Och-Ziff Capital Management Group LLC (Form: 8-K, Received: 01/30/2018 08:16:44)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): January 30, 2018 (January 27, 2018)

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

(Exact Name of Registrant as Specified in Its Charter)



Delaware	001-33805	26-0354783
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)



9 West 57th Street, New York, New York		10019
(Address of Principal Executive Offices)		(Zip Code)

212-790-0000

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01. Entry into a Material Definitive Agreement.

The information included in Item 5.02 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Resignation of Chief Executive Officer; Appointment of Chief Executive Officer and Director

On January 30, 2018, Och-Ziff Capital Management Group LLC (the “Company” or “Och-Ziff”) announced that Robert Shafir will succeed Daniel S. Och as Chief Executive Officer (“CEO”) of the Company, as of February 5, 2018 (the “Effective Date”). Mr. Shafir also was appointed to the Board of Directors (the “Board”) from the Effective Date. Mr. Och will remain as the Chairman of the Board, an Executive Managing Director and the largest shareholder in the Company. A copy of the Company’s press release announcing these changes is attached hereto as Exhibit 99.1.

Pursuant to the Class B Shareholders Agreement, by and between the Company and the holders of the Company’s Class B Shares, dated as of November 13, 2007, Mr. Shafir will serve on the Board as a designee of the Class B Shareholder Committee and will serve as a Class I director for a term that coincides with the remainder of the three-year term of the existing Class I directors, ending at the 2020 annual meeting of shareholders and until his successor is duly elected and qualified. The Board has not appointed Mr. Shafir to serve on any of its committees. Given that Mr. Shafir is a member of management, he will not receive any compensation with respect to his service as a director, but will be reimbursed for reasonable costs and expenses incurred in attending meetings of the Board.

Mr. Shafir, age 59, previously served in various capacities at Credit Suisse Group AG, most recently as the CEO of Credit Suisse Americas from 2008 to 2016 and Co-Head of Private Banking & Wealth Management, which included oversight of Asset Management, from 2012 to 2016. He also served on the Executive Board from 2007 until 2015. Prior to joining Credit Suisse in 2007, Mr. Shafir held several senior positions at Lehman Brothers Inc. for over 17 years, including Head of Global Equities and a member of the Executive Board. Mr. Shafir serves on the Board of The Film Society of Lincoln Center, and formerly served on the Boards of The Dwight School Foundation and The Cystic Fibrosis Foundation. Mr. Shafir received a B.A. in Economics from Lafayette College and an M.B.A. from Columbia Business School.

New CEO Employment Agreement

In connection with Mr. Shafir’s appointment as CEO, he has entered into an executive employment agreement, dated January 27, 2018, with OZ Management LP, a subsidiary of the Company (the “Employment Agreement”). The term of Mr. Shafir’s Employment Agreement ends on the fourth anniversary of the Effective Date.

Cash Compensation

The Employment Agreement provides that Mr. Shafir will receive an annual base salary of $2 million and a discretionary annual bonus with a minimum annual bonus equal to 100% of his base salary and a maximum annual bonus equal to 200% of his base salary, which may be paid in a combination of cash, deferred cash or equity awards of the Company; provided, that no less than 60% of each annual bonus will be paid in cash.

Equity Compensation

In connection with entering into the Employment Agreement, Mr. Shafir will receive (i) a one-time sign-on grant of 12 million restricted share units (the “Sign-On RSUs”), and (ii) a one-time sign-on grant of 10 million performance-based RSUs (the “Sign-On PSUs”), in each case, subject to the terms of the Company’s 2013 Incentive Plan (the “Incentive Plan”).

The Employment Agreement also provides that Mr. Shafir will receive an annual grant of RSUs equal to $5 million in value at grant (the “Annual RSUs”) for each year of the term of the Employment Agreement, subject to the terms of the Incentive Plan. The grant of Annual RSUs may be reduced in the sole discretion of the Board to no

less than 2.5 million RSUs in the event that the fair market value of Class A Shares of the Company is less than $2.00 on the date of grant, in which case the remainder of the value of the annual grant will be made in the form of cash-based awards subject to the same terms and conditions as the Annual RSUs. The first grant of Annual RSUs will be made as soon as practicable after the Effective Date.

The Sign-On RSUs and the Annual RSUs will vest in four equal installments on each of the first four anniversaries of the grant date, provided that Mr. Shafir is employed by the Company on each vesting date.

The Sign-On PSUs will conditionally vest if: (i) Mr. Shafir has continued in uninterrupted service until the third anniversary of the grant date (the “Service Condition”), and (ii) on or after such date, the total shareholder return on Class A Shares of the Company based on the average closing price on the NYSE for the 10 trading days immediately following the date of the public announcement of the appointment of Mr. Shafir as CEO equals or exceeds the Performance Thresholds, as defined in the Employment Agreement (the “Performance Condition”).

If a Sign-On PSU has not satisfied both the Service Condition and the Performance Condition by the sixth anniversary of the grant date, it will be forfeited and canceled immediately.

The Employment Agreement also provides that for so long as Mr. Shafir is employed by the Company, he will continue to hold at least 50% of the after-tax portion of Class A Shares of the Company delivered in respect of any equity awards (including on settlement of the Annual RSUs, Sign-On RSUs and Sign-On PSUs). This restriction will lapse on a termination of employment for any reason or upon a Change in Control.

Change in Control

In the event of a Change in Control (as defined in the Employment Agreement), all outstanding Sign-On RSUs and Annual RSUs will remain outstanding and continue to vest subject to Mr. Shafir’s continued employment with the Company or successor entity in a Substantially Equivalent Position (as defined in the Employment Agreement); provided, that (A) if Mr. Shafir’s employment with the Company or successor entity is terminated by the Company without cause or by Mr. Shafir because his position has ceased to be a Substantially Equivalent Position, in each case during the period beginning 6 months prior to a Change in Control and ending on the earlier of the two-year period following a Change in Control and the fourth anniversary of the Effective Date, or (B) if Mr. Shafir is not offered a Substantially Equivalent Position in such Change in Control and terminates his employment within 30 days following such Change in Control, in each case, then Mr. Shafir will be entitled to the payments and benefits payable on a termination without cause as described below.

