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Title: |
Consulting and Separation Agreement |
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Entities: |
Janus Capital Group Inc.; Hogan & Hartson; Latham & Watkins; Mark B. Whiston |
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Date: |
2004 |
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Size: |
105KB total |
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Price: |
$54 |
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ID: |
#250216 |
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CONSULTING AND SEPARATION AGREEMENT
This agreement ("AGREEMENT") is entered into as of April 20, 2004 (the
"EFFECTIVE DATE"), by and between Janus Capital Group, Inc. (the "COMPANY") and
Mark B. Whiston ("EXECUTIVE") (each a "PARTY," and together, the "PARTIES").
RECITALS
1. Executive currently serves in the capacity of Vice Chairman and
Chief Executive Officer of the Company pursuant to an Employment Agreement
between the Company and Executive entered into as January 1, 2003 and amended as
of December 18, 2003, (the "EMPLOYMENT AGREEMENT").
2. The Parties are parties to a Change of Control Agreement dated as of
February 10, 2003 and amended as of December 18, 2003, (the "CHANGE OF CONTROL
AGREEMENT").
3. Executive has decided to resign his employment, effective as of the
Effective Date.
4. The Parties wish to provide for, among other things, Executive's
continued service as a consultant to the Company following the Effective Date,
the Parties' cooperation in certain matters, and the payment to Executive of
certain benefits as set forth below.
AGREEMENT
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 agree as
follows:
1. Resignation. Effective as of the Effective Date, Executive shall be
deemed to have resigned from his employment with the Company and from all
offices and directorships held with the Company or any of its affiliates and/or
subsidiaries and with companies advised by the Company or its affiliates and/or
subsidiaries. Executive shall promptly execute such documents as the Company may
reasonably deem necessary or desirable to effectuate the foregoing.
2. Transition Benefits.
(a) No later than two (2) business days following the Effective
Date, the Company shall pay Executive, in cash, the gross amount of $4,600,000,
less required withholdings.
(b) As of the Effective Date, the Company shall credit $7,950,000 to
an account under a Deferred Compensation Agreement for Executive's benefit (the
"DEFERRED COMPENSATION CONTRIBUTION"). Contemporaneously with the execution of
this Agreement, the Parties shall execute a Deferred Compensation Agreement in
the form attached hereto as Exhibit A. As soon as practicable after the
Effective Date, and no later than 30 days after the Effective Date, the Company
shall enter into, with a Trustee selected by the Company with Executive's
approval (such approval not to be unreasonably withheld), a trust agreement in
the form attached hereto as Exhibit B.
{PAGE}
3. Welfare Benefits.
(a) For the period commencing on the Effective Date and continuing
through the earlier of the five-year anniversary of the Effective Date or the
date on which Executive and his spouse and dependents becomes eligible, under
another employer's employee benefit plans, to receive welfare benefits
substantially similar to those enjoyed by Executive and his spouse and
dependents, before the Effective Date, under Section 3(b)(v) of the Employment
Agreement: (i) the Company shall continue to provide such welfare benefits to
Executive and his spouse and dependents on the same basis such benefits were
provided to Executive immediately before the Effective Date, provided that the
cost of such coverage shall be treated as taxable income to Executive; or (ii)
if the Company ceases to maintain any program of welfare benefits under which
any of such benefits can be provided, then the Company shall provide Executive
with the lump sum cash equivalent thereof, grossed up for taxes.
(b) 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.
4. Stock and Stock Options
(a) No later than five (5) business days following the Effective
Date, the Company shall cause the remaining 130,452 shares of restricted Company
common stock granted to Executive that had not yet vested as of the Effective
Date (the "TRANSITION SHARES") to be fully vested. Thereafter, the Transition
Shares shall not be subject to any transfer restrictions (except applicable
securities laws, including those governing insider trading).
