whether or not the Share
Exchange is consummated.
Section 10.11. Interpretation.
(a) When a reference is made in this Agreement to an
Article, a Section, Schedule or Exhibit, such reference shall be
to an Article of, a Section of, or a Schedule or Exhibit to,
this Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference
purposes only and shall not affect in
B-19
any way the meaning or interpretation of this Agreement.
Whenever the word including is used in this
Agreement, it shall be deemed to be followed by the words
without limitation. The words hereof,
herein and hereunder and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement. The word extent in the phrase to
the extent shall mean the degree to which a subject or
other thing extends, and such phrase shall not mean simply
if. All terms defined in this Agreement shall have
the defined meanings when used in any Schedule or other document
made or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such
terms and to the masculine as well as to the feminine and neuter
genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument
that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver
or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments
thereto and instruments incorporated therein. References to a
Person are also to its permitted assigns and successors.
(b) The Stockholder Disclosure Schedule and the Parent
Share Exchange Disclosure Schedule shall identify items of
disclosure by reference to a particular section or subsection of
this Agreement; provided, that any matter disclosed with
respect to one section or subsection of this Agreement shall be
deemed disclosed for purposes of all other sections or
subsections of this Agreement to the extent its relevance to
such other sections or subsections is reasonably apparent.
(c) The parties hereto have participated jointly in the
negotiation and drafting of this Agreement and, in the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as jointly drafted by the parties
hereto and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of
any provision of this Agreement.
Section 10.12. Counterparts. This
Agreement may be executed in counterparts (each of which shall
be deemed to be an original but all of which taken together
shall constitute one and the same agreement) and shall become
effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties.
B-20
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed, individually or by its respective
officer thereunto duly authorized, as of the date first written
above.
MAN GROUP PLC
Name: Stephen Ross
Stockholders:
Noam Gottesman
Pierre Lagrange
Emmanuel Roman
Leslie J. Schreyer, in his capacity as trustee of the Gottesman
GLG Trust
Jeffrey A. Robins, in his capacity as trustee of the
Roman GLG Trust
JACKSON HOLDING SERVICES INC.
|
|
|
|
By:
|
/s/ Jeffrey
A. Robins
|
Name: Jeffrey A. Robins
B-21
|
|
|
|
|
G&S TRUSTEES LIMITED, in its capacity as trustee of the
LAGRANGE GLG TRUST
|
Name: Nigel Bentley
POINT PLEASANT VENTURES LTD.
Name: Nigel Bentley
LAVENDER HEIGHTS CAPITAL LP
By: Mount Garnet Limited, its general partner
|
|
|
|
By:
|
/s/ Leslie
J. Schreyer
|
Name: Leslie J. Schreyer
SAGE SUMMIT LP
By: Sage Summit Ltd., its general partner
|
|
|
|
By:
|
/s/ Leslie
J. Schreyer
|
Name: Leslie J. Schreyer
TOMS INTERNATIONAL LTD.
|
|
|
|
By:
|
/s/ Jeffrey
A. Robins
|
Name: Jeffrey A. Robins
|
|
|
|
Title:
|
Vice President and Assistant Secretary
|
B-22
SCHEDULE I
Stockholders Participating in Share Exchange
Agreement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
|
|
|
Preferred
|
|
|
|
(Other than
|
|
|
Open
|
|
|
Shares and
|
|
|
|
Open Market
|
|
|
Market
|
|
|
Exchangeable
|
|
Name
|
|
Shares)
|
|
|
Shares
|
|
|
Shares
|
|
|
Noam Gottesman
|
|
|
|
|
|
|
1,309,664
|
|
|
|
4,623
|
|
Pierre Lagrange
|
|
|
4,623
|
|
|
|
|
|
|
|
|
|
Emmanuel Roman
|
|
|
1,466
|
|
|
|
348,696
|
|
|
|
|
|
Gottesman GLG Trust
|
|
|
|
|
|
|
|
|
|
|
58,900,370
|
|
Jackson Holding Services Inc.
|
|
|
17,988,050
|
|
|
|
|
|
|
|
|
|
Roman GLG Trust(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Point Pleasant Ventures Ltd.
|
|
|
58,900,370
|
|
|
|
|
|
|
|
|
|
Lagrange GLG Trust(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Lavender Heights Capital LP
|
|
|
5,640,570
|
|
|
|
|
|
|
|
|
|
Sage Summit LP
|
|
|
8,460,854
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
90,995,933
|
|
|
|
1,658,360
|
|
|
|
58,904,993
|
|
|
|
|
(1) |
|
Stockholder owns its interests through Jackson Holding Services
Inc. |
|
(2) |
|
Stockholder owns its interests through Point Pleasant Ventures
Ltd. |
B-23
VOTING
AND SUPPORT AGREEMENT
This VOTING AND SUPPORT AGREEMENT (this
Agreement), dated as of May 17, 2010, is
entered into by and among MAN GROUP PLC, a public limited
company incorporated under the laws of England and Wales
(Parent), ESCALATOR SUB 1 INC., a Delaware
corporation and a wholly owned Subsidiary of Parent
(Merger Sub), and each of the stockholders
listed on Schedule I hereto (each, a
Stockholder and, collectively with any
Permitted Trust Transferee, the
Stockholders).
WHEREAS, concurrently with the execution of this Agreement, GLG
Partners, Inc., a Delaware corporation (the
Company), Parent and Merger Sub are entering
into an Agreement and Plan of Merger of even date herewith (as
may be amended in connection with Section 5.3(b) therein,
the Merger Agreement);
WHEREAS, concurrently with the execution of this Agreement, the
parties hereto are entering into a share exchange agreement of
even date herewith (the Share Exchange
Agreement);
WHEREAS, capitalized terms used but not defined in this
Agreement have the meanings ascribed thereto in the Merger
Agreement;
WHEREAS, as of the date hereof, each Stockholder is the record
and beneficial owner of, or is a Trustee Party (as defined
herein) that is the record holder of and whose beneficiaries are
the beneficial owners of, the number of shares of Company Common
Stock and Company Preferred Stock (together with the Company
Common Stock, the Shares), as set forth
opposite such Stockholders name on Schedule I hereto
(such Shares, together with any other Shares that are acquired
by the Stockholders after the date hereof, being collectively
referred to herein as the Covered
Shares); and
WHEREAS, as a condition to their willingness to enter into the
Merger Agreement and to Parents willingness to enter into
the Share Exchange Agreement, Parent and Merger Sub have
required that each Stockholder enter into this Agreement and, in
order to induce Parent and Merger Sub to enter into the Merger
Agreement and to induce Parent to enter into the Share Exchange
Agreement, each Stockholder is willing to enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Agreements of Stockholders.
(a) Voting. From the date hereof
until any termination of this Agreement in accordance with its
terms, at any meeting of the stockholders of the Company however
called (or any action by written consent in lieu of a meeting)
or any adjournment thereof, each Stockholder shall vote all
Covered Shares owned by such Stockholder (or cause them to be
voted) or (as appropriate) execute written consents in respect
thereof, (i) in favor of the adoption of the Merger
Agreement and the approval of the transactions contemplated by
the Merger Agreement, (ii) against any Takeover Proposal
and (iii) against any agreement (including, without
limitation, any amendment of any agreement), amendment of the
Companys Organizational Documents or other action that is
intended or could reasonably be expected to prevent, impede,
interfere with, delay, postpone or discourage the consummation
of the Merger. Any such vote shall be cast (or consent shall be
given) by each Stockholder in accordance with such procedures
relating thereto so as to ensure that it is duly counted,
including for purposes of determining that a quorum is present
and for purposes of recording the results of such vote (or
consent).
(b) [Reserved]
(c) Restriction on Transfer; Proxies;
Non-Interference; etc. From the date hereof
until any termination of this Agreement in accordance with its
terms, each Stockholder shall not, directly or indirectly,
(i) sell, transfer (including by operation of law), give,
pledge, encumber, assign or otherwise dispose of, or enter into
any contract, option or other arrangement or understanding with
respect to the sale, transfer, gift, pledge, encumbrance,
assignment or other disposition of, any Covered Shares (or any
right, title or interest thereto or therein), (ii) deposit
any Covered Shares into a voting trust or grant any proxies or
enter into a voting agreement, power of attorney or voting trust
with respect to any Covered Shares, (iii) otherwise permit
any Liens to be
C-1
created on any Covered Shares, (iv) subject to
Section 5(a), knowingly take any action that would make any
representation or warranty of such Stockholder set forth in this
Agreement untrue or incorrect in any material respect or have
the effect of preventing, disabling or delaying such Stockholder
from performing any of its obligations under this Agreement or
(v) agree (whether or not in writing) to take any of the
actions referred to in the foregoing clauses (i), (ii),
(iii) and (iv) of this Section 1(c).
(d) Waiver of Appraisal and Dissenters
Rights. Each Stockholder hereby irrevocably
waives and agrees not to exercise or assert any rights of
appraisal or similar rights under Section 262 of the DGCL
or other applicable Law in connection with the Merger and the
other transactions contemplated by the Merger Agreement.
(e) [Reserved]
(f) Information for Proxy Statement;
Publication.
(i) Each Stockholder hereby authorizes Parent and Merger
Sub to publish and disclose in the Proxy Statement, Shareholder
Circular and Prospectus and any other filing with any
Governmental Authority required to be made in connection with
the Merger Agreement or the Share Exchange Agreement its
identity and ownership of Covered Shares and the nature of its
commitments, arrangements and understandings under this
Agreement; provided, that in advance of any such publication or
disclosure, each Stockholder shall be afforded a reasonable
opportunity to review and comment on such disclosure (which
comments shall be considered in good faith). Except as otherwise
required by applicable law or a Governmental Authority, neither
Parent nor Merger Sub will make any other disclosures regarding
any Stockholder in any press release or otherwise without the
prior written approval of each Stockholder (not to be
unreasonably withheld or delayed).
(ii) No Stockholder shall issue or cause the publication of
any press release or make any other public announcement (to the
extent not previously issued or made in accordance the Merger
Agreement or the Share Exchange Agreement) with respect to this
Agreement, the Merger Agreement, the Share Exchange Agreement or
the transactions contemplated by the Merger Agreement or the
Share Exchange Agreement without the prior consent of Parent
(which consent shall not be unreasonably withheld or delayed),
except as may be required by Law (including, without limitation,
the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and Sections 13 and 16
of the Securities Exchange Act of 1934) or by any
applicable listing agreement with a national securities exchange
as determined in the good faith judgment of the Stockholder
proposing to make such release (in which case such Stockholder
shall not issue or cause the publication or making of such press
release or other public announcement without prior consultation
with Parent).
(g) Notices of Certain
Events. Each Stockholder shall promptly
notify Parent and Merger Sub of any development occurring after
the date hereof that causes, or that would reasonably be
expected to cause, any of the representations and warranties of
the Stockholders set forth in this Agreement to no longer be
true and correct.
2. Representations and Warranties of
Stockholders. Each Stockholder hereby,
severally and not jointly, represents and warrants to Parent and
Merger Sub as follows:
(a) Binding Agreement.
(i) If such Stockholder is incorporated as a corporation,
then such Stockholder has the requisite corporate power and
authority and full legal capacity to enter into, execute and
deliver this Agreement and to perform fully its obligations
hereunder. If such Stockholder is organized as a partnership,
then such Stockholder has the requisite partnership power and
authority and full legal capacity to enter into, execute and
deliver this Agreement and to perform fully its obligations
hereunder. If such Stockholder is organized as a limited
liability company, then such Stockholder has the requisite
limited liability company power and authority and full legal
capacity to enter into, execute and deliver this Agreement and
to perform fully its obligations hereunder. If such Stockholder
is organized as a trust, then such Stockholder has the requisite
power and authority and full legal capacity to enter into,
execute and deliver this Agreement and to perform fully its
obligations hereunder. If such Stockholder is an individual,
then such Stockholder has the power and authority and full legal
capacity to, and is competent to, enter into, execute and
deliver this Agreement and to perform fully his or her
obligations hereunder.
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(ii) The execution and delivery of this Agreement by such
Stockholder and the performance by such Stockholder of its
obligations hereunder have been duly and validly authorized and
approved by such Stockholder. No other proceedings on the part
of such Stockholder are necessary to authorize the execution and
delivery of this Agreement and the performance by such
Stockholder of its obligations hereunder. This Agreement has
been duly executed and delivered by such Stockholder and,
assuming due authorization, execution and delivery hereof by
Parent and Merger Sub, constitutes a legal, valid and binding
obligation of such Stockholder, enforceable against such
Stockholder in accordance with its terms, except that such
enforceability (A) may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws of general application affecting or relating
to the enforcement of creditors rights generally and
(B) is subject to general principles of equity, whether
considered in a proceeding at law or in equity (the
Bankruptcy and Equity Exception).
(b) Consents and Approvals; No Violations;
Non-Contravention. Except for filings under
the Exchange Act or as set forth on Section 3.3 of the
Stockholder Disclosure Schedule (as defined in the Share
Exchange Agreement), no consents or approvals of, or filings,
declarations or registrations with, any Governmental Authority
are necessary for the performance by such Stockholder of its
obligations under this Agreement, other than such other
consents, approvals, filings, declarations or registrations
that, if not obtained, made or given, would not, individually or
in the aggregate, reasonably be expected to prevent or
materially delay the performance by such Stockholder of any of
its obligations under this Agreement. Neither the execution and
delivery of this Agreement and each other agreement contemplated
to be executed and delivered herein by such Stockholder nor the
consummation by such Stockholder of its obligations under this
Agreement, nor compliance by such Stockholder with any of the
terms or provisions hereof or thereof, will (i) violate or
conflict with any provision of the Organizational Documents of
such Stockholder (if such Stockholder is not natural person) or
(ii) (A) violate in any material respect any Law,
injunction, order, judgment, ruling or decree of any
Governmental Authority applicable to such Stockholder or
(B) violate, conflict with, constitute a default (or an
event which, with notice or lapse of time, or both, would
constitute a default), or give rise to a right of termination or
cancellation, an acceleration of performance required, a loss of
benefits, or the creation of any Lien upon such
Stockholders Covered Shares, under, any of the terms,
conditions or provisions of any Contract or Permit to which such
Stockholder is a party, except, in the case of clause (ii), as
set forth on Section 3.2(b)(ii) of the Stockholder
Disclosure Schedule and for such violations, conflicts,
defaults, terminations, cancellations, accelerations, losses and
Liens as, individually and in the aggregate, would not
reasonably be expected to materially delay or impair such
Stockholders ability to perform its obligations hereunder.