In the event of a Change in Control, the Service Condition with respect to the Sign-On PSUs will be waived (if not already satisfied) but only to the extent that the applicable Performance Condition has been satisfied pursuant to the price per Class A Share of the Company implied by the Change in Control and the Sign-On PSUs will become vested to the extent the Performance Condition has been so satisfied, and the remaining unvested Sign-On PSUs, if any, will be forfeited on such date.

Termination of Employment

The Employment Agreement provides that upon a termination of Mr. Shafir’s employment by the Company without cause, or by Mr. Shafir by reason of his position no longer being a Substantially Equivalent Position, in each case, prior to the expiration of the term, Mr. Shafir will be entitled to receive the following severance benefits (the “Severance Benefit”): (1) a lump sum cash payment equal to (A) if such termination occurs prior to the second anniversary of the Effective Date, the lower of (x) the Base Severance Benefit (as defined below) and (y) $18 million, and (B) if such termination occurs on or after the second anniversary of the Effective Date, the lower of (x) the Base Severance Benefit, multiplied by a fraction, the numerator of which is the number of full months remaining in the initial term, and the denominator of which is 24, and (y) $18 million; (2) his minimum annual bonus, pro-rated for the fiscal year in which the termination occurs through the termination date; and (3) his annual bonus earned for the most recently completed fiscal year, to the extent such annual bonus was not previously paid. For purposes of the Employment Agreement, “Base Severance Benefit” means the product of (x) base salary and maximum annual bonus, multiplied by (y) 3.0.

In addition, upon Mr. Shafir’s termination without cause or by reason of his position no longer being a Substantially Equivalent Position as described above, his outstanding equity awards will also be treated as follows: (A) (i) the next two installments of the Sign-On RSUs will become vested on the termination date (or, for a qualifying termination in connection with a Change in Control, the later of the termination date and the date of the Change in Control), and in addition, to the extent unvested following application of the previous clause, a portion of an additional installment of Sign-On RSUs, pro-rated for the year of the employment term in which the termination occurs through the termination date, shall also become vested as of such date (and the remaining unvested Sign-On RSUs, if any, will be forfeited on such date); and (ii) the next two installments of the Annual RSUs will become vested as of the termination date (or, for a qualifying termination in connection with a Change in Control, the later of the termination date and the date of the Change in Control) and the remaining unvested Annual RSUs, if any, will be forfeited on such date; and (B) the Service Condition with respect to the Sign-On PSUs will be waived and Mr. Shafir will conditionally retain any remaining Sign-On PSUs for a period of up to 24 months following the termination date, at which time any such Sign-On PSUs that have not satisfied the Performance Condition will be forfeited.

If the Company does not offer to renew the Employment Agreement at the expiration of its term on substantially similar terms, (i) all unvested Annual RSUs and all unvested Sign-On RSUs then-held by Mr. Shafir will vest, (ii) Mr. Shafir will retain all of his remaining Sign-On PSUs until the sixth anniversary of the grant date, at which time any such Sign-On PSUs that have not satisfied the Performance Condition will be forfeited, (iii) all equity and deferred awards granted in payment of any annual bonuses then-held by Mr. Shafir will vest and he will receive his annual bonus earned for the most recently completed fiscal year, to the extent such annual bonus was not previously paid, and (iv) Mr. Shafir will receive his minimum annual bonus, pro-rated for the fiscal year in which the termination occurs.

The payment of the Severance Benefit and the treatment of the equity awards upon a qualifying termination of employment as described above under “Change in Control” and “Termination of Employment” in each case, is subject to Mr. Shafir’s execution of a general release of claims against the Company.

Restrictive Covenants

The Employment Agreement contains non-competition and non-solicitation restrictions, ending on the second anniversary of the date of Mr. Shafir’s termination for any reason (or on the 18-month anniversary in the case of a termination of employment upon or following the expiration of the term of the Employment Agreement in the case of the restrictions on competition and solicitation of the Company's investors), as well as confidentiality and other restrictions that are generally consistent with those applicable to the Company’s other executives.

Partner Admission

Within 30 calendar days of the Effective Date, Mr. Shafir will be admitted as a limited partner of each of the Company's operating partnerships by entering into the Limited Partnership Agreements of each of the Company's operating partnerships and partner agreements with each such operating partnership that will include substantially similar provisions as, and will supersede and replace, the Employment Agreement.

Succession Arrangements

In connection with the above-described succession, Mr. Och, Och-Ziff, certain of Och-Ziff's subsidiaries and, for purposes of the mutual release set forth therein, the independent directors of the Company except for one entered into a letter agreement dated January 27, 2018 and effective as of the Effective Date (the "Letter Agreement"), pursuant to which the parties agreed to various corporate governance arrangements set forth in the term sheet attached thereto as Exhibit A (the "Term Sheet").

The following description of the Letter Agreement does not purport to be complete and is qualified in its entirety by the full text of the Letter Agreement, which is filed hereto as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Class B Shareholder Committee

If Mr. Shafir continues to serve as the CEO as of 18 months from the Effective Date, then the Class B Shareholder Committee will relinquish its consent rights with respect to the approval of a successor CEO as of that 18 month date.

The Class B Shareholder Committee will be disbanded and the Class B Shareholders Agreement will be terminated (the "Class B Committee Dissolution") effective as of the Transition Date. The "Transition Date" will be December 31, 2019, subject to extension if either (i) the Company has advised Mr. Och that he may not withdraw any capital that he may request to withdraw or (ii) Mr. Och is advised by counsel that he is prohibited by law from withdrawing any capital he has requested to withdraw.

