EXHIBIT 10.28
CHANGE OF CONTROL AGREEMENT
AGREEMENT, dated as of the 10th day of February, 2003 (this
"Agreement"), by and between Janus Capital Group Inc., a Delaware corporation
(the "Company"), and Xxxx X. Xxxxxxx (the "Executive").
WHEREAS, the Board of Directors of the Company (the "Board"),
has determined that it is in the best interests of the Company and its
stockholders to assure that the Company will have the continued dedication of
the Executive, notwithstanding the possibility, threat or occurrence of a Change
of Control (as defined herein). The Board believes it is imperative to diminish
the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control and
to encourage the Executive's full attention and dedication to the current
Company and in the event of any threatened or pending Change of Control, and to
provide the Executive with compensation and benefits arrangements upon a Change
of Control that ensure that the compensation and benefits expectations of the
Executive will be satisfied and that are competitive with those of other
corporations;
WHEREAS, the Board intends that this Agreement shall take
effect only if and when a Change of Control occurs after the date of this
Agreement and within the Change of Control Period (as defined herein);
WHEREAS, the Board intends that whenever a conflict occurs
between this Agreement and any existing or subsequent employment agreement
between the Executive and the Company, this Agreement shall control with respect
to any such conflict only if and when after the date of this Agreement a Change
of Control occurs within the Change of Control Period;
Therefore, in order to accomplish these objectives, the Board
has caused the Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
SECTION 1. CERTAIN DEFINITIONS. (a) "Effective Date" means the
first date during the Change of Control Period on which a Change of Control
occurs. Notwithstanding anything in this Agreement to the contrary, if a Change
of Control occurs and if the Executive's employment with the Company is
terminated prior to the date on which the Change of Control occurs, and if it is
reasonably demonstrated by the Executive that such termination of employment (1)
was at the request of a third party that has taken steps reasonably calculated
to effect a Change of Control or (2) otherwise arose in connection with or
anticipation of a Change of Control, then "Effective Date" means the date
immediately prior to the date of such termination of employment.
(b) "Change of Control Period" means the period commencing on the date hereof
and ending on the third anniversary of the date hereof; provided, however, that,
commencing on the date one year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary thereof, the
"Renewal Date"), unless previously terminated, the Change of Control Period
shall be automatically extended so as to terminate three years from such Renewal
Date, unless, at least 60 days prior to the Renewal Date, the Company shall give
notice to the Executive that the Change of Control Period shall not be so
extended.
(c) "Affiliated Company" means any company controlled by, controlling or under
common control with the Company.
(d) "Change of Control" means:
(1) An acquisition by any Person of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act") of 20% or more of either (A) the then
outstanding shares of common stock of the Company (the "Outstanding Company
Common Stock") or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); excluding, however, the
following: (i) any acquisition by the Company, (ii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any entity controlled by the Company, or (iii) any acquisition pursuant to a
transaction which complies with clauses (A), (B) and (C) of subsection (3) of
this Section 1(d) or
(2) A change in the composition of the Board such that the
individuals who, as of the effective date of the Plan, 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 Section 1(d), that any individual who becomes a member of
the Board subsequent to the effective date hereof, whose election, or nomination
for election by the Company's stockholders, 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 accrual 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
Company 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 Company Common Stock and
Outstanding Company 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 Company or all or substantially all the
Company's 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 Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (B) no Person
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(other than the Company or any employee benefit plan (or related trust) of the
Company 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 Company of a
complete liquidation or dissolution of the Company.
For purposes of this definition, "person" shall mean any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act).
SECTION 2. EMPLOYMENT PERIOD. The Company hereby agrees to
continue the Executive in its employ, subject to the terms and conditions of
this Agreement, for the period commencing on the Effective Date and ending on
the third anniversary of the Effective Date (the "Employment Period"). The
Employment Period shall terminate upon the Executive's termination of employment
for any reason.
SECTION 3. TERMS OF EMPLOYMENT. (a) POSITION AND DUTIES. (1)
During the Employment Period, (A) the Executive's position (including status,
offices, titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material respects with
the most significant of those held, exercised and assigned at any time during
the 120-day period immediately preceding the Effective Date and (B) the
Executive's services shall be performed at the office where the Executive was
employed immediately preceding the Effective Date or at any other location less
than 35 miles from such office.
(2) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period, it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that, to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company.