If such Stockholder is a married individual and such
Stockholders Covered Shares constitute community property
or otherwise need spousal approval in order for this Agreement
to be a legal, valid and binding obligation of such Stockholder,
this Agreement has been duly authorized, executed and delivered
by, and constitutes a legal, valid and binding obligation of,
such Stockholders spouse, enforceable against such spouse
in accordance with its terms, subject to the Bankruptcy and
Equity Exception.
(c) Ownership of Shares. Each
Stockholder is the record and beneficial owner of, or is a
Trustee Party that is the record holder of and whose
beneficiaries are the beneficial owners of, the Shares set forth
opposite such Stockholders name on Schedule I
attached hereto free and clear of any security interests, liens,
charges, encumbrances, equities, claims, options or limitations
of whatever nature and free of any other limitation or
restriction (including any proxy and any restriction on the
right to vote, sell or otherwise dispose of such Shares), except
for any such encumbrances arising hereunder or under the Share
Exchange Agreement and except for such transfer restrictions of
general applicability as may be provided under the Securities
Act and the blue sky laws of the various states of
the United States. Without limiting the foregoing, except for
any such encumbrances arising hereunder or under the Share
Exchange Agreement and except for such transfer restrictions of
general applicability as may be provided under the Securities
Act and the blue sky laws of the various states of
the United States, such Stockholder has sole voting power and
sole power of disposition with respect to all of its Covered
Shares, with no restrictions on such Stockholders rights
of voting or disposition pertaining thereto and no Person other
than such Stockholder has any right to direct or approve the
voting or disposition of any of its Covered Shares. As of the
date hereof, such Stockholder does not own, beneficially or of
record, any voting securities of the Company other than the
number of Shares which constitute its Covered Shares.
C-3
(d) Brokers. Except for those fees
and expenses to be paid by the Company and which are disclosed
in the Merger Agreement, no broker, investment banker, financial
advisor or other Person is entitled to any brokers,
finders, financial advisors or other similar fee or
commission, or the reimbursement of expenses, based upon
arrangements made by or, with the knowledge of such Stockholder,
on behalf of such Stockholder in connection with its entering
into this Agreement.
3. [Reserved]
4. Termination. This Agreement
shall terminate on the first to occur of (a) the written
agreement executed by the parties hereto to terminate this
Agreement, (b) the termination of the Merger Agreement in
accordance with its terms, (c) the termination of the Share
Exchange Agreement in accordance with its terms and (d) the
Effective Time. Notwithstanding the foregoing, (i) nothing
herein shall relieve any party from liability for breach of this
Agreement and (ii) the provisions of Section 2(c),
Section 2(d), this Section 4 and Section 5 of
this Agreement, and the Whereas recitals in this
Agreement, shall survive any termination of this Agreement.
5. Miscellaneous.
(a) Action in Stockholder Capacity
Only. The parties acknowledge that this
Agreement is entered into by each Stockholder in its capacity as
an owner of Covered Shares and that nothing in this Agreement
shall in any way restrict or limit any Stockholder from taking
or authorizing any action or inaction in his or her capacity as
a director, officer, trustee or other fiduciary of the Company
or any subsidiary thereof or of any employee benefit plan of the
Company, including, without limitation, participating in his or
her capacity as a director of the Company in any discussions or
negotiations in accordance with Section 5.3 of the Merger
Agreement.
(b) Trustee Liability. The
following provisions shall apply to each of the parties to this
Agreement that are acting as trustees of a trust (a
Trustee Party):
(i) No Trustee Party shall have any personal liability or
obligations of any kind under this Agreement or any other
document contemplated by the Merger Agreement to which such
Trustee Party is a party. Any and all personal liability of any
Trustee Party for breaches by any Stockholder of any
obligations, covenants or agreements, either at common law or at
equity, under any law or otherwise, is hereby expressly waived
by each of Parent and Merger Sub as a condition of and
consideration for the execution of this Agreement.
(ii) By executing and delivering this Agreement or any
other document contemplated by the Merger Agreement, such
Trustee Party is acting solely on behalf of, and each of this
Agreement and any other document contemplated by the Merger
Agreement to which such Trustee Party is a party, is solely an
obligation of, and solely a claim against, the trust estate and
assets of the trust administered by such Trustee Party.
(iii) Any claim or right to proceed against any Trustee
Party individually, or the individual property or assets of any
Trustee Party, is hereby irrevocably waived and released. No
recourse under this Agreement or any other document contemplated
by the Merger Agreement to which such Trustee Party is a party
shall be had against any Trustee Party or any of its assets,
except to the extent of the trust estate and assets of the trust
administered by such Trustee Party from time to time, by the
enforcement of any assessment or by any legal or equitable
proceedings seeking to assert such recourse against the Trustee
Party by virtue of any law or otherwise.
(iv) Nothing in this Agreement or any other document
contemplated by the Merger Agreement to which such Trustee Party
is a party shall prevent any Trustee Party from making any
distribution from, investment, reinvestment, purchase, sale or
other disposition of, other transactions of any kind involving,
the trust estate and assets of the trust administered by such
Trustee Party other than the Covered Shares; provided,
however, that Covered Shares may be distributed or
otherwise transferred (a Permitted
Transfer) to a Person (each, a Permitted
Trust Transferee) who or which is (A) a
trust beneficiary or a spouse, former spouse, grandparent,
parent, brother, sister or lineal descendent of a trust
beneficiary or a Permitted Trust Transferee, (B), upon the
death of a trust beneficiary or a Permitted
Trust Transferee, executors, testamentary trustees,
devisees or legatees of or heirs to the estate of such deceased
person, (C) any trust principally for the benefit of one or
more of the trust beneficiaries
and/or any
Permitted Trust Transferee, (D) upon disability of any
trust beneficiary or
C-4
any Permitted Trust Transferee, any guardian or conservator
for such disabled person or (E) any corporation,
partnership or other entity if all the beneficial ownership of
such entity is held by the Trustee Party, the trust beneficiary
and/or any
Permitted Trust Transferee; provided,
further, that prior to the effectiveness of any Permitted
Transfer, the applicable Permitted Trust Transferee assumes
and agrees to perform, becomes a party to, and becomes a
Stockholder for all purposes under this Agreement.
(v) Each of Parent and Merger Sub hereby irrevocably agrees
that, in furtherance of the provisions of this Section,
(i) it shall not institute against, or join any other
Person in instituting against, any Trustee Party individually,
or the individual property or assets of any Trustee Party, any
bankruptcy, reorganization, insolvency or liquidation
proceeding, or other proceeding under any international,
national, federal or state bankruptcy or similar law, in
connection with any claim relating to the Transaction;
(ii) in the event of any reorganization under the
Bankruptcy Reform Act of 1978, as amended, of any Trustee Party,
it will make the election under Section 111(b)(2) of such
Act; and (iii) if for any reason, whether or not related to
the Bankruptcy Reform Act of 1978, as amended, it shall recover
from any Trustee Party individual property or assets of such
Trustee Party, it promptly shall return such asset or amount
recovered to such Trustee Party.
(c) Expenses. Except as otherwise
expressly provided in this Agreement and the Share Exchange
Agreement, all costs and expenses incurred in connection with
the transactions contemplated by this Agreement shall be paid by
the party incurring such costs and expenses.
(d) Additional Shares. Until any
termination of this Agreement in accordance with its terms, each
Stockholder shall promptly notify Parent of the number of
Shares, if any, as to which such Stockholder acquires record or
beneficial ownership after the date hereof. Any Shares as to
which such Stockholder acquires record and beneficial ownership
(or acquires record ownership, if such Stockholder is a trustee
of a trust) after the date hereof and prior to termination of
this Agreement shall be Covered Shares for purposes of this
Agreement. Without limiting the foregoing, in the event of any
stock split, stock dividend or other change in the capital
structure of the Company affecting the Company Common Stock, the
number of Shares constituting Covered Shares shall be adjusted
appropriately and this Agreement and the obligations hereunder
shall attach to any additional shares of Company Common Stock,
Company Preferred Stock or other voting securities of the
Company issued to Stockholder in connection therewith.
(e) Definition of Beneficial
Ownership. For purposes of this
Agreement, beneficial ownership with respect
to (or to beneficially own) any
securities shall mean having beneficial ownership of
such securities (as determined pursuant to
Rule 13d-3
under the Exchange Act), including pursuant to any agreement,
arrangement or understanding, whether or not in writing.
(f) Further Assurances. From time
to time, at the request of Parent and without further
consideration, each Stockholder shall execute and deliver such
additional documents and take all such further action as may be
reasonably required to consummate and make effective, in the
most expeditious manner practicable, the transactions
contemplated by this Agreement.
(g) Entire Agreement; No Third Party
Beneficiaries. This Agreement and the Share
Exchange Agreement constitutes the entire agreement, and
supersedes all prior agreements and understandings, both written
and oral, among the parties, or any of them, with respect to the
subject matter hereof. This Agreement is not intended to and
shall not confer upon any Person other than the parties hereto
any rights hereunder.
(h) Assignment; Binding
Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by
any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other
parties, except that Merger Sub may assign its rights and
interests hereunder to Parent or to any wholly-owned subsidiary
of Parent if such assignment would not cause a delay in the
consummation of any of the transactions contemplated by the
Merger Agreement, provided that no such assignment shall
relieve Merger Sub of its obligations hereunder if such assignee
does not perform such obligations. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective
successors and permitted assigns. Any purported assignment not
permitted under this Section shall be null and void.
(i) Amendments; Waiver. This
Agreement may not be amended or supplemented, except by a
written agreement executed by the parties hereto. Any party to
this Agreement may, subject to Law, (i) waive any
C-5
inaccuracies in the representations and warranties of any other
party hereto, (ii) extend the time for the performance of
any of the obligations or acts of any other party hereto,
(iii) waive compliance by the other party with any of the
agreements contained herein or (iv) except as otherwise
provided herein, waive any of such partys conditions. No
failure or delay by Parent or Merger Sub in exercising any right
hereunder shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right hereunder.
Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
(j) Severability. If any term or
other provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or incapable of
being enforced by any rule of law or public policy, all other
terms, provisions and conditions of this Agreement shall
nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible to the
fullest extent permitted by Law in an acceptable manner to the
end that the transactions contemplated hereby are fulfilled to
the extent possible.
(k) Counterparts. This Agreement
may be executed in counterparts (each of which shall be deemed
to be an original but all of which taken together shall
constitute one and the same agreement) and shall become
effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties.
(l) Descriptive Headings. Headings
of Sections and subsections of this Agreement are for
convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
(m) Notices. All notices, requests
and other communications to any party hereunder shall be in
writing and shall be deemed given if delivered personally,
telecopy faxed (which is confirmed) or sent by overnight courier
(providing proof of delivery) to the parties at the following
addresses:
if to Parent or Merger Sub, to:
Man Group plc
Sugar Quay
Lower Thames Street
London
EC3R 6DU
Fax: +44 207144 2001
Jasveer Singh
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Fax: (212) 310 8007
Danielle D. Do
if to a Stockholder, to the address on Schedule I
with a copy (which shall not constitute notice) to:
Allen & Overy LLP
1221 Avenue of the Americas
New York, New York 10020
Fax:
(212) 610-6399
Attention: Eric Shube
or such other address or telecopy fax number as such party may
hereafter specify by like notice to the other parties hereto.
All such notices, requests and other communications shall be
deemed received on the date of receipt by the recipient thereof
if received prior to 5 p.m. in the place of receipt and
such day is a Business Day in the place of
C-6
receipt. Otherwise, any such notice, request or communication
shall be deemed not to have been received until the next
succeeding Business Day in the place of receipt.
(n) Drafting. The parties hereto
have participated jointly in the negotiation and drafting of
this Agreement and, in the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be
construed as jointly drafted by the parties hereto and no
presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any
provision of this Agreement.
(o) Governing Law; Enforcement; Jurisdiction; Waiver
of Jury Trial.
(i) This Agreement, all claims or causes of action (whether
at Law, in contract, in tort or otherwise) that may be based
upon, arise out of or relate to this Agreement or the
negotiation, execution, termination, performance or
nonperformance of this Agreement, shall be governed by and
construed in accordance with the Laws of the State of Delaware,
without regard to any choice or conflicts of Law principles
(whether of the State of Delaware or any other jurisdiction)
that would cause the application of the Laws of any jurisdiction
other than the State of Delaware.
(ii) All actions and proceedings arising out of or relating
to this Agreement shall be heard and determined in the Chancery
Court of the State of Delaware and any state appellate court
therefrom within the State of Delaware (or, if the Chancery
Court of the State of Delaware declines to accept jurisdiction
over a particular matter, any state or federal court within the
State of Delaware), and the parties hereto hereby irrevocably
submit to the exclusive jurisdiction of such courts (the
Agreed Courts) in any such action or
proceeding and irrevocably waive the defense of an inconvenient
forum to the maintenance of any such action or proceeding.
Without limiting other means of service of process permissible
under applicable Law, each of the parties hereto agrees that
service of any process, summons, notice or document by
U.S. registered mail to the respective addresses set forth
in Section 5(m) shall be effective service of process for
any suit or proceeding in connection with this Agreement. The
consents to jurisdiction set forth in this paragraph shall not
constitute general consents to service of process in the State
of Delaware and shall have no effect for any purpose except as
provided in this paragraph and shall not be deemed to confer
rights on any Person other than the parties hereto. The parties
hereto agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by Law.
(iii) Each of the parties hereto irrevocably waives any and
all right to trial by jury in any legal proceeding between the
parties hereto arising out of relating to this Agreement of the
transactions contemplated hereby.
(iv) The parties agree that irreparable damage would occur
and that the parties would not have any adequate remedy at law
in the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms
and provisions of this Agreement in any Agreed Court, without
proof of actual damages (and each party hereby waives any
requirement for the securing or posting of any bond or other
security in connection therewith); specific performance being in
addition to any other remedy to which the parties are entitled
at law or in equity.
[signature
page follows]
C-7
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the date first above written.
MAN GROUP PLC
Name: Stephen Ross
ESCALATOR SUB 1 INC.
Name: John B. Rowsell
Stockholders:
Noam Gottesman
Pierre Lagrange
Emmanuel Roman
Leslie J. Schreyer, in his capacity as trustee of the
Gottesman GLG Trust
Jeffrey A. Robins, in his capacity as trustee of the
Roman GLG Trust
C-8
JACKSON HOLDING SERVICES INC.
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By:
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/s/ Jeffrey
A. Robins
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Name: Jeffrey A. Robins
G&S TRUSTEES LIMITED, in its capacity as trustee of the
LAGRANGE GLG TRUST
Name: Nigel Bentley
POINT PLEASANT VENTURES LTD.
Name: Nigel Bentley
LAVENDER HEIGHTS CAPITAL LP
By: Mount Garnet Limited, its
general partner
Name: Leslie J. Schreyer
C-9
By: Sage Summit Ltd., its general
partner
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By:
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/s/ Leslie
J. Schreyer
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Name: Leslie J. Schreyer
TOMS INTERNATIONAL LTD.