Exchange Committee

Promptly following the Transition Date, the Exchange Committee will be disbanded and the Amended and Restated Exchange Agreement will be terminated (together with the Class B Committee Dissolution, the "Committee Dissolutions"). Thereafter, any of the Company's executive managing directors, including any Class B Shareholders, may exchange his or her vested units over a period of two years in three equal installments.

Board Composition

Following the appointment of Mr. Shafir as CEO, the Board will consist of seven members: (a) Mr. Shafir; (b) Mr. Och; (c) all those other current directors who choose to remain on the Board for another term; (d) a replacement for any designee of the Class B Shareholder Committee who decides not to stand for reelection at the 2018 Shareholder Meeting, with any such replacement to qualify as an independent director and be appointed by Mr. Och with the approval of the Nominating, Corporate Governance And Conflicts Committee (the "Nominating Committee"); and (e) if any other current directors choose not to remain on the Board, one or more replacement individual(s) who will qualify as independent directors and be selected jointly by Mr. Och and the Nominating Committee.

Continuing Role of Mr. Och

Mr. Och will remain Chairman of the Board until March 31, 2019, at which time he will resign and be replaced by a successor nonexecutive Chairman of the Board selected from the existing Board members and mutually agreed upon by the Nominating Committee and the Class B Shareholder Committee.

As Chairman of the Board, Mr. Och will oversee and be involved with the overall direction and vision of the Company. Mr. Och will receive annual compensation in consideration for his services to the Board, in an amount consistent with the compensation of other Och-Ziff directors.

Following Mr. Och’s resignation as Chairman of the Board, Mr. Och will have the right to continue to serve as a director on the Board for so long as he continues to own interests in Och-Ziff representing at least 33% of either his current preferred units or current common equity units in the Company's Och-Ziff Operating Group entities.

Until the Committee Dissolutions, Mr. Och will continue to serve as the (i) sole member of the Class B Committee and (ii) Chairman of the Exchange Committee. The Company will develop a transition plan with respect to Mr. Och’s other roles and responsibilities and, to the extent necessary, the Company will seek consents or waivers with respect to certain of Mr. Och's roles in order to effect such transition. As part of the transition, Mr. Och expects to continue to support the OZ Group in its initiatives and remain involved with the OZ Group to ensure its future success. After the Committee Dissolutions, Mr. Och will generally resign from other officer positions and from the boards of directors of Och-Ziff subsidiaries and will not become director of any future OZ funds.

Investments by Mr. Och

To the extent Mr. Och or his related parties have any investments in OZ funds that were not previously charged fees as of the Effective Date, such investments will be charged the same management fees and incentive allocation as are applicable to other former executive managing directors of the Company on a "most favored nation" basis;

provided, however, that such fees shall not exceed a maximum of 1% in respect of management fees or 10% in respect of incentive fees.

Mutual Releases

In connection with entering into the foregoing arrangements, Och-Ziff and its subsidiaries, Mr. Och and the independent directors party to the Letter Agreement will provide one another with full mutual reciprocal releases.

Expenses of Mr. Och

The Company will reimburse Mr. Och for certain legal fees and expenses in an aggregate amount not to exceed $750,000.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits



Exhibit No.		Description
10.1		Letter Agreement (including Term Sheet attached as Exhibit A), dated January 27, 2018
99.1		Press Release of the Company, dated January 30, 2018

Forward-Looking Statements

The information contained in this Current Report on Form 8-K may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that reflect the Company’s current views with respect to, among other things, future events and financial performance. The Company generally identifies forward-looking statements by terminology such as “outlook,” “believe,” “expect,” “potential,” “continue,” “may,” “will,” “should,” “could,” “seek,” “approximately,” “predict,” “intend,” “plan,” “estimate,” “anticipate,” “opportunity,” “comfortable,” “assume,” “remain,” “maintain,” “sustain,” “achieve,” “see,” “think,” “position” or the negative version of those words or other comparable words.

Any forward-looking statements contained in this Current Report on Form 8-K are based upon historical information and on the Company’s current plans, estimates and expectations. The inclusion of this or other forward-looking information should not be regarded as a representation by the Company or any other person that the future plans, estimates or expectations contemplated by the Company will be achieved.

The Company cautions that forward-looking statements are subject to numerous assumptions, estimates, risks and uncertainties, including but not limited to the following: global economic, business, market and geopolitical conditions; U.S. and foreign regulatory developments relating to, among other things, financial institutions and markets, government oversight, fiscal and tax policy; the outcome of third-party litigation involving the Company; the consequences of the Foreign Corrupt Practices Act settlements with the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Department of Justice; conditions impacting the alternative asset management industry; the Company’s ability to retain existing investor capital; the Company’s ability to successfully compete for fund investors, assets, professional talent and investment opportunities; the Company’s ability to retain its active executive managing directors, managing directors and other investment professionals; the Company’s successful formulation and execution of its business and growth strategies; the Company’s ability to appropriately manage conflicts of interest and tax and other regulatory factors relevant to the Company’s business; and assumptions relating to the Company’s operations, investment performance, financial results, financial condition, business prospects, growth strategy and liquidity.

If one or more of these or other risks or uncertainties materialize, or if the Company’s assumptions or estimates prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. These factors are not and should not be construed as exhaustive and should be read in conjunction with the other cautionary statements and risks that are included in the Company’s filings with the SEC, including but not limited to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, dated March 1, 2017, as well as may be updated from time to time in the Company’s other SEC filings. There may be additional risks, uncertainties and factors that the Company does not currently view as material or that are not known. The Company does not undertake to update any forward-looking statement, because of new information, future developments or otherwise.

