EXHIBIT 10.39
JANUS CAPITAL CORPORATION
EMPLOYMENT AGREEMENT
THIS AGREEMENT, is effective January 1, 1998, by and between Janus
Capital Management LLC, a Delaware limited liability company (the "Company"),
and Xxxxx X. Xxxxx (the "Employee"), as amended and restated.
RECITALS:
A. The Employee's services are valued by the Company and the Company
and the Employee desire to set forth in this Agreement the terms and conditions
for the continuation of such employment during the term hereof.
B. The Company desires to compensate the Employee in a manner which
reflects the success of the Employee's investment results.
C. The Employee and the Company desire that the Employee shall be
compensated on the terms and conditions set forth herein.
D. The parties desire to amend this Agreement to reflect the occurrence
of the Change of Control of the Company (as defined below) and to remove
unnecessary provisions.
In consideration of the premises and mutual covenants herein contained,
it is agreed as follows:
AGREEMENT:
1. Employment. The Company shall employ the Employee as a portfolio
manager upon the terms and conditions set forth herein. The primary place of
employment shall be at the Company's principal offices in Denver, Colorado, or
at such other location as the Company and the Employee may agree.
2. Term. The term of this Agreement commenced on January 1, 1998 and
shall expire on April 1, 2005.
3. Duties. The Employee shall, during the Employee's employment with
the Company:
(a) Faithfully and diligently do and perform all such acts and
duties and furnish such services consistent with the Employee's
position as a portfolio manager and as the Board of Directors or the
Chief Executive Officer ("CEO") of the Company shall direct; and
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(b) Devote the Employee's full professional time, energies and
skills to the business of the Company and to the promotion of the
Company's best interests, except for vacations and leaves of absence
made necessary because of illness.
During the term of this Agreement, the Company shall not be entitled to reassign
the Employee to the position of senior research analyst.
4. Fixed Salary. The Employee's base annual salary for calendar year
1998 shall be $500,000 ("Fixed Salary"). Thereafter, the Employee's Fixed Salary
shall be subject to review on an annual basis by the CEO of the Company or the
Board of Directors of the Company (or a committee designated by the Board to
make such review). The Employee's Fixed Salary may be increased or decreased as
a result of such review; provided, however, that the Employee's Fixed Salary
shall not be decreased unless there has been a substantial reduction in the
character of the duties assigned to the Employee or in the Employee's level of
work responsibility. The Employee's Fixed Salary shall be prorated for any
partial year of employment.
5. Additional Incentive Compensation. The Employee may also receive
additional compensation consistent with the current methodologies used by the
Company to determine incentive compensation and bonuses and consistent with
similarly situated portfolio managers.
6. Payments. The Employee's Fixed Salary shall be paid at the usual
times for the payment of the Company's employees, but not less frequently than
monthly. The Employee's Additional Incentive Compensation, if any, shall be paid
under the then-existing Company practice. All payments under this Agreement
shall be subject to such withholding deductions as may be required to be made
pursuant to law, government regulation or order, or by written agreement with,
or written consent of, the Employee.
7. Benefits; Expense Reimbursement; Indemnification.
(a) The Employee shall be entitled to participate in such life
insurance, disability, medical, dental, pension, profit sharing and
retirement plans and other programs as may be made generally available
from time to time by the Company for the benefit of executives of the
Employee's level or its employees generally ("Benefits"). The Employee
also shall be entitled to paid time off during each consecutive 12
month period in accordance with the Company's written policy, to be
taken at such times and for such periods as the Employee and the
Company shall mutually determine. Paid time off shall not unreasonably
interfere with the duties required to be rendered by the Employee
hereunder (except as may be required for illness or injury).
(b) The Company shall promptly reimburse the Employee for all
reasonable expenses incurred in the performance of the Employee's
duties hereunder, including without limitation, expenses for
entertainment, travel and use of the telephone. The Employee shall
submit appropriate documentation for all expenses in accordance with
the Company's expense reimbursement policies, as in effect from time to
time.
