Exhibit 10.1
EMPLOYMENT
AGREEMENT
THIS AGREEMENT, dated as of the Effective Date
specified below (this “ Agreement ”) is by and
between Janus Management Holdings Corporation, a Delaware
corporation (the “ Company ”) and Jonathan D.
Coleman (the “ Executive ”), and shall be
effective as of January 1, 2007 (the “ Effective Date
”). Executive and the Company are sometimes referred to
in this Agreement as the “ Parties ,” or,
individually, as a “ Party .”
Recitals
1.
Prior to November 2006, the Company employed Executive as a
Portfolio Manager (“ PM ”). During
Executive’s service as a PM, the terms and conditions of
Executive’s employment were governed by a: (a) portfolio
manager compensation program; (b) cover letter from Gary D. Black
dated as of December 29, 2004 (the “ Cover Letter
”); (c) letter severance agreement dated as of December 29,
2004 (the “ Severance Agreement ”); and (d)
Portfolio Manager Change in Control Agreement dated as of December
29, 2004 (the “ PM Executive Change in Control
Agreement ”).
2.
As of November 6, 2006, Executive assumed the duties of Co-Chief
Investment Officer (“ Co-CIO ”) of Janus Capital
Management LLC (“ JCM ”) and the Company, the
operating subsidiaries of Janus Capital Group Inc., a Delaware
corporation (“ JCG ”), while continuing to
perform Executive’s duties as a PM.
3.
Executive and the Company desire to clarify the terms and
conditions of Executive’s employment during Executive’s
service as a PM and Co-CIO or Chief Investment Officer
(“CIO”), to provide for certain severance rights in the
event that Executive’s employment terminates under certain
circumstances during Executive’s service as a PM or Co-CIO,
and to provide for certain rights in the event of Executive’s
relinquishment of or removal from the PM, CIO or Co-CIO
position.
Agreement
1.
Term .
(a)
The Company hereby agrees to continue to employ Executive as its
Co-CIO and PM, and Executive hereby agrees to continue to serve as
the Company’s Co-CIO and PM, all on the terms and subject to
the conditions of this Agreement, for the period commencing on the
Effective Date and ending on December 31, 2008 (the “
Initial Term ”).
(b)
The Initial Term (and every subsequent twelve month extension as
set forth in this paragraph) shall automatically be extended for an
additional twelve months (the Initial Term and any twelve month
extension, “ Term ”), unless either Executive or
the Company gives written notice to the other of its intent not to
extend the then-current Term. Such notice must be given not
later than 90 calendar days before the expiration of the
then-current Term. If the Company elects to give notice not
to extend the Term pursuant to this Section 1(b), then,
contemporaneously with such non-renewal notice, the Company shall
offer to Executive severance rights that are no less favorable to
Executive than the form of severance rights then
generally in effect between the Company and its
PMs, which severance rights shall become effective immediately upon
the expiration of the Term.
(c)
If during the Initial Term, the Chief Executive Officer (“
CEO ”) of JCG as of the Effective Date ceases for any
reason to continue to serve as JCG’s CEO, then as of the
effective date of the appointment of the successor CEO (the “
Appointment Date ”), the Initial Term shall be
extended so that it shall expire 18 months following the
Appointment Date, and shall thereafter be subject to further
extension pursuant to Section 1(b) above.
2.
Position and Duties .
(a)
During the Term, Executive shall serve as CIO or Co-CIO, and shall
have the duties, authority and responsibilities commensurate with
such title and office, which shall include, but not necessarily be
limited to:
(i)
Day-to-day oversight of the investment team, including but not
limited to, final decisions related to hiring or firing investment
personnel, management of investment personnel performance and
compensation structure, design and allocations (subject to
parameters determined by the JCG Board of Directors (“ JCG
Board ”), the Compensation Committee of the JCG Board
(“ Compensation Committee ”) and the CEO),
portfolio construction and overlap, use of derivatives,
trading issues and similar issues;
(ii)
Serving as the primary interface between the PMs and Company
management;
(iii)
Participation in client meetings as necessary (including, without
limitation, meetings of the board of trustees of Janus Investment
Fund, Janus Adviser Series, Janus Aspen Series and the board of
Janus Capital Funds Plc);
(iv)
Participation on Executive Committee, Risk Management Committee
and Internal Compliance Controls Committee, and either
participating in or delegating responsibility for participating in,
certain other JCM committees, including without limitation, the
Management Committee, the Product Development Committee and the
Ethics Committee;
(v)
When necessary, completing final sign-off on product decisions that
come before Product Development Committee in accordance with the
applicable approval process;
(vi)
Upon request and with reasonable advance notice, attending meetings
and calls with prospects, consultants, brokers, industry ratings
agencies and the media and making presentations to trade groups,
industry ratings agencies and prospects; and
(vii)
As needed and with reasonable advance notice, attending internal
meetings and calls with executive management, sales, marketing,
operations, public relations, legal/compliance, finance personnel,
the JCG Board and its Committees.
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Notwithstanding any other provision of this
Agreement, Executive shall have the ability to delegate to another
Co-CIO or appropriate JCG or JCM executive officer responsibility
for compliance with Sections 2(a)(vi) and 2(a)(vii).
(b)
Executive and other Co-CIOs, if any, shall report directly to
JCG’s CEO. Executive, working in coordination with
other Co-CIOs, if any, shall have autonomy in managing JCG’s
and JCM’s investment business, subject to appropriate
oversight by the CEO, the JCG Board and applicable Committees
thereof.
