Exhibit 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of the Effective
Date specified below (this “Agreement”) by and between
Janus Capital Group Inc., a Delaware corporation (the
“Company”), and Gary D. Black (the
“Executive”).
Recitals
1.
Executive has been employed by the Company pursuant to an
Employment Agreement effective as of April 28, 2004 (the
“Original Agreement”).
2.
Executive has been duly appointed to serve, effective as of January
1, 2006, as the Company’s Chief Executive Officer
(“CEO”), while retaining his previous title and duties
as Chief Investment Officer.
3.
In connection with Executive’s assumption of the position and
duties of the Company’s CEO, Executive and the Company wish
to amend and restate the Original Agreement in its
entirety.
Agreement
Executive and the Company agree as
follows.
1.
Effective Date . The “Effective Date”
shall mean September 25, 2006. As of the Effective Date, the
Original Agreement shall be deemed superseded by this Agreement,
and shall thereafter be of no further force or effect; provided
however, any existing long term incentive award and deferred
compensation agreements, including but not limited to Long-Term
Incentive Compensation award, Special Restricted Stock Award,
Non-Qualified Stock Option Award, Management Incentive Mutual Fund
Share Award, and the Fund Performance Incentive Award will remain
in full force and effect. In all respects, the terms and
conditions of Executive’s employment with the Company prior
to the Effective Date shall be governed by the Original
Agreement.
2.
Employment Period . The Company hereby agrees to
employ the Executive, and the Executive hereby agrees to commence
and then remain in the employ of the Company, on the terms and
subject to the conditions of this Agreement, for the period
commencing on the Effective Date and ending on April 30, 2008 (the
“Initial Period”). Following the Initial Period,
this Agreement shall automatically renew for one-year periods
(“Renewal Period”), unless either party gives notice of
non-renewal at least 90 days prior to the end of the Initial Period
or any Renewal Period, as applicable. For purposes of this
Agreement, the “Employment Period” shall include the
Initial Period and any subsequent Renewal Period.
3.
Terms of Employment .
(a)
Position and Duties .
(i)
During the Employment Period the Executive shall serve as the
Company’s Chief Executive Officer and Chief Investment
Officer, with duties, authorities and responsibilities commensurate
with such titles and offices. The Executive shall be a member of
the Company’s senior-most management body, which as of the
Effective Date was the Company’s Executive Committee
(“EC”), and shall remain on the Company’s Board
of Directors (the “Board”) subject to the
Company’s Bylaws and applicable shareholder approval. At his
discretion, but only with the concurrence of the Board, the
Executive may designate another to assume the responsibilities of
Chief Investment Officer.
(ii)
During the Employment Period, and excluding any periods of
disability and vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote substantially all of his
attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge
the Executive’s responsibilities hereunder, to use the
Executive’s reasonable best efforts to perform 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; all 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; and, in the case of
Executive’s management of his personal investments, so long
as all such personal investment management activities comply with
the Company’s personal trading policies and, otherwise, with
applicable law.
(b)
Compensation .
(i)
Base Salary . From January 1, 2006 to the end of his
Employment Period, the Executive shall receive an annual base
salary (“Annual Base Salary”) of no less than
$800,000. The Annual Base Salary shall be reviewed by the
Compensation Committee (the “Committee”) of the
Company’s Board of Directors (the “Board”) no
less frequently than annually and may be increased (but not
decreased) at the discretion of the Committee or the Board.
If the Executive’s Annual Base Salary is increased, the
increased amount shall be the Annual Base Salary for the remainder
of the Employment Period, and shall be reviewed by the Committee no
less frequently than annually and may be increased (but not
decreased) at the discretion of the Committee or the Board.
The Annual Base Salary shall be payable in installments less
legally required withholdings, consistent with the Company’s
payroll procedures in effect from time to time, provided that such
installments shall be no less frequent than monthly.