This Current Report on Form 8-K does not constitute an offer of any Oz Management fund.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC
	(Registrant)

	By:		/s/ Daniel S. Och
			Daniel S. Och
			Chief Executive Officer, Executive Managing Director and Chairman of the Board of Directors

January 30, 2018

Exhibit 10.1

Och-Ziff Capital Management Group LLC

9 West 57 ^th Street

New York, New York 10019

January 27, 2018

Daniel S. Och

c/o Och-Ziff Capital Management Group LLC

9 West 57 ^th Street

New York, New York 10019

Re: OZ Corporate Governance Arrangements

Ladies and Gentlemen:

This binding letter agreement (as amended, supplemented or otherwise modified from time to time, this “ Agreement ”) is effective as of February 5, 2018 (the “ Effective Date ”) and sets forth the agreements, arrangements, understandings and intentions of Och-Ziff Capital Management Group LLC (the “ Company ”), the subsidiaries of the Company set forth on the signature pages hereto (the “ OZ Subsidiaries ”) and, solely for the purposes of the “Release” section in Exhibit A and the sections related thereto contained in this Agreement, the members of the Company’s board of directors (the “ Board ”) set forth on the signature pages hereto (the “ Independent Directors ”, and together with the Company and the OZ Subsidiaries, the “ OZ Parties ”), on the one hand, and Daniel S. Och (“ DSO ”), on the other, with respect to certain corporate governance arrangements to be implemented at the Company and its subsidiaries.

In connection with the foregoing, the parties hereto, each intending to be legally bound, agree as follows:

1. Governance Terms and Conditions . As of the Effective Date, the OZ Parties and DSO, on behalf of themselves and their affiliates and related parties, hereby agree to the terms and conditions set forth on Exhibit A , the terms of which are hereby incorporated by reference. As promptly as practicable following the date hereof, the parties hereto shall in good faith negotiate and execute such amendments to the organizational documents of the OZ Parties and any other agreement to which an OZ Party, DSO or their respective affiliates or related parties is a party (collectively, the “ Existing OZ Agreements ”), which Existing OZ Agreements include (x) the Second Amended and Restated Limited Liability Company Agreement of the Company, as amended (the “ Company LLC Agreement ”), (y) the Class B Shareholders Agreement, dated as of November 13, 2007, by and among the Company and the individuals set forth on the signature pages thereto, as amended, and (z) the Amended and Restated Exchange Agreement, dated as of August 1, 2012, by and among the Company the subsidiaries of the Company party thereto and the Och-Ziff Limited Partners and Class B Shareholders from time to time party thereto, as amended, and shall take such other actions as are reasonably necessary to reflect the terms hereof. Notwithstanding the foregoing, this Agreement shall remain binding and enforceable on the parties hereto in accordance with its terms if the parties hereto do not execute and deliver such amendments to the Existing OZ Agreements, and the parties hereto, intending to be bound hereby, declare that the terms hereof will be sufficient to effect the transactions contemplated hereby and agree to take all steps within their power to effect such transactions. In the event of any conflict between any provision of an Existing OZ Agreement, on the one hand, and any provision of this Agreement, on the other hand, the provisions of this Agreement shall control.

2. Representations and Warranties . Each of the OZ Parties and DSO represents and warrants to the other as follows: (a) in the case of an OZ Party, it is duly organized, validly existing and in good standing under the laws of the jurisdiction where it purports to be organized; (b) such party has full power and authority (and, in the case of DSO, legal capacity) to enter into and perform its obligations under this Agreement; (c) all actions (including, in the case of the OZ Parties, the approval of the Conflicts Committee (as defined in the Company LLC Agreement)) necessary to authorize such party’s signing and delivery of this Agreement, the performance of its obligations hereunder and the acknowledgements made by such party hereunder (including the acknowledgements set forth in in “DSO Continuing Role” in Exhibit A ), have been duly taken; (d) in the case of an OZ Party, this Agreement has been duly signed and delivered by a duly authorized officer or other representative of such OZ Party; (e) this Agreement constitutes the legal, valid and binding obligation of such party enforceable in accordance with its terms (except as such enforceability may be affected by applicable bankruptcy, insolvency or other similar laws affecting creditors’ rights generally, and except that the availability of equitable remedies is subject to judicial discretion); (f) no consent, approval or notification of any other person or entity (including any governmental authority) is required in connection with the signing, delivery and performance of this Agreement by such party that have not been obtained; and (g) the signing, delivery and performance of this Agreement do not violate the organizational documents of such party (in the case of the OZ Parties) or any material agreement to which such party is a party or by which it is bound.

4. Expenses. Except as set forth in Exhibit A , each party hereto shall bear its own costs and expenses in connection with this Agreement and the transactions contemplated hereby.

5. Notices . All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed given upon receipt by the parties at the following addresses (or at such other address for a party as will be specified by like notice):

A. if to an OZ Party, to:

Och-Ziff Capital Management Group LLC

9 West 57th Street

New York, New York 10019

Email: David.Levine@ozm.com

Attention: Chief Legal Officer

with a copy (which will not constitute notice) to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Email: jrosen@debevoise.com

Attention: Jeffrey J. Rosen

Attention: Mark P. Goodman

B. if to DSO, to:

Daniel S. Och

c/o Willoughby Capital Holdings, LLC

10 Bank Street, Suite 1120

White Plains, NY 10606

with a copy (which will not constitute notice) to:

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York 10019-6064

Facsimile: (212) 757-3990

Email: Ajdeckelbaum@paulweiss.com

Eching@paulweiss.com

Attention: Ariel J. Deckelbaum

Attention: Ellen N. Ching

All such notices or communications will be deemed to have been delivered and received (a) if delivered in person, on the day of such delivery, (b) if by facsimile or electronic mail, on the day on which such facsimile or electronic mail was sent; provided , that receipt is confirmed, (c) if by certified or registered mail (return receipt requested), on the seventh business day after the mailing thereof or (d) if by reputable overnight delivery service, on the second business day after the sending thereof.

6. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial . This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware without regard to principles of conflict of laws. Each party hereto (i) irrevocably submits to the jurisdiction of the Court of Chancery of the State of Delaware or, if such court lacks jurisdiction, any Delaware state court or U.S. federal court sitting in Wilmington, Delaware in any action arising out of this Agreement and (ii) consents to the service of process by mail.