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(c) The Company shall indemnify the Employee to the fullest
extent permitted under law from and against any expenses (including but
not limited to attorneys' fees, expenses of investigation and
preparation and fees and disbursements of the Employee's accountants or
other experts), judgments, fines, penalties and amounts paid in
settlement actually and reasonably incurred by the Employee in
connection with any proceeding in which the Employee was or is made
party or was or is involved (for example, as a witness) by reason of
the fact the Employee was or is employed by the Company, except to the
extent that such expense, judgment, fine, penalty or amount arises from
the gross negligence or willful misconduct of the Employee.
Such indemnification is subject to:
(i) the indemnifying party promptly receiving written
notice that a claim or liability has been asserted or
threatened ("Notice of Claim");
(ii) the indemnified party providing reasonable
cooperation and assistance in the defense or settlement of a
claim; and
(iii) the indemnifying party being afforded the
opportunity to have the sole control over the defense or
settlement of such claim or liability.
Unless within ten days after receiving the Notice of Claim,
the indemnifying party notifies in writing the indemnified
party of its intent to defend against such claim or liability,
the indemnified party may defend, settle and/or compromise any
such claim or liability, and be indemnified for all losses
resulting from such defense, settlement and/or compromise. Any
indemnified party also may participate in such defense at its
own cost and expense.
(d) If any dispute should arise under this Agreement involving
an effort by the Employee to protect, enforce, or secure rights or
benefits claimed by the Employee hereunder, the Company shall pay
(promptly upon demand by the Employee accompanied by reasonable
evidence of incurrence) all reasonable expenses (including attorneys'
fees) incurred by the Employee in connection with such dispute, without
regard to whether the Employee prevails in such dispute except that the
Employee shall repay the Company any amounts so received if a court
having jurisdiction shall make a final, nonappealable determination
that the Employee acted frivolously or in bad faith by such dispute. To
assure the Employee that adequate funds will be made available to
discharge the Company's obligations set forth in the preceding
sentence, the Company has established a trust and shall promptly
deliver to the trustee of such trust to hold in accordance with the
terms and conditions thereof that sum which the Company's Board of
Directors shall have determined is reasonably sufficient for such
purpose.
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8. Termination of Employment; Definitions.
(a) This Agreement and the Employee's employment with the
Company shall terminate upon non-renewal of this Agreement under
paragraph 2 and also under the following circumstances:
(i) Immediately upon the Employee's death;
(ii) Upon written notice from the Company to the
Employee if the Employee has become "Disabled";
(iii) Upon written notice from the Company to the
Employee for "Cause";
(iv) Upon written notice from the Employee to the
Company for "Good Reason";
(v) Upon not less than 90 days' prior written notice
from the Company to the Employee without "Cause"; or
(vi) Upon not less than 90 days' prior written notice
from the Employee to the Company without "Good Reason".
(b) The Employee shall be considered to be "Disabled" or to
have suffered a "Disability" if the Employee is disabled under the
terms of the Company's long-term disability policy.
(c) "Cause" shall be deemed to exist if and only if:
(i) The Employee willfully refuses to obey written
directions of the Board of Directors or the CEO of the Company
(so long as such directions do not involve a substantial
reduction in the character of the duties assigned to the
Employee or in the Employee's level of work responsibility or
illegal or immoral acts), which refusal continues for a period
of 15 days after written notice to the Employee by the Company
which notice describes such refusal in reasonable detail and
references this paragraph 8(c);
(ii) The Employee breaches paragraph 10 of this
Agreement;
(iii) The Employee commits a criminal offense that
constitutes a felony in the jurisdiction in which the offense
is committed (excluding any traffic or similar violations); or
(iv) The Employee commits an act that constitutes a
material violation of federal or state securities laws.
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The determination as to whether the Employee has committed a
felony for purposes of subparagraph (c)(iii) above or a
material violation of federal or state securities laws for
purposes of subparagraph (c)(iv) above shall be made in good
faith by the Board of Directors of the Company.
