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 Girard C.
Miller (the “Executive”). The Company and the Executive
shall sometimes be collectively referred to as the
“Parties.”
1. Executive
has been employed by the Company pursuant to an Employment
Agreement dated as of June 30, 2003 (the “Employment
Agreement”), and a Change of Control Agreement dated as of
June 30, 2003 (the “Change of Control Agreement”)
(collectively, the “Miller Agreements”).
2. Executive
and the Company desire to modify their relationship to provide for
a transition period and separation from the Company.
3. Accordingly,
Executive and the Company have entered into this Agreement to set
forth the terms and conditions of their relationship on and after
the Effective Date, and thereby to supersede in its entirety the
Employment Agreement subject to Section 9.
In consideration
of the following obligations, the parties agree as
follows.
1.
Effective Date and Separation Date . The “Effective
Date” shall mean August 5, 2005. At a time thereafter
determined by the Company in its reasonable discretion, the Company
shall announce the terms of this Agreement and the
Executive’s resignation from the Company effective as of
January 3, 2006, provided that such employment does not
earlier terminate pursuant to Section 4, below (the
“Separation Date”).
2.
Transition Period . The Company hereby agrees to continue to
employ the Executive, and the Executive hereby agrees to continue
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 the Separation Date or such earlier
date as Executive’s employment is terminated as provided
herein (the “Transition Period”).
(a)
Position and Duties .
(i) During
the Transition Period: (A) the Executive shall serve as the
Chief Operating Officer of the Company, or in such other executive
position as may be reasonably designated by the Company’s
Chief Executive Officer (“CEO”), with duties,
authorities and
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responsibilities commensurate with such title
and office and/or as may reasonably be assigned to Executive by the
CEO, consistent with Executive’s executive-level experience;
and (B) the Executive’s services shall primarily be
performed in Denver, Colorado, although Executive agrees to travel
to the extent reasonably necessary to perform his duties hereunder.
During the Transition Period, and excluding any periods of
disability and vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote his attention and time
during normal business hours to the business and affairs of the
Company as reasonably directed or specified by the Company’s
CEO, and, to the extent necessary to discharge the
Executive’s responsibilities hereunder, to use the
Executive’s reasonable best efforts to perform such
responsibilities, subject to Executive’s ability to
(A) serve on corporate, civic or charitable boards or
committees; provided that such service must be disclosed to and
approved by the Company in advance, pursuant to Company policy,
(B) deliver lectures, fulfill speaking engagements or teach at
educational institutions; provided that such engagements must be
disclosed to and approved by the Company in advance, pursuant to
Company policy 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, Company
policies and applicable law.
(ii) During
the Transition Period, Executive shall report to the
Company’s CEO and may, at Executive’s election, serve
as a member of the Company’s Executive Committee or the
successor body, if any, thereto. During the Transition Period,
Employee’s job duties shall encompass only matters as may be
reasonably assigned to him from time to time by the Company’s
CEO. Executive and the Company acknowledge and agree that, during
the Transition Period, most if not all of Executive’s
principal responsibilities will be transferred to other Company
executives, and that, therefore, Executive’s day-to-day job
functions will change substantially as the Transition Period
progresses. Executive and the Company also acknowledge and agree
that while Executive will throughout the Transition Period remain a
member of the Company’s senior executive team and in that
capacity will be required and expected to perform only
executive-level job functions, it may be inappropriate or
unnecessary to include Executive in all executive-level meetings
that the Company may conduct during the Transition Period.
Notwithstanding the foregoing, the Company agrees that during the
Transition Period Executive will be assigned only executive-level
responsibilities that are consistent with his skills, experience
and status within the Company, and that the Company will not seek
to hold Executive accountable for any Company-related matter unless
the Company included Executive in all material meetings and
decisions concerning that matter, or take any adverse action of any
kind against Executive based upon Executive’s failure or
inability to attend any meeting, or participate in any decision,
from which the Company excluded Executive.
(iii) As
of the Separation Date, Executive shall be deemed to have resigned
from all positions with the Company and all affiliates thereof,
including without limitation employment, membership on boards of
directors, and committee memberships. Thereafter, Executive shall
not be deemed an employee of the Company or any affiliate, and
except as provided in Section 5(c)(ii) shall not be entitled
to participate in any employee benefit or fringe benefit program of
any kind.
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(i)
Base Salary . During the Transition Period, the Executive
shall receive a base salary (“Base Salary”) payable in
cash at the rate of $500,000 per year. The Base Salary shall be
payable in installments, 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)
2005 Annual Bonus . In consideration of Executive’s
work during 2005, at the same time that the Company pays Peer
Executives annual bonuses for their work in 2005, the Company shall
pay Executive a bonus calculated by multiplying Executive’s
2005 bonus target by the same bonus multiplier used in calculating
the 2005 annual bonuses of the “Comparable Executives;”
provided that in no event shall the 2005 Annual Bonus paid to
Executive be less than 50% of Executive’s 2005 annual bonus
target. For purposes of this Agreement, “Comparable
Executives” shall mean participants in the Company’s
2005 Total Variable Compensation Plan excluding Gary Black, any
Company Portfolio Manager and all other executives whose employment
contracts require payment of an annual bonus in a fixed amount or
pursuant to a unique calculation.