(c)
During the Term, Executive may continue to act as a PM for the
portfolio(s) managed by Executive as of the Effective Date, subject
to the terms and conditions set forth below.
3.
Compensation and Benefits . During the Term, the
Company shall pay Executive: (i) an annual base salary (“
Annual Base Salary ”); (ii) compensation for
Executive’s work as Co-CIO or CIO (“ CIO
Compensation ”) for so long as Executive continues
performing as a Co-CIO or CIO; and (iii) compensation for
Executive’s work as a PM (“ PM Compensation
”) for so long as Executive continues performing as a PM, all
as and when specified in this Section 3.
(a)
Base Salary . Throughout the Term, the Executive’s
Annual Base Salary shall be in an amount established by the JCG
Compensation Committee, provided that such amount shall not be less
than $500,000.
(b)
CIO Compensation.
(i)
The Company shall pay Executive CIO Compensation as specified in
this Section 3(b), all of which is subject to the satisfaction of
Internal Revenue Code Section 162(m) performance criteria as
established by the JCG Compensation Committee annually (“
Section 162(m) Criteria ”).
(ii)
For 2007 and 2008, the CIO Compensation will be based 50 percent on
overall performance of all Janus-managed investment products, 20
percent on Janus-managed net long-term flows, 15 percent on
investment team leadership factors, and 15 percent on overall
corporate leadership factors, with specific goals to be established
by the CEO and JCG Compensation Committee at the beginning of each
year. For any year after 2008 during which the Term
continues, the CEO and the JCG Compensation Committee shall,
following consultation with Executive, establish criteria
applicable to CIO Compensation at the beginning of each year.
(iii)
Executive’s CIO Compensation range for 2007 shall be a
minimum of $2,000,000, a maximum of $3,500,000 and a target of
$2,750,000. Executive’s CIO Compensation range for 2008
shall be a minimum of $2,500,000, a maximum of $4,500,000, and a
target of $3,500,000. On and after January 1, 2009 (assuming
renewal of the Term and subject to the satisfaction of Section
162(m) Criteria), Executive’s CIO Compensation minimum,
maximum and target amounts shall be established in the discretion
of the JCG Compensation Committee, provided that the Company shall
give Executive written notice thereof no less than sixty (60) days
before the beginning of the year with respect to which such amounts
shall apply.
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(iv)
All CIO Compensation shall be payable after year-end at the same
time as bonus payments and LTI awards are made to other members of
the Company’s Executive Committee (the “ Peer
Executives ”). For 2007 and 2008, sixty percent of
the CIO Compensation shall be paid in cash, and the remaining forty
percent shall be in the form of LTI awards in the same manner and
type as granted to other Peer Executives.
(v)
As of the Effective Date, Executive shared the CIO’s
responsibilities with another Co-CIO. If, for any reason
during the Term, Executive becomes the Company’s sole CIO,
the Company shall adjust Executive’s CIO Compensation by an
amount to be determined in the discretion of the JCG Compensation
Committee. If, thereafter, during the Term another CIO is
appointed to serve with Executive, the Company may adjust
Executive’s CIO Compensation in an amount to be determined in
the discretion of the JCG Compensation Committee, subject to the
minimums and ranges specified in Section 3(b)(iii) above. If
the fact that Executive has become the Company’s sole CIO
(other than during a transitional, temporary period not exceeding
180 days; provided that throughout such temporary period the
Company shall be making reasonable, continuous efforts to fill the
Co-CIO vacancy) substantially impairs Executive’s ability to
continue to effectively perform Executive’s material
responsibilities as both sole CIO and PM, and the Company fails to
cure that condition upon receiving no less than 90 days’
prior written notice from Executive (which notice shall be given no
more than 180 days after Executive knows or should know of the
circumstances giving rise to the notice), then Executive may
relinquish Executive’s role as PM upon no less than 30
days’ written notice to the Company, in which case the
Parties shall negotiate in good faith concerning an amended
compensation arrangement as sole CIO. At any time before
December 31, 2008, but only after Executive has relinquished his
role as PM pursuant to the preceding sentence, Executive may elect,
upon no less than 90 days prior written notice, to relinquish
Executive’s role as sole CIO and return to a position on the
Company’s investment management team. In such event,
the Company shall make a reasonable effort to reassign Executive to
manage the portfolio(s) managed by Executive before Executive
relinquished the PM role or one or more other portfolios with at
least a comparable amount of assets under management, in which case
Executive’s rights and responsibilities would be as specified
in Section 4(a) below. In the event the Company is unable
through reasonable efforts to reassign Executive to manage the
portfolio(s) managed by Executive before Executive relinquished the
PM role or one or more other portfolios with at least a comparable
amount of assets under management, then Executive shall be assigned
to a position on the Company’s investment team and, until the
earlier of December 31, 2008 or the date on which Executive
resigns, Executive shall be compensated as if he had resumed
management of the portfolio(s) managed by Executive before
Executive relinquished the PM role as set forth above, and
Executive’s rights and responsibilities would be as specified
in Section 4(a) below except as otherwise specified in this
subsection.
(c)
PM Compensation . For Executive’s work as a PM,
and subject to the satisfaction of Section 162(m) Criteria, the
Company shall pay Executive individual performance-based PM
Compensation and Executive shall be eligible to participate in
other compensation for which PMs may be eligible in a manner
consistent with the terms of the Company’s then-current PM
compensation plan.