(ii)
Annual Bonus . In addition to the Annual Base Salary,
the Executive shall be eligible to earn, for each calendar year
ending during the Employment Period, an annual bonus (an
“Annual Bonus”) on terms and conditions, including
performance goals, as set forth in the Total Variable Compensation
Plan (the “Bonus Plan”) approved by the Company’s
Compensation Committee at periodic meetings of that
Committee. The Committee shall annually certify, to the
extent required by Section 162(m) of the Internal Revenue Code of
1986,
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as amended (the “Code”),
whether the Executive has met the performance goals necessary for
the payment of an Annual Bonus and in the amount calculated under
the Bonus Plan. Subject to Paragraph 3(b)(xv), below, as of
December 31, 2006, the Executive shall have the irrevocable right
to receive his target Annual Bonus for his work in calendar year
2006, Executive’s target Annual Bonus shall be no less than
$4,000,000 and his Annual Bonus shall be made in 2007 on the same
payment schedule that applies to other members of the EC (the
“Peer Executives). The Executive’s target for
future calendar years shall be reviewed and determined by the
Committee no less frequently than annually.
(iii)
Long-Term Incentive Compensation . At the discretion
of the Committee, the Executive shall be entitled to participate in
the Company’s long term incentive (“LTI”)
compensation arrangements 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. LTI awards may in
the Company’s discretion be granted in the form of stock
options, restricted stock, stock units, Janus fund units, or any
combination thereof. The Committee shall annually certify, to
the extent required by Section 162(m) of the Code, whether the
Executive has met the performance goals necessary for the payment
of a LTI award and in the amount determined by the Committee;
provided however and subject to Paragraph 3(b)(xv) below, as of
December 31, 2006, the Executive shall have the irrevocable right
to receive his target LTI award for his work in the calendar year
2006 and his LTI award(s) shall be granted on a date in 2007,
when such awards are customarily made to other Peer Executives, and
in such year Executive’s target LTI award shall be valued at
no less than $2,700,000. The Executive’s target for
future calendar years shall be reviewed and determined by the
Committee no less frequently than annually.
(iv)
Special Restricted Stock Award . Nothing herein shall
affect in any way the Special Restricted Stock Award granted to
Executive under Paragraph 3(b)(iv) of the Original Agreement, which
award shall remain in full force and effect in accordance with the
terms of the documents pursuant to which that award was
granted.
(v)
Non-Qualified Stock Option Award . Nothing herein
shall affect in any way the Non-Qualified Stock Option Award
granted to Executive under Paragraph 3(b)(v) of the Original
Agreement, which award shall remain in full force and effect in
accordance with the terms of the documents pursuant to which that
award was granted.
(vi)
Management Incentive Mutual Fund Share Award . Nothing
herein shall affect in any way the Management Incentive Mutual Fund
Share Award granted to Executive under Paragraph 3(b)(vi) of the
Original Agreement, which award shall remain in full force and
effect in accordance with the terms of the documents pursuant to
which that award was granted.
(vii)
Fund Performance Incentive . The Executive shall be
eligible to receive a special one-time fund performance incentive
award (a “Fund Performance Award”) based on the average
asset-weighted performance of all branded funds, institutional
separate accounts, sub-advised funds and commingled pools managed
or advised by the Company or its affiliates (collectively,
“Company Funds”) during the two and three-fourths year
period beginning April 1, 2004, and ending on December 31, 2006
(the “Performance Measurement Period”), as well as the
performance, during the Performance Measurement Period, of the
Janus Fund, Janus
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Twenty Fund and Janus Worldwide Fund
(such three funds to be collectively referred to as the
“Flagship Funds”), as follows:
(A)
If during the Performance Measurement Period the asset-weighted
average performance of all Company Funds exceeds the 40
th percentile as compared to peer-group
funds, measured by Lipper; and if the at the end of the Performance
Measurement Period the then-current performance of one, two or
three of the Flagship Funds exceeds the 40 th percentile as compared to peer-group
funds, measured by Lipper; and if Executive remains actively
employed by the Company as of the end of the Performance
Measurement Period, then the Company shall grant the Executive a
Fund Performance Award in the following amount: (x) if at the end
of the Performance Management Period one Flagship Fund’s
then-current performance meets or exceeds the 40
th percentile, then the Fund Performance
Award shall be valued at $2 million; and (y) if at the end of the
Performance Management Period two Flagship Funds’
then-current performance meets or exceeds the 40
th percentile, then the Fund Performance
Award shall be valued at $4 million; and (z) if at the end of the
Performance Management Period three Flagship Funds’
then-current performance meets or exceeds the 40
th percentile, then the Fund Performance
Award shall be valued at $6 million. Without limiting the
foregoing and for purposes of illustration only, if the
asset-weighted average performance of all Company Funds during the
Performance Measurement Period is in the 23rd percentile, the
performance of the Janus Fund at the end of the Performance
Measurement Period is in the 21st percentile and the performance of
the remaining two Flagship Funds at the end of the Performance
Management Period is below the 40 th percentile, then the Executive’s
Fund Performance Incentive would have a value of $2 million,
whereas if the asset-weighted average performance of all Company
Funds during the Performance Measurement Period is in the 31st
percentile, but the performance, at the end of the Performance
Management Period, of each of the three Flagship Funds is not at
least in the 40 th percentile, then Executive would be
entitled to no Fund Performance Incentive. No Fund
Performance Incentive shall be payable unless each and every
condition of this Paragraph is fully met. Without limiting
the generality of the foregoing, no pro rata or partial Fund
Performance Award shall be payable under any circumstances.