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By:
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/s/ Jeffrey
A. Robins
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Name: Jeffrey A. Robins
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Title:
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Vice President and Assistant Secretary
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C-10
SCHEDULE I
Stockholders
Participating in Voting and Support Agreement
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Company
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Common Stock
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Issuable Upon
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Company
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Conversion of
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Common
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Company
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Convertible
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Name
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Stock
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Preferred Stock
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Notes
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Noam Gottesman
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1,309,664
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4,623
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Pierre Lagrange
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4,623
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Emmanuel Roman
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350,162
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Gottesman GLG Trust
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58,900,370
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Jackson Holding Services Inc.
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17,988,050
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1,344,086
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Roman GLG Trust(1)
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Point Pleasant Ventures Ltd.
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58,900,370
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4,032,258
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Lagrange GLG Trust(2)
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Lavender Heights Capital LP
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5,640,570
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Sage Summit LP
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8,460,854
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TOMS International Ltd.
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2,688,172
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Total
|
|
|
92,654,293
|
|
|
|
58,904,993
|
|
|
|
8,064,516
|
|
|
|
|
(1) |
|
Stockholder owns its interests through Jackson Holding Services
Inc. |
|
(2) |
|
Stockholder owns its interests through Point Pleasant Ventures
Ltd. |
C-11
|
|
|
|
|
399 PARK AVENUE
5TH FLOOR
NEW YORK, NEW YORK 10022
|
|
|
T 212.880.7300
F 212.880.4260
|
May 16,
2010
Special Committee of the Board of Directors
GLG Partners, Inc.
399 Park Avenue,
38th Floor
New York, NY 10022
Members of the Special Committee of the Board of Directors:
You have requested our opinion as to the fairness from a
financial point of view to the stockholders of GLG Partners,
Inc. (the Company), other than the
Controlling Holders (as defined in the Agreement, as defined
below) of the Consideration (as defined below) to be received by
such stockholders (other than the Controlling Holders) pursuant
to the terms and subject to the conditions set forth in the
Agreement and Plan of Merger, dated as of May 17, 2010 (the
Agreement), to be entered into by the
Company, Man Group plc (the Acquiror) and
Escalator Sub 1 Inc., a wholly owned subsidiary of the Acquiror
(the Acquisition Sub). As more fully
described in the Agreement, Acquisition Sub will be merged with
the Company (the Transaction) and each issued
and outstanding share of the common stock of the Company, par
value of $0.0001 per share (the Company Common
Stock), except as set forth in the Agreement, will be
converted into $4.50 in cash (the
Consideration).
We have acted as your financial advisor in connection with the
Transaction and will receive a fee for our services, a
significant portion of which is contingent upon the consummation
of the Transaction. We will also receive a fee upon delivery of
this opinion. In addition, the Company has agreed to indemnify
us for certain liabilities arising out of our engagement. We are
a securities firm engaged in a number of merchant banking and
investment banking activities. This opinion was approved by a
Moelis & Company LLC fairness opinion committee.
Our opinion does not address the Companys underlying
business decision to effect the Transaction or the relative
merits of the Transaction as compared to any alternative
business strategies or transactions that might be available to
the Company and does not constitute a recommendation to any
stockholder of the Company as to how such stockholder should
vote with respect to the Transaction or any other matter. At
your direction, we have not been asked to, nor do we, offer any
opinion as to (i) the material terms of the Agreement or
the form of the Transaction or any other contractual arrangement
that the parties may enter into in connection with the
Transaction or (ii) the fairness of the Transaction to, or
any consideration that may be received in connection therewith
by, the Controlling Holders, nor do we offer any opinion as to
the relative fairness of the Consideration and the consideration
to be received by the Controlling Holders.
We have assumed, with your consent, that the representations and
warranties of all parties to the Agreement are true and correct,
that each party to the Agreement will perform all of the
covenants and agreements required to be performed by such party,
that all conditions to the consummation of the Transaction will
be satisfied without waiver thereof, and that the Transaction
will be consummated in a timely manner in accordance with the
terms described in the Agreement, without any modifications or
amendments thereto or any adjustment to the Consideration. In
rendering this opinion, we have also assumed, with your consent,
that the final executed form of the Agreement does not differ in
any material respect from the draft that we have examined. We
have not been authorized to and have not solicited indications
of interest in a possible transaction with the Company from any
party.
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NEW
YORK
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BOSTON
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CHICAGO
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LONDON
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LOS ANGELES
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SYDNEY
|
D-1
In arriving at our opinion, we have, among other things:
(i) reviewed certain publicly available business and
financial information relating to the Company, including
estimates of certain Wall Street analysts with respect to the
Company for 2010 and 2011, and the Acquiror; (ii) reviewed
certain internal information relating to the business, earnings,
cash flow, assets, liabilities and prospects of the Company
furnished to us by the Company; (iii) conducted discussions
with members of senior management and representatives of the
Company and the Acquiror concerning the matters described in
clauses (i) and (ii) of this paragraph, as well as the
business and prospects of the Company and the Acquiror
generally; (iv) reviewed publicly available financial and
stock market data, including valuation multiples, for the
Company and compared them with those of certain other companies
in lines of business that we deemed relevant; (v) compared
the proposed financial terms of the Transaction with the
financial terms of certain other transactions that we deemed
relevant; (vi) reviewed a draft of the Agreement, dated
May 16, 2010; (vii) participated in certain
discussions and negotiations among representatives of the
Company and the Acquiror and their financial and legal advisors;
and (viii) conducted such other financial studies and
analyses and took into account such other information as we
deemed appropriate.
In connection with our review, we have not assumed any
responsibility for independent verification of any of the
financial, legal, regulatory, tax, accounting and other
information supplied to, discussed with, or reviewed by us for
the purpose of this opinion and have, with your consent, relied
on such information being complete and accurate in all material
respects. In addition, at your direction we have not made any
independent evaluation or appraisal of any of the assets or
liabilities (contingent, derivative, off-balance-sheet, or
otherwise) of the Company, nor have we been furnished with any
such evaluation or appraisal. You have directed us to use the
average of the Wall Street analysts estimates referred to above
with certain additional assumptions provided by management of
the Company for the purposes of our analysis and this opinion.
Our opinion is necessarily based on economic, monetary, market
and other conditions as in effect on, and the information made
available to us as of, the date hereof.
In addition, you have not asked us to address, and this opinion
does not address, the fairness to, or any other consideration
of, the holders of any class of securities, creditors or other
constituencies of the Company, other than the holders of the
Company Common Stock that are not Controlling Holders. We also
do not express any opinion as to the fairness of the amount or
nature of any compensation to be received by any of the
Companys officers, directors or employees, or any class of
such persons, relative to the Consideration or otherwise.
This opinion is for the use and benefit of the Special Committee
of the Board of Directors of the Company in its evaluation of
the Transaction.
Based upon and subject to the foregoing, it is our opinion that,
as the date hereof, the Consideration to be received by the
stockholders of the Company (other than the Controlling Holders)
in the Transaction is fair from a financial point of view to
such stockholders other than the Controlling Holders.
Very truly yours,
MOELIS & COMPANY LLC
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NEW
YORK
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BOSTON
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CHICAGO
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LONDON
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LOS ANGELES
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SYDNEY
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D-2
PERSONAL
AND CONFIDENTIAL
May 17, 2010
Board of Directors
GLG Partners Inc.
20th
Floor, 390 Park Avenue
New York, NY 10022
Ladies and Gentlemen:
You have requested our opinion as to the fairness from a
financial point of view to holders (other than Man Group plc
(Man) and its affiliates) of shares of Common Stock,
Exchangeable Shares and Convertible Notes (each as defined
below) of GLG Partners Inc. (the Company) of the
Aggregate Consideration (as defined below) to be paid pursuant
to the Transaction Agreements (as defined below).
The Agreement and Plan of Merger, dated as of May 17, 2010
(the Merger Agreement), by and among Man, Escalator
Sub 1 Inc., a wholly owned subsidiary of Man, and the Company,
provides that, upon effectiveness of the merger described
therein (the Merger), each outstanding share of
common stock, par value $0.0001 per share (the Common
Stock), of the Company (other than the Rollover Shares (as
defined below) and shares held by Man and its subsidiaries not
specified therein) will be converted into the right to receive
US$4.50 in cash (such cash, in aggregate, the Public
Consideration).
Pursuant to the terms of the Companys convertible notes
due May 15, 2014 (the Convertible Notes) and
the Merger Agreement, each $1,000 principal amount of
Convertible Notes is convertible into a number of shares of
Common Stock determined in accordance with the terms thereof and
if the Convertible Notes are converted prior to the Merger, such
shares of Common Stock will be converted into the right to
receive US$4.50 per share in cash in the Merger (such cash, in
aggregate, the Convertible Consideration).
Under the Share Exchange Agreement (the Exchange
Agreement), dated as of May 17, 2010, among Man and
Noam Gottesman, Emmanuel Roman, Pierre Lagrange (including in
each case any affiliated entities and trusts) and two equity
participation plan limited partnerships that are parties to the
Exchange Agreement (collectively, the Principal
Group), each member of the Principal Group will exchange
all of his or its exchangeable Class B ordinary shares of
FA Sub 2 Limited (the Exchangeable Shares), if any,
for shares of Common Stock, and, simultaneously with such
exchange, each share of Series A voting preferred stock,
par value $0.0001 per share, of the Company will be redeemed by
the Company in accordance with its terms. Thereafter, the shares
of Common Stock issued in such exchange (the Exchanged
Shares) will be exchanged for a number of ordinary shares
of Man (Man Shares) equal to the product of
(i) the number of Exchanged Shares multiplied by
(ii) the Exchange Ratio (as defined in the Exchange
Agreement) (such Man Shares, the Exchangeable
Consideration).
Under the Exchange Agreement, each member of the Principal Group
also will exchange all of his or its other shares of Common
Stock (other than any shares into which Convertible Notes were
converted and any shares acquired in open market purchases) for
Man Shares based on the Exchange Ratio (such Man Shares, the
Rollover Consideration, and such shares of Common
Stock, together with the Exchanged Shares, the Rollover
Shares).
The Aggregate Consideration is the sum of the
aggregate Public Consideration, Convertible Consideration,
Exchangeable Consideration and Rollover Consideration.
Goldman Sachs International and its affiliates are engaged in
investment banking and financial advisory services, commercial
banking, securities trading, investment management, principal
investment, financial planning, benefits counseling, risk
management, hedging, financing, brokerage activities and other
financial and non-financial activities and services for various
persons and entities. In the ordinary course of these activities
and services, Goldman Sachs International and its affiliates may
at any time make or hold long or short positions and
investments, as well as actively trade or effect transactions,
in the equity, debt and other securities (or related derivative
securities) and financial instruments (including bank loans and
other obligations) of third parties, the Company, Man and any of
their respective affiliates and any affiliates of the members of
the Principal Group or any
E-1
Board of Directors
GLG Partners Inc.
May 17, 2010
Page Two
currency or commodity that may be involved in the transactions
contemplated by the Transaction Agreements (the
Transactions) for their own account and for the
accounts of their customers. We have acted as financial advisor
to the Company in connection with, and have participated in
certain of the negotiations leading to, the Transactions. We
expect to receive fees for our services in connection with the
Transactions, the principal portion of which is contingent upon
consummation of the Transactions, and the Company has agreed to
reimburse our expenses arising, and indemnify us against certain
liabilities that may arise, out of our engagement. In addition,
we have provided certain investment banking and other financial
services to the Company and its affiliates from time to time for
which our investment banking division has received, and may
receive, compensation. We also have provided certain investment
banking and other financial services to Man and its affiliates
from time to time for which our investment banking division has
received, and may receive, compensation. We also may provide
investment banking and other financial services to the Company,
Man, the members of the Principal Group and their respective
affiliates in the future for which our investment banking
division may receive compensation. Certain of the members of the
Principal Group are former employees of Goldman Sachs
International or its affiliates.
In connection with this opinion, we have reviewed, among other
things, the Transaction Agreements and certain other agreements
being entered into by the Company as of the date of this opinion
in connection with the Transactions (the Ancillary
Agreements); annual reports to stockholders and Annual
Reports on
Form 10-K
of the Company for the three fiscal years ended 31 December
2007, 2008 and 2009; the Proxy Statement of Freedom Acquisition
Holdings, Inc. (Freedom), dated October 11,
2007, relating to the acquisition by Freedom of GLG Partners LP
and certain affiliated entities; Annual Reports of Man for the
three fiscal years ended 31 March 2007, 2008, 2009; certain
interim reports to stockholders and Quarterly Reports on
Form 10-Q
of the Company and certain interim reports to stockholders and
Quarterly Reports of Man; the Prospectus for the Convertible
Notes; certain other communications from the Company and Man to
their respective stockholders; publicly available research
analyst reports for the Company and Man; certain internal
financial analyses and forecasts for the Company prepared by its
management, as approved for our use by the Company (the
Forecasts); and certain synergies projected by the
management of the Company to result from the Transactions, as
approved for our use by the Company (the Synergies).
We have also held discussions with members of the senior
managements of the Company and Man regarding their assessment of
the strategic rationale for, and the potential benefits of, the
Transactions and the past and current business operations,
financial condition and future prospects of their respective
companies; reviewed the reported price and trading activity for
the shares of Common Stock and Man Shares; compared certain
financial and stock market information for the Company and Man
with similar information for certain other companies the
securities of which are publicly traded; reviewed the financial
terms of certain recent business combinations in the financial
and asset management industries specifically and in other
industries generally; and performed such other studies and
analyses, and considered such other factors, as we deemed
appropriate.
For purposes of rendering this opinion, we have relied upon and
assumed, without assuming any responsibility for independent
verification, the accuracy and completeness of all of the
financial, legal, regulatory, tax, accounting and other
information provided to, discussed with or reviewed by us, and
we do not assume any responsibility for any such information. In
that regard, we have assumed with your consent that the
Forecasts and the Synergies have been reasonably prepared on a
basis reflecting the best currently available estimates and
judgments of the management of the Company. As you are aware,
the management of Man did not make available its forecasts of
the future financial performance of Man. With your consent, for
purposes of rendering this opinion, we have relied upon
published research analyst estimates of Man. We have not made an
independent evaluation or appraisal of the assets and
liabilities (including any contingent, derivative or other
off-balance-sheet assets and liabilities) of the Company or Man
or any of their respective subsidiaries and we have not been
furnished with any such evaluation or appraisal. We have assumed
that all governmental, regulatory or other consents and
approvals necessary for the consummation of the Transactions
will be obtained without any adverse effect on the Company or
Man on the expected benefits of the Transactions in any way
meaningful to our analysis. We also have assumed that the
Transactions will be consummated on the terms set forth in the
Agreements, without the waiver or modification of any term or
condition the effect of which would be in any way meaningful to
our analysis.
