TRANSITION AGREEMENT

 

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                                                                   EXHIBIT 10.30

 

                              TRANSITION AGREEMENT

 

         This agreement ("AGREEMENT") is entered into as of February 2, 2004

(the "EFFECTIVE DATE"), by and between Janus Capital Group, Inc. (the "COMPANY")

and Thomas A. Early ("EXECUTIVE") (each a "PARTY," and together, the "PARTIES").

 

                                   WITNESSETH:

 

         WHEREAS, Executive currently serves in the capacities of Senior Vice

President, General Counsel, Chief Corporate Affairs Officer, and Secretary of

the Company pursuant to an Employment Agreement between the Company and

Executive entered into as January 1, 2003 (the "EMPLOYMENT AGREEMENT");

 

         WHEREAS, the Parties are parties to a Change of Control Agreement dated

as of February 10, 2003 (the "CHANGE OF CONTROL AGREEMENT"),

 

         WHEREAS, Executive has decided to resign his employment, effective as

of the Termination Date set forth below;

 

         WHEREAS, the Parties wish to provide for, among other things,

Executive's continued service to the Company through the Termination Date set

forth below, Executive's cooperation in certain matters, and the payment to

Executive of certain benefits as set forth below;

 

          NOW, THEREFORE, in consideration of the mutual representations,

warranties, covenants and agreements set forth herein, and for other good and

valuable consideration, the receipt and sufficiency of which are hereby

acknowledged, the Parties, intending to be legally bound hereby, agree as

follows:

 

         1. Resignation. Effective as of the Termination Date (as defined

below), Executive's employment with the Company shall terminate, and Executive

shall be deemed to have resigned from all offices and directorships held with

the Company or any of its affiliates or companies advised by the Company or its

affiliates, all effective as of the Termination Date. Executive shall promptly

execute such documents as the Company may deem necessary or desirable to

effectuate the foregoing. As used herein, the term "TERMINATION DATE" shall mean

the earliest of: (a) the date 5 days following the date on which the Company

notifies Executive in writing of its desire that Executive terminate his

employment with the Company; (b) the close of business on the date of the

Company's Annual Meeting of Shareholders in 2004; or (c) June 30, 2004. As used

herein, the term "TRANSITION PERIOD" shall mean the period between the Effective

Date and the Termination Date.

 

         2. Services, Compensation and Benefits During the Transition Period.

During the Transition Period:

 

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                  (a) The Company shall continue to employ Executive, and

Executive shall continue to serve, as the Company's Senior Vice President,

General Counsel, Chief Corporate Affairs Officer, and Secretary; and

 

                  (b) Excluding periods of disability and vacation and sick

leave to which Executive is entitled, the Executive shall devote substantially

all of his business time and attention to the business and affairs of the

Company and, to the extent necessary to discharge the Executive's

responsibilities hereunder, use his reasonable best efforts to perform such

responsibilities. During the Transition Period, it shall not be a violation of

this Agreement for the Executive to: (i) serve on corporate, civic or charitable

boards or committees; (ii) deliver lectures, fulfill speaking engagements or

teach at educational institutions; or (iii) 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 investment management activities comply with

the Company's personal trading policies and, otherwise, with applicable law. It

is expressly understood and agreed that to the extent that any such activities

have been conducted by Executive prior to the Effective Date, the continued

conduct of such activities (or the conduct of activities similar in nature and

scope thereto) subsequent to the Effective Date shall not thereafter be deemed

to interfere with the performance of the Executive's responsibilities to the

Company; provided that in all events Executive shall comply with all Company

policies and procedures relating to personal investment activities, irrespective

of when implemented.