(b) For purposes of this Agreement, the "LTI PLAN" shall refer to
the Company's Long-Term Incentive Compensation Plan effective as of the
Effective Date, and the "OPTION AGREEMENTS" shall refer collectively to the
agreements reflecting and establishing certain terms of all stock options
granted by the Company to Executive in connection with his employment with the
Company, which stock options are summarized in Exhibit C hereto. Notwithstanding
any provision of the LTI Plan and/or Option Agreements to the contrary, all
stock options granted by the Company to Executive that remained unexercised as
of the Effective Date shall continue to vest during the period beginning on the
Effective Date and ending on the last day of the Consulting Period specified in
Section 5(a), below. At the end of the Consulting Period, all such stock options
shall cease vesting, all such stock options that had not yet vested as of the
conclusion of the Consulting Period shall terminate, and all such stock options
that had vested as of the end of the Consulting Period shall thereafter, in
accordance with the terms of the LTI Plan and Option Agreements, remain
exercisable for 90 days after the end of the Consulting Period, at which time
all of the Options then unexercised shall expire and be of no further force or
effect. For purposes of this Agreement, all of Executive's stock options that
vest during the Consulting Period shall be collectively referred to as the
"PRESERVED OPTIONS."
(c) Except as otherwise expressly provided in this Agreement, all
stock, stock options and other incentives of any kind granted or issued to
Executive by the Company in
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{PAGE}
connection with his employment with the Company but that had not yet vested as
of the Effective Date shall be terminated or forfeited, as the case may be.
(d) Except as specifically amended or terminated by this Agreement,
the terms and conditions of the LTI Plan and all agreements pursuant to which
the Company granted Executive any Company stock or stock options, or otherwise
relating to or arising from any such stock or stock option grants, shall remain
in full force and effect according to their terms.
(e) With respect to the Transition Shares, the Company agrees that
Executive shall participate in, and has provided or will provide 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.
(f) 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/or the Preserved Options, and the Company shall
complete all such filings.
5. Consulting.
(a) During the period commencing on the Effective Date and
concluding on December 31, 2004 (the "CONSULTING PERIOD"), Executive shall
consult with the Company concerning business matters on an as-needed and
as-requested basis. The Company shall exercise reasonable efforts to avoid
conflicts between such consulting services and Executive's personal and other
business commitments, and Executive shall exercise reasonable efforts to fulfill
the Company's consulting requests in a timely manner, notwithstanding his
personal and other business commitments. In consideration of Executive's
consulting services, on the Effective Date the Company shall pay Executive the
gross sum of $1,200,000, less legally required withholdings.
(b) The Parties understand and agree that it is in their mutual best
interest to minimize the effect of Executive's resignation upon the Company's
business. Accordingly, Executive agrees to take all actions reasonably requested
of him by the Company reasonably necessary to accomplish that objective, and
that he will not knowingly take any action that is intended to, or that he knows
is reasonably likely to, result in the redemption of any investment assets
managed by the Company as of the Effective Date, or to otherwise materially
damage the Company's business. Without limiting the generality of the foregoing
or of Section 5(a), above, Executive further agrees to consult with the Company,
during the Consulting Period, on an as needed, as-requested basis, and to
participate in communications with the Company's investors and/or investment
clients, such as are deemed by the Company to be necessary or advisable to
minimize the effect of Executive's resignation upon the Company's business.
6. 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.
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{PAGE}
7. Restrictive Covenants,
(a) 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. 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) Protection of Confidential Information.
i. Definition of Confidential Information. For purposes of
this Agreement, "CONFIDENTIAL INFORMATION" shall mean all nonpublic information
(whether in paper or electronic form, or contained in Executive's memory, or
otherwise stored or recorded) relating to or arising from Company's business,
including, without limitation, trade secrets used, developed or acquired by
Company in connection with its business. Without limiting the generality of the
foregoing, "Confidential Information" shall specifically include all information
concerning the manner and details of Company's operation, organization and
management; financial information and/or documents and nonpublic policies,
procedures and other printed, written or electronic material generated or used
in connection with Company's business; Company's business plans and strategies;
the identities of Company's customers and the specific individual customer
representatives with whom Company works; the details of Company's relationship
with such customers and customer representatives; the identities of
distributors, contractors and vendors utilized in Company's business; the
details of Company's relationships with such distributors, contractors and
vendors; the nature of fees and charges made to Company's customers; nonpublic
forms, contracts and other documents used in Company's business; all information
concerning Company's employees, agents and contractors, including without
limitation such persons' compensation, benefits, skills, abilities, experience,
knowledge and shortcomings, if any; the nature and content of computer software
used in Company's business, whether proprietary to Company or used by Company
under license from a third party; and all other information concerning Company's
concepts, prospects, customers, employees, agents, contractors, earnings,
products, services, equipment, systems, and/or prospective and executed
contracts and other business arrangements. "Confidential Information" does not
include information that is in the public domain through no wrongful act on the
part of Executive.