E-2
Board of Directors
GLG Partners Inc.
May 17, 2010
Page Three
Our opinion does not address the underlying business decision of
the Company to engage in the Transactions, or the relative
merits of the Transactions as compared to any strategic
alternatives that may be available to the Company; nor does it
address any legal, regulatory, tax or accounting matters. We
were not requested to solicit, and did not solicit, interest
from other parties with respect to an acquisition of, or other
business combination with, the Company or any other alternative
transaction. This opinion addresses only the fairness from a
financial point of view, as of the date hereof, of the Aggregate
Consideration to be paid to the holders (other than Man and its
affiliates) of shares of Common Stock, Exchangeable Shares and
Convertible Notes pursuant to the Transaction Agreements. We do
not express any view on, and our opinion does not address, any
other term or aspect of the Transaction Agreements or
Transactions or any term or aspect of any other agreement or
instrument contemplated by the Transaction Agreements or entered
into or amended in connection with the Transactions, including,
without limitation, the Ancillary Agreements, the Warrant Offers
(as defined in the Merger Agreement), the fairness of the
Transactions to, or any consideration received in connection
therewith by, the holders of any other class of securities,
creditors, or other constituencies of the Company; nor as to the
fairness of the consideration to be paid to the holders of the
Warrants (as defined in the Merger Agreement) as provided in the
Merger Agreement or the amount or nature of any compensation to
be paid or payable to any of the officers, directors or
employees of the Company, or class of such persons, in
connection with the Transactions, whether relative to the
Aggregate Consideration to be paid to the holders of shares of
Common Stock, Exchangeable Shares and Convertible Notes pursuant
to the Transaction Agreements or otherwise; nor as to the
allocation of the Aggregate Consideration as among the Public
Consideration, Convertible Consideration, Exchangeable
Consideration and Rollover Consideration. We are not expressing
any opinion as to the prices at which Man Shares will trade at
any time or as to the impact of the Transactions on the solvency
or viability of the Company or Man or the ability of the Company
or Man to pay its obligations when they come due. Our opinion is
necessarily based on economic, monetary, market and other
conditions as in effect on, and the information made available
to us as of, the date hereof and we assume no responsibility for
updating, revising or reaffirming this opinion based on
circumstances, developments or events occurring after the date
hereof. Our advisory services and the opinion expressed herein
are provided for the information and assistance of the Board of
Directors of the Company in connection with its consideration of
the Transactions and such opinion does not constitute a
recommendation as to how any holder of shares of Common Stock,
Exchangeable Shares
and/or
Convertible Notes should vote with respect to the Transactions
or any other matter or whether any holder of shares of Common
Stock or Exchangeable Shares should enter into the Exchange
Agreement or any other agreements in connection with the
Transactions. This opinion has been approved by a fairness
committee of Goldman, Sachs & Co.
Based upon and subject to the foregoing, it is our opinion that,
as of the date hereof, the Aggregate Consideration to be paid to
the holders (other than Man and its affiliates) of shares of
Common Stock, Exchangeable Shares and Convertible Notes pursuant
to the Transaction Agreements is fair from a financial point of
view to such holders.
Very truly yours,
GOLDMAN SACHS INTERNATIONAL
Authorized Signatory
E-3
SECTION 262
OF THE GENERAL CORPORATION LAW OF THE STATE OF
DELAWARE
§ 262.
Appraisal rights.
(a) Any stockholder of a corporation of this State who
holds shares of stock on the date of the making of a demand
pursuant to subsection (d) of this section with respect to
such shares, who continuously holds such shares through the
effective date of the merger or consolidation, who has otherwise
complied with subsection (d) of this section and who has
neither voted in favor of the merger or consolidation nor
consented thereto in writing pursuant to § 228 of this
title shall be entitled to an appraisal by the Court of Chancery
of the fair value of the stockholders shares of stock
under the circumstances described in subsections (b) and
(c) of this section. As used in this section, the word
stockholder means a holder of record of stock in a
stock corporation and also a member of record of a nonstock
corporation; the words stock and share
mean and include what is ordinarily meant by those words and
also membership or membership interest of a member of a nonstock
corporation; and the words depository receipt mean a
receipt or other instrument issued by a depository representing
an interest in one or more shares, or fractions thereof, solely
of stock of a corporation, which stock is deposited with the
depository.
(b) Appraisal rights shall be available for the shares of
any class or series of stock of a constituent corporation in a
merger or consolidation to be effected pursuant to
§ 251 (other than a merger effected pursuant to
§ 251(g) of this title), § 252,
§ 254, § 257, § 258,
§ 263 or § 264 of this title:
(1) Provided, however, that no appraisal rights under this
section shall be available for the shares of any class or series
of stock, which stock, or depository receipts in respect
thereof, at the record date fixed to determine the stockholders
entitled to receive notice of the meeting of stockholders to act
upon the agreement of merger or consolidation, were either
(i) listed on a national securities exchange or
(ii) held of record by more than 2,000 holders; and further
provided that no appraisal rights shall be available for any
shares of stock of the constituent corporation surviving a
merger if the merger did not require for its approval the vote
of the stockholders of the surviving corporation as provided in
§ 251(f) of this title.
(2) Notwithstanding paragraph (1) of this subsection,
appraisal rights under this section shall be available for the
shares of any class or series of stock of a constituent
corporation if the holders thereof are required by the terms of
an agreement of merger or consolidation pursuant to
§§ 251, 252, 254, 257, 258, 263 and 264 of this
title to accept for such stock anything except:
a. Shares of stock of the corporation surviving or
resulting from such merger or consolidation, or depository
receipts in respect thereof;
b. Shares of stock of any other corporation, or depository
receipts in respect thereof, which shares of stock (or
depository receipts in respect thereof) or depository receipts
at the effective date of the merger or consolidation will be
either listed on a national securities exchange or held of
record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.
and b. of this paragraph; or
d. Any combination of the shares of stock, depository
receipts and cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.,
b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware
corporation party to a merger effected under § 253 of
this title is not owned by the parent corporation immediately
prior to the merger, appraisal rights shall be available for the
shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of
incorporation that appraisal rights under this section shall be
available for the shares of any class or series of its stock as
a result of an amendment to its certificate of incorporation,
any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all
of the assets of the corporation. If the certificate of
incorporation contains such a provision, the
F-1
procedures of this section, including those set forth in
subsections (d) and (e) of this section, shall apply
as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which
appraisal rights are provided under this section is to be
submitted for approval at a meeting of stockholders, the
corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record
date for notice of such meeting with respect to shares for which
appraisal rights are available pursuant to subsection (b)
or (c) hereof of this section that appraisal rights are
available for any or all of the shares of the constituent
corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of
such stockholders shares shall deliver to the corporation,
before the taking of the vote on the merger or consolidation, a
written demand for appraisal of such stockholders shares.
Such demand will be sufficient if it reasonably informs the
corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of such
stockholders shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder
electing to take such action must do so by a separate written
demand as herein provided. Within 10 days after the
effective date of such merger or consolidation, the surviving or
resulting corporation shall notify each stockholder of each
constituent corporation who has complied with this subsection
and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has
become effective; or
(2) If the merger or consolidation was approved pursuant to
§ 228 or § 253 of this title, then either a
constituent corporation before the effective date of the merger
or consolidation or the surviving or resulting corporation
within 10 days thereafter shall notify each of the holders
of any class or series of stock of such constituent corporation
who are entitled to appraisal rights of the approval of the
merger or consolidation and that appraisal rights are available
for any or all shares of such class or series of stock of such
constituent corporation, and shall include in such notice a copy
of this section. Such notice may, and, if given on or after the
effective date of the merger or consolidation, shall, also
notify such stockholders of the effective date of the merger or
consolidation. Any stockholder entitled to appraisal rights may,
within 20 days after the date of mailing of such notice,
demand in writing from the surviving or resulting corporation
the appraisal of such holders shares. Such demand will be
sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends
thereby to demand the appraisal of such holders shares. If
such notice did not notify stockholders of the effective date of
the merger or consolidation, either (i) each such
constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of
the holders of any class or series of stock of such constituent
corporation that are entitled to appraisal rights of the
effective date of the merger or consolidation or (ii) the
surviving or resulting corporation shall send such a second
notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is
sent more than 20 days following the sending of the first
notice, such second notice need only be sent to each stockholder
who is entitled to appraisal rights and who has demanded
appraisal of such holders shares in accordance with this
subsection. An affidavit of the secretary or assistant secretary
or of the transfer agent of the corporation that is required to
give either notice that such notice has been given shall, in the
absence of fraud, be prima facie evidence of the facts stated
therein. For purposes of determining the stockholders entitled
to receive either notice, each constituent corporation may fix,
in advance, a record date that shall be not more than
10 days prior to the date the notice is given, provided,
that if the notice is given on or after the effective date of
the merger or consolidation, the record date shall be such
effective date. If no record date is fixed and the notice is
given prior to the effective date, the record date shall be the
close of business on the day next preceding the day on which the
notice is given.
(e) Within 120 days after the effective date of the
merger or consolidation, the surviving or resulting corporation
or any stockholder who has complied with subsections (a)
and (d) of this section hereof and who is otherwise
entitled to appraisal rights, may commence an appraisal
proceeding by filing a petition in the Court of Chancery
demanding a determination of the value of the stock of all such
stockholders. Notwithstanding the foregoing, at any time within
60 days after the effective date of the merger or
consolidation, any stockholder who has not commenced an
appraisal proceeding or joined that proceeding as a named party
shall have the right to withdraw such stockholders demand
for appraisal and to accept the terms offered upon the merger or
consolidation.
F-2
Within 120 days after the effective date of the merger or
consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d) of this
section hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting
from the consolidation a statement setting forth the aggregate
number of shares not voted in favor of the merger or
consolidation and with respect to which demands for appraisal
have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the
stockholder within 10 days after such stockholders
written request for such a statement is received by the
surviving or resulting corporation or within 10 days after
expiration of the period for delivery of demands for appraisal
under subsection (d) of this section hereof, whichever is
later. Notwithstanding subsection (a) of this section, a
person who is the beneficial owner of shares of such stock held
either in a voting trust or by a nominee on behalf of such
person may, in such persons own name, file a petition or
request from the corporation the statement described in this
subsection.
(f) Upon the filing of any such petition by a stockholder,
service of a copy thereof shall be made upon the surviving or
resulting corporation, which shall within 20 days after
such service file in the office of the Register in Chancery in
which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the
value of their shares have not been reached by the surviving or
resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in
Chancery, if so ordered by the Court, shall give notice of the
time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting
corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1
or more publications at least 1 week before the day of the
hearing, in a newspaper of general circulation published in the
City of Wilmington, Delaware or such publication as the Court
deems advisable. The forms of the notices by mail and by
publication shall be approved by the Court, and the costs
thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall
determine the stockholders who have complied with this section
and who have become entitled to appraisal rights. The Court may
require the stockholders who have demanded an appraisal for
their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery
for notation thereon of the pendency of the appraisal
proceedings; and if any stockholder fails to comply with such
direction, the Court may dismiss the proceedings as to such
stockholder.
(h) After the Court determines the stockholders entitled to
an appraisal, the appraisal proceeding shall be conducted in
accordance with the rules of the Court of Chancery, including
any rules specifically governing appraisal proceedings. Through
such proceeding the Court shall determine the fair value of the
shares exclusive of any element of value arising from the
accomplishment or expectation of the merger or consolidation,
together with interest, if any, to be paid upon the amount
determined to be the fair value. In determining such fair value,
the Court shall take into account all relevant factors. Unless
the Court in its discretion determines otherwise for good cause
shown, interest from the effective date of the merger through
the date of payment of the judgment shall be compounded
quarterly and shall accrue at 5% over the Federal Reserve
discount rate (including any surcharge) as established from time
to time during the period between the effective date of the
merger and the date of payment of the judgment. Upon application
by the surviving or resulting corporation or by any stockholder
entitled to participate in the appraisal proceeding, the Court
may, in its discretion, proceed to trial upon the appraisal
prior to the final determination of the stockholders entitled to
an appraisal. Any stockholder whose name appears on the list
filed by the surviving or resulting corporation pursuant to
subsection (f) of this section and who has submitted such
stockholders certificates of stock to the Register in
Chancery, if such is required, may participate fully in all
proceedings until it is finally determined that such stockholder
is not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of
the shares, together with interest, if any, by the surviving or
resulting corporation to the stockholders entitled thereto.
Payment shall be so made to each such stockholder, in the case
of holders of uncertificated stock forthwith, and the case of
holders of shares represented by certificates upon the surrender
to the corporation of the certificates representing such stock.
The Courts decree may be enforced as other decrees in the
Court of Chancery may be enforced, whether such surviving or
resulting corporation be a corporation of this State or of any
state.
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(j) The costs of the proceeding may be determined by the
Court and taxed upon the parties as the Court deems equitable in
the circumstances. Upon application of a stockholder, the Court
may order all or a portion of the expenses incurred by any
stockholder in connection with the appraisal proceeding,
including, without limitation, reasonable attorneys fees
and the fees and expenses of experts, to be charged pro rata
against the value of all the shares entitled to an appraisal.
(k) From and after the effective date of the merger or
consolidation, no stockholder who has demanded appraisal rights
as provided in subsection (d) of this section shall be
entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of
record at a date which is prior to the effective date of the
merger or consolidation); provided, however, that if no petition
for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a
written withdrawal of such stockholders demand for an
appraisal and an acceptance of the merger or consolidation,
either within 60 days after the effective date of the
merger or consolidation as provided in subsection (e) of
this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal
proceeding in the Court of Chancery shall be dismissed as to any
stockholder without the approval of the Court, and such approval
may be conditioned upon such terms as the Court deems just;
provided, however that this provision shall not affect the right
of any stockholder who has not commenced an appraisal proceeding
or joined that proceeding as a named party to withdraw such
stockholders demand for appraisal and to accept the terms
offered upon the merger or consolidation within 60 days
after the effective date of the merger or consolidation, as set
forth in subsection (e) of this section.
(l) The shares of the surviving or resulting corporation to
which the shares of such objecting stockholders would have been
converted had they assented to the merger or consolidation shall
have the status of authorized and unissued shares of the
surviving or resulting corporation.
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[EMPLOYMENT
AND SERVICE AGREEMENTS BETWEEN CERTAIN MAN GROUP PLC ENTITIES
AND EACH OF
NOAM GOTTESMAN, EMMANUEL ROMAN AND PIERRE LAGRANGE]
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NON-COMPETITION
AND NON-SOLICITATION AGREEMENT
This Non-Competition and Non-Solicitation Agreement (the
Agreement) is made and entered into as
of the 17th day of May, 2010, by and among Man Group plc, a
public limited company existing under the laws of England and
Wales (the Parent); GLG Partners Inc., a
Delaware corporation (GLG); and Noam
Gottesman (the Vendor).
