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)
February 4, 2010 (February 1, 2010)
Janus Capital Group Inc.
(Exact name of registrant as specified in its charter)
DELAWARE |
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001-15253 |
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43-1804048 |
(State or other jurisdiction |
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(Commission file |
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(IRS Employer |
of incorporation) |
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number) |
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Identification Number) |
151 DETROIT STREET
DENVER, COLORADO 80206
(Address of principal Mr. Weil offices) (Zip Code)
Registrants telephone number, including area code
(303) 691-3905
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 (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02 Compensatory Arrangements of Certain Officers
(e) Agreements Related to the Appointment of Chief Executive Officer
On February 1, 2010, Janus Capital Group Inc. (the Company) entered into a Severance Rights Agreement (Severance Agreement) and Change in Control Agreement (CIC Agreement) with Richard M. Weil, the Companys new Chief Executive Officer. As previously disclosed in the Companys Current Report on Form 8-K, filed on January 7, 2010, the below described agreements provide the terms of his employment arrangement with the Company in the event of certain changes to this employment.
Severance Rights Agreement
The Severance Agreement has a five (5) year term commencing on February 1, 2010. The Severance Agreement provides that in the event Mr. Weils employment is terminated by the Company other than for cause, or by Mr. Weil for good reason, he shall be entitled to: (i) a lump sum cash payment of $5,000,000; (ii) immediate vesting of all his then outstanding and unvested long-term incentive awards (LTI Awards); (iii) continued medical, dental and vision insurance for him and his dependents for a period of one year; and (iv) any earned, but unpaid, annual cash bonus awards, subject to applicable Section 162(m) performance criteria. In the event such LTI Awards are subject to Section 162(m) performance criteria, they shall only vest and be payable if, and at such time that, the performance criteria are satisfied and certified by the Companys Compensation Committee. Further, any stock options included in such LTI Awards shall remain exercisable for the remainder of each stock option awards original term. The Severance Agreement also provides that Mr. Weils receipt of severance would be subject to his execution of a legal release. In the event of Mr. Weils death or disability, the Company will pay to Mr. Weil or his estate the payments and benefits outlined above (except for (iii)).
Under the terms of the Severance Agreement, if Mr. Weil is found by a court or relevant regulator to have knowingly committed fraud, or if Mr. Weil is found to have actively participated in, knowingly concealed, or knowingly failed to identify a material misstatement in the Companys financial statements, he will forfeit and/or repay his LTI Awards granted in the prior three years. Mr. Weil would also be subject to certain non-compete, non-interference and non-solicitation covenants related to the Companys employees, clients and business.
A copy of the Severance Rights Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The foregoing description is qualified in its entirety by reference to the full text of the exhibit.
Change in Control Agreement
The CIC Agreement for Mr. Weil is in a form substantially similar to the change in control agreements that other Company senior executive officers have entered into with the Company (and which have been previously filed). The CIC Agreement has an initial term of two (2) years commencing on February 1, 2010, subject to one-year extensions.
The CIC Agreement provides that, in the event Mr. Weils employment is terminated after a change in control by the Company other than for cause, or by Mr. Weil for good reason, the Company will pay the following: (i) two times annual target cash compensation earned in the calendar year immediately preceding the termination of employment; (ii) two times the value of the Companys contributions made on behalf of Mr. Weil to the Janus 401(k), Profit Sharing and Employee Stock Ownership Plan in the four (4) calendar quarters prior to termination of employment (or, if higher, those immediately prior to the change in control); (iii) continued medical, dental and vision insurance benefits for him and his dependents for twenty-four (24) months; and (iv) outplacement services for three (3) months. The CIC Agreement does not provide for a gross-up payment arising from any excise tax under Section 4999 of the Internal Revenue Code.
A copy of the CIC Agreement is attached hereto as Exhibit 10.2 and is incorporated herein by reference. The foregoing description is qualified in its entirety by reference to the full text of the exhibit.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
10.1 Severance Rights Agreement by and between Janus Capital Group Inc. and Richard M. Weil dated as of February 1, 2010
10.2 Change in Control Agreement by and between Janus Capital Group Inc. and Richard M. Weil dated as of February 1, 2010
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Janus Capital Group Inc. |
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Date: February 4, 2010 |
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By: |
/s/ Gregory A. Frost |
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Executive Vice President and Chief Financial Officer |
Exhibit 10.1
Janus Capital Group Inc.
SEVERANCE RIGHTS AGREEMENT
THIS SEVERANCE RIGHTS AGREEMENT (this Agreement ) is made this 1st day of February, 2010 (Effective Date) by and between Janus Capital Group Inc., a Delaware corporation (the Company ), and Richard M. Weil (the Executive ).
WHEREAS, in partial consideration for the continued employment of the Executive with the Company and the severance benefits hereunder, the Company wishes to enter into this Agreement with the Executive upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and representations contained herein, the parties hereto agree as follows:
1. Term of Agreement.
2. Definitions .
Capitalized terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in this Section 2.
3. At-Will Employment .
4. Severance .
5. Restrictive Covenants .
6. Cooperation .
The Executive hereby agrees that, following termination of employment for any reason, the Executive shall reasonably cooperate with the Company and its Affiliates in providing information and assistance that the Company and its Affiliates reasonably requests and in taking such other action as the Company and its Affiliates may reasonably request including, without limitation, consultation concerning the Executives areas of responsibility. The Executive further agrees to reasonably assist the Company and its Affiliates with respect to all reasonable requests to testify in connection with any legal proceeding or matter relating to the Company or its Affiliates, including but not limited to, any federal, state or local audit, proceeding or investigation, other than proceedings relating to the enforcement of this Agreement or other proceedings in which the Executive is a named party whose interests are adverse to those of the Company. The Company will reimburse any reasonable out-of-pocket expenses incurred by the Executive incurred at the request of the Company in connection with any such cooperation or participation.
