Exhibit 10.1

 

EXCHANGE AGREEMENT

 

(the “Undersigned”), for itself and on behalf of the beneficial owners listed on
Exhibit A hereto (“Accounts”) for whom the Undersigned holds contractual and
investment authority (each Account, as well as the Undersigned if it is
exchanging Existing Notes (as defined below) hereunder, a “Holder”), enters into
this Exchange Agreement (the “Agreement”) with Janus Capital Group Inc. (the
“Company”) on June 14, 2013 whereby the Holders will exchange (the “Exchange”)
the Company’s 3.25% Convertible Senior Notes due 2014 (the “Existing Notes”) for
the Company’s new 0.75 % Convertible Senior Notes due 2018 (the “New Notes”)
that will be issued pursuant to the provisions of an Indenture dated as of
November 6, 2001 (the “Base Indenture”) between the Company and the Bank of New
York Mellon Trust Company, N.A., (as successor to The Chase Manhattan Bank) (the
“Trustee”), as supplemented by the Third Supplemental Indenture thereto, to be
dated as of June 19, 2013 (the “Supplement,” and, together with the Base
Indenture and all other supplements thereto, the “Indenture”) by and between the
Company and the Trustee.

 

On and subject to the terms hereof, the parties hereto agree as follows:

 

Article I:  Exchange of the Existing Notes for New Notes

 

Subject to the terms set forth in this Agreement, at the Closing (as defined
herein), the Undersigned hereby agrees to cause the Holders to exchange and
deliver to the Company the following Existing Notes, and in exchange therefor
the Company hereby agrees to issue to the Holders the principal amount of New
Notes described below and to pay in cash the following accrued but unpaid
interest on such Existing Notes:

 

Principal Amount of Existing Notes to be Exchanged:

$ 

                                     

 

(the “Exchanged Notes”).

 

 

Principal Amount of New Notes to be Issued in the Exchange:

$ 

                                  

 

(the “Holders’ New Notes”).

 

 

Cash Payment of Accrued but Unpaid Interest on Exchanged Notes:

$ 

                                       

 

(the “Cash Payment”).

 

The closing of the Exchange (the “Closing”) shall occur on a date (the “Closing
Date”) no later than three business days after the date of this Agreement.  At
the Closing, (a) each Holder shall deliver or cause to be delivered to the
Company all right, title and interest in and to its Exchanged Notes (and no
other consideration) free and clear of any mortgage, lien, pledge, charge,
security interest, encumbrance, title retention agreement, option, equity or
other adverse claim thereto (collectively, “Liens”), together with any documents
of conveyance or transfer that the Company may deem necessary or desirable to
transfer to and confirm in the Company all right, title and interest in and to
the Exchanged Notes free and clear of any Liens, and (b) the Company shall
deliver to each Holder the principal amount of Holders’ New Notes and the
portion of the Cash Payment specified on Exhibit A hereto (or, if there are no
Accounts, the Company shall deliver to the Undersigned, as the sole Holder, the
Holders’ New Notes and the

 

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Cash Payment specified above); provided, however, that the parties acknowledge
that the delivery of the Holders’ New Notes to the Holder may be delayed due to
procedures and mechanics within the system of the Depository Trust Company or
the New York Stock Exchange (including the procedures and mechanics regarding
the listing of the Conversion Shares (as defined below) on the New York Stock
Exchange) or events beyond the Company’s control and that such delay will not be
a default under this Agreement so long as (i) the Company is using its best
efforts to effect the issuance of one or more global notes representing the New
Notes, (ii) such delay is no longer than five business days, and (iii) interest
shall accrue on such New Notes from the Closing Date.  Simultaneously with or
after the Closing, the Company may issue New Notes to one or more other holders
of outstanding Existing Notes or to other investors, subject to the terms of the
Indenture.