ii. Executive's Use of Confidential Information. During the
period commencing on the Effective Date and continuing through the second
anniversary of the Effective Date, except in connection with his performance of
the consulting services contemplated by Section 5 of this Agreement, Executive
shall not, without Company's prior written consent, at any time, directly or
indirectly: (i) use any Confidential Information for any purpose; or (ii)
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 Company's property. Except in connection with and in
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{PAGE}
furtherance of Executive's work on Company's behalf or with Company's prior
written consent, Executive shall not, at any time, directly or indirectly: (i)
copy or use any Confidential Record for any purpose; or (ii) show, give, sell,
disclose or otherwise communicate any Confidential Record or the contents of any
Confidential Record to any person or entity. On the Effective Date, Executive
shall immediately deliver to 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 Company property in Executive's possession or
control. If any Confidential Information and/or Confidential Records are shared
with or disclosed to Executive during the Consulting Period, then such
Confidential Information and/or Confidential Records shall be governed by the
terms of this Section 7, and at the conclusion of the Consulting Period or upon
the Company's earlier request Executive shall immediately deliver to Company or
its designee (and shall not keep in Executive's possession or deliver to any
other person or entity) all Confidential Records then in Executive's possession
or control.
(c) Noninterference Covenants. For purposes of this Agreement,
"COMPETITIVE BUSINESS" shall mean any business that provides investment advisory
or investment management services, and "AFFILIATE" shall mean any corporation,
partnership, limited liability company, trust, or other entity which controls,
is controlled by or is under common control with the Company. During the period
commencing on the Effective Date and continuing through March 31, 2005,
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 the Company, or any Affiliate, 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, or any person who was employed or engaged as an
employee, consultant, agent or representative of the Company or any Affiliate
within the two-year period immediately preceding the Effective Date; or
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 the Company or any affiliate
of the Company shall have rendered service during the one-year period
immediately preceding the Effective Date; or
iv. Directly or indirectly divert or attempt to divert from
the Company or any Affiliate any business in which the Company or any Affiliate
has been actively engaged during the term hereof or interfere with any
relationship between the Company, or any Affiliate, and any of its clients.
(d) If any court shall determine that the duration, geographic
limitations, subject or scope 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.
5
{PAGE}
(e) 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 Executive of
any of those covenants. 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 Executive or by any person or persons acting for or with Executive
in any capacity whatsoever.
8. 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 Affiliate, whether under the
Employment Agreement (as amended), the Change of Control Agreement (as amended),
or otherwise, except with respect to benefits fully vested as of the Effective
Date that Executive is entitled to receive under the Company's 401(k) Profit
Sharing and Employee Stock Ownership Plan, any other qualified and non-qualified
pension and deferred compensation plans, and any other plans in which Executive
participates, and any unpaid salary, 2003 bonus or accrued vacation,
reimbursement for any previously incurred expenses in accordance with the
Company's policies in effect on the date hereof.
9. Legal Release.
(a) 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, Trustees, 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 resignation 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, the release set forth in this Section 9(a) shall not extend
to: (i) any rights arising under this Agreement or Section 10 of the Employment
Agreement; (ii) any rights arising under the LTI Plan and all agreements
pursuant to which Executive was awarded the stock and stock options referred to
in Section 4, above, the provisions of which are incorporated by this reference
to the extent not
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{PAGE}
inconsistent with this Agreement; (iii) any unpaid salary, 2003 bonus 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 Section 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 Section 9(a).