7. Counterparts . This Agreement may be executed in counterparts and signatures may be delivered by facsimile or by e-mail delivery of a “.pdf” format data file, each one of which shall be deemed an original and all of which together shall constitute one and the same Agreement.

8. Construction; Headings . As used herein, (i) “or” shall mean “and/or”; (ii) the terms “hereof”, “herein”, “hereby” and derivative or similar words refer to this entire Agreement; and (iii) “including” or “include” shall mean “including, without limitation.” The headings and captions herein are inserted for convenience of reference only and are not intended to govern, limit or aid in the construction of any term or provision hereof. It is the intention of the parties that every covenant, term and provision of this Agreement shall be construed simply according to its fair meaning and not strictly for or against any party (notwithstanding any rule of law requiring an Agreement to be strictly construed against the drafting party), it being understood that the parties to this Agreement are sophisticated and have had adequate opportunity and means to retain counsel to represent their interests and to otherwise negotiate the provisions of this Agreement.

9. Severability . If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.

10. Successors and Assigns . Except as otherwise provided herein, all of the terms and provisions of this Agreement shall inure to the benefit of and be binding upon each of the parties hereto and their respective permitted assigns and transferees. This Agreement may not be assigned by any of the parties without the prior written consent of the other parties hereto.

11. Entire Agreement . Except as expressly contemplated herein, this Agreement constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereto.

12. No Third Party Beneficiaries . It is understood and agreed among the parties that this Agreement and the covenants made herein are made expressly and solely for the benefit of the parties hereto, and that, except as otherwise expressly provided for in this Agreement, no other person or entity shall be entitled or be deemed to be entitled to any benefits or rights hereunder, nor be authorized or entitled to enforce any rights, claims or remedies hereunder or by reason hereof.

13. Amendments; Remedies and Waivers . No provision of this Agreement may be amended, modified or waived except in writing signed by the Company and DSO. Except as otherwise expressly set forth herein, no delay or omission on the part of any party to this Agreement in exercising any right, power or remedy provided by law or provided hereunder shall impair such right, power or remedy or operate as a waiver thereof. The single or partial exercise of any right, power or remedy provided by law or provided hereunder shall not preclude any other or further exercise of any other right, power or remedy. The rights, powers and remedies provided hereunder are cumulative and are not exclusive of any rights, powers and remedies provided by law.

14. Further Action . The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.

15. Specific Performance . The parties hereto agree that irreparable damage would occur if any of the provisions of this Agreement were not performed in accordance with its 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 hereof, in addition to any other remedy to which they are entitled at law or in equity, and shall not be required to post a bond or other collateral in connection therewith.

16. Public Announcements . The initial press release and other filings announcing the transactions contemplated hereby (the “ Initial Filings ”) shall be mutually agreed by the Company and DSO. No party hereto shall issue, or cause to be issued, any public announcements or disseminate any marketing material concerning the existence or terms of this Agreement without the prior written approval of the other party, except to the extent such announcement is required by law or stock exchange requirements; provided , however , that the foregoing shall not apply to any press release or materials to the extent it contains substantially the same information as previously communicated in the Initial Press Filings or by one or more of the parties without breach of the provisions hereof. If a public announcement is required by law or stock exchange requirements, the parties hereto will consult with each other before making the public announcement. To the extent any announcement or any marketing material permitted under this Section 16 expressly refers to any party or its affiliates or related party, such party shall, in its sole discretion, have the right to revise such announcement or advertising or marketing material prior to granting such written approval.

17 Actions and Determinations by the OZ Parties . With respect to any notice, consent, approval, waiver or other action or determination that is required or permitted to be taken, given or made by any of the OZ Parties pursuant to this Agreement, such notice, consent, approval, waiver or other action or determination shall be taken, given or made only by or with the express authorization of the Conflicts Committee. Without limiting the foregoing, the Conflicts Committee shall be entitled to exercise all rights and remedies of the OZ parties against DSO hereunder, and the parties hereto shall take all action necessary to cause the OZ Parties to comply with the directives of the Conflicts Committee

issued pursuant hereto. Further, notwithstanding anything to the contrary in the Company LLC Agreement or in any other agreement or document, the Conflicts Committee shall consist of those members of the Conflicts Committee in office as of the date hereof (for so long as each continues as a director and subject to each of their earlier resignation from the Conflicts Committee) and any other independent director elected to serve on the Conflicts Committee by a majority of the members of the Conflicts Committee.

If this Agreement correctly sets forth our understanding, please so acknowledge by signing below and returning a signed copy of this Agreement to us.


Very truly yours,

OCH-ZIFF CAPITAL MANAGEMENT GROUP LLC

By:		/s/ Alesia J. Haas
		Name: Alesia J. Haas
		Title: Chief Financial Officer

Accepted and Agreed as of the date first set forth above:


DSO :
/s/ Daniel S. Och
Daniel S. Och
OZ PARTIES : OZ MANAGEMENT LP By: Och-Ziff Holding Corporation, its general partner


By:		/s/ Alesia J. Haas
		Name: Alesia J. Haas
		Title: Chief Financial Officer
OZ ADVISORS LP By: Och-Ziff Holding Corporation, its general partner

By:		/s/ Alesia J. Haas
		Name: Alesia J. Haas
		Title: Chief Financial Officer


OZ ADVISORS II LP By: Och-Ziff Holding LLC, its general partner

By:		/s/ Alesia J. Haas
		Name: Alesia J. Haas
		Title: Chief Financial Officer
OCH-ZIFF HOLDING CORPORATION
By:		/s/ Alesia J. Haas
		Name: Alesia J. Haas
		Title: Chief Financial Officer
OCH-ZIFF HOLDING LLC
By:		/s/ Alesia J. Haas
		Name: Alesia J. Haas
		Title: Chief Financial Officer