(iii)
Long-Term Incentive Compensation . Executive shall not be
eligible to receive any further awards under the Company’s
Long-Term Incentive (“LTI”) Plan. All equity long-term
incentive awards or other incentive awards granted to the Executive
by the Company (collectively, “Retention and Incentive
Awards”) shall remain outstanding during the Transition
Period in accordance with the terms of their respective award
agreements; provided that as soon as practicable following the
Effective Date the Company and the Executive shall take the
necessary steps to cause all of Executive’s outstanding
vested and unvested stock option awards to be exchanged for Company
restricted stock that imposes the same terms, restrictions and
vesting schedules as the Executive’s outstanding stock
options (the “Exchange”) in an amount equal to the fair
market value of such stock options as of the date of the Exchange;
and provided further that the Company stock thus exchanged for
one-half of that portion of Executive’s July 2003 stock
option award that would have vested in July 2006 shall become
vested as of December 30, 2005; and provided further that all
portions of Executive’s Retention and Incentive Awards
(including the restricted stock subject to the Exchange) that are
not scheduled to vest until after the Separation Date shall remain
in full force and effect according to their terms throughout the
Transition Period; and provided further that all portions of
Executive’s Retention and Incentive Awards (including the
restricted stock subject to the Exchange) that have not yet vested
as of the Separation Date shall be forfeited and cancelled as of
the Separation Date without any compensation to the Executive. Fair
market value of the applicable stock options shall be determined on
the Effective Date using the Black-Scholes option pricing
methodology currently applied by the Company.
(iv)
Incentive, Savings and Retirement Plans . During the
Transition Period, but not thereafter, 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 executives who sit on the
Company’s Executive Committee or, if applicable, the
successor body thereto (collectively, “Peer
Executives”). Vesting of any Company contributions to
Executive’s 401(k) Plan account shall be in accordance with
the terms of the
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Company’s
401(k) Plan as amended; provided that for such purposes
Executive’s separation shall be deemed to have resulted from
a Job Elimination as that term is used in Section 1.33 of the
Company’s 401k Plan, as amended. In accordance with that
certain Agreement between the Executive and the Company, dated as
of February 20, 2004 (the “February 2004
Agreement”), all access restrictions applicable to the Janus
mutual fund shares held in an account for Executive under the
February 2004 Agreement shall no longer apply as of the
Separation Date.
(v)
Welfare Benefit Plans . During the Transition Period, but
not thereafter, 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 Peer Executives. Notwithstanding the
foregoing, Executive shall be eligible, upon the terms and
conditions set forth in Sections 5(c) and (d), below, to continued
participation in certain employee benefits plans following the
termination of his employment.
(vi)
Vacation . During the Transition Period, but not thereafter,
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 three
weeks.
(vii)
Initial Transition Payment . As soon as practicable
following the Effective Date, the Company shall pay Executive, in a
lump sum cash payment, an Initial Transition Payment in an amount
equal to the sum of $250,000, less legally required
withholdings
4.
Termination of Employment .
(a)
Death . The Executive’s employment shall terminate
automatically upon the Executive’s death during the
Transition Period.
(b)
Cause . The Company may terminate the Executive’s
employment during the Transition Period with or without Cause. For
purposes of this Agreement, “Cause” shall
mean:
(i) the
willful and 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), 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 substantially performed the
Executive’s duties and which gives the Executive a reasonable
opportunity of not less than thirty (30) days to cure the
deficiency noted therein; or
(ii) the
willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the
Company; or
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(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
willful material breach by the Executive of any material provision
of this Agreement; or
(v) a
willful violation of any regulatory requirement, or of any material
Company policy or procedure, that is 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.
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 in good faith and in the best
interests of the Company.
5.
Obligations of the Company In Relation to Termination
.
(a) Upon
any termination of Executive’s employment, the Company shall
pay to the Executive, in a lump sum in cash within five
(5) business days after the date of termination, the
Executive’s Base Salary through the date of termination, all
to the extent not yet paid as of the date of
termination.
(b)
Special Payment . If Executive remains employed by the
Company on December 27, 2005, or if the Company terminates the
Executive’s employment other than for Cause or death prior to
December 27, 2005, then on December 27, 2005 the Company
shall pay Executive a lump sum cash payment of $500,000 less
legally required withholdings.