WHEREAS, Parent, Escalator Sub 1 Inc, a Delaware
corporation and wholly owned subsidiary of Parent
(Merger Sub), and GLG propose to enter into
an Agreement and Plan of Merger, dated on or about the date
hereof, (the Merger Agreement), pursuant to
which, upon the terms and subject to the conditions thereof,
Merger Sub will be merged with and into GLG, and GLG will be the
surviving entity (the Merger);
WHEREAS, the Vendor and a trust known as the Gottesman
GLG Trust, which has been established for the benefit of,
inter alia, the Vendor
and/or his
family (together the Vendor Stockholders),
are acknowledged to be substantial stockholders in GLG;
WHEREAS, as a condition of the Merger Agreement, it is
agreed in accordance with the terms of a share exchange
agreement, dated on or about the date hereof, by and among the
Parent, the Vendor Stockholders and certain other stockholders
in GLG (the Share Exchange Agreement) that
the Vendor Shareholders will exchange their shares in GLG for
shares of Parent;
WHEREAS, the Share Exchange Agreement and the Merger
Agreement are the mechanism by which the Vendor Stockholders
will sell, and the Parent will acquire, the interests of the
Vendor Stockholders in GLG, thereby providing a substantial
financial benefit to the Vendor Stockholders (the
Transaction); and
WHEREAS, the parties acknowledge and agree that the
restrictive covenants contained in this Agreement are reasonable
and necessary for the protection of the business of GLG and its
related good will, which the Vendor is selling to the Parent as
part of the Transaction;
NOW, THEREFORE, the parties hereto, in consideration of
the foregoing recitals and the other good and valuable
consideration set forth herein, do hereby agree as follows:
1. Definitions. Capitalized terms
used herein that are not defined elsewhere in this Agreement or
in the Share Exchange Agreement shall have the meanings given to
such terms as set forth below.
1.1 GLG Entity means GLG, any wholly
owned subsidiary of GLG and any other entity, legal person,
partnership, limited partnership or limited liability
partnership which is controlled directly or indirectly by GLG at
the Share Exchange Closing Date, including the following
partnerships and companies: Laurel Heights LLP, an English
limited liability partnership, Mount Granite Limited an
International Business Corporation existing and operating under
the laws of the British Virgin Islands, Sage Summit LP, an
English limited partnership, Lavender Heights LLP, a Delaware
limited liability partnership, Lavender Heights Capital LP, a
Delaware limited partnership, Mount Garnet Limited a British
Virgin Islands company, GLG Partners LP an English limited
partnership, GLG Partners Services LP, a Cayman Islands exempted
limited partnership, GLG Holdings Limited, an International
Business Corporation existing and operating under the laws of
the British Virgin Islands, GLG Partners Limited, an English
company, GLG Partners Services Limited, a Cayman Islands
exempted company, Albacrest Corporation, an International
Business Corporation existing and operating under the laws of
the British Virgin Islands, Betapoint Corporation, an
International Business Corporation existing and operating under
the laws of the British Virgin Islands, GLG Partners (Cayman)
Limited, a Cayman Islands exempted company, and GLG Partners
Asset Management Limited, an Irish limited company.
1.2 Business means the management,
investment management and investment advisory businesses, and
the business of structuring, establishing, marketing,
distributing and managing investment funds, as carried on by any
GLG Entity as of the Share Exchange Closing Date; and for the
avoidance of doubt, if during the Restriction Period all or any
part of such business is transferred to another entity in the
Parent Group, it shall remain protected as Business
for purposes of this Agreement.
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1.3 Parent Group shall mean Parent, any
subsidiary of Parent, any parent of Parent or any subsidiary of
such parent, in each case from time to time.
1.4 Intermediary means (a) any
person who, at the Share Exchange Closing Date, promoted,
marketed, advised or arranged for investors in the services
and/or
products (including investment funds) of any GLG Entity,
(b) any person who at the Share Exchange Closing Date was a
partner, member, employee or agent of, or consultant to, such
Intermediary, or (c) any person who as of the Share
Exchange Closing Date was a partner, member, employee or agent
of a client or prospective client of any GLG Entity and who was
working in the capacity of an Intermediary, and, in all cases,
with which Intermediary the Vendor had direct dealings on behalf
of any GLG Entity in connection with such Intermediarys
promoting, marketing, advising or arranging for investors in the
services
and/or
products (including investment funds) of any GLG Entity.
1.5 Investor means (a) any person
who, at the Share Exchange Closing Date, held investment(s) in
any investment product(s) for which any GLG Entity provided
services whether as investment manager, investment adviser,
marketing adviser or in some other capacity, or (b) any
person who at the Share Exchange Closing Date was a partner,
member, employee or agent of, or consultant to, or affiliate of,
such Investor; and in all cases, with which Investor the
Executive had dealings either directly or through an
Intermediary (or Prospective Intermediary) on behalf of any GLG
Entity in connection with such investment(s).
1.6 Key Individual means any person who,
as of the Share Exchange Closing Date, is employed or engaged by
or a partner in any GLG Entity (a) with whom the Vendor has
had material contact and (b) is employed or engaged in the
marketing of any GLG Entitys services and products
(including investment funds) or in managing fund assets, as an
analyst or in a senior management position; and for the
avoidance of doubt, if during the Restriction Period any Key
Employee ceases to be employed by a GLG Entity and becomes
employed by another entity in the Parent Group, he or she shall
remain a Key Individual for the purposes of this
Agreement.
1.7 Prospective Investor means
(a) any person with whom or which any GLG Entity (either
directly or through an Intermediary or Prospective Intermediary)
entered into negotiations or discussions, or (b) on whom or
which any GLG Entity expended a material amount of money, at the
Share Exchange Closing Date and to the knowledge of the
Executive prior to the Share Exchange Closing Date, and in
either case, (i) with a view toward securing investment(s)
in any investment product(s) for which any GLG Entity provides
services whether as investment manager, investment adviser,
marketing adviser or in some other capacity, (ii) with
which person the Executive had dealings (either directly or
through an Intermediary or Prospective Intermediary) on behalf
of any GLG Entity, and (iii) which person does not
affirmatively indicate to any GLG Entity, at the Share Exchange
Closing Date, that he, she or it does not wish to become an
investor.
1.8 Restricted Area means the United
States, England, Scotland, Wales and Northern Ireland, Cayman
Islands, and any other country or territory in which any GLG
Entity had material operations as of the Share Exchange Closing
Date.
1.9 Restriction Period means the period
from and including the Share Exchange Closing Date until and
including the third anniversary of the Share Exchange Closing
Date.
1.10 Share Exchange Closing Date shall
have the same meaning as set forth in the Share Exchange
Agreement.
2. The Restrictive Covenants. In
consideration of, and as a material inducement to, the Parent
entering into the Merger Agreement and the Share Exchange
Agreement, and in further consideration of the payment of
US$100,000, less any applicable withholding and other taxes as
required by law, which amount shall be deposited by Parent into
the bank account of the Vendor (bank account details to be
provided in due course), within 14 days following the Share
Exchange Closing Date, such consideration being hereby
acknowledged
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and accepted by the Vendor as good and valuable consideration
for the undertakings he now gives, the Vendor agrees and
covenants as follows:
2.1 The Vendor shall not during the Restriction Period,
alone or jointly with or on behalf of any other person, directly
or indirectly, own, be employed or engaged by or in, or
otherwise assist or have any stake or interest in, any business
that is carried on in competition with the Business anywhere
within the Restricted Area, except Vendor may be a shareholder
or other equity owner of not more than 3% of the shares of any
company whose shares are quoted on any recognized investment
exchange.
2.2 The Vendor shall not, during the Restriction Period,
either alone or jointly with or on behalf of any person,
directly or indirectly:
(a) in connection with the carrying on of any business that
is in competition with the Business, have business dealings
with, provide services to, or otherwise accept business from any
person who or which, as of the Share Exchange Closing Date, had
business dealings with or received services or products from any
GLG Entity as a client, Investor or Prospective Investor;
(b) in connection with the carrying on of any business that
is in competition with the Business, have business dealings with
any Intermediary for the purpose of securing (or seeking to
secure) from such Intermediary the opportunity to provide to
his, her or its clients or prospective clients any services or
products (including investment funds) that are the same or
substantially similar to any of those provided by any GLG
Entity, or to place the business of any such client or
prospective client with any business that competes with the
Business;
(c) in connection with the carrying on of any business that
is in competition with the Business, solicit or attempt to
solicit any person who or which was, as of the Share Exchange
Closing Date, a client, Investor or Prospective Investor of any
GLG Entity, for the purpose of providing or offering to provide
to such person any services or products (including investment
funds) that are the same or substantially similar to any of
those offered or provided by any GLG Entity;
(d) in connection with the carrying on of any business that
is in competition with the Business, solicit or approach any
Intermediary for the purpose of securing (or seeking to secure)
from such Intermediary the opportunity to provide to his, her or
its clients or prospective clients any services or products
(including investment funds) that are the same or substantially
similar to any of those provided by any GLG Entity, or to place
the business of any such client or prospective client with any
business that competes with the Business;
(e) in connection with the carrying on of any business that
is in competition with the Business, solicit, induce or
encourage any Key Individual to cease his or her employment,
consultancy, partnership or other similar relationship with any
GLG Entity.
2.3 The covenants contained in Clause 2.1 and
Clause 2.2 (a), (b), (c), (d) and (e) of this
Agreement (collectively, the Restrictive
Covenants) shall not prevent the Vendor from being
interested in, in any capacity, any business that includes a
business carried on in competition with the Business, provided
that the Vendor is not concerned or involved with and does not
otherwise assist in any way whatsoever that part of the business
carried on in competition with the Business and does not
otherwise act in any way contrary to the Restrictive Covenants,
directly or indirectly.
3. Acknowledgments and Limitations on Certain
Defenses. The Vendor acknowledges and agrees
that the Restrictive Covenants are reasonable and necessary to
protect the legitimate interests of the Parent and GLG
(including the value of the good will of GLG) being transferred
to the Parent as part of the Transaction, that this Agreement
was negotiated in good faith by the parties, that the Vendor was
represented at all times by legal counsel of his own choosing,
that the Vendor is himself a highly sophisticated business
person who has entered into similar restrictive covenant
agreements as part of prior transactions with other parties, and
that the Vendor has entered into this Agreement of his own free
will and act and with a full understanding of its terms,
intending to be bound. Accordingly, the Vendor represents and
warrants that, should any action ever be brought
H-3
against him seeking to enforce the terms of this Agreement, the
Vendor shall not claim or allege as a defense that any part of
this Agreement is invalid, unreasonable, or unenforceable in any
respect.
4. Injunctive Relief. The Vendor
acknowledges and agrees that GLG
and/or the
Parent would be immediately and irreparably harmed if the Vendor
violated or threatened to violate any of the terms of this
Agreement and that monetary damages alone, in such a
circumstance, would be inadequate as a remedy. Accordingly, the
Vendor hereby acknowledges and agrees that GLG
and/or the
Parent, in addition to any other remedies available to either or
both at law, also shall be entitled to obtain injunctive or
other equitable relief, without the need to post a bond or other
security, to enjoin
and/or
prevent any continuing violation or threatened violation of the
Restrictive Covenants by the Vendor.
5. Governing Law, Choice of Venue and
Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the
state of New York, without reference to its conflict of law
principles, and the parties hereby submit to the exclusive
jurisdiction of the state and federal courts located in New
York, New York for purposes of litigating any claims (and
counterclaims) arising out of the terms of this Agreement,
including for purposes of obtaining any form of injunctive or
other equitable relief as set forth in Clause 4 above.
Accordingly, the parties hereto irrevocably and unconditionally
(a) submit to the jurisdiction of the state and federal
courts located in New York, New York and (b) waive
(i) any objection to the laying of venue in any such court
and (ii) any claim that any such court constitutes an
inconvenient forum.
6. Severability. If any term,
provision or part of this Agreement shall be determined to be in
conflict with any applicable federal, state or other
governmental law or regulation or otherwise shall be determined
to be invalid or unlawful, such term, provision or part shall
continue in effect to the fullest extent permitted by such law
or regulation. Such invalidity, unenforceability or unlawfulness
shall not affect or impair any other terms, provisions or parts
of this Agreement not in conflict, invalid or unlawful, and all
such terms, provisions and parts shall continue in full force
and effect and remain binding upon the parties hereto. The
parties further agree that to the extent a court of competent
jurisdiction determines that any Restrictive Covenant contained
in this Agreement is unreasonable in any respect, the court
shall have the authority to modify or blue pencil
the offending provision or term thereof to the extent necessary
to render the Restrictive Covenant reasonable under the
circumstances, and the court shall enforce the Restrictive
Covenant as so modified or blue-penciled to the
fullest extent permitted by law. The Restrictive Covenants
contained in this Agreement are, in each instance, intended to
be separate and distinct covenants and are intended to be
construed and enforced accordingly.
7. Conditions on Agreement. This
Agreement shall be conditional upon the occurrence of and shall
come into effect on and from the Share Exchange Closing Date.
Notwithstanding anything to the contrary contained herein, the
parties respective rights and obligations under this
Agreement shall be of no force or effect if the Share Exchange
Agreement is terminated in accordance with the provisions of
Article 9 of the Share Exchange Agreement.
8. Amendments and Waivers. The
terms of this Agreement may be amended or waived, but only by a
written instrument signed by all the parties hereto, or, in the
case of a waiver of any term of this Agreement, by the party
expressly waiving compliance. Delay on the part of a party in
exercising a right granted to it or him under this Agreement
shall not constitute a waiver of such right, nor will the waiver
of any right provided under this Agreement preclude a
partys subsequent exercise of that right or the exercise
of any other right granted to it or him under this Agreement.
9. Waiver of Jury Trial. EACH OF
THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, CONTROVERSY OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
10. Assignment. The Vendor shall
not assign or delegate any of his rights, interests or
obligations under this Agreement, without the prior written
consent of the Parent and GLG. The Parent and GLG also may not
assign any of their respective rights, interests or obligations
under this Agreement without the prior written approval of the
Vendor; provided, however, that the Parent and GLG
shall be entitled to assign this Agreement or any of their
respective rights, interests and obligations hereunder without
approval of the Vendor (i) to any
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member of the Parent Group; or (ii) in connection with the
sale of all or a majority of the equity securities of the Parent
and/or GLG
or a sale of all or substantially all of the assets or business
of the Parent
and/or GLG.