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(b) COMPENSATION. (1) BASE SALARY. During the Employment Period, the Executive
shall receive an annual base salary (the "Annual Base Salary") at an annual rate
at least equal to 12 times the highest monthly base salary paid or payable,
including any base salary that has been earned but deferred, to the Executive by
the Company and the Affiliated Companies in respect of the 12-month period
immediately preceding the month in which the Effective Date occurs. The Annual
Base Salary shall be paid at such intervals as the Company pays executive
salaries generally. During the Employment Period, the Annual Base Salary shall
be reviewed at least annually, beginning no more than 12 months after the last
salary increase awarded to the Executive prior to the Effective Date. Any
increase in the Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. The Annual Base Salary shall
not be reduced after any such increase and the term "Annual Base Salary" shall
refer to the Annual Base Salary as so increased.
(2) ANNUAL BONUS AND COMMISSION PAY. In addition to the Annual
Base Salary, the Executive shall be awarded, for each fiscal year ending during
the Employment Period, an annual bonus (the "Annual Bonus") in cash at least
equal to the Target Bonus as defined and described in SCHEDULE A hereto. Each
such Annual Bonus shall be paid no later than the end of the third month of the
fiscal year next following the fiscal year for which the Annual Bonus is
awarded, unless the Executive shall elect to defer the receipt of such Annual
Bonus, or if the Annual Bonus is measured with respect to sales commissions, the
Annual Bonus shall be paid in accordance with the time schedule in place during
the 120-day period immediately preceding the Effective Date.
(3) INCENTIVE, SAVINGS AND RETIREMENT PLANS. During the
Employment Period, the Executive shall be entitled to participate in all cash
incentive, equity incentive, savings and retirement plans, practices, policies,
and programs applicable generally to other peer executives of the Company and
the Affiliated Companies, but in no event shall such plans, practices, policies
and programs provide the Executive with incentive opportunities (measured with
respect to both regular and special incentive opportunities, to the extent, if
any, that such distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the aggregate, than the
most favorable of those provided by the Company and the Affiliated Companies for
the Executive under such plans, practices, policies and programs as in effect at
any time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive, those provided generally at any time after
the Effective Date to other peer executives of the Company and the Affiliated
Companies.
(4) WELFARE BENEFIT PLANS. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and the Affiliated
Companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other peer
executives of the Company and the Affiliated Companies, but in no event shall
such plans, practices, policies and programs provide the Executive with benefits
that are less favorable, in the aggregate, than the most favorable of such
plans, practices, policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive,
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those provided generally at any time after the Effective Date to other peer
executives of the Company and the Affiliated Companies.
(5) EXPENSES. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the most favorable policies,
practices and procedures of the Company and the Affiliated Companies in effect
for the Executive at any time during the 120-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and the Affiliated Companies.
(6) FRINGE BENEFITS. During the Employment Period, the
Executive shall be entitled to fringe benefits, including, without limitation,
tax and financial planning services, payment of club dues, and, if applicable,
use of an automobile and payment of related expenses, in accordance with the
most favorable plans, practices, programs and policies of the Company and the
Affiliated Companies in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and the Affiliated Companies.
(7) OFFICE AND SUPPORT STAFF. During the Employment Period,
the Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing provided
to the Executive by the Company and the Affiliated Companies at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated Companies.
(8) VACATION. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and the Affiliated Companies as
in effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and the Affiliated Companies.
SECTION 4. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY.
The Executive's employment shall terminate automatically if the Executive dies
during the Employment Period. If the Company determines in good faith that the
Disability (as defined herein) of the Executive has occurred during the
Employment Period (pursuant to the definition of "Disability"), it may give to
the Executive written notice in accordance with Section 10(b) of its intention
to terminate the Executive's employment. In such event, the Executive's
employment with the Company shall terminate effective on the 30th day after
receipt of such notice by the Executive (the "Disability Effective Date"),
provided that, within the 30 days after such receipt, the Executive shall not
have returned to full-time performance of the Executive's duties. "Disability"
means the absence of the Executive from the Executive's duties with the Company
on a full-time basis for 180 consecutive business days as a result of incapacity
due to mental or physical illness that is determined to be total and permanent
by a physician selected by
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the Company or its insurers and acceptable to the Executive or the Executive's
legal representative.