(b) The Company, on its own behalf and on behalf of its current and
past parents, subsidiaries and affiliates and each of their predecessors,
successors and assigns, knowingly and voluntarily releases and forever
discharges Executive and his heirs, personal representatives, executors,
administrators and assigns, (collectively, the "EXECUTIVE 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 the Company, its
current and past parents, subsidiaries and affiliates and each of their
predecessors, successors and assigns ever had, now have, or may hereafter claim
to have against any of the Executive 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 his separation therefrom, or arising under any
statute or regulation, 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;
provided, however, that notwithstanding the foregoing or anything else contained
in this Agreement, the release set forth in this paragraph 9(b) shall not extend
to: (i) any rights arising under this Agreement; (ii) any claim or claims
against Executive relating to or arising from any issue or matter that is the
subject matter of the regulatory investigations commenced in July 2003 and/or
ongoing related civil litigation; or (iii) any claim or claims that the Company
may have against Executive as of the Effective Date of which it is not aware as
of the Effective Date because of willful concealment by Executive. The Company,
on its own behalf and on behalf of its current and past parents and
subsidiaries, and each of their predecessors, successors and assigns, represents
that it has not 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 Section 9(b). The Company, on its own behalf and on behalf of
its current and past parents and subsidiaries, and each of their predecessors,
successors and assigns, further agrees that it will not seek or be entitled to
any personal recovery in any claim, charge, action or proceeding whatsoever
against Executive for any of the matters released in this Section 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 Section 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
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{PAGE}
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. No Transfer of Rights or Claims. Each of the Parties represents and
warrants that it has not heretofore assigned or transferred, or purported to
assign or transfer, to any person or entity, any of the claims released herein
and agrees to indemnify and hold harmless the other Party against any claim,
demand, debt, obligation, liability, cost, expense, right of action or cause of
action based on, arising out of, or with regard to any such assignment or
transfer.
11. Nondisparagement Covenants.
(a) Executive covenants never to disparage the Company or any
Affiliate, or of any product or service of the Company or any Affiliate, or of
any past or present employee, officer or director of the Company or any
Affiliate, or of any member of any Board of Trustees of any entity affiliated
with the Company at any time during Executive's employment with the Company.
(b) The Company covenants that no officer or director of the
Company, and no member of the Company's Management Committee ("MC"), shall,
while employed by or while serving on the Board or MC, as the case may be,
disparage Executive. Without limiting the foregoing, the Company covenants that
no member of the Company's Board or MC shall, while employed by or while serving
on the Board or MC, as the case may be, will suggest in any way that Executive's
separation from the Company was the result of disciplinary action against or
wrongdoing by Executive.
12. Limitations on Public Comment.
(a) Any statement by the Company to any prospective employer of
Executive, Company employees, or any third party shall not be inconsistent with
Exhibit D hereto.
(b) The Company shall file a Form 8K, and distribute a written
announcement of Executive's separation to the media, each of which shall be
consistent with Exhibit D. The Company and Executive each may make a statement
to the Company's employees with respect to Executive's separation provided that
such statement shall be consistent with Exhibit D.
(c) This Agreement shall not be construed or applied so as to limit
any person from giving truthful testimony in any lawsuit or action or from
providing candid, truthful information to any governmental or regulatory body or
any self-regulatory organization.
13. Additional Documents. Executive agrees that he shall do such acts, and
execute and deliver to the Company such additional documents or instruments not
inconsistent herewith, as may be reasonably required to effect the purposes of
this Agreement and shall cooperate fully with the Company to implement this
Agreement and any business transactions of the Company or any litigation that
may have arisen or arise in connection therewith.