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(d)
Total Compensation . Subject to the satisfaction of
Section 162(m) Criteria, Executive’s combined PM Compensation
and CIO Compensation for 2007 shall be a minimum of $3,500,000, and
Executive’s combined PM Compensation and CIO Compensation for
2008 shall be a minimum of $4,000,000.
(e)
Section 162(m) Performance Criteria . The Parties
acknowledge and agree that all compensation payable to Executive
(except Executive’s Annual Base Salary) under this Agreement,
including without limitation cash, shall be subject to and
conditioned upon such terms and conditions as are required to
obtain full deductibility under Section 162(m) of the Internal
Revenue Code, including without limitation the establishment, and
Executive’s attainment of, performance-based criteria.
(f)
Satisfaction of Withholding Requirements . All grants
and payments to Executive under this Agreement are subject to and
conditioned upon satisfaction of all applicable tax withholding
requirements. Executive agrees to execute all documents and
take all action reasonably deemed necessary by the Company to
ensure compliance with all such withholding requirements.
(g)
Incentive, Savings and Retirement Plans . During the
Term, Executive shall be entitled to participate in all other
incentive plans, practices, policies and programs, and all savings
and retirement plans, practices, policies and programs, in each
case on terms and conditions no less favorable than the terms and
conditions generally applicable to the Peer Executives, as in
effect from time to time; provided that this Section 3(g) shall not
entitle Executive to any particular amount or value that the
Company may from time to time provide to other Peer Executives.
(h)
Welfare Benefit Plans . During the Term, Executive and
Executive’s spouse and dependents, 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 its
affiliates (including, without limitation, medical, prescription,
dental, retiree health, disability, employee life, group life,
accidental death and travel accident insurance plans and programs)
on terms and conditions no less favorable than the terms and
conditions generally applicable to the Peer Executives.
(i)
Expenses . During the Term, Executive shall be
entitled to receive prompt reimbursement for all reasonable
expenses incurred by Executive in accordance with the
Company’s policies, practices and procedures in effect for
Peer Executives.
(j)
Fringe Benefits . During the Term, Executive shall be
entitled to fringe benefits on the same basis as those provided
generally at any time thereafter to the Peer Executives.
(k)
Vacation . During the Term, Executive shall be
entitled to paid vacation in accordance with the plans, policies,
programs and practices of the Company as in effect for the Peer
Executives.
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(l)
Executive Change in Control Agreement .
Contemporaneously with this Agreement, the parties shall execute an
“ Executive Change in Control Agreement ” in the
form attached hereto as Exhibit A , which shall be
substantially identical to the Agreement offered by JCG to Peer
Executives.
4.
Termination of Service as CIO or Co-CIO Without Termination of
Employment .
(a)
Upon giving the Company no less than 90 days’ advance written
notice, at any time during the Term, Executive may for any reason
relinquish Executive’s responsibilities as CIO or Co-CIO and
return to performing only the duties of a PM managing such
portfolios as Executive managed immediately before the Transition
Date (defined below) or one or more other funds with at least a
comparable amount of funds under management, in which case: (i)
this Agreement and the Executive Change in Control Agreement shall
terminate as of the effective date of Executive’s
relinquishment of Executive’s CIO role (the “
Transition Date ”); and (ii) the Company shall pay
Executive, after year-end in accordance with and at the same time
as payment of bonus and LTI compensation to other Peer Executives,
pro rata fully earned but as yet unpaid CIO Compensation for any
period of time during that year that Executive served as Co-CIO;
and (iii) following the Transition Date, the terms and conditions
of Executive’s employment shall be governed by the
compensation plan(s), severance rights, change in control
agreement, policies, procedures and programs applicable generally
to the Company’s PMs, which Executive agrees promptly to
execute or acknowledge, as the case may be, at the Company’s
request, to be effective as of the day following the Transition
Date. If Executive relinquishes Executive’s
responsibilities as CIO or Co-CIO but thereafter continues to
provide services to the Company in another senior management role
(other than PM), then for the first year of Executive’s
service in such other senior management role Executive will receive
a floor on Executive’s total target compensation, but
otherwise established in the discretion of the JCG Compensation
Committee, acting in consultation with the CEO, but subject to
applicable Section 162(m) Criteria.
(b)
Subject to the rights and restrictions under a termination for
“Good Reason” as defined in Sections 6(f) and 7(d)
below, at any time during the Term, the Company may for any reason
remove Executive from Executive’s CIO or Co-CIO title and
duties and direct that Executive return to the role of a PM,
managing such portfolios as Executive managed immediately before
the Transition Date or one or more other portfolios with at least a
comparable amount of assets under management. If the Company
elects to remove Executive from Executive’s CIO or Co-CIO
title and duties pursuant to this Section 4(b) and Executive
remains a PM without making an election under Section 6(f), then
the Company shall pay Executive, after year-end in accordance with
and at the same time as payment of bonus and LTI compensation to
other Peer Executives, a pro rata amount of the mid-range of
Executive’s then-current target CIO Compensation for the
period of time during the year of removal that Executive served as
Co-CIO.
5.
Termination of Service as PM without Termination of
Employment .
(a)
Upon giving the Company no less than 90 days’ advance written
notice, at any time during the Term, Executive may for any reason
relinquish Executive’s responsibilities as PM and continue
thereafter to perform only the duties of CIO or Co-CIO, in which
case: (i) Executive shall be entitled to receive PM Compensation,
on the terms and conditions set forth in Section 3(c) above, only
through the effective date of Executive’s relinquishment of
Executive’s
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responsibilities as PM; and (ii) with respect
to Executive’s work following the effective date of
Executive’s relinquishment of Executive’s
responsibilities as PM, Executive shall be entitled only to
Executive’s Annual Base Salary and CIO
Compensation.