 

                  (c) The Company shall pay Executive a base salary of

$57,941.67 per month, effective as of January 1, 2004, with the difference

between such salary and the salary actually paid to Executive between January 1,

2004, and the Effective Date to be included in Executive's first paycheck

following the Effective Date; and

 

                  (d) Executive and his spouse and dependents shall be entitled

to participate in the Welfare Benefit Plans described at Paragraph 3(b)(v) of

the Employment Agreement on the same basis as he participated immediately before

the Effective Date; and

 

                  (e) All cash and equity long-term incentive award or other

incentive awards granted to Executive, including any unvested shares of limited

liability company interests, in the Company, Janus Capital Management LLC or in

any of their affiliated companies (the "EQUITY INCENTIVES"), shall continue to

vest in accordance with and subject to the terms set forth in the plans,

agreements and certificates, as applicable, under which such Equity Incentives

were granted; and

 

                   (f) Executive shall continue to be reimbursed for reasonable

business expenses on the same terms and conditions described in Paragraph

3(b)(vi) of the Employment Agreement; and

 

                  (g) Except as otherwise expressly provided in this Agreement,

Executive shall not be entitled to participate in or receive any compensation,

incentive or benefit of any kind in

 

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connection with his work or employment during the Transition Period,

notwithstanding any Company plan, document, policy or procedure; and

 

                  (h) With respect to any contributions made on Executive's

behalf pursuant to the Janus 401(k), Profit Sharing and Employee Stock Ownership

Plan (the "PLAN") that remain unvested as of the Termination Date, Executive

will be one hundred percent (100%) vested in any such contributions on the

Termination Date.

 

         3.        2003 Bonus. No later than ten (10) business days following the

Effective Date, the Company shall pay Executive, in cash, the gross amount of

$600,000 (the "2003 BONUS"). Executive acknowledges and agrees that upon his

receipt of the 2003 Bonus, Executive shall not be entitled to any other or

further bonus, incentive or other compensation of any kind in connection with

his work during 2003.

 

         4.        No Admission of Liability. This Agreement, the Company's offer

to Executive of this Agreement and the payments set forth herein are not

intended as, and shall not be construed as, an admission of liability by or to,

or of improper conduct on the part of, either the Company or Executive.

 

         5.        Transition Benefit. No later than ten (10) business days

following the Effective Date, the Company shall pay Executive, in cash, the

gross amount of $500,000 (the "INITIAL TRANSITION PAYMENT"). In addition, if,

following the Termination Date, Executive executes and returns to the Company a

Supplemental Legal Release in the form attached hereto as Exhibit A (the

"SUPPLEMENTAL RELEASE"), does not thereafter revoke the Supplemental Legal

Release in the manner described therein, and otherwise complies with his

obligations under this Agreement, then the Company shall promptly execute and

return to Executive a copy of the Supplemental Release and shall provide

Executive with the following payments and benefits, which shall collectively be

referred to herein as the "TRANSITION BENEFIT":

 

                  (a) No later than 10 days after the Company has received the

Supplemental Release executed by Executive, the Company shall pay Executive, in

a cash, a lump sum in the gross amount of $3,500,000; and

 

                  (b) For the three (3)-year period commencing on the

Termination Date: (i) the Company shall continue to provide such health benefits

to Executive and his spouse and dependents on the same basis such benefits were

provided to Executive immediately before the Termination Date, provided however

that the cost of such coverage shall be treated as taxable income to the

Executive; or (ii) if the Company ceases to maintain a program of health

benefits under which such benefits can be provided, then the Company shall

provide Executive with the lump sum cash equivalent thereof, grossed up for

taxes; and

 

                  (c) From the conclusion of such three (3)-year period through

the earlier of: (i) the end of the month in which Executive becomes eligible for

health care coverage under Medicare (provided that in all events Executive shall

promptly take all actions necessary to attain such eligibility); or (ii) the

date on which Executive and his spouse and dependents, if any, become

 

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eligible to participate in any group health insurance program or plan

substantially equivalent to that provided by the Company for the Executive's

benefit as of the time immediately preceding the Termination Date; or (iii) the

date, if any, on which the Company ceases to maintain a program of retiree

health benefits; the Company shall, in accordance with the Action By Unanimous

Consent In Lieu Of Special Meeting Of Directors dated November 25, 2002 (the

"CONSENT"), continue to provide Executive (for himself and his spouse and

dependents) with special continuing health benefits coverage or retiree medical

coverage under arrangements substantially similar to those provided generally to

the Company's employees, provided that Executive shall bear all costs associated

with such coverage on an after-tax basis at a rate commensurate with that

charged to other former employees receiving coverage pursuant to the Consent;