(d) The Employee shall have "Good Reason" if there occurs
without the Employee's written consent (except as described below):
(i) A material reduction in the duties assigned to
the Employee or in the Employee's level of work responsibility
or working conditions, unless approved in writing by the
Employee and the Company;
(ii) A reduction in the Employee's Fixed Salary or a
material adverse change in the computation of the Employee's
Additional Incentive Compensation pursuant to paragraph 5, as
in effect immediately prior to April 2, 2002 (the "Control
Change Date");
(iii) A failure by the Company or its successor to
continue to provide to the Employee any of the Benefits or
paid time off referred to in paragraph 7, on substantially the
same basis as such Benefits or paid time off were in effect
immediately prior to April 2, 2002 (the "Prior Benefits"),
unless the Company provides and the Employee is eligible to
participate in other benefits which are at least equivalent in
all reasonable respects to the Prior Benefits;
(iv) A requirement that the Employee be based at a
location outside the metropolitan area of Denver, Colorado or
other location which was mutually agreed upon by the Company
and the Employee, except for required travel on Company
business to an extent substantially consistent with the
Employee's obligations immediately prior to the Control Change
Date; or
(v) Any material breach of this Agreement by the
Company or its successor which is not cured within 15 days
after written notice from the Employee which describes the
breach in reasonable detail and references this paragraph
8(d).
(e) A "Change in Control of the Company" occurred on April 2,
2002 because Xxxxxx X. Xxxxxx ("THB") no longer had the right to select
a majority of the Board of Directors of Janus Capital Corporation or
the Company in accordance with that certain Stock Purchase Agreement by
and among THB, Xxxxxxx X. Xxxxxxxxxxx III, Xxxxxxx Xxxxxxx, Xxxx X.
Xxxxxxxx and Kansas City Southern Industries, Inc. ("KCSI") dated April
13, 1984, as subsequently amended and as assigned to Xxxxxxxx Financial
Inc.
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9. Termination Benefit and Severance Pay.
(a) If the Employee's employment terminates either during the
term of this Agreement or at the expiration of this Agreement, the
Employee shall be entitled to receive a termination benefit and
severance pay for the period, if any, set forth in Schedule A.
Following any termination, regardless of the cause, the Employee shall
be entitled to receive any Fixed Salary which has been earned but has
not been paid as of the date of termination, any Additional Incentive
Compensation which is payable in accordance with the terms of paragraph
5, and reimbursement in accordance with paragraph 7(b) for expenses
incurred prior to the termination. The Employee shall have no duty to
mitigate. The termination benefit and severance pay set forth in
Schedule A shall not be offset with respect to compensation or benefits
which may be received by the Employee from a third party.
(b) If the Employee is entitled to additional months of
compensation in accordance with Schedule A, the amount to be paid by
the Company each month shall consist of one-twelfth of the sum of the
following amounts:
(i) The Employee's annual Fixed Salary;
(ii) The amount of the Employee's Additional
Incentive Compensation paid or accrued with respect to the
last four full calendar quarters preceding the date of the
Employee's termination; and
(iii) An amount equal to the pension, profit sharing
or other retirement or deferred compensation benefits paid or
accrued by the Company on behalf of or for the benefit of the
Employee with respect to the last full calendar year preceding
the date of the Employee's termination.
Payment of such monthly amounts shall be made at the usual times for
the payment of the Company's employees for the period, if any, set
forth in Schedule A. Notwithstanding the foregoing, if the Employee is
terminated due to Disability, monthly payments shall be reduced by any
payments received by the Employee following such termination under the
Company's long-term disability plan or other similar policy maintained
by the Company.