 

Article II:  Covenants, Representations and Warranties of the Holders

 

Each Holder (and, where specified below, the Undersigned) hereby covenants
(solely as to itself), as follows, and makes the following representations and
warranties (solely as to itself), each of which is and shall be true and correct
on the date hereof and at the Closing, to the Company and Barclays Capital Inc.,
and all such covenants, representations and warranties shall survive the
Closing.

 

Section 2.1                                   Power and Authorization.  The
Holder is duly organized, validly existing and in good standing, and has the
power, authority and capacity to execute and deliver this Agreement, to perform
its obligations hereunder, and to consummate the Exchange contemplated hereby. 
If the Undersigned is executing this Agreement on behalf of Accounts, (a) the
Undersigned has all requisite discretionary and contractual authority to enter
into this Agreement on behalf of, and bind, each Account, and (b) Exhibit A
hereto is a true, correct and complete list of (i) the name of each Account,
(ii) the principal amount of such Account’s Exchanged Notes, (iii) the principal
amount of Holders’ New Notes to be issued to such Account in respect of its
Exchanged Notes, and (iv) the portion of the Cash Payment to be made to such
Account in respect of the accrued interest on its Exchanged Notes.

 

Section 2.2                                   Valid and Enforceable Agreement;
No Violations.  This Agreement has been duly executed and delivered by the
Undersigned and the Holder and constitutes a legal, valid and binding obligation
of the Undersigned and the Holder, enforceable against the Undersigned and the
Holder in accordance with its terms, except that such enforcement may be subject
to (a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
or other similar laws affecting or relating to enforcement of creditors’ rights
generally, and (b) general principles of equity, whether such enforceability is
considered in a proceeding at law or in equity (the “Enforceability
Exceptions”).  This Agreement and consummation of the Exchange will not violate,
conflict with or result in a breach of or default under (i) the Undersigned’s or
the Holder’s organizational documents, (ii) any agreement or instrument to which
the Undersigned or the Holder is a party or by which the Undersigned or the
Holder or any of their respective assets are bound, or (iii) any laws,
regulations or governmental or judicial decrees, injunctions or orders
applicable to the Undersigned or the Holder.

 

Section 2.3                                   Title to the Exchanged Notes.  The
Holder is the sole legal and beneficial owner of the Exchanged Notes set forth
opposite its name on Exhibit A hereto (or, if there are no

 

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Accounts, the Undersigned is the sole legal and beneficial owner of all of the
Exchanged Notes).  The Holder has good, valid and marketable title to its
Exchanged Notes, free and clear of any Liens (other than pledges or security
interests that the Holder may have created in favor of a prime broker under and
in accordance with its prime brokerage agreement with such broker).  The Holder
has not, in whole or in part, except as described in the preceding sentence,
(a) assigned, transferred, hypothecated, pledged, exchanged or otherwise
disposed of any of its Exchanged Notes or its rights in its Exchanged Notes, or
(b) given any person or entity any transfer order, power of attorney or other
authority of any nature whatsoever with respect to its Exchanged Notes.  Upon
the Holder’s delivery of its Exchanged Notes to the Company pursuant to the
Exchange, such Exchanged Notes shall be free and clear of all Liens created by
the Holder.

 

Section 2.4                                   Accredited Investor and Qualified
Institutional Buyer.  The Holder is:  (i) an “accredited investor” within the
meaning of Rule 501 of Regulation D (“Regulation D”) promulgated under the
Securities Act of 1933, as amended (the “Securities Act”), and (ii) a “qualified
institutional buyer” within the meaning of Rule 144A promulgated under the
Securities Act.