(b) CAUSE. The Company may terminate the Executive's employment during the
Employment Period for Cause. "Cause" means:
(1) the willful and continued failure of the Executive to
perform substantially the Executive's duties (as contemplated by
Section 3(a)(1)(A)) with the Company or any Affiliated Company (other
than any such failure resulting from incapacity due to physical or
mental illness or following the Executive's delivery of a Notice of
Termination for Good Reason), after a written demand for substantial
performance is delivered to the Executive by the Board or the Chief
Executive Officer of the Company that specifically identifies the
manner in which the Board or the Chief Executive Officer of the Company
believes that the Executive has not substantially performed the
Executive's duties, or
(2) the willful engaging by the Executive in illegal conduct
or gross misconduct that is materially and demonstrably injurious to
the Company.
For purposes of this Section 4(b), no act, or failure to act, on the part of the
Executive shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer of
the Company or a senior officer of the Company 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. The cessation of employment of the Executive shall not be deemed to be
for Cause unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board (excluding the Executive,
if the Executive is a member of the Board) at a meeting of the Board called and
held for such purpose (after reasonable notice is provided to the Executive and
the Executive is given an opportunity, together with counsel for the Executive,
to be heard before the Board), finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in Section 4(b)(1) or
4(b)(2), and specifying the particulars thereof in detail.
(c) GOOD REASON. The Executive's employment may be terminated by the Executive
for Good Reason or by the Executive voluntarily without Good Reason. "Good
Reason" means:
(1) the assignment to the Executive of any duties inconsistent
in any respect with the Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 3(a), or any other
diminution in such position, authority, duties or responsibilities
(whether or not occurring solely as a result of the Company's ceasing
to be a publicly traded entity) or the assignment to the Executive of
material duties inconsistent with the Executive's position as Vice
Chairman of the Board and Chief Executive Officer of the Company,
excluding for this purpose an isolated, insubstantial and inadvertent
action not taken in bad faith and
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that is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(2) any failure by the Company to comply with any of the
provisions of Section 3(b), other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and that is remedied by
the Company promptly after receipt of notice thereof given by the
Executive;
(3) the Company's requiring the Executive (i) to be based at
any office or location other than as provided in Section 3(a)(1)(B),
(ii) to be based at a location other than the principal executive
offices of the Company if the Executive was employed at such location
immediately preceding the Effective Date, or (iii) to travel on Company
business to a substantially greater extent than required immediately
prior to the Effective Date;
(4) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this
Agreement;
(5) any failure by the Company to comply with and satisfy
Section 9(c);
(6) the failure of the Executive to continue, except pursuant
to his voluntary resignation or the failure of the Company shareholders
to approve his reelection, to serve as a member of the Board; or
(7) the failure of the Executive to serve as Vice Chairman of
the Board or, beginning January 1, 2004, as Chairman of the Board.
For purposes of this Section 4(c), any good faith determination of Good Reason
made by the Executive shall be conclusive. Anything in this Agreement to the
contrary notwithstanding, a termination by the Executive for any reason pursuant
to a Notice of Termination given during the 30-day period immediately following
the first anniversary of the Effective Date shall be deemed to be a termination
for Good Reason for all purposes of this Agreement. The Executive's mental or
physical incapacity following the occurrence of an event described above in
clauses (1) through (7) shall not affect the Executive's ability to terminate
employment for Good Reason.
(d) NOTICE OF TERMINATION. Any termination by the Company for Cause, or by the
Executive for Good Reason, shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 10(b). "Notice of
Termination" means a written notice that (1) indicates the specific termination
provision in this Agreement relied upon, (2) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated, and (3) if the Date of Termination (as defined herein) is other than
the date of receipt of such notice, specifies the Date of Termination (which
Date of Termination shall be not more than 30 days after the giving of such
notice). The failure by the Executive or the Company to set forth in the Notice
of Termination any fact or circumstance that contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively,
from asserting such fact or circumstance in enforcing the Executive's or the
Company's respective rights hereunder.
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(e) DATE OF TERMINATION. "Date of Termination" means (1) if the Executive's
employment is terminated by the Company for Cause, or by the Executive for Good
Reason, the date of receipt of the Notice of Termination or any later date
specified in the Notice of Termination, (which date shall not be more than 30
days after the giving of such notice), as the case may be, (2) if the
Executive's employment is terminated by the Company other than for Cause or
Disability, the date on which the Company notifies the Executive of such
termination, and (3) if the Executive resigns without Good Reason, the date on
which the Executive notifies the Company of such termination, and (4) if the
Executive's employment is terminated by reason of death or Disability, the date
of death of the Executive or the Disability Effective Date, as the case may be.