(b)
Upon giving Executive no less than 15 days’ advance written
notice, at any time during the Term, the Company may for any reason
discontinue Executive’s services as a PM and request that
Executive thereafter continue to perform only the duties of CIO or
Co-CIO, in which case:
(i)
Executive shall be entitled to receive PM Compensation, on the
terms and conditions set forth in Section 3(c) above, through the
effective date of Executive’s relinquishment of
Executive’s responsibilities as PM; and
(ii)
no later than 90 days following the effective date of the
discontinuation of Executive’s services as a PM, Executive
may, in Executive’s discretion, elect to either:
(A)
give the Company no less than 30 days prior written notice of
Executive’s resignation of employment with the Company and
its affiliates, and Executive shall thereafter be eligible to
receive the severance benefits set forth in Section 7(c) below,
conditioned upon Executive’s execution of the
Non-Solicitation Legal Release defined in such section; or
(B)
if but only if the Company’s discontinuation of
Executive’s services as a PM and request that Executive
thereafter continue to perform only the duties of CIO or Co-CIO
becomes effective before January 1, 2009, then Executive may
continue serving as CIO or Co-CIO, in which case the Parties shall
negotiate in good faith concerning an amended compensation
arrangement such that Executive’s removal from the PM role
shall not reduce Executive’s total target compensation
minimum (as set forth in Section 3(d)) during the remainder of the
Initial Term of this Agreement (ending December 31, 2008); provided
that in the absence of an alternative, mutually agreed upon amended
compensation arrangement, if Executive makes an election under this
Section 5(b)(ii)(B), then Executive shall, beginning on the date
immediately after Executive’s last day of eligibility to earn
PM Compensation (the “ PM Transition Date ”), be
entitled to “ Special Transitional Compensation
,” payable quarterly during the remainder of the Initial Term
of this Agreement (ending December 31, 2008) and subject to the LTI
award component granted annually, at a rate equal to the quarterly
PM Compensation payment earned by Executive for the last full
calendar quarter before the PM Transition Date, but subject to the
satisfaction of all applicable Section 162(m) Criteria.
6.
Termination of Employment During Term .
(a)
Death or Disability . Executive’s employment
shall terminate automatically upon Executive’s death during
the Term. If the Company determines in good faith that a
disability of Executive has occurred during the Term, it may
provide to Executive written notice in accordance with Section
13(b) of this Agreement of its intention to terminate
Executive’s employment. In such event,
Executive’s employment with the Company shall terminate
effective on the 90th day after receipt of such notice by Executive
(the “ Disability
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Effective Date ”), unless,
within the 90 days after the receipt of such notice, Executive has
returned to full-time performance of Executive’s
duties. For purposes of this section, disability shall be as
defined under, and Executive must comply with, the Company’s
then-current long-term disability policy. Notwithstanding any
other provision of this Agreement, the Company’s appointment
of an interim PM during any period during which the Company
determines in its reasonable discretion that Executive is unable
because of mental or physical illness to manage the investment
portfolio(s) then managed by Executive shall not constitute Good
Reason for purposes of Section 6(f) of this Agreement.
(b)
Termination Without Cause . Subject to its obligations
under Sections 7(a) and 7(d) below, at any time during the Term the
Company may terminate Executive’s employment without Cause
upon written notice to Executive.
(c)
Termination for Cause . The Company may terminate
Executive’s employment during the Term for Cause.
(d)
For purposes of this Agreement, “ Cause ” shall
mean:
(i)
the willful and continued failure by Executive to substantially
perform Executive’s duties with the Company (other than any
such failure resulting from Executive’s incapacity due to
physical or mental illness) that has not been cured within 30 days
after the Company delivers to Executive a written demand for
substantial performance, which demand specifically identifies the
manner in which the Company believes that Executive has not
substantially performed Executive’s duties;
(ii)
Executive’s willful engagement in conduct which is
demonstrably and materially injurious to the Company, monetarily or
otherwise;
(iii)
Executive’s material breach of any material provision of this
Agreement (including without limitation the covenants set forth in
Section 10 below) that has not been cured within 30 days after a
written demand for substantial performance is delivered to
Executive, which demand specifically identifies the manner in which
the Company believes that Executive has materially breached any
material provision of this Agreement; or
(iv)
Executive’s conviction of a felony (other than a traffic
related felony) or a guilty or nolo contendere plea by Executive
with respect thereto.
(e)
Executive’s termination of employment shall not be deemed to
be for Cause unless and until Executive has received a copy of a
resolution duly adopted by the affirmative vote of not less than
two-thirds of the entire membership of the JCG Board at a meeting
of the JCG Board called and held for such purpose (after Executive
is provided with reasonable notice to Executive and Executive is
given an opportunity, together with counsel, to be heard before the
JCG Board), finding that, in the good faith opinion of the JCG
Board, Executive is guilty of the conduct described in the
definition of Cause, and specifying the particulars thereof in
detail. For purposes of clauses (i) and (ii) of the preceding
definition, no act, or failure to act, on Executive’s part
shall be deemed “ willful ” unless done, or
omitted to be done, by Executive not in good faith and without
reasonable belief that Executive’s 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
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JCG
Board or the CEO 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 Executive in good
faith and in the best interests of the Company.