7. Notices .
Any notice or other communication required or permitted to be given under this Agreement (a Notice ) shall be in writing and delivered in person, by facsimile transmission (with a Notice contemporaneously given by another method specified in this Section 7), by overnight courier service or by postage prepaid mail with a return receipt requested, at the following locations (or to such other address as either party may have furnished to the other in writing by like Notice. All such Notices shall only be duly given and effective upon receipt (or refusal of receipt).
If to the Executive: At the last address on the records of the Company.
If to the Company: Janus Capital Group Inc.
151 Detroit St.
Denver, CO 80206
Attn: General Counsel
Facsimile: 303-639-6662
8. Arbitration .
Except as specifically provided herein, any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a single arbitrator mutually selected by the parties, in the State of Colorado, in accordance with the rules of the American Arbitration Association for employment disputes then in effect. If the parties are unable to agree on a single arbitrator, each party shall select an arbitrator and the two arbitrators selected by the parties shall select a third arbitrator. If three arbitrators are selected, they shall act by majority vote. Judgment may be entered on the arbitrators award in any court having jurisdiction. Each party shall bear their own costs and expenses of any such arbitration proceeding and shall share equally the costs of the third arbitrator, if any. In the event of any dispute or controversy hereunder, each party hereto shall be responsible for its own legal fees.
9. Waiver of Breach .
Any waiver of any breach of this Agreement shall not be construed to be a continuing waiver or consent to any subsequent breach on the part either of the Executive or of the Company.
10. Non-Assignment; Successors .
This Agreement is personal to each of the parties hereto. Except as provided in this Section 10, no party may assign or delegate any rights or obligations hereunder without first obtaining the advanced written consent of the other party hereto. Any purported assignment or delegation by the Executive in violation of the foregoing shall be null and void ab initio and of no force and effect. The Company may assign this Agreement to a person or entity that is an Affiliate or to any successor to all or substantially all of the business and/or assets of the Company which assumes in writing, or by operation of law, the obligations of the Company hereunder. As used in this Agreement, Company shall mean the Company and any successor to its business and/or assets, which assumes and agrees to perform this Agreement by operation of law, or otherwise.
11. Severability .
To the extent that any provision of this Agreement or portion thereof shall be invalid or unenforceable, it shall be considered deleted therefrom and the remainder of such provision and of this Agreement shall be unaffected and shall continue in full force and effect.
12. Counterparts .
This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
13. Governing Law . All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Colorado, without giving effect to any choice of law or conflict of law rules or provisions that would cause the application hereto of the laws of any jurisdiction other than the State of Colorado. In furtherance of the foregoing, the internal law of the State of Colorado shall control the interpretation and construction of this Agreement, even though under any other jurisdictions choice of law or conflict of law analysis the substantive law of some other jurisdiction may ordinarily apply.
14. Compliance with 409A .
15. Entire Agreement .
This Agreement constitutes the entire agreement by the Company and the Executive with respect to the subject matter hereof, and supersedes any and all prior agreements or understandings between the Executive and the Company with respect to the subject matter hereof, whether written or oral. This Agreement may be amended or modified only by a written instrument executed by the Executive and the Company.
[SIGNATURES TO FOLLOW]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above.
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/s/ Richard M. Weil |
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Executive |
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JANUS CAPITAL GROUP INC. |
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By: |
/s/ Steven L. Scheid |
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Steven L. Scheid |
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Chairman of the Board |
Exhibit A
LEGAL RELEASE
This Legal Release ( Release ) dated as of the last date executed below (the Release Date) is between Janus Capital Group Inc. ( Janus ) and Richard M. Weil (Executive) (each a Party , and together, the Parties ). Any terms not defined herein shall be defined as set forth in the Severance Agreement (defined below).
Recitals
A. Executive and Janus are parties to a Severance Rights Agreement dated as of February 1, 2010, to which this Release is appended as Exhibit A (the Severance Agreement ). Executives employment terminated on [date] (the Date of Termination) under circumstances that give rise to payments and benefits under Section 4 thereof.
B. Executive wishes to receive the payments and/or benefits defined in Section 4 of the Severance Agreement and this Release, which payments and/or benefits are conditioned upon Executives execution (and non-revocation) of a full waiver and release in the form hereof.
C. Janus wishes to benefit from the covenants and agreements referred to in the Severance Agreement and in this Release, and other good and valuable consideration, the receipt and sufficiency of which is hereby irrevocably acknowledged.
Agreement
The Parties agree as follows:
1. Confirmation of Severance Benefit Obligation . Janus shall pay or provide to the Executive the entire severance benefit to which Executive is entitled pursuant to Section 4 of the Severance Agreement (the Severance Benefit), as, when and on the terms and conditions specified in the Severance Agreement.