14. Cooperation in Proceedings. The Company and Executive agree that they
shall fully cooperate with respect to any claim, litigation or judicial,
arbitral or investigative proceeding initiated by any private party or by any
regulator, governmental entity, or self-regulatory organization, that relates to
or arises from any matter with which Executive was involved during
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{PAGE}
his employment with the Company, or that concerns any matter of which Executive
has information or knowledge (collectively, a "PROCEEDING"). Executive's duty of
cooperation includes, but is not limited to: (i) meeting with the Company's
attorneys by telephone or in person at mutually convenient times and places in
order to state truthfully Executive's recollection of events; (ii) appearing at
the Company's request as a witness at depositions or trials, without the
necessity of a subpoena, in order to state truthfully Executive's knowledge of
matters at issue; and (iii) signing at the Company's request declarations or
affidavits that truthfully state matters of which Executive has knowledge. The
Company's duty of cooperation includes, but is not limited to providing
Executive and his counsel access to documents, information, witnesses and the
Company's legal counsel as is reasonably necessary to litigate on behalf of
Executive in any Proceeding. In addition, Executive agrees to notify the
Company's Chief Legal Officer promptly of any requests for information or
testimony that he receives in connection with any litigation or investigation
relating to the Company's business, and the Company agrees to notify Executive
of any requests for information or testimony that it receives relating to
Executive. Notwithstanding any other provision of this Agreement, this Agreement
shall not be construed or applied so as to require any Party to violate any
confidentiality agreement or understanding with any third party, nor shall it be
construed or applied so as to compel any Party to take any action, or omit to
take any action, requested or directed by any regulatory or law enforcement
authority.
15. Confidentiality.
(a) Executive and the Company recognize that the Company will file
this Agreement and the exhibits thereto as exhibits to public securities
filings, and may also disclose this Agreement and the exhibits thereto as may be
required by law or legal proceedings. The Parties mutually agree that they, and
each of them, will keep the circumstances underlying the negotiation and/or
drafting of this Agreement (collectively, the "CONFIDENTIAL SETTLEMENT
INFORMATION") strictly confidential, will not disclose any Confidential
Settlement Information in any way other than as provided herein, and will not
make any representation or other communication (orally or in writing) regarding
any Confidential Settlement Information to anyone, for any reason whatsoever,
without the express written consent of the other, unless the disclosure,
representation or communication: (i) is compelled by law; (ii) is to an attorney
and the attorneys' employees or agents and/or a financial advisor of Executive
and/or the Company and is necessary for the rendition of professional advice to
Executive or the Company (the restrictions stated in this Section 15 shall
automatically apply to the attorney and/or financial advisor of Executive or the
Company, which shall so advise the attorney and/or financial advisor); (iii) if
by Executive, is to Executive's immediate family (the restrictions stated in
this Section 15 shall automatically apply to the immediate family member and
Executive shall so advise the immediate family member); or (iv) if by the
Company, is to its employees, to any state or federal tribunal or regulatory
agency, to any insurer and/or, consistent with business necessity, to any other
person or entity. Executive and the Company shall not be entitled to make any
disclosure pursuant to subpart (i), above, unless he or it has first given the
other Party, through its counsel, written notice of, and a copy of, any subpoena
or other legal process purporting to require the disclosure of information
rendered confidential by this Section 15, as soon as practicable after Executive
or the Company receives such subpoena or other legal process.
(b) Notwithstanding any other provision of this Agreement, any Party
to this Agreement (and each employee, representative, or other agent of such
party) may disclose to any
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and all persons, without limitation of any kind, the tax treatment and tax
structure of the transaction and all materials of any kind (including opinions
and other tax analyses) that are provided to the Party relating to such tax
treatment and tax structure, provided that, in connection with any such
disclosure, all references to the amounts paid pursuant to this Agreement, and
other figures from which such amounts may be estimated or calculated, shall be
redacted.
(c) The Company and Executive may disclose any terms or conditions
of this Agreement as required or reasonably determined by each of them to be
necessary or appropriate in any civil, criminal and/or administrative
proceeding, or in discovery related to any such proceeding, in which case the
notice provisions of Section 15(a) above shall be applicable.
