Exhibit 10.1
TRANSITION AGREEMENT
This agreement
(the “Agreement”), dated as of the Effective Date
specified below, is by and between Janus Capital Group Inc., a
Delaware corporation (the “Company”) and Loren M. Starr
(the “Executive”). The Company and the Executive shall
sometimes be collectively referred to as the
“Parties.”
Recitals
1. Executive
has been employed by the Company pursuant to an Employment
Agreement dated as of January 1, 2003 (the “Employment
Agreement”), and a Change of Control Agreement dated as of
February 10, 2003 (the “Change of Control
Agreement”) (collectively, the “Starr
Agreements”).
2. Executive
is resigning from the Company, and the parties wish to arrange for
a mutually acceptable process for his separation.
3. Accordingly,
Executive and the Company have entered into this Agreement to set
forth the terms and conditions of their relationship following the
Effective Date, and thereby to supersede in their entirety the
Starr Agreements.
Agreement
In
consideration of the following obligations, the parties agree as
follows.
1.
Effective Date, Separation Date and Press Release . The
“Effective Date” shall mean June 29, 2005. At a
time thereafter determined by the Company in its reasonable
discretion, the Company shall announce Executive’s
resignation as Chief Financial Officer as of June 29, 2005 and
his resignation from the Company effective as of July 2, 2005
(the “Separation Date”), by means of a Form 8-K in
substantially the form attached hereto as
Exhibit A.
2.
Resignation . Effective as of the Separation Date, Executive
hereby resigns from employment with the Company, and shall be
deemed to have resigned from all offices, directorships and other
positions with the Company and its affiliates thereof, including
without limitation board, trustee and committee memberships.
Thereafter, Executive shall not be deemed an employee of the
Company or any affiliate, and except as expressly provided in this
Agreement shall not be entitled to participate in any employee
benefit or fringe benefit program of any kind.
3.
Vacation and Services Between the Effective Date and Separation
Date . Executive was on paid vacation before the Effective Date
and shall remain on paid vacation through the Separation Date;
provided that during the period between the Effective Date and
Separation Date (the “Transition Period”), upon the
Company’s request and upon reasonable advance notice
Executive shall meet with one or more Company designees, at a
mutually agreeable place, to discuss matters relating to the
Company’s business and the transition of Executive’s
responsibilities to his successor, and shall otherwise timely
respond to the Company’s request for information.
4. Pay
During Transition Period and Transition Benefits .
(a) The
Company shall pay Executive at his customary base compensation rate
throughout the Transition Period. Executive acknowledges and agrees
that except as otherwise specifically provided in this Agreement,
he shall have no right to any payments or benefits of any
kind.
(b)
Transition Benefits .
(i) If
Executive does not exercise his revocation right under
Section 12(d), below (the “Revocation Right”)
within the seven days following the Effective Date, then on the
eighth day following the Effective Date (or on the business day
immediately thereafter, if the eighth day falls on a weekend or
holiday), the Company shall pay Executive transition pay in the
amount of Three Million One Hundred Seventy Five Thousand Dollars
($3,175,000.00), less legally required withholdings. Executive
shall be ineligible for guaranteed payments, distributions, bonus,
commission or other compensation of any kind, and shall not receive
any benefits of any kind except as specifically set forth in this
Agreement. Should Executive be offered re-employment at the Company
or any Janus affiliate within twelve (12) months of his
Separation Date, the Company reserves the right to condition that
offer upon his repayment of a pro rata portion of his cash
transition benefit; and
(ii) For
the period commencing on the Separation Date and ending thirty-six
(36) months thereafter, the Company shall continue to provide
the benefits described in Section 3(b)(v) of the Employment
Agreement 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 or on such basis as provided to the
other senior executive officers of the Company (collectively
“Welfare Benefits”).
(c)
Expenses . The Company shall promptly reimburse Executive
for all reasonable expenses incurred by the Executive before the
Separation Date in accordance with the Company’s most
favorable policies, practices and procedures in effect for
similarly situated executives of the Company; provided that before
the Separation Date Executive shall provide the Company with
expense reimbursement requests and supporting documentation in the
form generally required of him during his employment with the
Company.
5.