SECTION 5. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a)
GOOD REASON; OTHER THAN FOR CAUSE, DEATH OR DISABILITY. If, during the
Employment Period, the Company terminates the Executive's employment other than
for Cause or Disability or the Executive terminates employment for Good Reason:
(1) the Company shall pay to the Executive, in a lump sum in
cash within 30 days after the Date of Termination, the aggregate of the
following amounts:
(A) the sum of (1) the Executive's Annual Base Salary
through the Date of Termination, (2) any bonus with respect to
the fiscal year of the Company prior to the Date of
Termination and calculated pursuant to the Executive's then
current employment agreement, if any, or if no employment
agreement is in effect, then the Target Bonus ("Current
Bonus"), (3) any accrued vacation and (4) the product of (x)
the Current Bonus, and (y) a fraction, the numerator of which
is the number of days in the fiscal year in which the Date of
Termination occurs through the Date of Termination, and the
denominator of which is 365, in each case to the extent not
theretofore paid (the sum of the amounts described in clauses
(1), (2), (3) and (4), shall be hereinafter referred to as the
"Accrued Obligations"); and
(B) an amount equal to the product of (1) three and
(2) the sum of (a) the Annual Base Salary and (b) the average
of the actual sales commissions paid, if any, for the last
three full fiscal years prior to the Effective Date, and for
any of the three such fiscal years for which a sales
commission was not paid, the Target Bonus as defined and
described in SCHEDULE A hereto; and
(2) for the three-year period commencing on the Date of
Termination, the Company shall continue to provide the benefits
described in Section 3(b)(4) to the Executive and his spouse and
dependents on the same basis such benefits were provided to the
Executive immediately prior to the Effective Date, and, if such
benefits cannot be provided, a lump sum cash equivalent thereof on a
grossed-up basis for taxes (collectively "Welfare Benefits"); and
(3) any unvested cash and equity long-term incentive award or
other incentive awards granted to the Executive, including any unvested
shares of limited liability company interests, in the Company, Janus
Capital Management LLC or in any of their affiliated companies held by
the Executive (collectively, "Retention and Incentive
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Awards") shall immediately vest and/or be paid, as applicable, in full
and any stock options shall, from and after such vesting, remain
exercisable for the remainder of their respective terms; and
(4) to the extent not theretofore paid or provided, the
Company shall timely pay or provide to the Executive any Other Benefits
(as defined in Section 6).
(b) DEATH. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, the Company shall provide the
Executive's estate or beneficiaries with the Accrued Obligations and the timely
payment or delivery of the Other Benefits and shall provide the Welfare Benefits
to the Executive's spouse and dependents for a three-year period commencing as
of the Date of Termination, and shall have no other severance obligations under
this Agreement. In addition, all Retention and Incentive Awards shall be treated
as described in Section 5(a)(3). The Accrued Obligations shall be paid to the
Executive's estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination. With respect to the provision of the Other
Benefits, the term "Other Benefits" as utilized in this Section 5(b) shall
include, without limitation, and the Executive's estate and/or beneficiaries
shall be entitled to receive, benefits at least equal to the most favorable
benefits provided by the Company and the Affiliated Companies to the estates and
beneficiaries of peer executives of the Company and the Affiliated Companies
under such plans, programs, practices and policies relating to death benefits,
if any, as in effect with respect to other peer executives and their
beneficiaries at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive's estate and/or the
Executive's beneficiaries, as in effect on the date of the Executive's death
with respect to other peer executives of the Company and the Affiliated
Companies and their beneficiaries.
(c) DISABILITY. If the Executive's employment is terminated by reason of the
Executive's Disability during the Employment Period, the Company shall provide
the Executive with the Accrued Obligations and the timely payment or delivery of
the Other Benefits and the provision of Welfare Benefits to the Executive, his
spouse and dependents for a three-year period commencing of the Date of
Termination, and shall have no other severance obligations under this Agreement.
In addition, all Retention and Incentive Awards shall be treated as described in
Section 5(a)(3). The Accrued Obligations shall be paid to the Executive in a
lump sum in cash within 30 days of the Date of Termination. With respect to the
provision of the Other Benefits, the term "Other Benefits" as utilized in this
Section 6(c) shall include, and the Executive shall be entitled after the
Disability Effective Date to receive, disability and other benefits at least
equal to the most favorable of those generally provided by the Company and the
Affiliated Companies to disabled executives and/or their families in accordance
with such plans, programs, practices and policies relating to disability, if
any, as in effect generally with respect to other peer executives and their
families at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive and/or the Executive's
family, as in effect at any time thereafter generally with respect to other peer
executives of the Company and the Affiliated Companies and their families.