11. Attorneys Fees. In the
event any legal action or proceeding arising out of this
Agreement is commenced by any party, the prevailing party in
such action or proceeding shall be entitled to recover from the
losing party all of its or his costs and expenses incurred in
connection with such action or proceeding, including court costs
and reasonable attorneys fees. For purposes of this
Agreement (including Clause 4 hereof), the term
Prevailing Party shall mean any party
who or which receives a favorable judgment, award or decision,
whether or not any monetary damages are awarded, on any claim
for relief asserted by said party.
12. Implied Covenant. The parties
agree that nothing contained in this Agreement, the Share
Exchange Agreement, or the Merger Agreement shall be deemed to
extinguish, conflict with, narrow, or otherwise impair the
implied covenant of a vendor, as recognized in the common law of
New York, to refrain from soliciting former customers and
clients following the sale of its business, along with its good
will, to a purchaser, which implied covenant is recognized and
acknowledged to be indefinite in duration and shall be deemed
incorporated, without waiver or prejudice, into this Agreement
13. Counterparts. This Agreement
may be executed in several counterparts, each of which shall be
deemed to be an original, and all such counterparts when taken
together shall constitute one and the same original.
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IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed as of the first date set forth above.
MAN GROUP PLC
Name: Jasveer Singh
GLG PARTNERS INC
|
|
|
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By:
|
/s/ Alejandro
San Miguel
|
Name: Alejandro San Miguel
NOAM GOTTESMAN
Noam Gottesman
Witness
May 17, 2010
Date
H-6
(1) MAN
GROUP PLC
(2) GLG
PARTNERS, INC
(3) EMMANUEL
ROMAN
DEED OF
VENDOR COVENANT
H-7
THIS DEED is made the 17th day of May 2010.
BETWEEN:
(1) MAN GROUP PLC a company registered in England
under number 2921462 whose registered office is at Sugar Quay,
Lower Thames Street, London EC3R 6DU (the
Parent); and;
(2) GLG PARTNERS, INC a Delaware corporation
(GLG); and
(3) EMMANUEL ROMAN of
(the Vendor).
WHEREAS:
(A) Parent, Escalator Sub 1 Inc, a Delaware corporation and
wholly owned subsidiary of Parent (Merger
Sub), and GLG propose to enter into an Agreement and
Plan of Merger, to be dated on or about the date of this Deed
(the Merger Agreement), pursuant to which,
upon the terms and subject to the conditions thereof, Merger Sub
will be merged with and into GLG, and GLG will be the surviving
entity (the Merger);
(B) The Vendor and a trust known as the Roman GLG Trust
which has been established for the benefit of inter alia
the Vendor
and/or his
family (together the Vendor Stockholders) are
substantial stockholders in GLG;
(C) As Parent wishes to acquire the shares held by the
Vendor Shareholders on different terms than the terms being
offered under the Merger Agreement it is proposed that Parent,
the Vendor Stockholders and certain other stockholders in GLG
enter into an agreement pursuant to which Parent agrees to
acquire the GLG shares held by the other parties (the
Share Exchange Agreement), governed by the
laws of the State of Delaware, under which the Vendor
Shareholders will exchange their shares in GLG for ordinary
shares of Parent (the Share Exchange);
(D) It is contemplated that closing of the Merger Agreement
will take place immediately after, and conditional upon closing
of the Share Exchange Agreement.
(E) As an inducement to Parent to enter into the Share
Exchange Agreement, from which the Vendor Stockholders will
derive a substantial financial benefit, and in order to protect
the goodwill of and all and any other legitimate interests
attaching to GLG, which are a valuable and integral part of what
the Parent is acquiring from the Vendor Shareholders as a result
of the Share Exchange the Vendor is willing to enter into this
Deed of Vendor Covenant.
(F) The protections provided to the Parent and GLG by this
Deed of Vendor Covenant are an integral part of the Share
Exchange and are contained in a separate Deed of Covenant (as
opposed to being included in the Share Exchange Agreement)
because the parties wish these matters to be governed by English
law and subject to the exclusive jurisdiction of the English
courts.
IT IS NOW HEREBY AGREED AS FOLLOWS:
1. In this Deed the following words and phrases shall have
the meanings specified in this clause 1 as follows:
1.1 GLG Entity means GLG, any wholly
owned subsidiary of GLG and any other entity, legal person,
partnership, limited partnership or limited liability
partnership which is controlled directly or indirectly by GLG as
at the Share Exchange Date including without prejudice to the
generality of the foregoing following partnerships and
companies: Laurel Heights LLP, an English limited liability
partnership, Mount Granite Limited an International Business
Corporation existing and operating under the laws of the British
Virgin Islands, Sage Summit LP, an English limited partnership,
Lavender Heights LLP, a Delaware limited liability partnership,
Lavender Heights Capital LP, a Delaware limited partnership,
Mount Garnet Limited a British Virgin Islands company, GLG
Partners LP an English limited partnership, GLG Partners
Services LP, a Cayman Islands exempted limited partnership, GLG
Holdings Limited, an International Business Corporation existing
and operating under the laws of the British Virgin Islands, GLG
Partners Limited, an English company,
H-8
GLG Partners Services Limited, a Cayman Islands exempted
company, Albacrest Corporation, an International Business
Corporation existing and operating under the laws of the British
Virgin Islands, Betapoint Corporation, an International Business
Corporation existing and operating under the laws of the British
Virgin Islands, GLG Partners (Cayman) Limited, a Cayman Islands
exempted company, and GLG Partners Asset Management Limited, an
Irish limited company.
1.2 Business means the management,
investment management and investment advisory businesses, and
the business of structuring, establishing, marketing,
distributing and managing investment funds, as carried on by any
GLG Entity at the Share Exchange Closing Date; and for the
avoidance of doubt if during the Restriction Period all or any
part of such business is transferred to another entity in the
Parent Group it shall remain protected as Business
for the purposes of this Deed.
1.3 Parent Group shall mean Parent, any
subsidiary undertaking of Parent, any parent undertaking of
Parent or any subsidiary undertaking of such parent undertaking,
in each case from time to time.
1.4 Intermediary means (a) any
person who, at the Share Exchange Closing Date promoted,
marketed, advised or arranged for investors in the services
and/or
products (including investment funds) of any GLG Entity,
(b) any person who at the Share Exchange Closing Date was a
partner, member, employee or agent of, or consultant to, such
Intermediary, or (c) any person who at the Share Exchange
Closing Date was a partner, member, employee or agent of a
client or prospective client of any GLG Entity and who was
working in the capacity of an Intermediary, and in all cases,
with which Intermediary the Vendor had direct dealings on behalf
of any GLG Entity in connection with such Intermediarys
promoting, marketing, advising or arranging for investors in the
services
and/or
products (including investment funds) of any GLG Entity.
1.5 Investor means (a) any person
who, at the Share Exchange Closing Date, held investment(s) in
any investment product(s) for which any GLG Entity provided
services whether as investment manager, investment adviser,
marketing adviser or in some other capacity, or (b) any
person who at the Share Exchange Closing Date was a partner,
member, employee or agent of, or consultant to, or affiliate of,
such Investor; and in all cases, with which Investor the
Executive had dealings either directly or through an
Intermediary (or Prospective Intermediary) on behalf of any GLG
Entity in connection with such investment(s).
1.6 Key Individual means any person who,
immediately before the Share Exchange Closing Date, is employed
or engaged by or a partner or member in any GLG Entity
(a) with whom the Vendor has had material contact and
(b) is employed or engaged in the marketing of any GLG
Entitys services and products (including investment
funds), in managing fund assets, as an analyst or in a senior
management position; and for the avoidance of doubt if during
the Restriction Period any Key Employee ceases to be employed or
engaged by or a partner or member of a GLG Entity and becomes
employed or engaged by (or a partner or member of) another
entity in the Parent Group he or she shall remain protected as a
Key Individual for the purposes of this Deed.
1.7 Prospective Investor means
(a) any person with whom or which any GLG Entity (either
directly or through an Intermediary or Prospective Intermediary)
entered into negotiations or discussions, or (b) on whom or
which any GLG Entity expended a material amount of money, at the
Share Exchange Closing Date and to the knowledge of the
Executive prior to the Share Exchange Closing Date, and in
either case, (i) with a view toward securing investment(s)
in any investment product(s) for which any GLG Entity provides
services whether as investment manager, investment adviser,
marketing adviser or in some other capacity, (ii) with
which person the Executive had dealings (either directly or
through an Intermediary or Prospective Intermediary) on behalf
of any GLG Entity, and (iii) which person does not
affirmatively indicate to any GLG Entity, at the Share Exchange
Closing Date, that he, she or it does not wish to become an
investor.
H-9
1.8 Restricted Area means the United
Kingdom, the Cayman Islands, Switzerland, the United States and
any other country in which any GLG Entity had material
operations as at the Share Exchange Closing Date.
1.9 Restriction Period means the period
from and including the Share Exchange Closing Date until and
including the third anniversary of the Share Exchange Closing
Date.
1.10 the Merger Agreement shall have the
meaning in recital (A).
1.11 the Share Exchange Agreement shall
have the meaning in recital (C).
1.12 Vendor Stockholders shall have the
meaning in recital (B).
1.13 the Share Exchange Closing Date
shall have the meaning in the Share Exchange Agreement.
1.14 parent undertaking and
subsidiary undertaking shall have the same
meanings as in section 1162 of the Companies Act 2006.
1.15 references to a Clause are to clauses of this Deed.
2. In consideration of the Parent and GLG being willing to
enter into the Merger Agreement and the Parent being willing to
enter into the Share Exchange Agreement and in further
consideration of the payment of US$100,000 which shall be paid
by Parent on behalf of it, GLG and all and any GLG Entity direct
into the bank account of the Vendor (bank account details to be
provided in due course) such payment to be made (subject to such
withholdings as the Parent is required to make) within
14 days after the Share Exchange Closing Date which
consideration is hereby acknowledged and accepted by the Vendor
as being good and valuable consideration for the undertaking
which he gives, the Vendor hereby covenants that he shall not,
for the Restriction Period, without the prior written consent of
the Chief Executive Officer of the Parent, in his or her sole
and absolute discretion, either alone or jointly with or on
behalf of any person, directly or indirectly:
2.1 carry on or set up, or be employed or engaged by or in,
be a partner in, or otherwise assist or be interested in, in any
capacity (except as a shareholder or other equity owner of not
more than 3% of the shares of any company whose shares are
quoted on any recognized investment exchange), any business that
is carried on in competition with the Business anywhere within
the Restricted Area;
2.2 in connection with the carrying on of any business that
is in competition with the Business, have business dealings
with, provide services to, or otherwise accept the custom of any
person who or which as at the Share Exchange Closing Date did
business or dealt with, or received services from any GLG Entity
as a client, Investor or Prospective Investor, and with whom or
which the Vendor shall have had dealings on behalf of any GLG
Entity;
2.3 in connection with the carrying on of any business that
is in competition with the Business, have business dealings with
any Intermediary for the purpose of securing or seeking to
secure from such Intermediary the opportunity to provide to his,
her or its clients or prospective clients services or products
(including investment funds) that are the same or substantially
similar to those provided by any GLG Entity, or to place the
business of any such client or prospective client with another
business that is in competition with the Business;
2.4 in connection with the carrying on of any business that
is in competition with the Business, canvass solicit or
approach, or cause to be canvassed or solicited or approached,
for orders or instructions in respect of any services or
products (including investment funds) of a type offered or
provided by any GLG Entity, as at the Share Exchange Closing
Date any person who or which as at that date is a client,
Investor or Prospective Investor of any GLG Entity, and with
whom or which the Vendor had dealings on behalf of any GLG
Entity;
2.5 in connection with the carrying on of any business that
is in competition with the Business, canvass solicit or
approach, or cause to be canvassed solicited or approached, any
Intermediary for the purpose of securing or seeking to secure
from such Intermediary the opportunity to provide to his, her or
H-10
its clients or prospective clients any services or products
(including investment funds) that are the same or substantially
similar to those provided by any GLG Entity, or to place the
business of any such client or prospective client with another
business that is in competition with the Business
2.6 in connection with the carrying on of any business that
is in competition with the Business, solicit or entice away, or
endeavour to solicit or entice away, from employment or
engagement by or from partnership with any GLG Entity or any
member of the Parent Group any Key Individual.
2.7 The covenants contained in Clauses 2.1 to 2.6
shall not prevent the Vendor from being interested in, in any
capacity, any business which includes a business that is carried
on in competition with the Business provided that the Vendor is
not concerned or involved with and does not otherwise assist in
any way whatsoever directly or indirectly that part of the
business which is carried on in competition with the Business
and does not otherwise act in any way contrary to
Clauses 2.1 to 2.6.
2.8 The covenants contained in Clauses 2.1 to 2.6 are
intended to be separate and severable and enforceable as such.
The provisions of Clauses 2.1 to 2.6 have been agreed by
the parties to be reasonable and necessary to protect the
legitimate interests of GLG and the Parent and were negotiated
in good faith by the parties, the Vendor having taken
independent legal advice.
3. The Vendor acknowledges that were he to act in breach of
the covenants contained in Clauses 2.1 to 2.6 damages would not
be an adequate remedy and that accordingly the Parent
and/or GLG
will seek to enforce the terms of these covenant by way of
injunctive or other equitable relief.
4. If the Vendor receives any offer of employment,
engagement or any offer to enter into any partnership,
association or other business relationship which, if accepted,
would or might involve the Vendor acting in breach of any of the
covenants in Clauses 2.1 to 2.6, the Vendor shall promptly
notify the Chief Executive Officer of the Parent of such offer.
5. The provisions of Clauses 2 to 4 shall be
conditional upon the occurrence of and shall only come into
effect on and from the Share Exchange Closing Date.
6. The parties obligations under the provisions of
Clauses 2 to 4 shall not have any effect if the Share
Exchange Agreement is terminated in accordance with the
provisions of Article 9 of the Share Exchange Agreement.
7. This Deed is governed by and shall be construed in
accordance with English law and the parties to this Deed hereby
submit to the exclusive jurisdiction of the English Courts.
8. This Deed may be executed in any number of counterparts,
including facsimiles, each of which is an original and all of
which together evidence the same Deed.
H-11
IN WITNESS whereof this Deed has been executed as a Deed
by the Parties hereto and is intended to be and is delivered on
the date first above written.
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Executed as a Deed by
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Emmanuel Roman
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/s/ Emmanuel Roman
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in the presence of:
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Signature
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/s/ Barrie
Roman
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Name
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Barrie S. Roman
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Executed as a Deed by
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/s/ Jasveer Singh
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Man Group PLC
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Jasveer Singh
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Attorney
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In the presence of:
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/s/ Elisabeth Marsden
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Solicitor
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Executed as a Deed by
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/s/ Alejandro San Miguel
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GLG Partners, Inc.