(f)
Good Reason . Subject to Sections 6 and 7, the
Executive’s employment may be terminated by Executive for
Good Reason. For purposes of this Agreement, “ Good
Reason ” shall mean in the absence of a written consent
of Executive:
(i)
the involuntary removal of Executive by the Company from
Executive’s position as CIO or Co-CIO;
(ii)
a material and non-temporary reduction in Executive’s
authority or duties that changes the fundamental character of
Executive’s job to such an extent as to constitute a de facto
demotion, or actual demotion, including the reassignment of
Executive to a role that is inconsistent with Executive’s
responsibilities as a PM or Co-CIO that materially and adversely
alters Executive’s status as PM or Co-CIO, but excluding for
this purpose: (A) the appointment of another Co-CIO (which
shall have the rights and consequences set forth in Section 7(e)
below); (B) any assignment of Executive to a mutual fund or
portfolio with a smaller amount of assets under management that may
result in reduced compensation, so long as Executive remains as a
PM; (C) any action not taken in bad faith and that is remedied by
the Company within 30 days after receipt of written notice of the
material reduction in Executive’s authority or duties given
by Executive as provided in Section 6(h) below; (D) any mere change
of JCG’s, JCM’s or the Company’s organizational
chart; (E) any mere change in title so long as the fundamental
character of Executive’s job is not changed to such an extent
as to constitute a de facto demotion; and (F) the mere fact that
JCG’s stock ceases to be publicly traded;
(iii)
the relocation of Executive’s principal place of employment
to a location more than 40 miles from Executive’s current
principal place of employment;
(iv)
during the Term, but prior to a “ change in control
” (as defined in the Executive Change in Control Agreement),
a substantial adverse change to the methodology used to calculate
Executive’s PM Compensation or CIO Compensation;
(v)
during the Term, but prior to a “ change in control
” (as defined in the Executive Change in Control Agreement),
a reduction in Executive’s Annual Base Salary or a reduction
in the established minimums for CIO Compensation, provided that
such compensation must satisfy the Section 162(m) Criteria and
therefore a failure to satisfy such Section 162(m) Criteria will
not trigger this Section 6(f)(v);
(vi)
the Company’s failure to cure, within 30 days, a material
failure to pay or provide to Executive any sum or benefit specified
by or due under this Agreement or the Executive Change in Control
Agreement;
(vii)
removal from the Executive Committee (other than in connection with
Executive’s removal from the role of CIO or Co-CIO in
accordance with Section 4 above); or
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(viii)
non-renewal of the Executive Change in Control Agreement other than
in connection with the termination or non-renewal of the Executive
Change in Control Agreement for similarly situated Peer
Executives.
Executive’s mental or physical incapacity
following the occurrence of an event described above in clause (i)
through (viii) shall not affect Executive’s ability to
terminate employment for Good Reason.
(g)
Sunset on Right to Terminate for Good Reason . If
circumstances arise giving Executive the right to terminate this
Agreement for Good Reason, Executive shall within 60 days after
Executive knew or should have known of such circumstances 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
Executive shall have an additional 30 days within which to exercise
the right to terminate for Good Reason. If Executive does not
timely do so the right to terminate for Good Reason shall lapse and
be deemed waived, and Executive shall not thereafter have the right
to terminate for Good Reason unless further circumstances occur
giving rise independently to a right to terminate for Good Reason,
in which case the provisions of this Section 6(g) 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. The 60 and 30
day periods specified above for Executive to give notice or
exercise Executive’s right to terminate for Good Reason,
respectively, shall be tolled for any period not exceeding 90 days
in the aggregate during which a properly qualified physician
certifies that Executive is medically incapacitated from performing
Executive’s duties hereunder.
(h)
Notice of Termination . Any termination by the Company
for Cause, or by Executive for Good Reason, shall be communicated
by Notice of Termination to the other party hereto given in
accordance with Section 6(g) of this Agreement. For purposes
of this Agreement, a “ Notice of Termination ”
means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
Executive’s employment under the provision so indicated, and
(iii) if the Date of Termination (as defined below) is other than
the date of receipt of such notice, specifies the termination date
(which date shall be not more than thirty days after the giving of
such notice). The failure by Executive or the Company to set
forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not
constitute a waiver of any right of Executive or the Company,
respectively, hereunder or preclude Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing
Executive’s or the Company’s rights hereunder.
(i)
Date of Termination . “ Date of
Termination ” means (i) if Executive’s employment
is terminated by the Company for Cause, or by Executive for Good
Reason, the date of receipt of the Notice of Termination or any
later date specified therein within 30 days of such notice, as the
case may be, (ii) if Executive’s employment is terminated by
the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies
Executive of such termination and (iii) if Executive’s
employment is terminated by reason of death or Disability, the Date
of Termination shall be the date of death of Executive or the
Disability Effective Date, as the case may be.
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7.
Obligations of the Company Upon Termination . Except
for the Accrued Obligations set forth below or as otherwise
expressly specified in this Agreement, Executive’s right to
severance and/or welfare benefits under any subsection of this
Agreement cannot be cumulated with any right to severance or
welfare benefits arising under any other subsections of this
Agreement. Accordingly, the Parties agree that Executive
shall only be entitled to severance benefits under only one
subsection of this Agreement in connection with any event of
termination or change in duties. In addition and
notwithstanding anything to the contrary in this Agreement, if any
amounts payable to the Executive under this Section 7 cannot be
paid in the manner provided for in this Agreement without
subjecting the Executive or the Company to additional tax, interest
or penalties under Section 409A of the Internal Revenue Code, any
such payment which is payable during the first six months following
the Executive’s termination of employment shall be made in a
lump-sum payment within the first ten (10) business days of the
seventh calendar month immediately following the month in which
Executive’s date of termination occurs.