INDEPENDENT DIRECTORS

By:		/s/ Allan S. Bufferd
		Name: Allan S. Bufferd
		Title: Lead Independent Director

By:
		Name: William P. Barr
		Title: Independent Director

By:		/s/ J. Barry Griswell
		Name: J. Barry Griswell
		Title: Independent Director

By:		/s/ Jerome P. Kenney
		Name: Jerome P. Kenney
		Title: Independent Director

By:		/s/ Georganne C. Proctor
		Name: Georganne C. Proctor
		Title: Independent Director

Exhibit A

Governance Terms


CHIEF EXECUTIVE OFFICER ROLE		● The Board of Directors of OZ (the “ Board ”), with the approval of the Class B Shareholder Committee (the “ Class B Committee ”), will appoint and announce a new Chief Executive Officer of the OZ Group (the “ New CEO ”). ● The New CEO shall enter into an employment agreement on terms and conditions to be negotiated by the Board’s Compensation Committee. ● Daniel S. Och (“ DSO ”) shall resign as CEO concurrently with the New CEO’s appointment.

CLASS B SHAREHOLDER COMMITTEE		● On the 18-month anniversary of the appointment of the New CEO, if the New CEO is continuing to serve as the Chief Executive Officer of the OZ Group as of such date, the Class B Committee shall relinquish its consent rights with respect to the approval of a successor CEO and the Class B Shareholders Agreement shall be amended to reflect such relinquishment. ● The Class B Committee will be disbanded and the Class B Shareholders Agreement will be terminated (the “ Class B Committee Dissolution ”) effective December 31, 2019 (such date, the “ Transition Date ”, and the period of time until the Transition Date, the “ Transition Period ”) unless (i) the OZ Group has, following the date of the appointment of the New CEO, advised DSO in writing that he may not withdraw capital invested in the firm that he has requested to withdraw, or (ii) (x) DSO is advised in writing by his counsel (which written advice is promptly furnished to the OZ Group) that he is prohibited by law (other than laws relating to DSO’s possession of material nonpublic information of the OZ Group (“ OZ MNPI ”), which shall be determined by the OZ Group and its counsel, and such determination shall be communicated to DSO as contemplated by the immediately preceding clause (i)) from withdrawing capital invested in the firm that he has requested to withdraw and (y) counsel to the OZ Group does not thereafter inform DSO in writing that he is not so prohibited (any such blockage or restriction, a “ Withdrawal Restriction ”), in which event the Transition Date shall be deferred and the Transition Period extended if and to the extent contemplated by the following subparagraph.



		● In the event that (i) DSO is prohibited by a Withdrawal Restriction from withdrawing an amount of capital that he has, in accordance with the applicable fund documents, requested to withdraw during a redemption window, (ii) DSO so seeks in each subsequent redemption window pertinent to such withdrawal request to withdraw any unwithdrawn amount of such request and (iii) DSO is prohibited by subsequent Withdrawal Restrictions from withdrawing the remaining unwithdrawn amount thereof, then the Transition Period shall be tolled and the Transition Date shall be extended, until the day following the closing of the next redemption window pertinent to such withdrawal request as to which no Withdrawal Restriction restricts DSO’s ability to withdraw unwithdrawn amounts requested to be withdrawn prior to January 1, 2019. The provisions of the preceding sentence may apply sequentially to subsequent redemption windows and simultaneously to multiple requests to withdraw capital. ● From and after the Transition Date, each of the Class B Shareholders shall be able to vote his or her Class B shares directly.

EXCHANGE COMMITTEE		● Promptly following the Transition Date, the Exchange Committee will be disbanded and the Amended and Restated Exchange Agreement will be terminated (the “ Exchange Committee Dissolution ”, and together with the Class B Committee Dissolution, the “ Committee Dissolutions ”). ● Following the date of the Exchange Committee Dissolution, (a) any partner, including any Class B Shareholder, shall be free to exchange his or her vested units over a period of two years in three equal installments commencing upon the date of the Exchange Committee Dissolution and on each of the first and second anniversary thereof (and thereafter such units shall be freely exchangeable) and (b) thereafter, whenever a tranche of any partner’s units vest, such partner shall be free to exchange such vested units over a period of two years in three equal installments commencing upon the date of such vesting and on each of the first and second anniversary thereof (and thereafter such units shall be freely exchangeable).

BOARD COMPOSITION		● As promptly as practicable following the appointment of the New CEO, the Board shall consist of seven members, constituted and selected as follows: (a) the New CEO, who shall be appointed by DSO (in his capacity as the member of the Class B Committee) as a Class B Director, replacing William Barr who resigned, effective January 31, 2018; (b) DSO, as a Class B Director; (c) all those other current directors who choose to remain on the Board for at least the remainder of their term (none of whom (other than David Windreich) shall be Class B Directors); (d) to the extent of any vacancy of a Class B Director, an individual who shall qualify as an independent director and be appointed by DSO (in his capacity as the member of the Class B Committee) as a Class B Director with the approval, which shall not be unreasonably withheld, of the Nominating, Corporate Governance and Conflicts Committee; and (e) if any other(s) of such other current directors choose not to remain on the Board, one or more replacement individual(s) who shall qualify as independent directors and be selected jointly by DSO and the Nominating, Corporate Governance and Conflicts Committee.



		● DSO shall waive the Class B Committee’s right to appoint Class B Directors (other than with respect to the three directors described in clauses (a), (b) and (d) above), until the applicable nomination period for the 2019 Shareholder Meeting. In the event that DSO chooses in connection with such nomination period to exercise such right to appoint additional directors, such additional directors shall qualify as independent directors and shall be presented to the Nominating, Corporate Governance and Conflicts Committee for that Committee’s approval, which may only be withheld on reasonable grounds that such additional directors are manifestly unqualified or not independent of DSO and the OZ Group. ● For the avoidance of doubt, the Board shall at all times have a majority of members who shall qualify as independent directors. Contemporaneously with the Board changes contemplated hereby, J. Barry Griswell shall be designated the lead independent director.