 

Section 2.5                                   No Affiliate, Related Party or 5%
Stockholder Status.  The Holder is not, and has not been during the consecutive
three month period preceding the date hereof, a director, officer or “affiliate”
within the meaning of Rule 144 promulgated under the Securities Act (an
“Affiliate”) of the Company.  To its knowledge, the Holder did not acquire any
of the Exchanged Notes, directly or indirectly, from an Affiliate of the
Company.  The Holder and its Affiliates collectively beneficially own and will
beneficially own as of the Closing Date (but without giving effect to the
Exchange) (i) less than 5% of the outstanding common stock, par value $0.01 per
share, of the Company (the “Common Stock”) and (ii) less than 5% of the
aggregate number of votes that may be cast by holders of those outstanding
securities of the Company that entitle the holders thereof to vote generally on
all matters submitted to the Company’s stockholders for a vote (the “Voting
Power”).  The Holder is not a subsidiary, affiliate or, to its knowledge,
otherwise closely-related to any director or officer of the Company or
beneficial owner of 5% or more of the outstanding Common Stock or Voting Power
(each such director, officer or beneficial owner, a “Related Party”).  To its
knowledge, no Related Party beneficially owns 5% or more of the outstanding
voting equity, or votes entitled to be cast by the outstanding voting equity, of
the Holder.

 

Section 2.6                                   No Illegal Transactions.  Each of
the Undersigned and the Holder has not, directly or indirectly, and no person
acting on behalf of or pursuant to any understanding with it has, engaged in any
transactions in the securities of the Company (including, without limitation,
any Short Sales (as defined below) involving any of the Company’s securities)
since the time that the Undersigned was first contacted by either the Company,
Barclays Capital Inc. or any other person regarding the Exchange, this Agreement
or an investment in the New Notes or the Company.  Each of the Undersigned and
the Holder covenants that neither it nor any person acting on its behalf or
pursuant to any understanding with it will engage, directly or indirectly, in
any transactions in the securities of the Company (including Short Sales) prior
to the time the transactions contemplated by this Agreement are publicly
disclosed.  “Short Sales” include, without limitation, all “short sales” as
defined in Rule 200 of Regulation SHO promulgated under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and all types of

 

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direct and indirect stock pledges, forward sale contracts, options, puts, calls,
short sales, swaps, derivatives and similar arrangements (including on a total
return basis), and sales and other transactions through non-U.S. broker-dealers
or foreign regulated brokers.  Solely for purposes of this Section 2.6, subject
to the Undersigned’s and the Holder’s compliance with their respective
obligations under the U.S. federal securities laws and the Undersigned’s and the
Holder’s respective internal policies, (a) “Undersigned” and “Holder” shall not
be deemed to include any employees, subsidiaries or affiliates of the
Undersigned or the Holder that are effectively walled off by appropriate
“Chinese Wall” information barriers approved by the Undersigned’s or the
Holder’s respective legal or compliance department (and thus have not been privy
to any information concerning the Exchange), and (b) the foregoing
representations of this Section 2.6 shall not apply to any transaction by or on
behalf of an Account that was effected without the advice or participation of,
or such Account’s receipt of information regarding the Exchange provided by, the
Undersigned.

 

Section 2.7                                   Adequate Information; No
Reliance.  The Holder acknowledges and agrees that (a) the Holder has been
furnished with all materials it considers relevant to making an investment
decision to enter into the Exchange and has had the opportunity to review the
Company’s filings and submissions with the Securities and Exchange Commission
(the “SEC”), including, without limitation, all information filed or furnished
pursuant to the Exchange Act, (b) the Holder has had a full opportunity to ask
questions of the Company concerning the Company, its business, operations,
financial performance, financial condition and prospects, and the terms and
conditions of the Exchange, (c) the Holder has had the opportunity to consult
with its accounting, tax, financial and legal advisors to be able to evaluate
the risks involved in the Exchange and to make an informed investment decision
with respect to such Exchange and (d) the Holder is not relying, and has not
relied, upon any statement, advice (whether accounting, tax, financial, legal or
other), representation or warranty made by the Company or any of its affiliates
or representatives including, without limitation, and Barclays Capital Inc.,
except for (A) the publicly available filings and submissions made by the
Company with the SEC under the Exchange Act, and (B) the representations and
warranties made by the Company in this Agreement.