 

                  (d) The Parties acknowledge and agree that the benefits

provided herein are not in lieu of any rights under the Consolidated Omnibus

Budget Reconciliation Act ("COBRA") that Executive, his spouse, and/or

dependents might otherwise have as the result of any loss of the coverage

provided for herein; and

 

                  (e) Effective as of ten (10) days after the Termination Date

(the "VESTING DATE") all Equity Incentives held by Executive or by the Company

on behalf of Executive, shall immediately vest and/or be paid, as applicable, in

full, and any stock options shall, from and after such vesting, remain

exercisable for the remainder of their respective terms, in accordance with and

subject to the terms set forth in the plans, agreements and certificates, as

applicable, under which such Equity Incentives were granted. Notwithstanding the

foregoing, as of the Vesting Date, all Equity Incentives that are vested as of

the Effective Date, vest pursuant to Paragraph 2(e), or vest pursuant to this

Paragraph 5(e) will no longer be subject to any transfer restrictions (except

applicable securities laws including those governing insider trading).

 

         6. Vesting Issues. The Company acknowledges that Exhibit B accurately

sets forth the number of vested and unvested shares of Company stock and the

number of Company stock options held by Executive or by the Company on behalf of

Executive. With respect to unvested shares of Company stock which vest pursuant

to Paragraph 2(e) or Paragraph 5(e), the Company further acknowledges and agrees

that with respect to such shares ("TRANSITION SHARES") Executive shall continue

to be eligible for and participate in, and has provided to the Company all

documentation necessary to participate in, the Company's Share Withholding

Program, under which the Company shall purchase from Executive shares sufficient

to pay any withholding on income and employment taxes payable by Executive as a

result of the vesting of Transition Shares. Executive shall in his discretion

have the right, but no obligation, to meet any withholding obligations relating

to the vesting of the Transition Shares by tendering cash to the company in lieu

of participating in the Share Withholding Program. Executive shall timely

provide to the Company all information necessary to make Form 4 and other

filings, if any, associated with the vesting of Transition Shares, and the

Company shall complete all such filings. The Company acknowledges and agrees

that all vested Transition Shares not sold pursuant to the Share Withholding

Program will be transferred to Executive's individual Schwab account on the date

on which they vest pursuant to this Agreement.

 

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         7. Acknowledgement Concerning Other Compensation. Executive

acknowledges that the payments and benefits referred to in this Agreement are in

lieu of, and in full satisfaction of, any other benefits or compensation of any

kind to which Executive was or could have been entitled in connection with his

relationship with and work for the Company and any affiliates, whether under the

Employment Agreement, the Change of Control Agreement, or otherwise.

 

         8. Payment of Transition Benefit in the Event of Executive's Death. In

the event of Executive's death, any unpaid remaining portion of the Transition

Benefit shall be paid to Executive's surviving spouse, or in the event of her

death, to Executive's estate.

 

         9. Legal Releases.

 

                  (a) In consideration of the Transition Benefit and the

Company's other covenants and agreements contained herein, Executive, on his own

behalf and on behalf of his heirs, personal representatives, executors,

administrators and assigns, knowingly and voluntarily releases and forever

discharges the Company and its affiliates and any of their respective parents,

subsidiaries and affiliates, together with all of their respective past and

present directors, members, managers, officers, shareholders, partners,

employees, agents, attorneys and servants, and each of their affiliates,

predecessors, successors and assigns (collectively, the "COMPANY RELEASEES")

from any and all claims, charges, complaints, promises, agreements,

controversies, liens, demands, causes of action, obligations, damages and

liabilities of any nature whatsoever, known or unknown, suspected or

unsuspected, that Executive or his heirs, executors, administrators, or assigns

ever had, now have, or may hereafter claim to have against any of the Company

Releasees by reason of any matter, cause or thing whatsoever from the beginning

of time through the date hereof, whether or not previously asserted before any

state or federal court, agency or governmental entity or any arbitral body. This

release includes, without limitation, any rights or claims relating in any way

to Executive's employment relationship with the Company or any of the Company

Releasees, or his separation therefrom, or arising under any statute or

regulation, including Title VII of the Civil Rights Act of 1964, the Civil

Rights Act of 1991, Age Discrimination in Employment Act of 1967 ("ADEA"), the

Americans with Disabilities Act of 1990, the Employee Retirement Income Security

Act of 1974, and the Family Medical Leave Act of 1993, each as amended, or any

other federal, state or local law, regulation, ordinance, or common law, or

under any policy, agreement, understanding or promise, written or oral, formal

or informal, between Executive and the Company or any of the Company Releasees;