Non-exclusivity of Rights . Except as otherwise specifically
provided in this Agreement, 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
any affiliate for which the Executive may qualify. Amounts that are
vested benefits, which consist of any compensation previously
deferred by the Executive, or which the Executive is otherwise
entitled to receive under any plan, policy, practice or program of
or any contract or agreement with the Company or any affiliate at
or subsequent to the Separation Date (“Other
Benefits”), including, but not necessarily limited to,
previously vested restricted Company stock and stock options;
vested amounts in the Janus 401(k), Profit Sharing and Employee
Stock Ownership Plan; the Employee Stock Purchase Plan (ESPP); the
Janus Income Deferral Program; amounts in a Janus retail mutual
fund account in accordance with that certain Agreement dated as of
February 20,
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2004, between the Parties; each
shall be payable in accordance with such plan, policy, practice,
program, contract or agreement except as explicitly modified by
this Agreement. Notwithstanding any other provision of this
Agreement, the Executive shall not be entitled to receive any
payments or benefits under any severance or transition program
other than those that are described and anticipated under this
Agreement. Executive shall receive vesting credit with respect to
each of the foregoing benefits and entitlements through the
Separation Date in accordance with such plan, policy, practice,
program, contract or agreement.
6. 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 the Executive to the Company, and to any valid
legal claim for set-off or recoupment. 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 knows of no such setoffs or claims for
recoupment against Starr.
7.
Restrictive Covenants .
(a) The
Executive acknowledges that his employment as a senior officer of
the Company creates a relationship of confidence and trust between
the Executive and the Company with respect to confidential and
proprietary information applicable to the business of the Company
and its clients. The Executive further acknowledges the highly
competitive nature of the business of the Company. Accordingly, it
is agreed that the restrictions contained in this Section 7
are reasonable and necessary for the protection of the interests of
the Company and that any violation of these restrictions would
cause substantial and irreparable injury to the Company.
(b) During
the period beginning on the Effective Date and ending on the one
year anniversary of the Separation Date, the Executive shall not
(nor shall the Executive cause, encourage or provide assistance to,
anyone else to):
(i) Knowingly
interfere with any relationship which may exist from time to time
between the Company, or any affiliate of the Company, and any of
its employees, consultants, agents or representatives;
or
(ii) Knowingly
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 the Company or any affiliate of the Company, or
any person who was employed or engaged as an employee, consultant,
agent or representative of the Company or any affiliate of the
Company within the two-year period immediately preceding the
Executive’s termination; or
(iii) On
behalf of the Executive or a Competitive Business, solicit or
participate in the solicitation of the customer business or account
of any Protected Investment Advisory Client, as defined
below.
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For purposes of
Section 7(b)(ii), the terms “consultant,”
“agent,” and “representative” shall not
include auditors, accounting firms, investment bankers or
investment banks.
(c)
“Competitive Business” means any business that provides
investment advisory or investment management services, printing
fulfillment, or related services. For the purposes of this Section
7, “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.
(d)
“Protected Investment Advisory Client” shall mean any
person or entity to whom the Company or any affiliate provided
investment advisory or investment management services at any point
during the twelve months preceding the Separation Date, but only
if: (i) Executive had personal contact with the client during
such twelve month period in a representative capacity involving the
Company’s business; or (ii) during his employment with
the Company, Executive had knowledge of nonpublic information
relating to the client’s relationship with the Company and/or
the Company’s plans for servicing the client and/or securing,
expanding or retaining the client’s investment management
and/or investment advisory business, which information if
improperly used could have a material adverse impact on the
Company’s relationship with the client.
(e) To
the extent permitted by law, Executive covenants never to provide
information, assistance or encouragement of any kind to any
governmental agency, person or entity concerning the investigation
or prosecution of any claim against the Company, except pursuant to
subpoena or court order or as otherwise required by law.
(f) If
any court shall determine that the scope or duration of any
restriction contained in this Section 7 is unenforceable, it
is the intention of the parties that this Section 7 shall not
thereby be terminated but shall be deemed amended to the extent
required to make it valid and enforceable, such amendment to apply
only with respect to the operation of this Section 7 in the
jurisdiction of the court that has made the
adjudication.
(g) The
Executive acknowledges that the restrictive covenants of this
Section 7 are reasonable and that irreparable injury will
result to the Company and to its business and properties in the
event of any breach by the Executive of any of those covenants, and
that the Executive’s continued employment is predicated on
the commitments undertaken by the Executive pursuant to this
Section 7. In the event any of the covenants of this
Section 7 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 the Executive
or by any person or persons acting for or with the Executive in any
capacity whatsoever.
8.
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 otherwise 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.
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(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 Agreeme