 

Section 2.8                                   No Public Market; Call Hedge.  The
Holder understands that (a) no public market exists for the New Notes, and that
there is no assurance that a public market will ever develop for the New Notes,
and (b) the Company may enter into the Call Hedge (as defined below), which may
affect the market price per share of Common Stock on an ongoing basis or
periodically after the date hereof.

 

Article III:  Covenants, Representations and Warranties of the Company

 

The Company hereby covenants as follows, and makes the following representations
and warranties, each of which is and shall be true and correct on the date
hereof and at the Closing, to the Holders, and Barclays Capital Inc., and all
such covenants, representations and warranties shall survive the Closing.

 

Section 3.1                                   Power and Authorization.  The
Company is duly incorporated, validly existing and in good standing under the
laws of its state of incorporation, and has the power,

 

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authority and capacity to execute and deliver this Agreement and the Supplement,
to perform its obligations hereunder and thereunder, and to consummate the
Exchange contemplated hereby.

 

Section 3.2                                   Valid and Enforceable Agreements;
No Violations.  This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except that such
enforcement may be subject to the Enforceability Exceptions.  At the Closing,
the Supplement, substantially in the form of Exhibit B hereto, will have been
duly executed and delivered by the Company and will govern the terms of the New
Notes, and the Indenture will constitute a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except that such enforcement may be subject to the Enforceability Exceptions. 
This Agreement, the Indenture and consummation of the Exchange will not violate,
conflict with or result in a breach of or default under (i) the charter, bylaws
or other organizational documents of the Company, (ii) any agreement or
instrument to which the Company is a party or by which any of its assets are
bound, or (iii) any laws, regulations or governmental or judicial decrees,
injunctions or orders applicable to the Company, except, in the case of clauses
(ii) and (iii), as would not reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), earnings or business of the
Company and its subsidiaries considered as one enterprise.

 

Section 3.3                                   Validity of the Holders’ New
Notes.  The Holders’ New Notes have been duly authorized by the Company and,
when executed and authenticated in accordance with the provisions of the
Indenture and delivered to the Holder pursuant to the Exchange against delivery
of the Exchanged Notes in accordance with the terms of this Agreement, the
Holders’ New Notes will be valid and binding obligations of the Company,
enforceable in accordance with their terms, except that such enforcement may be
subject to the Enforceability Exceptions, and the Holders’ New Notes will not be
subject to any preemptive, participation, rights of first refusal or other
similar rights.  Assuming the accuracy of each Holder’s representations and
warranties hereunder, the Holders’ New Notes (a) will be issued in the Exchange
exempt from the registration requirements of the Securities Act pursuant to
Section 4(2) of the Securities Act and Rule 506 of Regulation D under the
Securities Act, (b) will, at the Closing, be free of any restrictions on resale
by such Holder pursuant to Rule 144 promulgated under the Securities Act, and
(c) will be issued in compliance with all applicable state and federal laws
concerning the issuance of the Holders’ New Notes.

 

Section 3.4                                   Validity of Underlying Common
Stock.  The Holders’ New Notes will be convertible into cash, shares of Common
Stock (the “Conversion Shares”) or a combination of cash and Conversion Shares
in accordance with the terms of the Supplement.  The Conversion Shares have been
duly authorized and reserved by the Company for issuance upon conversion of the
Holders’ New Notes and, when issued upon conversion of the Holders’ New Notes in
accordance with the terms of the Holders’ New Notes and the Indenture, will be
validly issued, fully paid and non-assessable, and the issuance of the
Conversion Shares will not be subject to any preemptive, participation, rights
of first refusal or other similar rights.

 

Section 3.5                                   Listing Approval.  At the Closing,
the Conversion Shares shall be eligible for trading on the New York Stock
Exchange, subject to official notice of issuance.

 

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Section 3.6                                   Disclosure.  On or before the
first business day following the date of this Agreement, the Company shall issue
a publicly available press release or file with the SEC a Current Report on
Form 8-K disclosing all material terms of the Exchange (to the extent not
previously publicly disclosed).