For clarity, as used in this Agreement: percentile references
for the Company Funds generally shall be computed on an
asset-weighted basis across all Company Funds; and shall refer to
the top, not bottom percentile, so, for example, performance in the
40 th percentile refers to performance in the
top 40 percent.
(B)
Any Fund Performance Award shall be made in the form of shares in
Janus-branded mutual fund(s), issued as follows. The Company
shall issue a payroll payment to Executive in the gross amount of
the Fund Performance Incentive earned by Executive, withhold
required taxes, and deposit the after-tax remainder in such
Janus-branded mutual fund(s) as Executive directs (subject to
applicable law, the terms of the applicable prospectus(es) and
Company policies governing personal investment activities).
The Fund Performance Award shall be fully vested as of the date of
the award but shall be subject to a two-year holding period (which
two year holding period shall exist only if the Executive is
employed by the Company during that two year period) during which,
subject to applicable law, fund prospectus terms and written
Company
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policies concerning personal
investment activities, the Executive shall have the right to
self-direct the investment of the shares comprising the Fund
Incentive Award and any appreciation thereon among Janus-branded
mutual fund(s) of Executive’s choosing, subject only to
applicable law, fund prospectus terms and Company policies
governing personal investment activities, but shall not have the
right to redeem or otherwise withdraw or transfer the shares
comprising the Fund Incentive Award or any appreciation or
derivative thereof. If the Executive is no longer employed by
the Company at the beginning of, or during the two year holding
period, such restrictions shall not apply.
(viii)
Office and Executive Assistant . During
the Employment Period, the Company shall pay reasonable expenses
associated with Executive’s maintenance of an office and
employment of an executive assistant in the New York metropolitan
area.
(ix)
Incentive, Savings and Retirement Plans . During the
Employment Period, the 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.
(x)
Welfare Benefit Plans . During the Employment Period,
the Executive and the 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,
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. Following the Employment Period, the
Executive and the Executive’s spouse and dependents, shall be
eligible for participation in, and shall receive all benefits under
the Company’s or its affiliates’ Health Benefits For
Retirees Plan, subject to the terms of such plan and unless such
plan is modified or terminated by the Company with respect to the
Peer Executives.
(xi)
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 Company’s most favorable policies, practices and
procedures in effect for Peer Executives.
(xii)
Fringe Benefits . During the Employment Period, the
Executive shall be entitled to fringe benefits on the same basis as
those provided generally at any time thereafter to the Peer
Executives. Without limitation, such benefits shall include
periodic use of the Company’s corporate jet, if any, for
business purposes in accordance with the Company’s policies
and practices.
(xiii)
Vacation . During the Employment Period, the 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, but in no event less than four
weeks.
(xiv)
Relocation Benefit . If Executive notifies the Company
in writing of his intention to relocate his primary personal
residence to the Denver, Colorado metropolitan area during the
Employment Period in connection with is employment by the Company,
Executive shall be eligible for a relocation benefit under the
Company’s executive relocation program.
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(xv)
Section 162(m) Performance Criteria . The Parties
acknowledge and agree that compensation payable to Executive under
this Agreement, including without limitation cash (other than his
Annual Base Salary) and any long-term incentive awards, 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 benchmarks (the “Performance
Criteria”). The Performance Criteria shall be
established in the reasonable discretion of the Compensation
Committee after consultation with Executive during the first
calendar quarter for the applicable calendar year.