16. Disputes.
(a) Any dispute arising under or relating in any way to this
Agreement shall be submitted to arbitration in Denver, Colorado, or such other
venue as the Parties may mutually determine, in front of a single arbitrator who
is a member of the panel of former judges affiliated with the Judicial Arbiter
Group (the "JAG"), in accordance with the Employment Arbitration Rules of the
American Arbitration Association then in effect, as the exclusive remedy for
such dispute. Each Party shall submit a list of three names of proposed
arbitrators from the JAG panel. If the Parties cannot mutually agree on an
arbitrator from such lists, each Party shall strike two names from the other
Party's list, and the arbitrator shall then be chosen at random by the JAG from
the two remaining names. The Parties agree that such arbitration will be
confidential and that no details, descriptions, settlements, or other facts
concerning such arbitration shall be disclosed or released to any third party
without the specific written consent of the other Party, unless required by law
or in connection with enforcement of any decision in such arbitration. Any
damages awarded in such arbitration shall be limited to the contract measure of
damages, and shall not include punitive damages. The award of the arbitrator may
be entered as a judgment in any court of competent jurisdiction.
(b) The Company agrees to pay as incurred (within 10 days following
the Company's receipt of an invoice from Executive), to the full extent
permitted by law, all legal fees and expenses that Executive may reasonably
incur as a result of any contest (regardless of the outcome thereof unless
Executive's claim is determined by a court to have been frivolous or made in bad
faith, in which case Executive shall make prompt reimbursement of such fees and
expenses to the extent already paid by the Company and received by Executive) by
the Company, Executive, or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by Executive about the amount of
any payment pursuant to this Agreement), plus, in each case, interest on any
delayed payment at the applicable federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended.
(c) The Company agrees to reimburse Executive for the costs and
expenses incurred by Executive in negotiating this Agreement, the further
agreements attached hereto, and the press statement attached as Exhibit D
hereto, including but not limited to the fees of Executive's legal and public
relations advisors.
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17. Severability. It is the desire and intent of the Parties that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. In the event that any one or more of the provisions or
parts thereof of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remainder of
this Agreement shall not in any way be affected or impaired thereby. Moreover,
if any one or more of the provisions or parts thereof contained in this
Agreement is held to be excessively broad as to duration, scope, activity or
subject, such provisions shall be construed by limiting and reducing them so as
to be enforceable to the maximum extent allowed by applicable law.
18. Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the Parties regarding the subject matter hereof and may not be
modified without the express written consent of the Parties. Except as provided
by Section 29, this Agreement supersedes all prior discussions, agreements,
arrangements, understandings and negotiations, written or oral, between the
Parties regarding the subject matter hereof.
19. Notices. Any notice required or permitted under this Agreement shall
be given in writing and shall be deemed effectively given upon the earliest of
personal delivery, actual receipt or the third (3rd) full business day following
deposit in the United States mail with postage and fees prepaid, addressed to
the other Party hereto at such Party's address shown below or at such other
address as such Party may designate by ten (10) calendar days' advance written
notice to the other Party hereto. The addresses for notices are as follows:
For the Company: Janus Capital Group, Inc.
100 Fillmore Street
Denver, Colorado 80206
Attn: Chief Operating Office
With a copy to: Hogan & Hartson LLP
1200 17th Street, Suite 1500
Denver, Colorado, 80202
Attn: Edwin P. Aro
For Executive: Mark B. Whiston
At the most current residential address then on
file with the Company
With a copy to: Latham & Watkins LLP
633 West Fifth Street, Suite 4000
Los Angeles, CA 90071-2007
Attn: Peter W. Devereaux and James D. C. Barrall
20. Waiver. The failure of either Party to this Agreement to enforce any
of its terms, provisions or covenants shall not be construed as a waiver of the
same or of the right of such Party to enforce the same. Waiver by either Party
hereto of any breach or default by the other Party of
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{PAGE}
any term or provision of this Agreement shall not operate as a waiver of any
other breach or default.
21. Governing Law. This Agreement and all rights, duties and remedies
hereunder shall be governed by and construed and enforced in accordance with the
laws of the State of Delaware, without reference to its conflict of law rules.