2. Legal Release of Claims by Executive .
(a) Executive, individually and on behalf of Executives heirs, personal representatives, executors, administrators, successors and assigns, knowingly and voluntarily releases, waives and forever discharges Janus and its affiliates and any of their respective parents, subsidiaries and affiliates, together with all of their respective past and present directors, officers, shareholders, trustees, members, managers, partners, employees, agents, attorneys, representatives and insurers, and each of their affiliates, heirs, predecessors, successors and assigns (collectively, the Company Releasees ) from any and all claims, charges, complaints, promises, agreements, controversies, liens, demands, causes of action, obligations, losses, damages and liabilities of any kind and nature whatsoever, whether known or unknown, whether suspected or unsuspected, whether in law or in equity, whether fixed or contingent (Claims), that Executive or Executives heirs, executors, administrators, or assigns ever had, now have, or may hereafter claim to have against any of the Company Releasees by reason of any matter,
cause or thing whatsoever from the beginning of time through the Release Date, whether or not previously asserted before any state or federal court, agency or governmental entity or any arbitral body. This legal release includes, without limitation, any rights or claims relating in any way to Executives employment relationship and/or association with Janus or any of the Company Releasees, or Executives resignation therefrom, and all rights and claims arising under federal, state, or local laws prohibiting disability, handicap, age, sex, race, national origin, religion, sexual orientation, retaliation, or any other form of discrimination, such as the Americans with Disabilities Act, 42 U.S.C.§§ 12101 et seq .; the Age Discrimination in Employment Act, as amended, 29 U.S.C. §§ 621 et seq .; Title VII of the 1964 Civil Rights Act, as amended, 42 U.S.C. §§ 2000e et seq .; Claims for intentional infliction of emotional distress, tortious interference with contract or prospective advantage; Claims for breach of express or implied contract; and under any policy, agreement, understanding or promise, written or oral, formal or informal, between Executive and a Company Releasee; promise, misrepresentation, negligence, estoppel, defamation, violation of public policy and other tort claims; any claim for costs, fees, or other expenses, including attorneys fees; and any rights relating to any long-term incentive award granted to Executive by Janus or any affiliate thereof ( LTI Award ) that had not vested by its own terms as of the Date of Termination; provided, however, that notwithstanding the foregoing or anything else contained in this Release, the legal release set forth in this Section 2(a) shall not extend to: (i) any unpaid amounts due under Section 4(g) of the Severance Agreement that were earned or reimbursable prior to the Date of Termination; (ii) any rights arising under or recognized by this Release or the Severance Agreement; (iii) any rights related to any LTI Award or Sign-On Bonus to the extent that such LTI Award or Sign-On Bonus had vested as of the Date of Termination or shall become vested pursuant to Section 4(c) of the Severance Agreement (collectively Vested LTI Awards ); (iv) any rights to indemnification under the terms of the Severance Agreement, the by-laws, charter or any insurance policy under which Executive is entitled to coverage; (v) any rights to which the Executive is entitled to under any of the pension, welfare or other employee benefit or incentive plans, programs or arrangements maintained by the Company; or (vi) be construed to prohibit Executive from bringing appropriate proceedings to enforce this Release (the Executive Excluded Claims).
(b) In order to provide a full and complete release, Executive understands and agrees that this Release is intended to include all claims, if any, covered under this Section 2 that Executive may have and not now know or suspect to exist in Executives favor against the Company Releasees and that this Release extinguishes such claims, other than the Executive Excluded Claims. Thus, Executive expressly waives all rights under any statute or common law principle in any jurisdiction that provides, in effect, that a general release does not extend to claims which Executive does not know or suspect to exist in Executives favor at the time of executing the Release, which if known by Executive may have materially affected Executives settlement with the Company Releasees, other than the Executive Excluded Claims.
(c) Executive hereby warrants that Executive has not assigned or transferred to any person any portion of any claim which is released, waived and discharged above. Executive further states and agrees that Executive has not experienced any illness, injury, or disability compensable or recoverable under the workers compensation laws of Colorado or other applicable states workers compensation laws, that has not as of the Release Effective Date been made the subject of a claim for Workers Compensation benefits, and Executive
agrees that Executive will not file a workers compensation claim asserting the existence of any such illness, injury, or disability. Executive has specifically been advised and urged by Janus to consult with Executives attorneys with respect to the agreements, representations, and declarations set forth in the previous sentence. Executive understands and agrees that by signing this Release Executive is giving up Executives right to bring any legal claim against any Company Releasee concerning, directly or indirectly, Executives employment relationship with Janus, including Executives separation from association and/or employment, and/or any and all contracts between Executive and any Company Releasee, express or implied. Executive agrees that this Release is intended to be interpreted in the broadest possible manner in favor of the Company Releasees, to include all actual or potential legal claims that Executive may have against any Company Releasees, except as specifically provided otherwise in this Release, and acknowledges that this Release provides Executive with benefits to which Executive would not otherwise be entitled, and understands its terms and that Executive enters into this Release freely, voluntarily, and without coercion.
(d) Executive acknowledges that Executive consulted with an attorney of Executives choosing before signing the Severance Agreement and this Release, and that Janus provided Executive with no fewer than thirty-eight (38) days following the Date of Termination during which to consider whether to sign this Release and, specifically, the release set forth in Section 2(a) above, although Executive may sign and return the Release sooner if Executive so chooses. Executive further acknowledges that Executive has the right to revoke this Release for a period of seven (7) days after signing it and that this Release shall not become effective until such seven (7)-day period has expired (the Release Effective Date ). Executive acknowledges and agrees that if Executive wishes to revoke this Release, Executive must give notice of such revocation in conformity with Section 4(b) below, no later than 5 p.m. (Mountain Time) on the seventh (7th) day after Executive has signed this Release. Executive acknowledges and agrees that, if he revokes this Release, Executive shall have no right to receive the Severance Benefit. If Executive does not revoke/rescind this Release within such seven (7)-day period, this Release shall become final and binding and shall be irrevocable.
(e) Executive agrees to pay all taxes relating to or arising from any payment made or consideration provided pursuant to the Severance Agreement (other than as expressly provided for therein); provided that all payments required to be made by the Company to the Executive under the Severance Agreement shall be subject to the withholding of such amounts for taxes and other payroll deductions as the Company may reasonably determine it should withhold pursuant to any applicable law or regulation.