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Alejandro San Miguel
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Name
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General Counsel
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Title
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H-12
(1) MAN
GROUP PLC
(2) GLG
PARTNERS, INC
(3) PIERRE
LAGRANGE
DEED OF
VENDOR COVENANT
H-13
THIS DEED is made the 17th day of May 2010.
BETWEEN:
(4) MAN GROUP PLC a company registered in England
under number 2921462 whose registered office is at Sugar Quay,
Lower Thames Street, London EC3R 6DU (the
Parent); and;
(5) GLG PARTNERS, INC a Delaware corporation
(GLG); and
(6) PIERRE LAGRANGE of
(the Vendor).
WHEREAS:
(G) Parent, Escalator Sub 1 Inc, a Delaware corporation and
wholly owned subsidiary of Parent (Merger
Sub), and GLG propose to enter into an Agreement and
Plan of Merger, to be dated on or about the date of this Deed
(the Merger Agreement), pursuant to which,
upon the terms and subject to the conditions thereof, Merger Sub
will be merged with and into GLG, and GLG will be the surviving
entity (the Merger);
(H) The Vendor and a trust known as Lagrange GLG Trust
which has been established for the benefit of inter alia
the Vendor
and/or his
family (together the Vendor Stockholders) are
substantial stockholders in GLG;
(I) As Parent wishes to acquire the shares held by the
Vendor Shareholders on different terms than the terms being
offered under the Merger Agreement it is proposed that Parent,
the Vendor Stockholders and certain other stockholders in GLG
enter into an agreement pursuant to which Parent agrees to
acquire the GLG shares held by the other parties (the
Share Exchange Agreement), governed by the
laws of the State of Delaware, under which the Vendor
Shareholders will exchange their shares in GLG for ordinary
shares of Parent (the Share Exchange);
(J) It is contemplated that closing of the Merger Agreement
will take place immediately after, and conditional upon closing
of the Share Exchange Agreement.
(K) As an inducement to Parent to enter into the Share
Exchange Agreement, from which the Vendor Stockholders will
derive a substantial financial benefit, and in order to protect
the goodwill of and all and any other legitimate interests
attaching to GLG, which are a valuable and integral part of what
the Parent is acquiring from the Vendor Shareholders as a result
of the Share Exchange the Vendor is willing to enter into this
Deed of Vendor Covenant.
(L) The protections provided to the Parent and GLG by this
Deed of Vendor Covenant are an integral part of the Share
Exchange and are contained in a separate Deed of Covenant (as
opposed to being included in the Share Exchange Agreement)
because the parties wish these matters to be governed by English
law and subject to the exclusive jurisdiction of the English
courts.
IT IS NOW HEREBY AGREED AS FOLLOWS:
1. In this Deed the following words and phrases shall have
the meanings specified in this clause 1 as follows:
1.1 GLG Entity means GLG, any wholly
owned subsidiary of GLG and any other entity, legal person,
partnership, limited partnership or limited liability
partnership which is controlled directly or indirectly by GLG as
at the Share Exchange Date including without prejudice to the
generality of the foregoing following partnerships and
companies: Laurel Heights LLP, an English limited liability
partnership, Mount Granite Limited an International Business
Corporation existing and operating under the laws of the British
Virgin Islands, Sage Summit LP, an English limited partnership,
Lavender Heights LLP, a Delaware limited liability partnership,
Lavender Heights Capital LP, a Delaware limited partnership,
Mount Garnet Limited a British Virgin Islands company, GLG
Partners LP an English limited partnership, GLG Partners
Services LP, a Cayman Islands exempted limited partnership, GLG
Holdings Limited, an International Business Corporation existing
and operating under the laws of the British Virgin Islands, GLG
Partners Limited, an English company,
H-14
GLG Partners Services Limited, a Cayman Islands exempted
company, Albacrest Corporation, an International Business
Corporation existing and operating under the laws of the British
Virgin Islands, Betapoint Corporation, an International Business
Corporation existing and operating under the laws of the British
Virgin Islands, GLG Partners (Cayman) Limited, a Cayman Islands
exempted company, and GLG Partners Asset Management Limited, an
Irish limited company.
1.2 Business means the management,
investment management and investment advisory businesses, and
the business of structuring, establishing, marketing,
distributing and managing investment funds, as carried on by any
GLG Entity at the Share Exchange Closing Date; and for the
avoidance of doubt if during the Restriction Period all or any
part of such business is transferred to another entity in the
Parent Group it shall remain protected as Business
for the purposes of this Deed.
1.3 Parent Group shall mean Parent, any
subsidiary undertaking of Parent, any parent undertaking of
Parent or any subsidiary undertaking of such parent undertaking,
in each case from time to time.
1.4 Intermediary means (a) any
person who, at the Share Exchange Closing Date promoted,
marketed, advised or arranged for investors in the services
and/or
products (including investment funds) of any GLG Entity,
(b) any person who at the Share Exchange Closing Date was a
partner, member, employee or agent of, or consultant to, such
Intermediary, or (c) any person who at the Share Exchange
Closing Date was a partner, member, employee or agent of a
client or prospective client of any GLG Entity and who was
working in the capacity of an Intermediary, and in all cases,
with which Intermediary the Vendor had direct dealings on behalf
of any GLG Entity in connection with such Intermediarys
promoting, marketing, advising or arranging for investors in the
services
and/or
products (including investment funds) of any GLG Entity.
1.5 Investor means (a) any person
who, at the Share Exchange Closing Date, held investment(s) in
any investment product(s) for which any GLG Entity provided
services whether as investment manager, investment adviser,
marketing adviser or in some other capacity, or (b) any
person who at the Share Exchange Closing Date was a partner,
member, employee or agent of, or consultant to, or affiliate of,
such Investor; and in all cases, with which Investor the
Executive had dealings either directly or through an
Intermediary (or Prospective Intermediary) on behalf of any GLG
Entity in connection with such investment(s).
1.6 Key Individual means any person who,
immediately before the Share Exchange Closing Date, is employed
or engaged by or a partner or member in any GLG Entity
(a) with whom the Vendor has had material contact and
(b) is employed or engaged in the marketing of any GLG
Entitys services and products (including investment
funds), in managing fund assets, as an analyst or in a senior
management position; and for the avoidance of doubt if during
the Restriction Period any Key Employee ceases to be employed or
engaged by or a partner or member of a GLG Entity and becomes
employed or engaged by (or a partner or member of) another
entity in the Parent Group he or she shall remain protected as a
Key Individual for the purposes of this Deed.
1.7 Prospective Investor means
(a) any person with whom or which any GLG Entity (either
directly or through an Intermediary or Prospective Intermediary)
entered into negotiations or discussions, or (b) on whom or
which any GLG Entity expended a material amount of money, at the
Share Exchange Closing Date and to the knowledge of the
Executive prior to the Share Exchange Closing Date, and in
either case, (i) with a view toward securing investment(s)
in any investment product(s) for which any GLG Entity provides
services whether as investment manager, investment adviser,
marketing adviser or in some other capacity, (ii) with
which person the Executive had dealings (either directly or
through an Intermediary or Prospective Intermediary) on behalf
of any GLG Entity, and (iii) which person does not
affirmatively indicate to any GLG Entity, at the Share Exchange
Closing Date, that he, she or it does not wish to become an
investor.
H-15
1.8 Restricted Area means the United
Kingdom, the Cayman Islands, Switzerland, the United States and
any other country in which any GLG Entity had material
operations as at the Share Exchange Closing Date.
1.9 Restriction Period means the period
from and including the Share Exchange Closing Date until and
including the third anniversary of the Share Exchange Closing
Date.
1.10 the Merger Agreement shall have the
meaning in recital (A).
1.11 the Share Exchange Agreement shall
have the meaning in recital (C).
1.12 Vendor Stockholders shall have the
meaning in recital (B).
1.13 the Share Exchange Closing Date
shall have the meaning in the Share Exchange Agreement.
1.14 parent undertaking and
subsidiary undertaking shall have the same
meanings as in section 1162 of the Companies Act 2006.
1.15 references to a Clause are to clauses of this Deed.
2. In consideration of the Parent and GLG being willing to
enter into the Merger Agreement and the Parent being willing to
enter into the Share Exchange Agreement and in further
consideration of the payment of US$100,000 which shall be paid
by Parent on behalf of it, GLG and all and any GLG Entity direct
into the bank account of the Vendor (bank account details to be
provided in due course) such payment to be made (subject to such
withholdings as the Parent is required to make) within
14 days after the Share Exchange Closing Date which
consideration is hereby acknowledged and accepted by the Vendor
as being good and valuable consideration for the undertaking
which he gives, the Vendor hereby covenants that he shall not,
for the Restriction Period, without the prior written consent of
the Chief Executive Officer of the Parent, in his or her sole
and absolute discretion, either alone or jointly with or on
behalf of any person, directly or indirectly:
2.1 carry on or set up, or be employed or engaged by or in,
be a partner in, or otherwise assist or be interested in, in any
capacity (except as a shareholder or other equity owner of not
more than 3% of the shares of any company whose shares are
quoted on any recognized investment exchange), any business that
is carried on in competition with the Business anywhere within
the Restricted Area;
2.2 in connection with the carrying on of any business that
is in competition with the Business, have business dealings
with, provide services to, or otherwise accept the custom of any
person who or which as at the Share Exchange Closing Date did
business or dealt with, or received services from any GLG Entity
as a client, Investor or Prospective Investor, and with whom or
which the Vendor shall have had dealings on behalf of any GLG
Entity;
2.3 in connection with the carrying on of any business that
is in competition with the Business, have business dealings with
any Intermediary for the purpose of securing or seeking to
secure from such Intermediary the opportunity to provide to his,
her or its clients or prospective clients services or products
(including investment funds) that are the same or substantially
similar to those provided by any GLG Entity, or to place the
business of any such client or prospective client with another
business that is in competition with the Business;
2.4 in connection with the carrying on of any business that
is in competition with the Business, canvass solicit or
approach, or cause to be canvassed or solicited or approached,
for orders or instructions in respect of any services or
products (including investment funds) of a type offered or
provided by any GLG Entity, as at the Share Exchange Closing
Date any person who or which as at that date is a client,
Investor or Prospective Investor of any GLG Entity, and with
whom or which the Vendor had dealings on behalf of any GLG
Entity;
2.5 in connection with the carrying on of any business that
is in competition with the Business, canvass solicit or
approach, or cause to be canvassed solicited or approached, any
Intermediary for the purpose of securing or seeking to secure
from such Intermediary the opportunity to provide to his, her or
H-16
its clients or prospective clients any services or products
(including investment funds) that are the same or substantially
similar to those provided by any GLG Entity, or to place the
business of any such client or prospective client with another
business that is in competition with the Business
2.6 in connection with the carrying on of any business that
is in competition with the Business, solicit or entice away, or
endeavour to solicit or entice away, from employment or
engagement by or from partnership with any GLG Entity or any
member of the Parent Group any Key Individual.
2.7 The covenants contained in Clauses 2.1 to 2.6
shall not prevent the Vendor from being interested in, in any
capacity, any business which includes a business that is carried
on in competition with the Business provided that the Vendor is
not concerned or involved with and does not otherwise assist in
any way whatsoever directly or indirectly that part of the
business which is carried on in competition with the Business
and does not otherwise act in any way contrary to
Clauses 2.1 to 2.6.
2.8 The covenants contained in Clauses 2.1 to 2.6 are
intended to be separate and severable and enforceable as such.
The provisions of Clauses 2.1 to 2.6 have been agreed by
the parties to be reasonable and necessary to protect the
legitimate interests of GLG and the Parent and were negotiated
in good faith by the parties, the Vendor having taken
independent legal advice.
3. The Vendor acknowledges that were he to act in breach of
the covenants contained in Clauses 2.1 to 2.6 damages would not
be an adequate remedy and that accordingly the Parent
and/or GLG
will seek to enforce the terms of these covenant by way of
injunctive or other equitable relief.
4. If the Vendor receives any offer of employment,
engagement or any offer to enter into any partnership,
association or other business relationship which, if accepted,
would or might involve the Vendor acting in breach of any of the
covenants in Clauses 2.1 to 2.6, the Vendor shall promptly
notify the Chief Executive Officer of the Parent of such offer.
5. The provisions of Clauses 2 to 4 shall be
conditional upon the occurrence of and shall only come into
effect on and from the Share Exchange Closing Date.
6. The parties obligations under the provisions of
Clauses 2 to 4 shall not have any effect if the Share
Exchange Agreement is terminated in accordance with the
provisions of Article 9 of the Share Exchange Agreement.
7. This Deed is governed by and shall be construed in
accordance with English law and the parties to this Deed hereby
submit to the exclusive jurisdiction of the English Courts.
8. This Deed may be executed in any number of counterparts,
including facsimiles, each of which is an original and all of
which together evidence the same Deed.
H-17
IN WITNESS whereof this Deed has been executed as a Deed
by the Parties hereto and is intended to be and is delivered on
the date first above written.
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Executed as a Deed by
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Pierre Lagrange
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/s/ Pierre Lagrange
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in the presence of:
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Signature
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/s/ Catherine
Amspach
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Name
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Catherine Amspach
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Executed as a Deed by
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/s/ Jasveer Singh
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Man Group PLC
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Jasveer Singh
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Attorney
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In the presence of:
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/s/ Elizabeth Marsden
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Solicitor
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Executed as a Deed by
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/s/ Alejandro San Miguel
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GLG Partners, Inc.
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Alejandro San Miguel
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Name
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General Counsel
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Title
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H-18
Appendix
I
JOINDER
AGREEMENT
THIS JOINDER AGREEMENT (this Agreement),
dated as of June 21, 2010, is by and among Man Group plc, a
public limited company existing under the laws of England and
Wales (Man), Escalator Sub 1 Inc., a Delaware
corporation and a wholly owned subsidiary of Man
(Merger Sub), GLG Partners, Inc., a Delaware
corporation (GLG), Ogier Fiduciary Services
(Cayman) Limited, acting solely in its capacity as trustee of
Blue Hill Trust, a Cayman Islands STAR Trust (Blue
Hill), Ogier Fiduciary Services (Cayman) Limited,
acting solely in its capacity as trustee of Green Hill Trust, a
Cayman Islands STAR Trust (Green Hill), Sage
Summit LP, a UK partnership (Sage Summit),
and Lavender Heights Capital LP, a Delaware limited partnership
(Lavender Heights).