provided, however, that notwithstanding the foregoing or anything else contained

in this Agreement, Executive's release shall not extend to: (i) any rights

arising under this Agreement; (ii) any rights arising under any grant, plan or

agreement pursuant to which Executive was awarded the stock and stock options

reflected Exhibit B hereto, the provisions of which are incorporated by this

reference to the extent not inconsistent with this Agreement; (iii) any unpaid

salary or accrued vacation, reimbursement for any previously incurred expenses

in accordance with the Company's policies in effect on the date hereof, or any

benefits or claims for benefits under any Welfare Benefit Plans accrued as of

the date hereof; and (iv) any rights arising under COBRA. Executive represents

that he has not commenced or joined in any claim, charge, action or proceeding

whatsoever against the Company or any of the Company Releasees arising out of or

relating to any of the matters released in this

 

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Paragraph 9(a). Executive further agrees that he will not seek or be entitled to

any personal recovery in any claim, charge, action or proceeding whatsoever

against the Company or any of the Company Releasees for any of the matters

released in this Paragraph 9(a).

 

                   (b) In consideration of Executive's release set forth in

Paragraph 9(a), above, and Executive's other covenants and agreements contained

herein, the Company and its affiliates hereby forever release and discharge

Executive and his heirs, executors, administrators and assigns from any and all

claims, charges, complaints, promises, agreements, controversies, liens,

demands, causes of action, obligations, damages and liabilities of any nature

whatsoever, known or unknown, suspected or unsuspected, which against Executive

or his heirs, executors, administrators, or assigns the Company or any of its

affiliates ever had, now have, or may hereafter claim to have by reason of any

matter, cause or thing whatsoever from the beginning of time through the date

hereof, whether or not previously asserted before any state or federal court,

agency or governmental entity or any arbitral body; provided, however, that

notwithstanding the foregoing or anything else contained in this Agreement, the

Company's release shall not extend to any rights arising under this Agreement or

to any claim against Executive arising from: (i) Executive's knowing and

intentional commission of a felony crime involving fraud and relating to his

employment with the Company; (ii) a breach of fiduciary duty relating to

Executive's employment with the Company that renders Executive ineligible for

indemnification pursuant to paragraph 13 of this Agreement; or (iii) Executive's

knowing and intentional violation of any federal or state law regulating insider

trading relating to his employment with the Company. The Company represents that

neither it nor any of its affiliates has commenced or joined in any claim,

charge, action or proceeding whatsoever against Executive arising out of or

relating to any of the matters released in this Paragraph 9(b). The Company

further agrees that neither it nor any of its affiliates will seek or be

entitled to any recovery in any claim, charge, action or proceeding whatsoever

against Executive for any of the matters released in this Paragraph 9(b).

 

                  (c) In order to provide a full and complete release, each of

the Parties understands and agrees that this Agreement is intended to include

all claims, if any, covered under this Paragraph 9 that such Party may have and

not now know or suspect to exist in his or its favor against any other Party and

that this Agreement extinguishes such claims. Thus, each of the Parties

expressly waives all rights under any statute or common law principle in any

jurisdiction that provides, in effect, that a general release does not extend to

claims which the releasing party does not know or suspect to exist in his favor

at the time of executing the release, which if known by him must have materially

affected his settlement with the party being released.

 

         10. Termination.

 

                  (a) The Company may terminate Executive's employment and this

Agreement for Cause. For purposes of this Agreement, "CAUSE" for termination

shall mean Executive's knowing and intentional commission of a felony crime

involving fraud and relating to his employment with the Company, or Executive's

knowing and intentional violation of any federal or state law regulating insider

trading relating to his employment with the Company, either or both as

determined in accordance with Paragraph 10(c), below.