(f) Janus shall reimburse Executive for his reasonable business expenses related to his employment with Janus through the Date of Termination, consistent with the Januss policies, and conditioned on Executives presentation to Janus, within 10 (ten) days after the Release Effective Date, of documentation verifying such expenses.
3. Legal Release of Claims by Janus .
(a) Janus, individually and on behalf of its controlled subsidiaries, assignees, successors and assigns (collectively, the Janus Releasors), knowingly and voluntarily releases, waives and forever discharges Executive and his heirs, personal representatives, executors, administrators, successors and assigns, each in their capacity as such (collectively, the
Executive Releasees ) from any and all Claims that any of the Janus Releasors ever had, now have, or may hereafter claim to have against any of the Executive Releasees by reason of any matter, cause, action, omission, course or thing whatsoever from the beginning of time through the Release Date whether or not previously asserted before any state or federal court, agency or governmental entity or any arbitral body. This legal release includes, without limitation, any rights or claims relating in any way to Executives employment relationship, service relationship, and/or association with Janus or any of the Janus Releasors, or Executives resignation therefrom, Claims for tortious interference with contract or prospective advantage; Claims for breach of express or implied contract; and under any policy, agreement, understanding or promise, written or oral, formal or informal, between Janus and Executive; promise, misrepresentation, negligence, estoppel, defamation, violation of public policy and other tort claims; any claim for costs, fees, or other expenses, including attorneys fees; and any rights relating to any LTI Award ; provided, however, that notwithstanding the foregoing or anything else contained in this Release, the legal release set forth in this Section 3(a) shall not extend to (i) any rights arising under or recognized by this Release; (ii) any right of Janus in the Severance Agreement; (iii) any claims involving good faith allegations of fraud, embezzlement or other violations of criminal statutes by Executive with respect to the Company, shareholder claims that are made against directors or officers relating to Executives tenure as an officer or director, any breach of fiduciary duty by Executive as an employee, officer or director of Janus which is not indemnifiable under the laws of Colorado or Delaware ; or (iv) be construed to prohibit Janus from bringing appropriate proceedings to enforce this Release (the Janus Excluded Claims).
(b) In order to provide a full and complete release, Janus understands and agrees that this Release is intended to include all claims, if any, covered under this Section 3 that Janus may have and not now know or suspect to exist in Janus favor against the Executive Releasees and that this Release extinguishes such claims, other than the Janus Excluded Claims. Thus, Janus expressly waives all rights under any statute or common law principle in any jurisdiction that provides, in effect, that a general release does not extend to claims which Janus does not know or suspect to exist in Janus favor at the time of executing the Release, which if known by Janus may have materially affected Janus settlement with the Executive Releasees, other than the Janus Excluded Claims.
(c) Janus hereby warrants that Janus has not assigned or transferred to any person any portion of any claim which is released, waived and discharged above. Janus understands and agrees that by signing this Release Janus is giving up Janus right to bring any legal claim against any Executive Releasee concerning, directly or indirectly, Executives employment relationship with Janus, including Executives separation from association and/or employment, and/or any and all contracts between Janus and Executive, express or implied. Janus agrees that notwithstanding any other provision of this Release to the contrary, this Section 3 is intended to be interpreted in the broadest possible manner in favor of the Executive Releasees, to include all actual or potential legal claims that Janus may have against any Executive Releasees, except as specifically provided otherwise in this Release, and acknowledges that this Release provides Janus with benefits to which Janus would not otherwise be entitled, and understands its terms and that Janus enters into this Release freely, voluntarily, and without coercion.
4. Miscellaneous .
(a) This Release shall be governed by and construed in accordance with the laws of the State of Colorado without reference to principles of conflict of laws. The captions of this Release are not part of the provisions hereof and shall have no force or effect. This Release may not be amended or modified otherwise than by a written agreement executed by the Parties hereto or their respective successors and legal representatives.
(b) All notices and other communications shall be in writing and shall be delivered personally to the party to receive the same, given by electronic means, or when mailed first class postage prepaid, by registered or certified mail, return receipt requested, addressed to the party to receive the same as set forth below, or such other address as the party to receive the same may have specified by written notice given in the manner provided for in this Section 4(b). All notices shall be deemed to have been given as of the date of personal delivery, transmittal or mailing thereof.
If to Executive, to:
If to Janus, to:
Attention: General Counsel
151 Detroit Street
(d) The invalidity or unenforceability of any provision of this Release shall not affect the validity or enforceability of any other provision of this Release.
(e) Executives or Janus failure to insist upon strict compliance with any provision of this Release or the failure to assert any right Executive or Janus may have hereunder shall not be deemed to be a waiver of such provision or right or any other provision or right of this Release.
(f) Except with respect to Executives right to continued employment with Janus, which terminated on the Date of Termination, and except as otherwise specifically amended by this Release, the Severance Agreement shall remain in full force and effect according to its terms, including without limitation, Sections 4(n), 5 and 6 of the Severance Agreement. From and after the Release Effective Date, this Release shall supersede all agreements between the parties other than the Severance Agreement and the agreements reflecting Vested LTI Awards.
(g) All disputes relating to or arising from this Release shall be tried only in accordance with the arbitration provisions of Section 8 of the Severance Agreement.
(h) By entering into this Release, neither Janus nor Executive admits any impropriety, wrongdoing or liability of any kind whatsoever.
(i) Each party shall promptly execute, acknowledge and deliver any additional document or agreement that the other party reasonably believes is necessary to carry out the purpose or effect of this Release.