(c) If the Employee is entitled to additional months of
Benefits in accordance with Schedule A, the Employee shall also be
entitled to participate in each of the Benefits described in paragraph
7 (other than pension, profit-sharing or retirement plans and deferred
compensation arrangements) for the period, if any, set forth in
Schedule A at the Company's expense. If any such Benefit (other than
pension, profit-sharing or retirement plans and deferred compensation
arrangements) cannot reasonably be made available to the Employee, then
the Employee shall receive an amount in cash equal to (i) the cost to
the Company of providing any such benefits previously provided by the
Company which were tax-exempt to the Employee, "grossed up" based upon
the highest combined federal and applicable state marginal tax rate in
effect (assuming that the Employee is married
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and filing a joint return) on the date of payment, and (ii) the cost to
the Company of providing any such benefits previously provided by the
Company which were taxable to the Employee. The Company shall determine
the cost of such benefits in good faith and shall provide reasonable
documentation to support its findings to the Employee.
(d) If the Employee's employment terminates as a result of the
Employee's death, or if the Employee should die prior to payment of all
amounts due hereunder, payments shall continue for the period, if any,
set forth in Schedule A, and payments to be made after the Employee's
death, including without limitation any payments of additional months
of compensation in accordance with Schedule A, Additional Incentive
Compensation in accordance with paragraph 5, shall be paid to the
Employee's named beneficiary if any, otherwise to the Employee's
estate.
10. Restrictive Covenants.
(a) The Employee acknowledges that employment as a member of
the Company's executive or management team or as a member of
professional staff supporting the Company's executive or management
team creates a relationship of confidence and trust between the
Employee and the Company with respect to confidential and proprietary
information applicable to the business of the Company and its clients.
The Employee further acknowledges the highly competitive nature of the
business of the Company. Accordingly, it is agreed that the
restrictions contained in this paragraph 10 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 Employee's employment with the Company, and for
a period of three years following the date of termination of the
Employee's employment with the Company for any reason, including
termination occasioned by the expiration of this Agreement, the
Employee shall not (nor shall the Employee 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;
(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
Employee's termination;
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(iii) Solicit directly or indirectly on behalf of the
Employee 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 two-year period
immediately preceding the Employee'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.
Notwithstanding the foregoing, the provisions of this
paragraph 10(b) shall not apply following termination of
employment if the CEO of the Company immediately prior to
termination of employment was someone other than the CEO of
the Company on January 1, 1998.
(c) "Competitive Business" means (A) any business which
provides investment advisory or investment management services, and (B)
any business which otherwise competes with the business which was
conducted or proposed to be conducted by the Company or any affiliate
of the Company within the two-year period immediately preceding the
Employee's termination. For purposes of this paragraph 10, "affiliate"
means any corporation, partnership, limited liability company, trust,
or other entity which controls, is controlled by or is under common
control with the Company.
(d) The Employee shall have no right to receive any further
payments under this Agreement which are unpaid at the time of a breach
of this restrictive covenant by the Employee, and in the event of such
a breach the Company shall have no further obligation to pay any amount
to the Employee. Any payments made as described in paragraph 10(b)
prior to such breach shall be promptly returned upon demand by the
Company.
(e) If any court shall determine that the duration, geographic
limitations, subject or scope of any restriction contained in this
paragraph 10 is unenforceable, it is the intention of the parties that
this paragraph 10 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 paragraph
10 in the jurisdiction of the court that has made the adjudication.
(f) The Employee acknowledges and recognizes the importance to
the Company of the above covenants and agrees that following
termination of employment with the Company, at the request of the
Company from time to time during the three year period referred to in
paragraph 10(b), the Employee shall advise the Company of the identity
of the Employee's employer and shall provide a general description, in
reasonable detail, of the business of such employer and the Employee's
duties and
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responsibilities so that the Company may determine whether there has
been any breach of this Agreement.
11. Additional Remedies. The Employee acknowledges that the restrictive
covenants of paragraph 10 are reasonable and that irreparable injury will result
to the Company and to its business and properties in the event of any breach by
the Employee of any of those covenants, and that the Employee's continued
employment is predicated on the commitments undertaken by the Employee pursuant
to said paragraph. In the event any of the covenants of paragraph 10 are
breached, the Company shall be entitled, in addition to any other remedies and
damages available, to injunctive relief to restrain the violation of such
covenants by the Employee or by any person or persons acting for or with the
Employee in any capacity whatsoever.