22. Successors and Assigns. This Agreement shall be binding upon, and
shall inure to the benefit of, the Parties and their respective heirs,
administrators, representatives, executors, successors and assigns.
Notwithstanding the foregoing, Executive shall not assign any of his rights or
delegate any of his obligations under this Agreement without obtaining the prior
express written consent of the Company. The Company shall 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.
23. Authority. Each of the Parties has full authority to enter into and to
bind itself or himself to this Agreement.
24. Tax Withholdings. The Company may withhold from any amount payable to
Executive under this Agreement such Federal, state, local or foreign taxes as
shall be required to be withheld pursuant to any applicable law or regulation.
25. Nonreliance. Each Party understands and agrees that he or it assumes
all risk that the facts or law may be, or become, different than the facts or
law as believed by the Party at the time he or it executes this Agreement. The
Parties acknowledge that the character of their relationship as of the Effective
Date precludes any affirmative obligation of disclosure, and expressly disclaim
all reliance upon information supplied or concealed by the adverse Party or its
counsel in connection with the negotiation and/or execution of this Agreement.
26. Construction. The parties acknowledge that they and their respective
counsel have reviewed this Agreement in its entirety and have had a full and
fair opportunity to negotiate its terms. Each Party therefore waives all
applicable rules of construction that any provision of this Agreement should be
construed against its drafter, and agrees that all provisions of the Agreement
shall be construed as a whole, according to the fair meaning of the language
used.
27. Burden of Proof. Any Party contesting the validity or enforceability
of any term of this Agreement shall be required to prove by clear and convincing
evidence fraud, concealment, failure to disclose material information,
unconscionability, misrepresentation or mistake of fact or law.
28. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
29. Prior Agreements. This Agreement supercedes the Change of Control
Agreement (as amended) and the Employment Agreement (as amended), which
therefore shall be of no further force or effect except to the extent expressly
incorporated by reference herein. Notwithstanding
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{PAGE}
any other provision of this Agreement, the Company's obligations under Section
10 of the Employment Agreement (as amended) shall survive the execution of this
Agreement and shall thereafter remain enforceable according to their terms.
30. Acknowledgement The Parties acknowledge that they have each read this
Agreement and understand its terms. By signing this Agreement, the Parties
acknowledge and agree that they enter into this Agreement knowingly, voluntarily
and without coercion, that they have had sufficient opportunity to consult with
legal counsel of their choice, and that they do not rely, and have not relied,
on any fact, representation, statement or assumption other than as specifically
set forth in this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first written above.
[SIGNATURES FOLLOW]
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JANUS CAPITAL GROUP, INC. EXECUTIVE
By: /s/ Girard C. Miller /s/ Mark B. Whiston
----------------------------- -----------------------------
Mark B. Whiston
Date: 4/19/04 Date: 4/19/04
14
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Exhibits to Consulting and Separation Agreement
A. Deferred Compensation Agreement
B. Deferred Compensation Agreement Rabbi Trust
C. Stock Option Summary
D. Form of Public Statement
15
{PAGE}
EXHIBIT A
JANUS CAPITAL GROUP INC.
DEFERRED COMPENSATION AGREEMENT
FOR
MARK B. WHISTON
This Janus Capital Group Inc. Deferred Compensation Agreement for Mark B.
Whiston (this "AGREEMENT"), by and between Janus Capital Group Inc., a Delaware
corporation (the "COMPANY"), and Mark B. Whiston ("EXECUTIVE"), is hereby
approved and entered into effective as of the effective date of the Consulting
and Separation Agreement (the "CONSULTING AND SEPARATION AGREEMENT") by and
between the Company and Executive to which this Agreement is an exhibit (the
"EFFECTIVE DATE").