 

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                  (b) The Company warrants and represents that it currently is

unaware of any facts giving rise to a basis to terminate Executive's employment

for Cause as that term is defined in this Agreement or the Employment Agreement

and that it has no present intention to terminate Executive's employment for

Cause. Absent the disclosure of material facts of which the Company was unaware

as of the Effective Date, the Company agrees that it shall make no effort to

terminate Executive's employment for Cause. The Company shall bear the burden,

in any dispute between the parties, of proving by clear and convincing evidence

that as of the Effective Date it was unaware of any facts alleged by the Company

to give rise to a right to terminate Executive's employment for Cause.

 

                  (c) Notwithstanding any other provision of this Agreement:

 

                     (i)       The cessation of employment of Executive shall not

be deemed to be for Cause unless and until: (A) there shall have been delivered

to Executive a copy of a resolution duly adopted by the affirmative vote of not

less than the entire membership of the Company's Board of Directors ("BOARD")

(not including Executive) at a meeting of the Board called and held for such

purpose (after reasonable notice is provided to Executive and Executive is given

an opportunity, together with counsel, to be heard by the Board, and after the

Board has conferred with counsel), finding that the Board has a reasonable basis

to believe that Executive is guilty of the conduct described in Paragraph 10(a),

above, and specifying the particulars thereof in detail; and (B) there has been

a final determination in accordance with the procedure set forth in Paragraph

10(c)(ii), below, that Executive in fact is guilty of the conduct described in

Paragraph 10(a), above.

 

                  (ii)      In the event of any dispute concerning the existence

of Cause to terminate Executive's employment pursuant to this Paragraph 10 (a

"CAUSE DISPUTE"), the provisions of Paragraph 21 shall not apply to such

dispute. Instead, any Cause Dispute shall be resolved as follow:

 

                           (A)       All Cause Disputes shall be resolved by

arbitration in the Denver, Colorado, metropolitan area by a single arbitrator

who is a member of the panel of former judges affiliated with the Judicial

Arbiter Group (the "JAG"). The Parties further understand and agree that this

Agreement evidences a transaction involving commerce within the meaning of 9

U.S.C. Section 2, and that this Agreement shall therefore be governed by the

Federal Arbitration Act, 9 U.S.C. Sections 1, et seq.

 

                           (B)       To commence an arbitration pursuant to this

Paragraph 10(c)(ii), a Party shall serve a written arbitration demand (the

"DEMAND") on the other Party in the manner specified in Paragraph 24, below, and

at the same time submit a copy of the Demand to the JAG, together with a check

payable to the JAG in the amount of JAG's then-current arbitration filing fee.

The claimant shall attach a copy of this Agreement to the Demand, which shall

also describe the dispute in sufficient detail to advise the respondent and

arbitrator of the nature of the dispute. Within fifteen (15) days after

receiving the Demand, the respondent shall mail to the claimant a written

response to the Demand (the "RESPONSE"), and submit a copy of the Response to

the JAG.

 

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                           (C)       Promptly after service of the Response, the

Parties shall confer in good faith to attempt to agree upon a suitable

arbitrator. If the Parties are unable to agree upon an arbitrator, then the

Parties each shall submit to the other a list of three names of proposed

arbitrators from the JAG panel, from which the other Party shall strike up to

two names, and JAG shall select the arbitrator from the remaining names, based,

if possible, on his or her expertise with respect to the subject matter of the

Cause Dispute, or randomly.

 

                           (D)       Notwithstanding the choice-of-law principles

of any jurisdiction, the arbitrator shall be bound by and shall resolve all

Cause Disputes in accordance with the substantive law of the State of Colorado

and Colorado rules relating to the admissibility of evidence, including, without

limitation, all relevant privileges and the attorney work product doctrine.

 

                           (E)       The Parties shall to the greatest extent

practicable expedite all proceedings relating to any arbitration commenced

pursuant to this Paragraph 10(c)(ii), including the scheduling and completion of

the final hearing on the merits, which shall be held within six (6) months from

the date of appointment of the arbitrator, unless the Parties agree to a later

date or the arbitrator on his or her own initiative sets a later date not to

exceed nine (9) months from the date of such appointment.