(j) By signing this Release, each Party acknowledges that the Party has carefully read and understands all the terms and provisions of this Release and has given them careful consideration, and that the Party voluntarily signs this Release as the Partys own free act without coercion or duress.
(k) Any Party contesting the validity or enforceability of any term of this Release shall be required to prove by clear and convincing evidence fraud, concealment, failure to disclose material information, unconscionability, misrepresentation or mistake of fact or law.
(l) The Parties acknowledge that they have reviewed this Release in its entirety and have had a full and fair opportunity to negotiate its terms, in consultation with counsel of their own choosing. Each Party therefore waives all applicable rules of construction that any provision of this Release should be construed against its drafter, and agrees that all provisions of the Release shall be construed as a whole, according to the fair meaning of the language used.
(m) This Release may be signed in counterparts, each of which will be deemed an original and will constitute one and the same instrument. The parties further agree that this Release may be executed by the exchange of facsimile signature pages provided that by doing so the parties agree to undertake to provide original signatures as soon thereafter as reasonable in the circumstances.
[SIGNATURE PAGE FOLLOWS]
Exhibit 10.2
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, dated February 1, 2010, is made by and between Janus Capital Group Inc. (the Company) and Richard M. Weil (the Executive).
WHEREAS, the Company considers it essential to the best interests of the Company to foster the continued employment of key personnel; and
WHEREAS, the Company recognizes that the possibility of a Change in Control always exists and that such possibility, and the uncertainty and questions which it may raise among employees, may result in the departure or distraction of key personnel to the detriment of the Company; and
WHEREAS, the Company has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of key personnel, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control;
WHEREAS, the Company deems it advisable to amend the Agreement to comply with Section 409A of the Internal Revenue Code;
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree as follows:
1. Defined Terms . The definitions of capitalized terms used in this Agreement are provided in the last Section hereof.
2. Term of Agreement . The Term of this Agreement shall commence on the date hereof and shall continue in effect through December 31, 2011; provided , however , that commencing on January 1, 2012 and each January 1 thereafter, the Term shall automatically be extended for one additional year unless, not later than September 30 of the preceding year, the Company or the Executive shall have given notice not to extend the Term; and further provided , however , that if a Change in Control shall have occurred during the Term, the Term shall expire no earlier than twenty-four (24) months beyond the month in which such Change in Control occurred. Notwithstanding anything herein to the contrary, the Term of the Agreement shall immediately terminate if, prior to the Change in Control, the Company (or such other Affiliate of the Parent that then employs the Executive) ceases to be an Affiliate of the Parent.
3. Companys Covenants Summarized . In order to induce the Executive to remain in the employ of the Company and in consideration of the Executives covenants set forth in Section 4 hereof, the Company agrees, under the conditions described herein, to pay the Executive the Severance Payments and the other payments and benefits described herein. No Severance Payments shall be payable under
this Agreement unless there shall have been (or, under the terms of the second sentence of Section 6.1 hereof, there shall be deemed to have been) a termination of the Executives employment with the Company following a Change in Control and during the Term. This Agreement shall not be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company.
4. The Executives Covenants . The Executive agrees that, subject to the terms and conditions of this Agreement, in the event of a Potential Change in Control during the Term, the Executive will remain in the employ of the Company until the earliest of (i) a date which is six (6) months from the date of such Potential Change in Control, (ii) the date of a Change in Control, (iii) the date of termination by the Executive of the Executives employment for Good Reason or by reason of death, Disability or Retirement, or (iv) the termination by the Company of the Executives employment for any reason.
5. Compensation Other Than Severance Payments .
5.1 Following a Change in Control and during the Term, during any period that the Executive fails to perform the Executives full-time duties with the Company as a result of incapacity due to physical or mental illness, the Company shall pay the Executives base salary to the Executive at the rate in effect at the commencement of any such period, together with all compensation and benefits payable to the Executive under the terms of any compensation or benefit plan, program or arrangement maintained by the Company during such period (other than any disability plan), until the Executives employment is terminated by the Company for Disability.
5.2 If the Executives employment shall be terminated for any reason following a Change in Control and during the Term, the Company shall pay the Executives base salary and incentive compensation to the Executive through the Date of Termination as in effect immediately prior to the Date of Termination or, if higher, as in effect immediately prior to the Change in Control, together with all compensation and benefits payable to the Executive through the Date of Termination under the terms of the Companys compensation and benefit plans, programs or arrangements as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the Change in Control.
5.3 If the Executives employment shall be terminated for any reason following a Change in Control and during the Term, the Company shall pay to the Executive the Executives normal post-termination compensation and benefits as such payments become due. Such post-termination compensation and benefits shall be determined under, and paid in accordance with, the Companys retirement, insurance and other compensation or benefit plans, programs and arrangements as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the Change in Control.
6. Severance Payments .
6.1 Subject to the provisions of Section 6.2 hereof, if the Executives employment is terminated following a Change in Control and during the Term, other than (A) by the Company for Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason, then, the Company shall pay the Executive the amounts, and provide the Executive the benefits, described in this Section 6.1 (Severance Payments), in addition to any payments and benefits to which the Executive is entitled under Section 5 hereof. For purposes of this Agreement, the Executives employment shall be deemed to have been terminated following a Change in Control by the Company without Cause or by the Executive with Good Reason, if (i) the Executives employment is terminated by the Company without Cause prior to a Change in Control (whether or not a Change in Control ever occurs) and such termination was at the request or direction of a Person who has entered into an agreement with the Parent (the consummation of which would constitute a Change in Control), (ii) the Executive terminates his employment for Good Reason prior to a Change in Control (whether or not a Change in Control ever occurs) and the circumstance or event which constitutes Good Reason occurs at the request or direction of such Person, or (iii) the Executives employment is terminated by the Company without Cause or by the Executive for Good Reason and such termination or the circumstance or event which constitutes Good Reason is otherwise in connection with or in anticipation of a Change in Control (whether or not a Change in Control ever occurs).