(d) CAUSE; OTHER THAN FOR GOOD REASON. If the Executive's employment is
terminated for Cause during the Employment Period, the Company shall provide to
the Executive (1) the Executive's Annual Base Salary through the Date of
Termination, (2) the amount of any
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compensation previously deferred by the Executive, (3) any accrued and unpaid
vacation, and (4) the Other Benefits, in each case, to the extent theretofore
unpaid, and shall have no other severance obligations under this Agreement. If
the Executive voluntarily terminates employment during the Employment Period,
excluding a termination for Good Reason, the Company shall provide to the
Executive the Accrued Obligations and the timely payment or delivery of the
Other Benefits, and shall have no other severance obligations under this
Agreement. In such case, all the Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination.
(e) EXCISE TAX. Notwithstanding any other language to the contrary in this
Agreement or in this Section 5, the Company shall not be obligated to pay and
shall not pay that portion of any payment or distribution in the nature of
compensation within the meaning of Section 280G(b)(2) of the Internal Revenue
Code of 1986, as amended (the "Code") to the benefit of the Executive otherwise
due or payable the Executive under this Agreement or this Section 5 if that
portion would cause any excise tax imposed by Section 4999 of the Code to become
due and payable by the Executive.
SECTION 6. NON-EXCLUSIVITY OF RIGHTS. Nothing in this
Agreement shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided by the Company
or the Affiliated Companies and for which the Executive may qualify, nor,
subject to Section 10(f), shall anything herein limit or otherwise affect such
rights as the Executive may have under any other contract or agreement with the
Company or the Affiliated Companies. Amounts that are vested benefits or that
the Executive is otherwise entitled to receive under any plan, policy, practice
or program of or any other contract or agreement with the Company or the
Affiliated Companies at or subsequent to the Date of Termination ("Other
Benefits") shall be payable in accordance with such plan, policy, practice or
program or contract or agreement, except as explicitly modified by this
Agreement. Notwithstanding the foregoing, if the Executive receives payments and
benefits pursuant to Section 5(a) of this Agreement, the Executive shall not be
entitled to any severance pay or benefits under any severance plan, program or
policy of the Company and the Affiliated Companies, unless otherwise
specifically provided therein in a specific reference to this Agreement.
SECTION 7. FULL SETTLEMENT. The Company's obligation to make
the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense, or other claim, right or action that the Company may have
against the Executive or others. In no event shall the Executive be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement,
and such amounts shall not be reduced whether or not the Executive obtains other
employment. The Company agrees to pay as incurred (within 10 days following the
Company's receipt of an invoice from the Executive), to the full extent
permitted by law, all legal fees and expenses that the Executive may reasonably
incur as a result of any contest (regardless of the outcome thereof) by the
Company, the Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement), plus, in each case,
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interest on any delayed payment at the applicable federal rate provided for in
Section 7872(f)(2)(A) of the Code.
SECTION 8. CONFIDENTIAL INFORMATION. The Executive shall hold
in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company or the
Affiliated Companies, and their respective businesses, which information,
knowledge or data shall have been obtained by the Executive during the
Executive's employment by the Company or the Affiliated Companies and which
information, knowledge or data shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those persons designated by the Company. In no event shall an asserted
violation of the provisions of this Section 8 constitute a basis for deferring
or withholding any amounts otherwise payable to the Executive under this
Agreement.
SECTION 9. SUCCESSORS. (a) This Agreement is personal to the
Executive, and, without the prior written consent of the Company, shall not be
assignable by the Executive other than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns. Except as provided in Section 9(c), without the
prior written consent of the Executive this Agreement shall not be assignable by
the Company.
(c) 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 assume expressly 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. "Company" means
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid that assumes and agrees to perform this Agreement by
operation of law or otherwise.
SECTION 10. MISCELLANEOUS. (a) This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without reference to principles of conflict of laws. The captions of this
Agreement are not part of the provisions hereof and shall have no force or
effect. This Agreement may not be amended or modified other than by a written
agreement executed by the parties hereto or their respective successors and
legal representatives.
(b) All notices and other communications hereunder shall be in writing and shall
be given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
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if to the Executive:
At the most recent address on file at the Company.
if to the Company:
Janus Capital Group Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn.: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement.