(c)
Severance Benefit . In addition to the “Special
Payment” contemplated by Section 5(b), if the Company
terminates the Executive’s employment other than for Cause or
death during the Transition Period, or if the Executive’s
employment shall terminate on the Separation Date, then conditioned
upon Executive’s execution (and if applicable non-revocation)
of a legal release in the form attached hereto as
Exhibit A:
(i) within
5 business days after the date of termination or on his Separation
Date, the Company shall pay to the Executive, in a lump sum cash
payment, an amount equal to $2,000,000, less legally required
withholdings.
(ii) for
the period commencing on the earlier of the date of termination of
employment or the Separation Date and ending on the third
anniversary thereof, the Company shall continue to provide the
benefits described in Section 3(b)(v) to the Executive and his
dependents on the same basis such benefits were provided to the
Executive immediately prior to
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the Effective
Date (collectively “Welfare Benefits”); provided that
Executive’s right to benefits continuation shall terminate as
of the date on which he becomes eligible for substantially similar
welfare benefits under another employer’s group benefit
plans; and
(iii) any
and all unvested Retention and Incentive Awards shall be forfeited
and cancelled without any compensation to the Executive;
(iv) to
the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any Other Benefits (as
defined in Section 6).
(d)
Death. If the Executive’s employment is terminated by
reason of the Executive’s death during the Transition Period,
the Company shall: (i) pay to the Executive’s estate or
beneficiaries Executive’s base salary to the extent unpaid at
the time of Executive’s death, plus $500,000, in full
satisfaction of the Company’s obligations under
Section 5(b), above, plus a pro rata 2005 Annual Bonus in the
amount of $1,500,000 multiplied by a fraction in which the
numerator is the number of days in 2005 that had elapsed as of the
date of Executive’s death and the denominator is 365, in full
satisfaction of the Company’s obligations under
Section 3(b)(ii), all less applicable taxes (which three
payments shall collectively be referred to herein as the
“Accrued Obligations”); and (ii) provide to the
estate or beneficiaries the Other Benefits (as defined in
Section 6) and shall provide the Welfare Benefits to the
Executive’s dependents for a three-year period commencing as
of the date of termination, and shall have no other severance
obligations under this Agreement. In addition, all equity awards
shall be treated as described in their respective award agreements.
The Accrued Obligations shall be paid to the Executive’s
estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the date of termination. With respect to the
provision of the Other Benefits, the term “Other
Benefits” as utilized in this Section 5(d) shall include, and
the Executive’s estate and /or beneficiaries shall be
entitled to receive, benefits at least equal to death benefits as
in effect on the date of the Executive’s death with respect
to comparable executives of the Company and their beneficiaries. In
the event of Executive’s death, the Company shall be required
to pay Executive’s estate or beneficiaries only the Accrued
Obligations. Without limiting the generality of the foregoing, in
the event of Executive’s death the Company shall not be
required to pay Executive or Executive’s estate any payment
under Section 5(c), above.
(e)
Cause; Other than for Good Reason . If the Executive’s
employment shall be terminated for Cause or the Executive
voluntarily terminates his employment during the Transition Period,
the Company shall be required only to pay to the Executive
(i) his Base Salary through the date of termination, and
(ii) the Other Benefits (as defined in Section 6)
, in each case to the extent theretofore unpaid.
(f)
Excise Tax . Notwithstanding any other language to the
contrary in this Agreement or in this Section 5, the Company
shall not be obligated to pay and shall not pay that portion of any
payment or distribution in the nature of compensation within the
meaning of Section 280G(b)(2) of the Code to the benefit of
the Executive otherwise due or payable the Executive under this
Agreement or this Section 5 if that portion would cause any
excise tax imposed by Section 4999 of the Code to become due
and payable by the Executive.
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6.
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 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, the Executive shall not be entitled to
receive any payments or benefits under any severance program other
than those that are described and anticipated under this
Agreement.
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 Executive’s employment with the Company, and for a period
of one year following the date of termination for any reason (the
“Restricted Period”), the Executive shall not (nor
shall the Executive cause, encourage or provide assistance to,
anyone else to):
(i) 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) 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) Solicit
directly or indirectly on behalf of the Executive or a Competitive
Business, the customer business or account of any investment
advisory or investment management client to which the Company or
any affiliate of the Company shall have rendered service during the
one-year period immediately preceding the Executive’s
termination; or
(iv) Directly
or indirectly divert or attempt to divert from the Company or any
affiliate of the Company any business in which the Company or any
affiliate of the Company has been actively engaged during the term
hereof or interfere with any relationship between the Company, or
any affiliate of the Company, and any of its clients.
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Notwithstanding
any of the foregoing, the Company and Executive agree that if
Executive is employed in an operational role at a Competitive
Business during the Restricted Period, such employment alone will
not be interpreted to constitute a violation of this
Section 7, nor shall the actions of Executive’s employer
during the Restricted Period be imputed to Executive u
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