(a)
Upon any termination of Executive’s employment, the Company
shall pay to Executive, in a lump sum in cash within 30 days after
the Date of Termination, the sum of
(i)
Executive’s Annual Base Salary through the Date of
Termination; and
(ii)
any fully earned and vested but yet unpaid CIO Compensation and PM
Compensation through the Date of Termination (collectively “
Accrued Obligations ”).
(b)
Death or Disability . If, Executive’s employment
is terminated by reason of Executive’s death or disability
during the Term, the Company will pay to Executive or
Executive’s estate or beneficiaries (as applicable) the full
amount of any Accrued Obligations and an amount equal to
Executive’s total cash compensation earned in the four (4)
full calendar quarters immediately prior to the date of death or
disability, as the case may be.
(c)
Termination as PM by Company (but not CIO or Co-CIO) and
Executive Elects to Terminate Employment . If Executive
terminates Executive’s employment under Section 5(b), then
conditioned upon Executive’s execution (and non-revocation)
of a legal release in substantially the form attached hereto as
Exhibit B (the “ Non-Solicitation Legal Release
”), the Company will:
(i)
pay to Executive, in a lump sum cash payment, severance
compensation in an amount equal to Executive’s total cash
compensation earned by Executive as a PM ( i.e. ,
Executive’s Annual Base Salary and PM Compensation) for the
four (4) full calendar quarters immediately prior to the Date of
Termination;
(ii)
make available to Executive three (3) months of outplacement
services at no cost to Executive through a provider of such
services selected by the Company to be used by Executive at any
time during the applicable non-solicitation restriction period;
and
(iii)
arrange to provide Executive and Executive’s dependents with
medical, dental and vision insurance benefits substantially similar
to those provided to Executive and Executive’s dependents
immediately prior to the Date of Termination; provided that
benefits
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otherwise receivable under this paragraph will
be reduced to the extent benefits of the same type are received by
or made available to Executive during the twelve (12) month period
following Executive’s Date of Termination of employment
(which such benefits Executive undertakes to promptly report to the
Company); and provided further that any such health insurance
benefits shall run concurrently with and will be offset against any
continuation coverage under Part 6 of Title I of Employee
Retirement Income Security Act of 1974, as amended.
(d)
Termination by Company Without Cause or by Executive for Good
Reason . If, during the Term, the Company terminates
Executive’s employment without Cause or Executive resigns
Executive’s employment for Good Reason, then, conditioned
upon Executive’s execution (and non-revocation) of a
Non-Solicitation Legal Release, the Company will:
(i)
pay Executive, in a lump sum within 14 business days following the
Date of Termination, an amount equal to one times the
Executive’s Annual Base Salary, plus the greater of: (A) one
year of CIO Compensation at the mid-range of target compensation
for the calendar year of termination, or (B) the remaining total
CIO Compensation calculated at the mid-range of target compensation
for the initial two-year Term of this Agreement to the extent then
unpaid (for purposes of this Section 7(d)(i), CIO Compensation
shall include all cash and non-cash compensation, including the
cash value of the LTI component, if any, of CIO Compensation);
(ii)
make available to Executive three (3) months of outplacement
services at no cost to Executive through a provider of such
services selected by the Company to be used by Executive at any
time during the applicable non-solicitation restriction period;
and
(iii)
arrange to provide Executive and Executive’s dependents with
medical, dental and vision insurance benefits substantially similar
to those provided to Executive and Executive’s dependents
immediately prior to the Date of Termination; provided that
benefits otherwise receivable under this paragraph will be reduced
to the extent benefits of the same type are received by or made
available to Executive during the twelve (12) month period
following Executive’s Date of Termination of employment
(which such benefits Executive undertakes to promptly report to the
Company); and provided further that any such health insurance
benefits shall run concurrently with and will be offset against any
continuation coverage under Part 6 of Title I of Employee
Retirement Income Security Act of 1974, as amended.
(e)
Appointment of Additional Co-CIO(s) . If during the
Term another person is appointed to serve as Co-CIO (other than
Richard Gibson Smith) and the new appointee’s duties overlap
to any material extent with Executive’s duties as Co-CIO as
of the time immediately before the appointment, then upon 60 days
prior written notice, Executive may, at Executive’s option,
either: (i) relinquish Executive’s role as a Co-CIO and
Executive shall return to the role of a PM, managing such
portfolios as Executive managed immediately before
Executive’s election under this Section 7(e)(i) or one or
more other portfolios with at least a comparable amount of assets
under management; or (ii) resign Executive’s employment with
the Company (a “ Special Resignation ”).
In the event of a Special Resignation, conditioned upon
Executive’s execution (and non-revocation) of a
Non-Solicitation Legal Release, the Company shall pay Executive, in
a lump sum within 14 business days following the Date of
Termination, a Special Resignation cash payment equal to
$2,000,000.