(A) In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to two times the sum of (1) the Executives cash compensation in the calendar year prior to the Date of Termination or, if higher, earned in the calendar year immediately prior to the Change in Control and (2) the value of the Companys contributions made pursuant to the Janus Capital Group Inc. 401(k), Profit Sharing and Employee Stock Ownership Plan (or any successor plan) on behalf of the Executive in the four quarters immediately prior to the Date of Termination or, if higher, in the four quarters immediately prior to the Change in Control. For purposes of calculating the cash compensation payment under Section 6.1(A)(1), the Executives annual target cash bonus in the calendar year immediately prior to the Date of Termination or the Change in Control, as applicable, will be applied rather than the actual cash bonus amount paid to the Executive.
(B) In the event the Executive has been employed by the Company for less than one full calendar year, and for purposes of calculating the cash compensation payment under 6.1(A)(1), the base salary compensation paid to Executive in the calendar year immediately prior to the Date of Termination will be annualized.
(C) For the twenty-four (24) month period immediately following the Date of Termination, the Company shall arrange to provide the Executive and his dependents medical, dental, and vision insurance benefits substantially similar to those provided to the Executive and his dependents immediately prior to the Date of Termination or, if more favorable to the Executive, those provided to the Executive and his dependents immediately prior to the Change in Control, at no greater after tax cost to the Executive than the after tax cost to the Executive immediately prior to such date. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(C) shall be reduced to the extent benefits of the same type are received by or made available to the Executive during the twenty-four (24) month period following the Executives termination of employment (and any such benefits received by or made available to the Executive shall be reported to the Company by the Executive); provided , however , that the Company shall reimburse the Executive for the excess, if any, of the after tax cost of such benefits to the Executive over such cost immediately prior to the Date of Termination or, if more favorable to the Executive, the Change in Control. The coverage provided pursuant to this Section 6.1(C) shall run concurrently with and shall be offset against any continuation coverage under Part 6 of Title I of Employee Retirement Income Security Act of 1974, as amended. Amounts reimbursed to the Executive in one taxable year may not affect the amounts eligible for reimbursement in any other taxable year. If the Severance Payments shall be decreased pursuant to Section 6.2 hereof, and the Section 6.1(C) benefits which remain payable after the application of Section 6.2 hereof are thereafter reduced pursuant to the immediately preceding sentence, the Company shall, no later than five (5) business days following such reduction, pay to the Executive the least of (a) the amount of the decrease made in the Severance Payments pursuant to Section 6.2 hereof, (b) the amount of the subsequent reduction in these Section 6.1(C) benefits, or (c) the maximum amount which can be paid to the Executive without being, or causing any other payment to be, nondeductible by reason of section 280G of the Code.
(D) The Company will make available to the Executive three months of outplacement service at no cost to the Executive through a provider of such services selected by the Company.
6.2 (A) Notwithstanding any other provisions of this Agreement, in the event that any payment or benefit received or to be received by the Executive (including any payment or benefit received in connection with a Change in Control or the termination of the Executives employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits, including the Severance Payments, being hereinafter referred to as the Total Payments) would be subject (in whole or part), to the Excise Tax, then, after taking into account any reduction in the Total Payments provided by reason of section 280G of the Code in such other plan, arrangement or agreement, the cash Severance Payments shall first be reduced, and the noncash Severance Payments shall thereafter be reduced, to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax but only if
(A) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (B) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments); provided , however , that the Executive may elect to have the noncash Severance Payments reduced (or eliminated) prior to any reduction of the cash Severance Payments.
(B) For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a payment within the meaning of section 280G(b) of the Code shall be taken into account, (ii) no portion of the Total Payments shall be taken into account which, in the opinion of tax counsel (Tax Counsel) reasonably acceptable to the Executive and selected by the accounting firm (the Auditor) which was, immediately prior to the Change in Control, the Companys independent auditor, does not constitute a parachute payment within the meaning of section 280G(b)(2) of the Code (including by reason of section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments shall be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of section 280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such reasonable compensation, and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Auditor in accordance with the principles of sections 280G(d)(3) and (4) of the Code.
(C) At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from Tax Counsel, the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement). If the Executive objects to the Companys calculations, the Company shall pay to the Executive such portion of the Severance Payments (up to 100% thereof) as the Executive determines is necessary to result in the proper application of subsection A of this Section 6.2.
6.3 Subject to the provisions of Section 6.5, the payments provided in subsection (A) of Section 6.1 hereof shall be made no later than ten (10) business days following the Date of Termination.
6.4 In the event the Executive incurs legal fees and expenses disputing in good faith any issue hereunder relating to the termination of the Executives employment, seeking in good faith to obtain or enforce any benefit or right provided by this Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to any payment or benefit provided hereunder, the Company shall pay to the Executive all legal fees and expenses. Such payments shall be made within thirty (30) days after delivery of the Executives written requests for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require but in no event later than the end of the calendar year following the calendar year in which the expense was incurred. Notwithstanding the above, in the event that the Executive does not prevail on such good faith claim, the Executive shall return to the Company any amounts reimbursed pursuant to this Section 6.4 within thirty (30) days following the final resolution of such dispute. In no event shall the amounts reimbursed pursuant to this Section 6.4 in one calendar year affect the amounts eligible for reimbursement in any other calendar year and Executives right to have the Company pay such legal fees and expenses may not be liquidated or exchanged for any other benefit.