(d) The Company may withhold from any amounts payable under this Agreement such
United States federal, state or local or foreign taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict compliance
with any provision of this Agreement or the failure to assert any right the
Executive or the Company may have hereunder, including, without limitation, the
right of the Executive to terminate employment for Good Reason pursuant to
Sections 4(c)(1) through 4(c)(5), shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement.
(f) The Executive and the Company acknowledge that, except as may otherwise be
provided under any other written agreement between the Executive and the
Company, the employment of the Executive by the Company is "at will" and,
subject to Section 1(a), prior to the Effective Date, the Executive's employment
may be terminated by either the Executive or the Company at any time prior to
the Effective Date, in which case the Executive shall have no further rights
under this Agreement. From and after the Effective Date, except as specifically
provided herein, this Agreement shall supersede any other agreement between the
parties with respect to the subject matter hereof.
SECTION 11. INDEMNIFICATION AND DIRECTORS' AND OFFICERS'
INSURANCE.
(a) The Company shall indemnify the Executive to the fullest
extent permitted under law from and against any expenses (including but not
limited to attorneys' fees, expenses of investigation and preparation and fees
and disbursements of the Executive's accountants or other experts), judgments,
fines, penalties and amounts paid in settlement actually and reasonably incurred
by the Executive in connection with any proceeding in which the Executive was or
is made party or was or is involved (for example, as a witness) by reason of the
fact the Executive was or is employed by the Company.
Such indemnification is subject to:
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(i) the indemnifying party promptly receiving written
notice that a claim or liability has been asserted or threatened ("Notice of
Claim");
(ii) the indemnified party providing reasonable
cooperation and assistance in the defense or settlement of a claim; and
(iii) the indemnifying party being afforded the
opportunity to have the sole control over the defense or settlement of such
claim or liability.
Unless within ten days after receiving the Notice of Claim, the indemnifying
party notifies in writing the indemnified party of its intent to defend against
such claim or liability, the indemnified party may defend, settle and/or
compromise any such claim or liability, and be indemnified for all losses
resulting from such defense, settlement and/or compromise. Any indemnified party
also may participate in such defense at its own cost and expense.
Such indemnification shall continue as to the Executive during the Employment
Period and for six years from the Date of Termination with respect to acts or
omissions which occurred prior to his cessation of employment with the Company
and shall inure to the benefit of the Executive's heirs, executors and
administrators. The Company shall advance to the Executive all costs and
expenses incurred by him in connection with any proceeding covered by this
provision within 20 calendar days after receipt by the Company of a written
request for such advance. Such request shall include an undertaking by the
Executive to repay the amount of such advance if it shall ultimately be
determined that he is not entitled to be indemnified against such costs and
expenses.
(b) The Company agrees to continue and maintain directors' and
officers' liability insurance policies covering the Executive to the extent that
the Company provides such coverage for its other executive officers. Such
insurance coverage shall continue as to the Executive even if he has ceased to
be a director, member, employee or agent of the Company , with respect to acts
or omissions which occurred prior to his cessation of employment with the
Company. Notwithstanding the foregoing, however, if the Company shall cease to
maintain directors' and officers' liability insurance policies covering the
Executive and other executive officers by reason of: (i) a consolidation,
merger, sale or other reorganization of the Company; (ii) any person or entity
or group of persons or entities acting in concert acquiring management control
of the Company; or (iii) the insurers providing such insurance canceling or
refusing to renew such insurance, then the Executive shall have coverage only to
the extent provided in any run-off policies extending the period during which
the Company or the Executive may give the insurers notice of a claim under the
terminating directors' and officers' liability insurance policies. The Company
shall take all reasonable actions to ensure that it obtains such run-off
policies and that such run-off policies extend the claims reporting period
through any applicable statutes of limitations, but nothing in this section
shall obligate the Company to obtain extraordinary insurance coverage for the
Executive. Insurance contemplated under this Section 11(b) shall inure to the
benefit of the Executive's heirs, legal representatives or assigns.
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IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from the Board, the Company
has caused these presents to be executed in its name on its behalf, all as of
the day and year first above written.
/s/ Xxxx X. Xxxxxxx
---------------------------------------------------
Xxxx X. Xxxxxxx
JANUS CAPITAL GROUP INC.
/s/ Xxxxxx X. Early
---------------------------------------------------
By: Xxxxxx X. Early
General Counsel and Chief Corporate Affairs Officer
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SCHEDULE A
TARGET BONUS
------------
Xxxx X. Xxxxxxx, CEO $4,000,000
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