DSO CONTINUING ROLE:		● Following DSO’s resignation as CEO, DSO will remain Chairman of the Board. No later than March 31, 2019, DSO shall resign and be replaced by a successor Nonexecutive Chairman of the Board selected from the existing Board members and mutually agreed upon by the Nominating, Corporate Governance and Conflicts Committee and the Class B Committee. ● As Chairman of the Board, DSO will oversee and be involved with the overall direction and vision of the OZ Group and will devote such business time as reasonably required to fulfill his responsibilities to the OZ Group in a manner consistent with his Continuing Positions. ● DSO will receive annual compensation in consideration for his service as Chairman of the Board in an amount consistent with the compensation of the directors of OZ more generally (both in terms of amount and composition (cash and stock mix)). ● Following DSO’s resignation as Chairman of the Board, DSO shall have the right to continue to serve as a director on the Board for as long as DSO continues to own either (i) preferred shares of OZ with an initial liquidation preference not less than 33% of the initial liquidation preference of the preferred shares currently owned by DSO or (ii) a number of common equity units (on an as-converted basis) of OZ not less than 33% of the number of common equity units (on an as-converted basis) of OZ currently owned by DSO.



		● For the avoidance of doubt, the transactions contemplated hereby, and any discussions in connection herewith, will not constitute a “Withdrawal” by DSO pursuant to the limited partnership agreements of OZ Advisors LP, OZ Advisors II LP and OZ Management LP (each such entity, an “ Operating LP ” and together, the “ Operating Group ”, and each such limited partnership agreement, a “ LPA ”) or the Class B Shareholders Agreement, and DSO’s continuing rights and obligations with respect to the OZ Group will be determined in the manner set forth in this Term Sheet.

FUND INVESTMENTS:		● For as long as DSO or his related parties have any investments in the firm, any liquid balances of such investments that are not currently charged fees would be charged the same management fees or be subject to the same incentive allocation as are applicable to other former Partners (on a MFN basis); provided, however, that the fees on such investments by DSO or his related parties shall not exceed, a maximum of 1% in respect of management fees or 10% in respect of incentive fees. ● For the avoidance of doubt, other than as advised by counsel to comply with applicable law and without limiting the tolling provisions described above, (i) DSO and his related parties will continue to not be subject to any restrictions on their ability to withdraw or transfer their capital invested in the firm, (ii) the OZ Group shall not restrict or block (or attempt to restrict or block) any withdrawals or transfers of invested capital by DSO and/or his related parties and (iii) the OZ Group shall take all actions necessary to give effect to any withdrawal or transfer notice provided by DSO and/or his related parties.

DSO TITLES:		● Until the effectuation of the Committee Dissolutions, DSO will continue to serve as the (i) sole member of the Class B Committee and (ii) Chairman of the Exchange Committee (collectively, together with the Chairman position, DSO’s “ Continuing Positions ”). ● The parties will develop a transition plan with respect to DSO’s other roles and responsibilities. In particular, to the extent required by law or contract, DSO will serve in certain specified roles on a transitional basis on a timeframe to be mutually agreed, provided that, to the extent necessary and in any event prior to December 31, 2018, OZ will seek consents or waivers to effect such transition. OZ has proposed the following transitional roles, the final scope of which will be agreed between DSO and OZ following the determination of any effects on DSO’s restricted activities as described below: o a Director of Och-Ziff Holding Corporation and a Member of Och-Ziff Holding LLC, together with at least two other Directors and Members, respectively, to be mutually agreed between DSO and OZ; and



		o a Director of the offshore OZ funds set forth on Annex A hereto, together with at least two other Directors to be mutually agreed between DSO and OZ. ● Except as expressly noted above, DSO will resign from all officer positions and from the boards of directors of all OZ Group subsidiaries. For the avoidance of doubt, DSO will not serve as an officer or director of any future OZ funds. ● As part of the transition, DSO would, subject to his reasonable availability and in any event on a schedule no more burdensome than consistent with prior practice: o support the OZ Group in its initiatives to refinance the debt; o support the ongoing process for pursuing strategic alternatives; and o discuss with management the operations of OZ Management LP and provide strategic advice. ● Prior to DSO’s resignation as Chairman, DSO and the OZ Group shall mutually agree on other customary separation matters.

RELEASE:		● In connection with entering into the transactions contemplated hereby, the OZ Group, DSO and the independent directors shall all enter into and provide one another with full mutual reciprocal releases.

EXPENSES:		● The OZ Group will reimburse DSO for his out-of-pocket legal fees and expenses incurred from and including December 25, 2017, in an aggregate amount not to exceed $750,000.

NON- CIRCUMVENTION:		● The OZ Group and DSO to be bound by non-circumvention restrictions prohibiting the OZ Group from taking actions that would otherwise be inconsistent with the terms and intent of this Term Sheet. ● Notwithstanding the foregoing, nothing in this Term Sheet shall limit or otherwise modify any of DSO’s contractual rights or any of DSO’s rights as a shareholder of OZ (including, without limitation, the rights relating to DSO’s preferred investment and tax receivables agreement) that are not expressly to be modified or amended pursuant to this Term Sheet.

Annex A

1.	OZ Master Fund, Ltd.

OZ Overseas Fund, Ltd.

OZ Overseas Fund II, Ltd.

OZ Overseas Institutional Fund, Ltd.

OZ Overseas GBP Fund, Ltd.

OZ Overseas EUR Fund, Ltd.

2.	OZ Asia Master Fund, Ltd.

OZ Asia Overseas Fund, Ltd.

OZ Asia Overseas Institutional Fund, Ltd.

3.	OZ Europe Master Fund, Ltd.

OZ Europe Overseas Fund, Ltd.

OZ Europe Overseas Fund II, Ltd.

OZ Europe Overseas Institutional Fund, Ltd.