6.5 Notwithstanding anything contained herein to the contrary, the Executive shall not be considered to have terminated employment with the Company for purposes of this Agreement, unless the Executive would be considered to have incurred a separation from service from the Company within the meaning of Section 409A. If current or future regulations or guidance from the Internal Revenue Service dictates, or the Companys counsel determines that, any payments or benefits due to Executive hereunder would cause the application of an accelerated or additional tax under Section 409A of the Internal Revenue Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Executives termination of employment shall instead be paid within five (5) business days after the date that is six months following the Executives termination of employment (or upon the Executives death, if earlier).
7. Termination Procedures .
7.1 Notice of Termination . After a Change in Control and during the Term, any purported termination of the Executives employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 10 hereof. For purposes of this Agreement, a Notice of Termination shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executives employment under the provision so indicated. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executives counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail.
7.2 Sunset on Right to Terminate for Good Reason . If circumstances arise giving the Executive the right to terminate this Agreement for Good Reason, the Executive shall within 90 days notify the Company in writing of the existence of such circumstances, and the Company shall have an additional 30 days within which to investigate and remedy the circumstances, after which 30 days the Executive shall have an additional 60 days within which to exercise the right to terminate for Good Reason. If the Executive does not timely do so, the right to terminate for Good Reason shall lapse and be deemed waived, and the Executive shall not thereafter have the right to terminate for Good Reason, in which case the provisions of this paragraph shall once again apply, but in which case no consideration shall be given to other, prior circumstances that precipitated a notice by Executive of a purported right to terminate for Good Reason.
7.3 Date of Termination . Date of Termination, with respect to any purported termination of the Executives employment after a Change in Control and during the Term, shall mean (i) if the Executives employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executives duties during such thirty (30) day period), or (ii) if the Executives employment is terminated for any other reason, the date specified in the Notice of Termination (which, in the case of a termination by the Company, shall not be less than thirty (30) days (except in the case of a termination for Cause) or, in the case of a termination by the Executive, shall not be less than fifteen (15) days nor more than sixty (60) days, respectively, from the date such Notice of Termination is given).
8. No Mitigation . The Company agrees that, if the Executives employment with the Company terminates during the Term, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to Section 6 hereof. Further, except as specifically provided in Section 6.1(B) hereof, no payment or benefit provided for in this Agreement shall be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company, or otherwise.
9. Successors; Binding Agreement .
9.1 In addition to any obligations imposed by law upon any successor to the Company, and subject to the last sentence of Section 2, the Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.
9.2 This Agreement shall inure to the benefit of and be enforceable by the Executives personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive
shall die while any amount would still be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Executives estate.
10. Notices . For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed, if to the Executive, to the address inserted below the Executives signature on the final page hereof and, if to the Company, to the address set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt:
To the Company:
Janus Capital Group Inc.
151 Detroit Street
Denver, Colorado 80206
Attn.: General Counsel
11. Miscellaneous . No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and the Company, provided, however, that the Company may amend the Agreement in a manner reasonably intended to avoid the acceleration of tax and the possible imposition of penalties under Section 409A of the Code. No waiver by either party hereto at any time of any breach by the other party hereto of, or of any lack of compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement supersedes any other agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof which have been made by either party; provided , however , that this Agreement shall supersede any agreement setting forth the terms and conditions of the Executives employment with the Company only in the event that the Executives employment with the Company is terminated on or following a Change in Control, by the Company other than for Cause or by the Executive for Good Reason or prior to a Change in Control pursuant to the second sentence of Section 6.1 of this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware. All references to sections of the Exchange Act or the Code shall be deemed also to refer to any successor provisions to such sections. Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law and any additional withholding to which the Executive has agreed. The obligations of the Company and the Executive under this Agreement which by their nature may require either partial or total performance after the expiration of the Term (including, without limitation, those under Section 6 hereof) shall survive such expiration.
12. Validity . The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.
13. Counterparts . This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
14. Settlement of Disputes . All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Board and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim and shall further allow the Executive to appeal to the Board a decision of the Board within sixty (60) days after notification by the Board that the Executives claim has been denied. Notwithstanding the above, in the event of any dispute, any decision by the Board hereunder shall be subject to a de novo review by the court.
15. Definitions . For purposes of this Agreement, the following terms shall have the meanings indicated below:
(A) Affiliate shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.
(B) Auditor shall have the meaning set forth in Section 6.2 hereof.
(C) Base Amount shall have the meaning set forth in section 280G(b)(3) of the Code.
(D) Board shall mean the Board of Directors of the Parent.
(E) Cause for termination by the Company of the Executives employment shall mean (i) the willful and continued failure by the Executive to substantially perform the Executives duties with the Company (other than any such failure resulting from the Executives incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by the Executive pursuant to Section 7.1 hereof) that has not been cured within 30 days after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executives duties; (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise; or (iii) a willful or reckless violation by the Executive of a material legal or regulatory requirement that is materially and demonstrably
injurious to the Company . For purposes of this definition, no act, or failure to act, on the Executives part shall be deemed willful unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executives act, or failure to act, was in the best interest of the Company. Any act, or failure to act, based upon express written authority by the Board with respect to such act or omission or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company.