 

                           (F)       The Parties shall engage in such discovery

as is necessary to a full and fair arbitration hearing, with an expedited

schedule to conduct such discovery being established by the arbitrator if the

Parties are unable to agree to a schedule among themselves.

 

                           (G)       Within twenty (20) days after the

arbitration hearing is closed, the arbitrator shall issue a written award

setting forth his or her decision and the reasons therefore (the "INITIAL

AWARD").

 

                            (H)       Any Party who believes that the Initial

Award is based upon or encompasses an error of fact or law such as would, in

civil litigation, give rise to an appeal under the substantive and procedural

law of the State of Colorado shall have the right to appeal the Initial Award as

set forth in this Paragraph 10(c)(ii)(H). A Party desiring to take an appeal

from the Initial Award shall serve on the opposing Party and JAG a written

notice of appeal no later than 20 days after that Party's receipt of the Initial

Award. The appeal shall be heard by a panel of three (3) JAG arbiters (not

including the arbiter who entered the Initial Award) selected by the Parties or,

if the Parties are unable to agree upon the composition of the appeal panel,

then appointed randomly by JAG. The appeal shall be governed by the provisions

of the Colorado Appellate Rules, and shall be subject to the same substantive

legal requirements and standards of review as would apply had the arbitration

been conducted instead as a civil action in a Colorado State District Court and

appealed to the Colorado Court of Appeals. Within 90 days following the issuance

of the Initial Award, the appeal panel shall issue a written award setting forth

its decision and the reasons therefore (the "FINAL AWARD").

 

                           (I)       In the event that, at any time before the

Cause Dispute is fully and finally resolved pursuant to this Paragraph

10(c)(ii), JAG ceases to conduct business as a private

 

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dispute resolution service, then the Parties shall confer in good faith in an

effort to identify a suitable replacement dispute resolution service. If they

are unable to do so, then the arbitrator and/or appeal arbitrators shall be

selected as follows. The Parties shall request a list of 10 arbitrators on the

American Arbitration Association's Commercial Arbitration Panel for the Denver,

Colorado metropolitan area, the cost of which shall be paid by the Company.

Starting with the Executive, the Parties shall alternate striking names from the

list until the list is reduced to three (3) names, or one (1) name, depending

upon whether the Parties are at the initial arbitration hearing stage or the

appeal stage.

 

                           (J)       The Final Award, or if no appeal is timely

taken pursuant to Paragraph 10(c)(ii)(H), above, then the Initial Award, shall

be final, nonappealable and binding upon the Parties, subject only to the

provisions of 9 U.S.C. Sections 10 and 11, and may be entered as a judgment in

any court of competent jurisdiction.

 

                           (K)       The Parties agree that reliance upon courts

of law and equity can add significant costs and delays to the process of

resolving disputes. Accordingly, they recognize that an essence of this

Agreement is to provide for the submission of all Cause Disputes to binding

arbitration. Therefore, if any court concludes that any provision of this

Paragraph 10(c)(ii) is void or voidable, the Parties understand and agree that

the court shall reform each such provision to render it enforceable, but only to

the extent absolutely necessary to render the provision enforceable and only in

view of the Parties' express desire that Cause Disputes be resolved by

arbitration and, to the greatest extent permitted by law, in accordance with the

principles, limitations and procedures set forth in this Paragraph 10(c)(ii).

 

                  (d) Any cash portion of the Transition Benefit that has not

been paid as of the effective date of any purported termination for Cause shall

be held in an interest-bearing escrow pending a final resolution of the Cause

Dispute and shall be subject to forfeiture by Executive upon any final

determination that Cause exists reached in accordance with Paragraph 10(c)(ii);

provided, however, that if Executive prevails in the initial arbitration

proceeding, then such funds, together with any interest thereon, shall be

released to him from escrow, subject to Executive executing an undertaking to

repay such funds should the Company ultimately prevail as the result of the

appeal described in Paragraph 10(c)(ii), above.

 

         11. No Transfer of Rights or Claims. Each of the Parties represents and

warrants that it has not hereto