 

Article IV:  Miscellaneous

 

Section 4.1                                   Call Hedge.  Concurrently with or
shortly following its execution of this Agreement, the Company intends to enter
into convertible note hedge transactions (the “Call Hedge”) with one or more
counterparties intended to reduce the dilutive impact of the conversion feature
of the New Notes on the outstanding shares of Common Stock.  The counterparties
in these hedge transactions or their respective affiliates may immediately enter
into various transactions (including transactions with RBC Capital Markets or
their respective affiliates) with respect to the Common Stock or related
derivative securities that could have the effect of increasing or preventing a
decline in the market price per share of Common Stock.  Additionally, such
parties may subsequently modify or eliminate their hedge positions through sales
of Common Stock or by unwinding derivatives transactions (such as during New
Notes conversion settlement averaging periods) that can have the effect of
reducing the value of the consideration to be received upon conversion of New
Notes.

 

Section 4.2                                   Tax Matters.  The Company will
determine the issue price of the New Notes for United States federal income tax
purposes and will inform the Undersigned of the issue price reasonably promptly
after the Company’s determination thereof.  The Company, the Undersigned and
each Holder shall report the tax consequences of the Exchange and the issuance
and holding of the New Notes in a manner that is consistent with the issue
price, as so determined.  The undersigned and each Holder shall provide to the
Company a duly completed and executed Internal Revenue Service Form W-9 or
applicable Form W-8 at or prior to the time of the Exchange.

 

Section 4.3                                   Entire Agreement.  This Agreement
and any documents and agreements executed in connection with the Exchange embody
the entire agreement and understanding of the parties hereto with respect to the
subject matter hereof and supersede all prior and contemporaneous oral or
written agreements, representations, warranties, contracts, correspondence,
conversations, memoranda and understandings between or among the parties or any
of their agents, representatives or affiliates relative to such subject matter,
including, without limitation, any term sheets, emails or draft documents, and
is not intended to confer upon any person any rights or remedies hereunder other
than the parties hereto, and, with respect to the representations and warranties
in Articles II and III, Barclays Capital Inc.

 

Section 4.4                                   Construction.  References in the
singular shall include the plural, and vice versa, unless the context otherwise
requires.  References in the masculine shall include the feminine and neuter,
and vice versa, unless the context otherwise requires.  Headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meanings of the provisions hereof.  Neither party, nor its respective
counsel, shall be deemed the drafter of this Agreement for purposes of
construing the provisions of this Agreement, and all language in all parts of
this Agreement shall be construed in accordance with its fair meaning, and not
strictly for or against either party.

 

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Section 4.5                                   Governing Law.  This Agreement
shall in all respects be construed in accordance with and governed by the
substantive laws of the State of New York, without reference to its choice of
law rules.

 

Section 4.6                                   Counterparts.  This Agreement may
be executed in counterparts, each of which shall be deemed an original, but all
of which taken together shall constitute one and the same instrument.  Any
counterpart or other signature hereon delivered by facsimile shall be deemed for
all purposes as constituting good and valid execution and delivery of this
Agreement by such party.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first above written.

 

“UNDERSIGNED”:

 

“Company”:

 

 

 

 

 

JANUS CAPITAL GROUP INC.

(in its capacities described in the first paragraph hereof)

 

 

 

 

 

 

 

 

 

 

By:

 

 

By:

 

Name:

 

 

Name:

 

Title:

 

 

Title:

 

 

Signature Page to Exchange Agreement
Janus Capital Group Inc. 3.25% Convertible Senior Notes due 2014

 

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EXHIBIT A
Exchanging Beneficial Owners

 

Name of
Beneficial Owner

 

Principal Amount of
Exchanged Notes

 

Principal Amount of
Holders’ New Notes

 

Portion of
Cash Payment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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EXHIBIT B
Form of Third Supplemental Indenture

 

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