WHEREAS, Man, Merger Sub and GLG are parties to an Agreement and
Plan of Merger (the Merger Agreement)
dated as of May 17, 2010;
WHEREAS, Man and, Sage Summit, Lavender Heights and certain
other stockholders of GLG (collectively, the Selling
Stockholders) are parties to a Share Exchange
Agreement (the Share Exchange Agreement)
dated as of May 17, 2010;
WHEREAS, Man, Merger Sub and the Selling Stockholders are
parties to a Voting and Support Agreement (the Voting
and Support Agreement) dated as of May 17, 2010;
WHEREAS, Sage Summit and Blue Hill are parties to a Purchase
Agreement (the Sage Purchase Agreement)
dated as of the date hereof, pursuant to which it is
contemplated that (i) Blue Hill shall purchase from Sage
Summit all shares of common stock of GLG held by Sage Summit,
which are subject to the Share Exchange Agreement and the Voting
and Support Agreement, and (ii) Blue Hill shall become a
party to and assume the rights and obligations of Sage Summit
under the Share Exchange Agreement and the Voting and Support
Agreement; and
WHEREAS, Lavender Heights and Green Hill are parties to a
Purchase Agreement (the Lavender Purchase
Agreement) dated as of the date hereof, pursuant to
which it is contemplated that (i) Green Hill shall purchase
from Lavender Heights all shares of common stock of GLG held by
Lavender Heights, which are subject to the Share Exchange
Agreement and the Voting and Support Agreement, and
(ii) Green Hill shall become a party to and assume the
rights and obligations of Lavender Heights under the Share
Exchange Agreement and the Voting and Support Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Share Exchange Agreement
Joinder. Each of Blue Hill and Green Hill
hereby agrees that, upon execution of this Agreement and subject
to the following sentence, (i) it shall become a party to
the Share Exchange Agreement and shall have the benefit of and
be bound by, and subject to, all of the rights, covenants, terms
and conditions of the Share Exchange Agreement as fully and the
same as though each of Blue Hill and Green Hill was an original
party thereto, and shall be subject to all the provisions and
shall perform all the obligations of the Share Exchange
Agreement (including Section 2.1 thereof) applicable to
Sage Summit or Lavender Heights, as the case may be, as fully
and the same as though performed by Sage Summit or Lavender
Heights, as the case may be, and (ii) without limiting the
generality of the foregoing, it hereby makes the representations
and warranties in Article 3 of the Share Exchange Agreement
of a Stockholder as defined in and under the Share
Exchange Agreement. The parties hereto acknowledge and agree
that, in accordance with the terms of the Share Exchange
Agreement, for all purposes under the Share Exchange Agreement,
each of Blue Hill and Green Hill shall be deemed to be a
Stockholder and a Service Partnership as
such terms are defined thereunder and Ogier Fiduciary Services
(Cayman) Limited (OFSCL) shall be deemed to
be a Trustee Party as such term is defined
thereunder, with the full benefit of the provisions in the Share
Exchange Agreement that apply to a Trustee Party.
For the avoidance of doubt, each of Blue Hill and Green Hill is
a purpose trust and currently does not have any beneficiaries as
of the date hereof but may in the future have beneficiaries.
2. Voting and Support Agreement
Joinder. Each of Blue Hill and Green Hill
hereby agrees that, upon execution of this Agreement and subject
to the following sentence, (i) it shall become a party to
the Voting and Support Agreement and shall have the benefit of
and be bound by, and subject to, all of the rights, covenants,
terms and conditions of the Voting and Support Agreement as
fully and the same as though each of Blue Hill
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and Green Hill was an original party thereto, and shall be
subject to all the provisions and shall perform all the
obligations of the Voting and Support Agreement applicable to
Sage Summit or Lavender Heights, as the case may be, as fully
and the same as though performed by Sage Summit or Lavender
Heights, as the case my be, and (ii) without limiting the
generality of the foregoing, it hereby makes the representations
and warranties in Article 2 of the Voting and Support
Agreement of a Stockholder as defined in and under
the Voting and Support Agreement. The parties hereto acknowledge
and agree that, in accordance with the terms of the Voting and
Support Agreement, for all purposes under the Voting and Support
Agreement, each of Blue Hill and Green Hill shall be deemed to
be a Stockholder as such term is defined thereunder
and OFSCL shall be deemed to be a Trustee Party as
such term is defined thereunder, with the full benefit of the
provisions in the Voting and Support Agreement that apply to a
Trustee Party.
3. Consent. Man and Merger
Sub hereby consent to the execution, delivery and performance of
the Sage Purchase Agreement and the Lavender Purchase Agreement
and the transactions contemplated thereby (including delivery of
shares of GLG common stock), by Sage Summit and Lavender
Heights, respectively, for purposes of Sections 5.5(a)(vi),
5.5(a)(viii), 5.5(a)(xi) and 5.5(a)(xviii) of the Merger
Agreement, the Share Exchange Agreement and the Voting and
Support Agreement.
4. GLG Shares. Each of Sage
Summit and Lavender Heights hereby represents and warrants to
Man and Merger Sub that the dates and numbers of GLG Shares
subject to the calculation of the number of Man Shares to be
delivered by Blue Hill to Sage Summit or Green Hill to Lavender
Heights, as applicable, as set forth on the applicable
Schedule I to the Sage Purchase Agreement or Lavender
Purchase Agreement, as the case may be, correspond to the true
and correct vesting dates and applicable vested amounts under
the Second Amended and Restated Limited Partnership Agreement of
Sage Summit or the Second Amended and Restated Limited
Partnership Agreement of Lavender Heights, as applicable, in
effect on May 17, 2010 (the Limited Partnership
Agreements).
5. Vesting and Other
Terms. Each of Sage Summit and Lavender
Heights hereby agrees that the purchase price to be received by
Sage Summit from Blue Hill under the Sage Purchase Agreement or
by Lavender from Green Hill under the Lavender Purchase
Agreement, as applicable, shall be subject to the same vesting
and other terms and conditions that were applicable to Sage
Summits and Lavender Heights GLG Shares immediately
prior to the closing of the Sage Purchase Agreement or Lavender
Purchase Agreement, as applicable, except to the extent
acceleration is necessary to permit payment of applicable taxes;
provided, however, such purchase price and the payment dates of
such purchase price may be adjusted to the extent that
forfeitures
and/or
reallocations of membership interest held by certain members of
Sage Summit or Lavender Heights occur after the date of this
Agreement in accordance with the terms of the applicable Limited
Partnership Agreement.
6. Certification. Starting
on December 31, 2010 and ending on the date on which the
final purchase price installment is payable under the Sage
Purchase Agreement or the Lavender Purchase Agreement, as
applicable, on June 30 and December 31 of each year, each of
Sage Summit, Lavender Heights, Blue Hill and Green Hill shall
provide certifications to Man to the effect that it has not
distributed Man Shares (or proceeds from the sale of Man Shares)
other than in accordance with the provisions of the Sage
Purchase Agreement, Lavender Purchase Agreement or the
applicable Limited Partnership Agreement, as the case may be.
7. Assignment. Neither this
Agreement nor any of the rights, interests or obligations
hereunder shall be assigned, in whole or in part, by operation
of law or otherwise, by any of the parties without the prior
written consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by, the parties hereto and their
respective successors and permitted assigns. Any purported
assignment not permitted under this Section 7 shall be null
and void.
8. Further Assurances. Each
party hereto shall, from time to time execute such other
documents and agreements and provide such certificates as any
other party hereunder may reasonably request to carry out and
fulfill the transactions, and permit the exercise and assumption
of, such rights and obligations as are contemplated hereunder.
9. Headings and
Counterparts. The descriptive headings of
this Agreement are for convenience of reference only and do not
constitute a part of this Agreement. This Agreement may be
executed by facsimile or
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portable document format (pdf) transmission and in separate
counterparts, each such counterpart being deemed to be an
original instrument, and all such counterparts will together
constitute the same agreement.
10. Governing Law. All
claims or causes of action (whether at law, in contract, in tort
or otherwise) that may be based upon, arise out of or relate to
this Agreement (including, without limitation, the negotiation,
termination, performance or non-performance of this Agreement)
or the execution of this Agreement, shall be governed by and
construed in accordance with the laws of the State of Delaware
(without regard to any choice or conflicts of law principles
(whether of the State of Delaware or any other jurisdiction)
that would cause the application of the laws of any jurisdiction
other than the State of Delaware).
11. Jurisdiction.
(a) All actions and proceedings arising out of or relating
to this Agreement shall be heard and determined in the Chancery
Court of the State of Delaware and any state appellate court
therefrom within the State of Delaware (or, if the Chancery
Court of the State of Delaware declines to accept jurisdiction
over a particular matter, any state or federal court within the
State of Delaware), and the parties hereto hereby irrevocably
submit to the exclusive jurisdiction of such courts in any such
action or proceeding and irrevocably waive the defense of an
inconvenient forum to the maintenance of any such action or
proceeding.
(b) Without limiting other means of service of process
permissible under applicable law, each of the parties hereto
agrees that service of any process, summons, notice or document
by U.S. registered mail to the respective addresses set
forth in the Share Exchange Agreement (as supplemented by this
Agreement) shall be effective service of process for any suit or
proceeding in connection with this Agreement. The consents to
jurisdiction set forth in this Section 11 shall not
constitute general consents to service of process in the State
of Delaware and shall have no effect for any purpose except as
provided in this Section 11 and shall not be deemed to
confer rights on any person other than the parties hereto. The
parties hereto agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law.
12. Notices. For purposes of
the Share Exchange Agreement and the Voting and Support
Agreement, all notices, requests and other communications to be
given or made to Blue Hill and Green Hill shall be delivered at
the following addresses:
If to Blue Hill, to:
Blue Hill Trust
c/o Ogier
Fiduciary Services (Cayman) Limited
89 Nexus Way
Camana Bay
Grand Cayman KY1-9007
Cayman Islands
If to Green Hill, to:
Green Hill Trust
c/o Ogier
Fiduciary Services (Cayman) Limited
89 Nexus Way
Camana Bay
Grand Cayman KY1-9007
Cayman Islands
13. Effective Time. This
Agreement shall not become effective until the closing of the
transactions contemplated by the Sage Purchase Agreement and the
Lavender Purchase Agreement.
[Signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
MAN GROUP PLC
Name: Peter Clarke
ESCALATOR SUB 1, INC.
Name: John B. Rowsell
GLG PARTNERS, INC.
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By:
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/s/ Alejandro
San Miguel
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Name: Alejandro San Miguel
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Title:
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General Counsel and Corporate
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Secretary
SAGE SUMMIT LP
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By:
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Sage Summit Ltd., its general partner
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By:
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/s/ Leslie
J. Schreyer
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Name: Leslie J. Schreyer
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LAVENDER HEIGHTS CAPITAL LP
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By:
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Mount Garnet Limited, its general partner
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By:
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/s/ Leslie
J. Schreyer
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Name: Leslie J. Schreyer
OGIER FIDUCIARY SERVICES (CAYMAN) LIMITED, acting solely in its
capacity as
Trustee of BLUE HILL TRUST
Name: Fiona Barrie
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Title:
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Authorised Signatory
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Name: Inderjit Singh
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Title:
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Authorised Signatory
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OGIER FIDUCIARY SERVICES (CAYMAN) LIMITED, acting solely in its
capacity as
Trustee of GREEN HILL TRUST
Name: Fiona Barrie
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Title:
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Authorised Signatory
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Name: Inderjit Singh
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Title:
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Authorised Signatory
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PRELIMINARY, SUBJECT TO COMPLETION
DATED AUGUST 27, 2010
GLG PARTNERS, INC.
399 PARK AVENUE,
38TH FLOOR NEW
YORK, NY 10022
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until
11:59 p.m. Eastern Time on September , 2010. Have your proxy card in hand when you access the web site
and follow the instructions to obtain your records and to create an electronic voting instruction form.
If you vote by the Internet, you should not return your proxy card.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until
11:59 p.m. Eastern Time on September , 2010. Have your proxy card in hand
when you call and then follow the instructions. If you vote by telephone, you should not return your proxy card.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we
have provided or return it to Vote Processing, c/o Broadridge, 51
Mercedes Way, Edgewood, NY 11717 to be received by September ,
2010.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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The Board of Directors recommends you vote FOR the following proposal(s): |
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Abstain |
1 Adoption of the
Agreement and Plan of Merger dated as of May 17, 2010, as amended, among GLG Partners, Inc., Man Group plc,
and Escalator Sub 1 Inc. (the Merger Proposal).
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Against |
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2 Approval
of the adjournment of the special meeting, if necessary, to permit further solicitation
and vote of proxies if there are insufficient votes at the time of the special meeting to
approve the Merger Proposal. |
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NOTE: Such other business
as may properly come before the meeting or any adjournment or postponement thereof.
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Please sign exactly as your name(s)
appear(s) hereon. When signing as attorney executor, administrator, or other fiduciary, please give
full title as such. Joint owners should each sign personally. All holders must sign. If a corporation
or partnership please sign in full corporate or partnership name, by authorized officer.
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Signature [PLEASE SIGN WITHIN BOX]
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Date |
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Signature (Joint Owners) |
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GLG PARTNERS, INC.
SPECIAL MEETING OF STOCKHOLDERS
SEPTEMBER , 2010
10:00 a.m. Eastern Time
CHADBOURNE & PARKE LLP
30 ROCKEFELLER PLAZA
NEW YORK, NY 10112
(212) 408-5100
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE BY INTERNET, TELEPHONE OR MAIL. SEE THE INSTRUCTIONS ON THE
OTHER SIDE OF THIS CARD.
Important Notice Regarding the Availability of Proxy Materials for the Special Meeting:
The Notice & Proxy Statement are available at
www.proxyvote.com.
PROXY CARD
GLG PARTNERS, INC.
SOLICITED BY AND ON BEHALF OF THE BOARD OF
DIRECTORS
The undersigned hereby
appoints Noam Gottesman, Emmanuel Roman and Alejandro San Miguel, or any of them, each with
full power of substitution, as proxies and attorneys-in-fact, and hereby authorizes them to represent
and vote, as designated on this proxy card, all of the shares of Common Stock and Series A Preferred
Stock of GLG PARTNERS, INC. (the Company) which the undersigned is entitled to vote and, in their
discretion, to vote upon such other business as may properly come before the Special Meeting of Stockholders
of the Company to be held at the offices of Chadbourne & Parke LLP, 30 Rockefeller Plaza, New York, NY 10112
on September , 2010 at 10:00 a.m., Eastern Time, and at any adjournments or postponements thereof.
SUCH PROXIES ARE DIRECTED TO VOTE AS SPECIFIED OR,
IF NO SPECIFICATION IS MADE, FOR
THE ADOPTION OF THE AGREEMENT AND PLAN OF MERGER DATED AS OF MAY 17, 2010, AS AMENDED, AMONG THE COMPANY,
MAN GROUP PLC, AND ESCALATOR SUB 1 INC., AND FOR PROPOSAL 2, AND TO VOTE IN ACCORDANCE WITH THEIR DISCRETION ON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS
RECOMMENDATIONS, JUST SIGN AND DATE; NO BOXES NEED TO BE CHECKED.
Continued and to be signed on reverse side