(F) A Change in Control shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:
(1) An acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then outstanding shares of common stock of the Parent (the Outstanding Parent Common Stock) or (B) the combined voting power of the then outstanding voting securities of the Parent entitled to vote generally in the election of directors (the Outstanding Parent Voting Securities); excluding, however, the following: (i) any acquisition directly from the Parent, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Parent, (ii) any acquisition by the Parent, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Parent or any entity controlled by the Parent, or (iv) any acquisition pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (3) of this definition; or
(2) A change in the composition of the Board such that the individuals who, as of the effective date of this Agreement, constitute the Board (such Board shall be hereinafter referred to as the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided , however , for purposes of this definition, that any individual who becomes a member of the Board subsequent to the effective date hereof, whose election, or nomination for election by the Parents shareholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; but, provided further , that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered as a member of the Incumbent Board; or
(3) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Parent or the acquisition of the assets or stock of another entity (Business Combination); excluding, however, such a Business Combination pursuant to which (A) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the Outstanding Parent Common Stock and Outstanding Parent Voting Securities immediately prior to such Business Combination will beneficially own, directly or indirectly, more than 50% of, respectively, the outstanding shares of common stock, and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Parent or all or substantially all the Parents assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Parent Common Stock and Outstanding Parent Voting Securities, as the case may be, (B) no Person (other than the Parent or any employee benefit plan (or related trust) of the Parent or the corporation resulting from such Business Combination) will beneficially own, directly or indirectly, 20% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the election of directors except to the extent that such ownership existed prior to the Business Combination; and (C) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting form such Business Combination; or
(4) The approval by the stockholders of the Parent of a complete liquidation or dissolution of the Parent.
(G) Code shall mean the Internal Revenue Code of 1986, as amended from time to time.
(H) Company shall mean Janus Capital Group Inc. collectively with its Affiliates, and any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise.
(I) Date of Termination shall have the meaning set forth in Section 7.3 hereof.
(J) Disability shall be deemed the reason for the termination by the Company of the Executives employment, if, as a result of the Executives incapacity due to physical or mental illness, the Executive shall have been absent from the full-time performance of the Executives duties with the Company for a
period of six (6) consecutive months, the Company shall have given the Executive a Notice of Termination for Disability, and, within thirty (30) days after such Notice of Termination is given, the Executive shall not have returned to the full-time performance of the Executives duties.
(K) Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
(L) Excise Tax shall mean any excise tax imposed under section 4999 of the Code.
(M) Executive shall mean the individual named in the first paragraph of this Agreement.
(N) Good Reason for termination by the Executive of the Executives employment shall mean the occurrence (without the Executives express written consent which specifically references this Agreement) after any Change in Control, or prior to a Change in Control under the circumstances described in clauses (ii) and (iii) of the second sentence of Section 6.1 hereof (treating all references in paragraphs (1) through (4) below to a Change in Control as references to a Potential Change in Control), of any one of the following acts by the Company, or failures by the Company to act, unless, in the case of any act or failure to act described in paragraph (1), or (4) below, such act or failure to act is corrected pursuant to the notice and cure provisions of Section 7.2 (Sunset on Right to Terminate for Good Reason) prior to the Date of Termination specified in the Notice of Termination given in respect thereof:
(1) a material negative change in the nature or status of the Executives responsibilities from those in effect immediately prior to the Change in Control other than any such alteration primarily attributable to the fact that the Parent may no longer be a public company or to other changes in the identity, nature or structure of the Parent; and provided , that a change in the Executives title or reporting relationships shall not of itself constitute Good Reason (unless such change results in a material negative change as described above);
(2) a material negative change in the Executives aggregate target compensation as in effect immediately prior to the Change in Control or a material negative change in the methodology used to determine incentive compensation; provided , however , that changes to individual components of Executives compensation comprising aggregate target compensation shall not constitute Good Reason;
(3) the relocation of the Executives principal place of employment to a location more than 40 miles from the Executives principal place of employment immediately prior to the Change in Control or the Companys requiring the Executive to be based anywhere other than
such principal place of employment (or permitted relocation thereof), provided that such relocation results in a material negative change to the Executives employment, except for required travel on the Companys business to an extent substantially consistent with the Executives present business travel obligations;
(4) any purported termination of the Executives employment which is not effected pursuant to a Notice of Termination satisfying the requirements of Section 7.1 hereof; for purposes of this Agreement, no such purported termination shall be effective. The Executives right to terminate the Executives employment for Good Reason shall not be affected by the Executives incapacity due to physical or mental illness; or
(5) failure of the Company to obtain assumption and agreement by a successor of the Company to perform this Agreement as provided in Section 9.1.
In no event will the Executive have Good Reason to terminate employment for Good Reason unless such act or failure to act results in a material negative change to Executives employment. Subject to compliance with the requirements of Section 7.2 hereof, the Executives continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder.
(O) Notice of Termination shall have the meaning set forth in Section 7.1 hereof.
(P) Parent shall mean Janus Capital Group Inc.
(Q) Person shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(R) Potential Change in Control shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:
(1) the Parent enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;
(2) the Parent or any Person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control;
(3) any Person becomes the beneficial owner, directly or indirectly, of securities of the Parent representing 15% or more of either the then outstanding shares of common stock of the Parent or the combined voting power of the Parents then outstanding securities (not including in the securities beneficially owned by such Person any securities acquired directly from the Parent or its Affiliates); or
(4) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.
(S) Retirement shall be deemed the reason for the termination by the Executive of the Executives employment if such employment is terminated in accordance with the Companys retirement policy, including early retirement, generally applicable to its salaried employees.
(T) Severance Payments shall have the meaning set forth in Section 6.1 hereof.
(U) Tax Counsel shall have the meaning set forth in Section 6.2 hereof.
(V) Term shall mean the period of time described in Section 2 hereof (including any extension, continuation or termination described therein).
(W) Total Payments shall mean those payments so described in Section 6.2 hereof.
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