12. Assignment. This Agreement is personal to the Employee and shall
not be assigned by the Employee. The Employee shall not hypothecate, delegate,
encumber, alienate, transfer or otherwise dispose of the Employee's rights and
duties hereunder. The Company may assign this Agreement without the Employee's
consent to any other entity who, in connection with such assignment, acquires
all or substantially all of the Company's assets or into or with which the
Company is merged or consolidated.
13. Waiver. The waiver by either party of a breach by the other party
of any provision of this Agreement shall not be construed as a waiver of a
breach of any other provision or any subsequent breach.
14. Severability. If any clause, phrase, provision or portion of this
Agreement or the application thereof to any person or circumstance shall be
invalid or unenforceable under any applicable law, such event shall not affect
or render invalid or unenforceable the remainder of this Agreement and shall not
affect the application of any clause, provision, or portion hereof to any other
person or circumstance.
15. Benefit. Subject to the restrictions of paragraph 12, the
provisions of this Agreement shall inure to the benefit of the Company, its
successors and assigns, and shall be binding upon the Company and the Employee,
the Employee's heirs, personal representatives and successors and assigns,
including without limitation the Employee's estate and the executors,
administrators, or trustees of such estate.
16. Relevant Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Colorado, without regard to the
conflicts of laws principles of such State.
17. Notices. All notices, requests, demands and other communications in
connection with this Agreement shall be made in writing and shall be deemed to
have been given (i) when delivered by hand, or (ii) 48 hours after mailing at
any general or branch United States Post Office, by registered or certified
mail, postage prepaid, return receipt requested, or (iii) one business day after
deposit for overnight delivery at an express courier service holding itself out
as
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being able to make overnight delivery, in each case addressed as follows, or to
such other address as shall have been designated in writing by the addressee:
If to the Company:
Janus Capital Corporation
ATTN: CEO
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
With a copy to the Office of General Counsel
If to the Employee:
Xxxxx X. Xxxxx
00 Xxxx Xxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
18. Entire Agreement. This Agreement sets forth the entire
understanding of the parties and supersedes all prior agreements, arrangements,
and communications, whether oral or written, pertaining to the subject matters
hereof. This Agreement may only be amended or modified by a writing signed by
both parties. Oral promises or assurances are not effective to enforce, amend or
modify this Agreement.
19. Survival. The provisions of paragraphs 6, 7(b), 7(c) and 9 through
19 shall survive any termination, expiration or nonrenewal of this Agreement for
such periods as are necessary to enforce the provisions thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective on the date first set forth above.
JANUS CAPITAL MANAGEMENT LLC
By: /s/ Xxxxxx X. Early
--------------------------------
Xxxxxx X. Early, Vice President
EMPLOYEE:
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Xxxxx X. Xxxxx
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SCHEDULE A
TERMINATION BENEFIT AND SEVERANCE PAY
TERMINATION BENEFIT AND SEVERANCE PAY FOLLOWING CHANGE IN CONTROL
ADDITIONAL ADDITIONAL
EVENT OF MONTHS OF MONTHS OF
TERMINATION BENEFITS COMPENSATION
DEATH 12 12
DISABILITY 12 12
TERMINATION BY 3 NONE
COMPANY FOR CAUSE
TERMINATION BY 36* 36*
EMPLOYEE FOR
GOOD REASON
NON-RENEWAL BY 3 NONE
EMPLOYEE
NON-RENEWAL BY 36* 36*
COMPANY
TERMINATION BY 36* 36*
COMPANY WITHOUT
CAUSE
TERMINATION BY 3 NONE
EMPLOYEE WITHOUT
GOOD REASON
*For an Event of Termination occurring within 3 years following the
Change-in-Control; reduced to 12 months for an Event of Termination occurring
thereafter.
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