4.	OZ Credit Opportunities Master Fund, Ltd.

5.	OZ European Credit Opportunities Master Fund, Ltd.

6.	OZ ELS Master Fund, Ltd.

OZ ELS Overseas Fund, Ltd.

7.	OZ Enhanced Master Fund, Ltd.

OZ Enhanced Overseas Fund, Ltd.

OZ Enhanced Overseas Institutional Fund, Ltd.

8.	OZ Global Equity Opportunities Master Fund, Ltd.

OZ Global Equity Opportunities Overseas Fund, Ltd.

OZ Global Equity Opportunities Overseas Institutional Fund, Ltd.

9.	OZ ESC Master Fund, Ltd.

OZ ESC Overseas Fund, Ltd.

10.	OZ GC Opportunities Master Fund, Ltd.

OZ GC Opportunities Overseas Fund, Ltd.

11.	OZC Global Equities Overseas Fund, Ltd.

12.	OZ Global Special Investments, Ltd.

13.	OZ Institutional Income Master Fund, Ltd.

14.	Och-Ziff Capital Structure Arbitrage Master Fund, Ltd.

Och-Ziff Capital Structure Arbitrage Overseas Fund, Ltd.

15.	OZ Overseas Select Fund, Ltd.

OZ MANAGEMENT APPOINTS ROBERT SHAFIR TO

SUCCEED DAN OCH AS CHIEF EXECUTIVE OFFICER

Och to Remain Chairman of the Board

NEW YORK , January 30, 2018 - Och-Ziff Capital Management Group LLC (NYSE: OZM) (the “Company,” “Oz Management” or “Oz”) announced today that Robert Shafir will succeed Dan Och as Chief Executive Officer, effective February 5, 2018. As part of the transition, Mr. Shafir will join the Board of Directors on the same date. Mr. Och, the Company’s largest shareholder, will continue to serve as Chairman of the Board through March 31, 2019, after which time he expects to remain involved with the firm.

Mr. Shafir, who previously served as the CEO of Credit Suisse Americas and Co-Head of Private Banking & Wealth Management, will provide day-to-day leadership and management of the Company. He will also be responsible for the planning and execution of Oz’s strategic direction, financial objectives and client engagement.

Mr. Och said, “Rob is a world-class executive who will be a great asset to Oz as we continue our evolution as a firm. His distinguished career of over 30 years leading global financial institutions and asset management businesses brings unique experience that will benefit Oz significantly. Importantly, having Rob as a dedicated CEO will enable our nearly 150 investment professionals to continue to focus solely on what they do best—generating returns for our clients. I am confident this will be a seamless transition and look forward to building on our strong 2017 results.”

Allan S. Bufferd, Lead Independent Director of Oz Management, said, “We are grateful for Dan’s leadership over the past two decades and his continued efforts to position Oz for future success. We are thrilled to have someone of Rob’s caliber join and collaborate with the organization’s deep and experienced management team to drive the next phase of this storied firm’s development. Rob has exceptional experience growing and managing a global asset management firm. He has the support of the Board and we are confident that he is a perfect fit to lead Oz going forward.”

Mr. Shafir said, “Oz Management is an excellent firm with a stellar long-term track record and a robust institutional infrastructure. Dan has built a leading global asset management organization and I’m honored to lead the Company as the next CEO. The firm is deeply committed to its investors, employees and shareholders and I look forward to working with the Board, Dan and all of our employees to continue to drive value in the years ahead.”

Jimmy Levin, Co-Chief Investment Officer, said, “Oz is a tremendous firm with a talented and creative team that works each day to identify and execute on the most compelling investment opportunities around the world. I am excited about the future and look forward to welcoming Rob.”

About Robert Shafir

Mr. Shafir previously served in various capacities at Credit Suisse Group AG, most recently as the CEO of Credit Suisse Americas from 2008 to 2016 and Co-Head of Private Banking & Wealth Management, which included oversight of Asset Management, from 2012 to 2016. He was a member of the Executive Board of Credit Suisse Group and Credit Suisse. He was also Chairman of the Americas CEO Management Committee and the Private Banking & Wealth Management Products Management Committee.

Prior to joining Credit Suisse, in August 2007, Mr. Shafir worked at Lehman Brothers for 17 years serving as Head of Global Equities, as well as a member of their Executive Board. He also held other senior roles, including Head of European Equities and Global Head of Equities Trading, and played a key role in building Lehman's equities business into a global, institutionally-focused franchise. Prior to that, he worked at Morgan Stanley in the preferred stock business within the fixed income division.

Mr. Shafir received a B.A. in Economics from Lafayette College and an M.B.A. from Columbia Business School.

* * * *

About Oz Management

Oz Management is one of the largest institutional alternative asset managers in the world, with offices in New York, London, Hong Kong, Mumbai, Beijing, Shanghai and Houston. Oz provides asset management services to investors globally through its multi-strategy funds, dedicated credit funds, including opportunistic credit funds and Institutional Credit Strategies products, real estate funds and other alternative investment vehicles. Oz seeks to generate consistent, positive, absolute returns across market cycles, with low volatility compared to the broader markets, and with an emphasis on preservation of capital. Oz’s funds invest across multiple strategies and geographies, consistent with the investment objectives of each fund. The global investment strategies Oz employs include convertible and derivative arbitrage, corporate credit, long/short equity special situations, merger arbitrage, private investments, real estate and structured credit. As of January 1, 2018, Oz had approximately $31.9 billion in assets under management. For more information, please visit Oz Management’s website ( www.ozm.com ).



Investor Relations Contact		Media Relations Contacts
Adam Willkomm		Joe Snodgrass
Head of Business Development and Shareholder Services		Head of Corporate Communications
+1-212-719-7381		+1-212-887-4821
investorrelations@ozm.com		joseph.snodgrass@ozm.com

		Jonathan Gasthalter
		Gasthalter & Co. LP
		+1-212-257-4170
		jg@gasthalter.com