A. WHEREAS, the Company and Executive have negotiated the terms of
Executive's resignation from employment in the Consulting and Separation
Agreement; and
B. WHEREAS, a portion of the consideration for resignation takes the
form of a credit to a deferred compensation arrangement, the payment of which is
subject to certain conditions precedent.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and in the Consulting and Separation Agreement, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive hereby agree as follows:
1. Executive's Deferred Compensation Account.
As of the Effective Date, the Company shall establish in its books
and records a deferred compensation account with respect to Executive (the
"ACCOUNT"). The initial balance in said Account as of the Effective Date shall
be $7,950,000. Following such date, amounts shall be credited to the Account
only in accordance with the provisions of this Agreement. Such Account shall be
maintained and administered in accordance with the provisions of this Agreement,
and if the Account becomes payable under the terms of this Agreement, the
Company shall make a payment to Executive based on the balance reflected in the
Account at such time and in the manner provided under the terms of this
Agreement.
2. Forfeiture of Account.
(a) If, at any time before the Payment Commencement Date (defined
in Section 4, below), Executive is found by a final, unappealable judgment or
court or administrative order to have violated any law based upon his acts or
omissions in connection with his employment by the Company, or if Executive
pleads guilty or no contest to, or admits any such misconduct, or if Executive
consents or confesses to entry of a cease and desist,
{PAGE}
injunctive or similar court or administrative order arising from or relating to
an alleged violation of law based upon his acts or omissions in connection with
his employment by the Company and that results in Executive being barred or
suspended from association with an investment advisor, and/or paying any fine,
restitution and/or disgorgement, then Executive immediately shall forfeit the
Account in its entirety, and the bookkeeping entry representing the Account
shall be reversed to zero.
(b) If, at any time on or after the Payment Commencement Date
(defined in Section 4, below), Executive is found by a final, unappealable
judgment or court or administrative order to have violated any law based upon
his acts or omissions in connection with his employment by the Company, or if
Executive pleads guilty or no contest to, or admits any such misconduct, or if
Executive consents or confesses to entry of a cease and desist, injunctive or
similar court or administrative order arising from or relating to an alleged
violation of law based upon his acts or omissions in connection with his
employment by the Company and that results in Executive being barred or
suspended from association with an investment advisor and/or paying any fine,
restitution and/or disgorgement, then Executive shall promptly refund to the
Company 100% of the amount of the Account previously paid to Executive and
Executive immediately shall forfeit the remaining balance in the Account and the
bookkeeping entry representing the remaining balance in the Account shall be
reversed to zero.
(c) Notwithstanding any other provision of this Agreement or the
Consulting and Separation Agreement, in any action or arbitration in which the
Company seeks to collect sums from Executive that are payable or claimed to be
payable under Section 2(a) of this Agreement, the party substantially prevailing
therein shall recover its costs and expenses in connection with that action or
arbitration, including reasonable attorneys' fees.
3. Investment Performance.
(a) Except as otherwise provided herein, the amounts credited to
the Account shall be deemed to be invested in one or more of the investment
alternatives specified in Exhibit A attached hereto or any other investment
alternatives that are offered by the Company as investment alternatives under
its deferred compensation plans for its officers or members of its Board of
Directors (each an "INVESTMENT FUND"). The proportions in which the total
balance credited to the Account are to be allocated from time to time among the
Investment Funds shall be as specified pursuant to a written deferred
compensation investment election ("INVESTMENT ELECTION") made by Executive.
Executive may change his then current Investment Election from time to time by
delivering to the Company a new Investment Election to supercede Executive's
most recent Investment Election, provided, however, in no event shall Executive
make changes to his Investment Election more than twice (2) per calendar year.
Once a valid Investment Election is delivered to the Company by Executive, such
Investment Election shall remain in effect until it is changed by Executive by
the delivery to the Company of a valid Investment Election which supercedes
Executive's prior Investment Election. Each Investment Election shall be in a
form as approved by the Company from time to time and shall be delivered by
Executive to the Company's Assistant General Counsel or Controller ("COMPANY
REPRESENTATIVE") not less than three business days prior to the effective date
as of which the deemed investments in the Investment Funds are to be deemed made
or changed, as applicable. If Executive fails to file an effective Investment
Election prior to the crediting of any amounts to
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