(xvi)
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. The Executive agrees to use his best efforts to
ensure satisfaction of all such withholding requirements, and shall
execute all documents and take all action reasonably deemed
necessary by the Company to ensure compliance with all such
withholding requirements.
4.
Termination of Employment .
(a)
Death or Disability . The Executive’s employment
shall terminate automatically upon the Executive’s death
during the Employment Period. If the Company determines in
good faith that the Disability of the Executive has occurred during
the Employment Period (pursuant to the definition of Disability set
forth below), it may provide to the Executive written notice in
accordance with Paragraph 11(b) of this Agreement 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 the receipt of such notice, the
Executive shall not have returned to full-time performance of the
Executive’s duties. For purposes of this Agreement,
“Disability” shall mean 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, which is determined to be total
and permanent by a physician selected by the Company or its
insurers and reasonably acceptable to the Executive or the
Executive’s legal representative.
(b)
Cause . The Company may terminate the
Executive’s employment during the Employment Period with or
without Cause. For purposes of this Agreement,
“Cause” shall mean:
(i)
the continued failure of the Executive to perform substantially the
Executive’s duties with the Company (other than any such
failure resulting from incapacity due to physical or mental
illness, but including a failure by Executive for any other reason
to meet reasonable, material performance expectations that are not
measured by Company economic performance, or that are not measured
by unsatisfactory investment performance that is not specifically
attributable primarily to Executive’s acts or omissions),
after a written demand for substantial performance is delivered to
the Executive by the Board or its representative, which
specifically identifies the manner in which the Board believes that
the Executive has not
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substantially performed the
Executive’s duties and which gives the Executive no fewer
than 120 (one-hundred twenty) days to cure the deficiency noted
therein; or
(ii)
the willful engaging by the Executive in illegal conduct or gross
misconduct that is materially and demonstrably injurious to the
Company; or
(iii)
conviction of a felony (other than a traffic related felony) or
guilty or nolo contendere plea by the Executive with respect
thereto; or
(iv)
a material breach by the Executive of any material provision of
this Agreement; provided that, if such breach is promptly curable,
the Company shall not have the right to terminate Executive’s
employment for Cause pursuant to this Paragraph 4(b)(iv) unless
Executive, having received written notice of the breach, fails to
cure the breach within a reasonable time but no less than 30
(thirty) days; or
(v)
a willful or reckless violation of a material regulatory
requirement, or of any material written Company policy or
procedure, that is materially and demonstrably injurious to the
Company; or
(vi)
Executive’s failure to obtain or maintain, or inability to
qualify for, any license required for the performance of
Executive’s material job responsibilities, or the suspension
or revocation of any such license held by the Executive.
(c)
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 act or omission was in the best
interests of the Company. Any act, or failure to act, based
upon express authority given pursuant to a resolution duly adopted
by the Board with respect to such act or omission or based upon the
advice of counsel for the Company shall be conclusively presumed to
be done, or omitted to be done, by the Executive his good faith and
in the best interests of the Company.
(d)
Termination Procedures .
(i)
If the Company desires to terminate Executive’s employment
for Cause pursuant to Paragraph 4(ii), (iii), (iv), (v) or (vi),
above, 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 two-thirds of the entire
membership of the Board (not including the Executive) 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, to be heard before the Board)
(a “Two-Thirds Board Vote”), finding that, in the good
faith opinion of the Board, the Executive is guilty of the conduct
described in Paragraph 4(ii), (iii), (iv), (v) or (vi), above, and
specifying the particulars thereof in detail.
(ii)
If the Company desires to terminate Executive’s employment
for Cause pursuant to Paragraph 4(i), above, the cessation of
employment of the Executive shall not be deemed to be for Cause due
to Executive’s failure to meet the Company’s
reasonable, material performance expectations that are not measured
by the Company’s economic performance or that
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are not measured by unsatisfactory
performance that is not specifically attributable primarily to
Executive’s act or omissions, except pursuant to a resolution
duly adopted by the affirmative vote of not less the entire
membership of the Board (not including the Executive) less one
(meaning, for example, that at least 9 of 10 Board Members (not
including the Executive) must vote in support of the resolution) 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, to be heard before the
Board), finding that, in the good faith opinion of the Board, the
Executive fai