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(f)
Change in
Control . Executive’s rights and the
Company’s obligations to make any compensation or severance
payments after a change in control of JCG shall be provided for and
subject to the terms of the Executive Change in Control Agreement
entered into by Executive and the Company, and such Executive
Change in Control Agreement shall supersede any conflicting terms
or agreements; provided however, the parties agree that the
Executive Change in Control Agreement during its term shall not
cause the reduction of any compensation or benefits that are
provided for in this Agreement. To the extent that severance benefits become
payable under the Executive Change in Control Agreement, no
severance benefits will be payable pursuant to this
Agreement.
(g)
Cause . If the Executive’s employment shall be
terminated for Cause during the Term, this Agreement shall
terminate without further obligations to the Executive other than
the obligation to pay to the Executive the Accrued Obligations to
the extent theretofore unpaid.
(h)
Voluntary Departure by Executive (Not for Good Reason) with
Non-Compete Obligations . If, during the Term, the
Executive voluntarily decides to end his employment with the
Company (not for Good Reason under Section 6(f)) and is in
“good standing,” then, conditioned upon
Executive’s execution (and non-revocation) of a
two-year non-compete including the terms set forth in the
Non-Solicitation Legal Release substantially in the form attached
as Exhibit C (collectively, the “ Non-Compete
Release ”), all unvested equity long-term incentive
awards granted to Executive on or after December 30, 2004 (“
equity long-term incentive awards ” shall include
without limitation unvested shares of Janus restricted stock,
unvested options to purchase Janus stock, and awards consisting of
unvested mutual fund share investment units) will continue to vest
and/or be paid, as applicable, in accordance with the original
vesting schedule provided for in the applicable award agreement,
and any stock options will, from and after such vesting, remain
exercisable for the remainder of their respective terms, subject to
compliance with the terms of the above Non-Compete Release and as
limited by the terms of the agreement(s), certificate(s) and/or
incentive plans underlying each such grants; provided however, any
vesting events scheduled to occur for the applicable long-term
incentive awards during the two-year, non-compete period will not
be delivered or transferred to Executive until the expiration of
such two year period and Executive’s satisfactory compliance
with the Non-Compete Release, subject to applicable tax withholding
obligations of the Janus Entities. The Company may elect in
its sole discretion to accelerate the vesting of any unvested
equity award granted to Executive after the two-year, non-compete
period but prior to the completion of its original vesting
schedule. For purposes of this subsection, “ good
standing ” shall mean that the CEO has approved the
continuation of vesting and has certified that Executive has not
engaged in any conduct, action or omission that would constitute
grounds for terminating Executive’s employment for Cause.
(i)
Termination at the End of the Term or Thereafter . If
the Executive’s employment shall terminate for any reason at
the end of the Term or thereafter, the Company shall pay to the
Executive the Accrued Obligations to the extent theretofore
unpaid.
(j)
Excise Tax . Notwithstanding any other language to the
contrary in this Agreement or in this Section 7, 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
13
Section 280G(b)(2) of the Internal Revenue Code
to the benefit of Executive otherwise due or payable Executive
under this Agreement or this Section 7 if that portion would cause
any excise tax imposed by Section 4999 of the Internal Revenue Code
to become due and payable by Executive.
8.
Non-Exclusivity of Rights . Except as otherwise
specifically provided in this Agreement, nothing in this Agreement
shall prevent or limit Executive’s continuing or future
participation in any plan, program, policy or practice provided by
the Company for which Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as Executive may have
under any contract or agreement with the Company or any of its
affiliated companies. Amounts which are vested benefits,
which consist of any compensation previously deferred by Executive,
or which Executive is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement with
the Company 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 any other provision of this Agreement, Executive
shall not be entitled to receive any payments or benefits under any
severance program other than that which are described and
anticipated under this Agreement or under any Change of Control
Agreement.
9.
Full Settlement . The Company’s obligation to
make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall be subject to any lawful
indebtedness owed by Executive to the Company, and to any valid
legal claim for set-off or recoupment. In no event shall
Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to Executive
under any of the provisions of this Agreement and, such amounts
shall not be reduced whether or not Executive obtains other
employment.
10.
Restrictive Covenants .
(a)
Executive acknowledges that Executive’s employment as a
senior officer of the Company and JCM creates a relationship of
confidence and trust between Executive and the Company and its
Affiliates (as defined below) (collectively “ Janus
Entities, ” individually, a “ Janus Entity
”) with respect to confidential and proprietary information
applicable to the business of the Janus Entities and their
clients. Executive further acknowledges the highly
competitive nature of the business of the Janus Entities.
Accordingly, it is agreed that the restrictions contained in this
Agreement are reasonable and necessary for the protection of the
interests of the Janus Entities and that any violation of these
restrictions would cause substantial and irreparable injury to the
Janus Entities.
14
(b)
Protection of Confidential Information .
(i)
Definition of Confidential Information . “
Confidential Information ” means all information
(whether in paper or electronic form, contained in
Executive’s memory, or otherwise stored or recorded) relating
to or arising from a Janus Entity’s business operations,
plans, products, strategies, employees, clients, relationships, or
compensation programs, including, without limitation, trade secrets
used, developed or acquired by a Janus Entity in connection with
its business. “Confidential Information” does not
include information that is in the public domain through no
wrongful act on the part of Executive, nor does it include
information, knowledge and know-how already within
Executive’s possession or memory before Executive’s
employment with a Janus Entity or one of its predecessors.
(ii)
Executive’s Use of Confidential Information .
Except in connection with and in furtherance of Executive’s
work on a Janus Entity’s behalf, Executive shall not, without
the Company’s prior written consent, at any time, directly or
indirectly: (a) use any Confidential Information for any purpose;
or (b) disclose or otherwise communicate any Confidential
Information to any person or entity.
(iii)
Records Containing Confidential Information . “
Confidential Records ” means all documents and other
records, whether in paper, electronic or other form, that contain
or reflect any Confidential Information. All Confidential
Records prepared by or provided to Executive are and shall remain
the Janus Entities’ property. Except in connection with
and in furtherance of Executive’s work on a Janus
Entity’s behalf or with a Janus Entity’s prior written
consent, Executive shall not, at any time, directly or indirectly:
(a) copy or use any Confidential Record for any purpose; or (b)
show, give, sell, disclose or otherwise communicate any
Confidential Record or the contents of any Confidential Record to
any person or entity. Upon the termination of
Executive’s employment with the Company, or upon a Janus
Entity’s request, Executive shall immediately deliver to the
Company or its designee (and shall not keep in Executive’s
possession or deliver to any other person or entity) all
Confidential Records and all other Janus Entity property in
Executive’s possession or control.
(c)
Noninterference Covenants . During
Executive’s employment with the Company, and for a period of
one year following the Date of Termination for any reason,
Executive shall not (nor shall Executive cause, encourage or
provide assistance to, anyone else to):
(i)
interfere with any relationship which may exist from time to time
between a Janus Entity and any of its employees, consultants,
agents or representatives; or
(ii)
employ or otherwise engage, or attempt to employ or otherwise
engage, in or on behalf of any Competitive Business, any person who
is employed or engaged as an employee, consultant, agent or
representative of a Janus Entity, or any person who was employed or
engaged as an employee, consultant, agent or representative of a
Janus Entity within the six month period immediately preceding the
Date of Termination; or
15
(iii)
solicit directly or indirectly on behalf of Executive or a
Competitive Business, the customer business or account of any
investment advisory or investment management client to which a
Janus Entity shall have rendered service during the six month
period immediately preceding the Date of Termination; or
(iv)
directly or indirectly divert or attempt to divert from a Janus
Entity any business in which a Janus Entity has been actively
engaged during the term hereof or interfere with any relationship
between a Janus Entity and any of its clients.
(d)
Definitions
(i)
“ Competitive Business ” means any business that
provides investment advisory or investment management services.
(ii)
“ Affiliate ” means any corporation,
partnership, limited liability company, trust, or other entity
which controls, is controlled by or is under common control with
the Company.
(e)
If any court of competent jurisdiction shall determine that the
duration, geographic limitations, subject or scope of any
restriction contained in this Agreement is unenforceable, it is the
intention of the parties that this Agreement shall not thereby be
terminated but shall be deemed amended to the extent required to
make it valid and enforceable.
(f)
Executive acknowledges that these restrictive covenants are
reasonable and that irreparable injury will result to the Company
and to its business and properties in the event of any breach by
Executive of any of those covenants, and that Executive’s
continued employment is predicated on the commitments undertaken by
Executive pursuant to this Agreement. In the event any of the
covenants are breached, the Company shall be entitled, in addition
to any other remedies and damages available, to injunctive relief
to restrain the violation of such covenants by Executive or by any
person or persons acting for or with Executive in any capacity
whatsoever.
11.
Successors .
(a)
This Agreement is personal to Executive and without the prior
written consent of the Company shall not be assignable by Executive
otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of
and be enforceable by Executive’s legal representatives.
(b)
This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(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. As used in
this Agreement, “ Company ” shall mean the
Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law or otherwise.
16
12.
Indemnification and Directors and Officers’ Insurance
.
(a)
The Company shall indemnify Executive to the fullest extent
permitted under law from and against any expenses (including but
not limited to reasonable attorneys’ fees, expenses of
investigation and preparation and fees and disbursements of
Executive’s accountants or other experts), judgments, fines,
penalties and amounts paid in settlement actually and reasonably
incurred by Executive in connection with any proceeding in which
Executive was or is made party or was or is involved (for example,
as a witness) by reason of the fact Executive was or is employed by
the Company, including advancement of payments of such expenses as
provided for by law.
(b)
Executive’s right to indemnification under this Section 12 is
subject to:
(i)
the Company promptly receiving written notice that a claim or
liability has been asserted or threatened (“ Notice of
Claim ”);
(ii)
the Executive providing reasonable cooperation and assistance in
the defense or settlement of a claim; and
(iii)
the Company being afforded the opportunity to have the sole control
over the defense or settlement of such claim or liability, subject
to Executive consent and approval of settlement if such settlement
directly impacts Executive, including requiring him to personally
pay claims that cannot be reimbursed by the Company, or negatively
impacting Executive’s professional licenses or
certifications.
(c)
Unless within ten days after receiving the Notice of Claim, the
Company notifies in writing the Executive of its intent to defend
against such claim or liability, the Executive 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. Executive also may participate in such defense at
his own cost and expense.
(d)
Such indemnification shall continue as to Executive during the Term
and for ten years from the Date of Termination with respect to acts
or omissions which occurred prior to Executive’s cessation of
employment with the Company and shall inure to the benefit of
Executive’s heirs, executors and administrators. The
Company shall advance to Executive all costs and expenses incurred
by Executive 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 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.
(e)
The Company agrees to continue and maintain directors’ and
officers’ liability insurance policies covering Executive to
the extent that the Company provides such coverage for the Peer
Executives. Such insurance coverage shall continue as to
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 Executive’s cessation of employment with
the Company. Notwithstanding the foregoing, however, if the
Company shall cease to maintain directors’ and
officers’ liab
